UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4066
Cash Assets Trust
(Exact name of Registrant as specified in charter)
380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 697-6666
Date of fiscal year end: 3/31
Date of reporting period: 3/31/09
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL
REPORT
MARCH 31, 2009
PACIFIC
CAPITAL FUNDS(R)
OF
CASH ASSETS TRUST
Pacific Capital Cash Assets Trust
Pacific Capital Tax-Free
Cash Assets Trust
Pacific Capital U.S. Government
Securities Cash Assets Trust
[LOGO OF THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST: A LION STANDING ON A
TWISTED ROPE AND SAIL TO LEFT OF PACIFIC](R)
A CASH MANAGEMENT
INVESTMENT
[LOGO OF THE PACIFIC PACIFIC
CAPITAL FUNDS OF CASH CAPITAL FUNDS(R)
ASSETS TRUST: A LION OF
STANDING ON A TWISTED CASH ASSETS TRUST
ROPE AND SAIL TO
LEFT OF PACIFIC](R) ANNUAL REPORT
May, 2009
Dear Investor:
We are pleased to provide you with the Annual Report for The Pacific
Capital Funds of Cash Assets Trust for the fiscal year ended March 31, 2009.
The enclosed Annual Report includes the three series of Cash Assets Trust
(the "Trust"): Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash
Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust,
each of which has two classes of shares, Original Shares and Service Shares. The
Trust was specifically created to meet the short-term investment needs of Hawaii
investors and others.
********************************************
OVERVIEW
As you may know, the National Bureau of Economic Research officially
declared that the current recession began in December 2007. The recession
continued during the past fiscal year of your Trust although, in the eyes of
some, the economy has begun to show signs of stabilizing.
As of this writing just after the close of your Trust's 2009 fiscal year,
all bets are out on when the recession might end. Some experts are declaring
that the recession ended in April 2009. Others, in a recent Wall Street Journal
survey of economists, predict that the recession could end as soon as August
with a slow recovery that could take between 3 - 6 years. One thing that can be
said for sure is that this recession could very well prove to be the longest in
the post World War II period as well as the first world wide recession during
that period of time.
THE ECONOMY
Calendar year 2008 into the first quarter of 2009 has been a very
difficult period for the U.S. economy which has been weighed down by a credit
crisis, the fall of several major financial institutions, a drop in spending by
consumers and businesses, a rise in unemployment, home foreclosures, bank losses
and tight credit. The possibility of deflation was a cause for concern. A
deflationary spiral occurs when weak consumer demand leads companies to reduce
prices and consumers begin to expect further price reductions, which in turn
weakens demand even further. The consensus is that unemployment will continue to
rise over the course of the current fiscal year. Consumer confidence reached an
all time low in the past year, but as of the time of this writing appears to be
slowly improving.
In June 2008, a "bear" market - generally defined as a downturn of 20% or
more in multiple market indexes - was declared. The following month, oil prices
reached $147 per barrel and money flowed from housing and equities into
commodities. Oil prices subsequently plummeted to under $34 a barrel in December
2008.
In September - October 2008, there was a worldwide stock market crash,
followed by a period of high volatility. A considerable number of banks,
mortgage lenders and insurance companies subsequently failed. Lehman Brothers
filed for bankruptcy, affecting global credit markets. Subsequently, the Reserve
Primary Money Market Fund "broke the buck" (shareholder investments were no
longer equivalent to $1 per share) as it owned Lehman Brothers issued debt and
experienced heavy
NOT A PART OF THE ANNUAL REPORT
redemptions. In the flight to quality that followed, investment monies then
poured into Treasury securities until in early December some Treasury bills
briefly had negative yields.
GOVERNMENT RESPONSE
As previously reported to you in the Trust's Semi-Annual Report, the U.S.
Treasury Department announced a temporary money market fund insurance program
("Program") on September 19, 2008 to add stability to the financial markets and
to reassure money market fund investors. This Program guaranteed a Net Asset
Value of $1.00 for those investor assets that were invested in a participating
money market fund as of September 19, 2008. The insurance was available for all
taxable and tax-free money market funds that are registered with the Securities
and Exchange Commission and maintain a stable share price of $1.00.
As detailed within this report, the Trust applied for this insurance for
all three money market funds - Cash Assets Trust, U.S. Government Securities
Cash Assets Trust and Tax-Free Cash Assets Trust (the "Funds"). All three Funds
were accepted for and covered under the Program through April 30, 2009. Cash
Assets Trust and Tax-Free Cash Assets Trust will additionally be covered through
September 18, 2009. Since U.S. Government Securities Cash Assets Trust invests
primarily in agencies and direct obligations of the U.S. Government, it was
determined that there was no longer a need for the Fund to participate in the
Program.
During the course of this past fiscal year, the federal government also
took numerous other decisive actions to address other areas of concern with
respect to the financial crisis.
YOUR INVESTMENT
Safety of principal is first and foremost in the eyes of your Board of
Trustees, Investment Adviser and Administrator when managing your cash reserves.
As such, the Trust's investment management team seeks to carefully follow
economic developments, financial markets and interest rate movements for each of
the Trust's portfolios.
We currently have a cautious outlook on the economy. As such, we have
sought to emphasize a portfolio structure for each of the Funds in quality
investments designed for a slower economy. While competitive returns are sought,
they have been challenging in the current economic environment in which the
historically low federal funds rate has contributed to lower yields.
As such, the Adviser and the Administrator have taken action to maintain a
positive yield for shareholders of the Funds. Specifically, in response to
current economic conditions, a) the Advisor and Administrator have waived, and
may continue to waive portions of their management fees for the Government
Securities Fund; and b) payments of certain fees under each of the Funds'
Distribution Plans for Service Shares have been, and may continue to be,
reduced. While there is no contractual or other requirement that such waivers
and/or reductions in fees occur or continue, the Adviser and the Administrator
have informed the Trust that for the benefit of the shareholders, they intend to
continue to take reasonably practicable steps to maintain a positive yield for
the shareholders of each of the Funds.
As always, we wish to express our appreciation for the confidence you have
shown by your investment in the Pacific Capital Funds of Cash Assets Trust. We
can assure you that we will consistently seek to do our very best to merit your
continued level of trust.
Sincerely,
/s/ Diana P. Herrmann /s/ Lacy B. Herrmann
Diana P. Herrmann Lacy B. Herrmann
Vice Chair and President Founder and Chairman Emeritus
NOT A PART OF THE ANNUAL REPORT
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The Pacific Capital Funds of Cash Assets Trust:
We have audited the accompanying statement of assets and liabilities,
including the schedules of investments, of The Pacific Capital Funds of Cash
Assets Trust (the "Trust") (comprised of Pacific Capital Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets Trust, and Pacific Capital U.S. Government
Securities Cash Assets Trust) (the "Funds"), as of March 31, 2009 and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the year ended March 31, 2005 were audited by other auditors,
whose report dated May 23, 2005 expressed an unqualified opinion on such
financial highlights.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform our audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Trust is not required to have, nor were we engaged to perform, an audit of
the Trust's internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Trust's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 2009, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the Funds comprising the Trust as of March 31, 2009, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
May 27, 2009
- --------------------------------------------------------------------------------
PACIFIC CAPITAL
CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
PRINCIPAL
AMOUNT U. S. GOVERNMENT AGENCY OBLIGATIONS (38.1%): VALUE
- --------------- ----------------------------------------------------------- -------------
$ 23,250,000 Federal Home Loan Mortgage Corp., 0.29%, 04/01/09 ......... $ 23,250,000
25,000,000 Federal Home Loan Mortgage Corp., 0.36%, 06/30/09 ......... 24,977,500
25,000,000 Federal Home Loan Mortgage Corp., 0.41%, 07/27/09 ......... 24,966,687
30,000,000 Federal National Mortgage Association, 0.15%,
04/27/09 ............................................... 29,996,750
30,000,000 Federal National Mortgage Association, 0.16%,
04/30/09 ............................................... 29,996,133
25,000,000 Federal National Mortgage Association, 1.80%,
07/02/09 ............................................... 24,885,000
17,983,000 Federal National Mortgage Association, 0.50%,
07/30/09 ............................................... 17,953,028
-------------
Total U.S. Government Agency Obligations .................. 176,025,098
-------------
CORPORATE NOTES (9.8%):
2,600,000 Merrill Lynch & Co., 1.29%, 05/08/09 (A) .................. 2,590,319
17,400,000 Merrill Lynch & Co., 3.05%, 05/20/09 (A) .................. 17,394,230
25,000,000 Toyota Series B, 2.43%, 01/29/10 (A) ...................... 24,999,992
-------------
Total Corporate Notes ..................................... 44,984,541
-------------
COMMERCIAL PAPER (13.9%)
BANKS (4.3%):
20,000,000 Lloyds Bank, 1.04%, 04/09/09 .............................. 19,995,378
-------------
EDUCATION (5.2%):
24,000,000 Michigan State University, 1.20%, 06/01/09 ................ 24,000,000
-------------
FOREIGN BANKS (4.4%):
20,000,000 Calyon NA, Inc., 0.97%, 05/14/09 .......................... 19,976,828
-------------
63,972,206
-------------
FDIC GUARANTEED SECURITIES (8.2%)
8,500,000 Bank of America TLGP, 1.41%, 12/23/10 (A) ................. 8,500,000
3,000,000 General Electric Capital Corp. TLGP, 1.46%,
07/08/10 (A) ........................................... 3,000,000
24,000,000 General Electric Capital Corp. TLGP, 0.55%, 06/15/09 ...... 23,972,500
2,500,000 SunTrust Bank Note, 1.97%, 12/16/10 (A) ................... 2,504,244
-------------
Total FDIC Guaranteed Securities .......................... 37,976,744
-------------
PRINCIPAL
AMOUNT MUNICIPAL SECURITY (3.9%): VALUE
- --------------- ----------------------------------------------------------- -------------
$ 18,000,000 Municipal Electric Authority of Georgia Taxable
Commercial Paper, 2.50%, 04/06/09 ...................... $ 18,000,000
-------------
SHARES INVESTMENT COMPANIES (26.1%):
- --------------- -----------------------------------------------------------
50,000,000 Goldman Sachs Financial Square Government
Money Market Fund, Institutional Share Class ........... 50,000,000
50,000,000 JPMorgan Tax Free Money Market Fund, Agency
Share Class ............................................ 50,000,000
20,590,362 JPMorgan U.S. Government Money Market Fund,
Premier Share Class .................................... 20,590,362
-------------
120,590,362
-------------
Total Investments (Amortized Cost $461,548,951*) . 100.0% 461,548,951
Other assets less liabilities .................... 0.0 53,830
----- -------------
NET ASSETS ....................................... 100.0% $ 461,602,781
===== =============
(A) Variable interest rate - subject to periodic change.
* Cost for Federal income tax and financial reporting purposes is identical.
Abbreviations:
FDIC - Federal Deposit Insurance Corp.
TLGP - Temporary Liquidity Guarantee Program
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
U. S. Government Agency Obligations .............. 38.1%
Corporate Notes .................................. 9.8
Commercial Paper ................................. 13.9
FDIC Guaranteed Securities ....................... 8.2
Municipal Security ............................... 3.9
Investment Companies ............................. 26.1
-----
100.0%
=====
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (90.1%): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
ALABAMA (1.1%)
Montgomery, AL Downtown Redevelopment,
National-re Insured
$ 3,500,000 5.000%, 10/01/09 ....................................... Aa3/AA- $ 3,565,932
--------------
ARIZONA (1.7%)
Maricopa County, AZ Unified School District No. 48
(Scottsdale), National-re FGIC Insured
5,405,000 5.000%, 07/01/09 ....................................... Aa2/AA 5,448,608
Tucson, AZ Industrial Development Authority VRDO*
425,000 0.500%, 07/15/31 ....................................... Aaa/AAA 425,000
--------------
5,873,608
--------------
ARKANSAS (0.2%)
Baxter County, AR Hospital Revenue Refunding &
Improvement-Series B, Prerefunded to 9/1/09 @ 100
700,000 5.625%, 09/01/28 ....................................... Prerefunded 714,161
--------------
CALIFORNIA (2.4%)
Bay Area, CA Toll Authority Toll Bridge Revenue
A-2, VRDO*
5,000,000 0.200%, 04/01/47 ....................................... VMIG1/A-1 5,000,000
California Statewide Communities Development
Authority Revenue Bond (John Muir Health) Series
A VRDO*
3,200,000 0.250%, 08/15/36 ....................................... VMIG1/A-1+ 3,200,000
--------------
8,200,000
--------------
COLORADO (2.5%)
Colorado Educational & Cultural Facilities Authority
Revenue Bond - Boulder Country Day School,
VRDO*
1,150,000 0.470%, 09/01/24 ....................................... NR/AAA 1,150,000
Colorado Educational & Cultural Facilities Authority
Revenue Bond - National Jewish Federation Series
A4 VRDO*
1,000,000 0.500%, 02/01/35 ....................................... VMIG1/NR 1,000,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
COLORADO (CONTINUED)
Colorado Educational & Cultural Facilities Authority
Revenue Bond - National Jewish Federation Series
C4 VRDO*
$ 1,000,000 0.500%, 06/01/37 ....................................... VMIG1/NR $ 1,000,000
Colorado Educational & Cultural Facilities Authority
Revenue Bond - National Jewish Federation
Series D4 VRDO*
1,050,000 0.500%, 05/01/38 ....................................... VMIG1/NR 1,050,000
Colorado Health Facilities, Prerefunded to 12/1/09
@ 101
4,000,000 5.750%, 12/01/23 ....................................... Prerefunded 4,178,820
--------------
8,378,820
--------------
CONNECTICUT (3.1%)
Connecticut State Special Tax, FSA Insured VRDO*
10,500,000 1.250%, 12/01/10 ....................................... Aa2/AAA 10,500,000
--------------
DISTRICT OF COLUMBIA (0.6%)
District of Columbia Revenue American Geophysical
Union, VRDO*
2,135,000 0.550%, 09/01/23 ....................................... Aaa/NR 2,135,000
--------------
FLORIDA (2.1%)
Broward County, FL Series B
3,000,000 5.000%, 01/01/10 ....................................... Aa1/AA+ 3,101,718
Orange County, FL Housing Financial Authority,
FNMA Insured VRDO*
1,800,000 0.500%, 06/01/25 ....................................... NR/A-1+ 1,800,000
Polk County, FL School District Sales, FSA Insured
2,285,000 4.000%, 10/01/09 ....................................... Aa3/AAA 2,319,665
--------------
7,221,383
--------------
HAWAII (20.4%)
City & County Honolulu, HI Commercial Paper
1,500,000 0.400%, 04/03/09 ....................................... P1/A1+ 1,500,000
5,000,000 0.600%, 04/03/09 ....................................... P1/A1+ 5,000,000
5,000,000 0.450%, 04/07/09 ....................................... P1/A1+ 5,000,000
8,000,000 0.500%, 04/07/09 ....................................... P1/A1+ 8,000,000
2,700,000 0.500%, 04/07/09 ....................................... P1/A1+ 2,700,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
HAWAII (CONTINUED)
City & County Honolulu, HI VRDO*
$ 6,000,000 5.000%, 07/01/09 ....................................... Aa2/AA $ 6,046,603
City & County Honolulu, HI, Prerefunded to 7/01/09
@101
1,000,000 5.125%, 07/01/10 ....................................... Prerefunded 1,017,974
City & County Honolulu, HI, Prerefunded to 7/01/09
@101
2,930,000 5.125%, 07/01/18 ....................................... Prerefunded 2,982,760
Hawaii County, HI
1,015,000 4.000%, 07/15/09 ....................................... A1/AA- 1,022,118
Hawaii County, HI, FSA Insured Prerefunded to
5/15/09 @101
500,000 5.400%, 05/15/15 ....................................... Prerefunded 507,130
Hawaii County, HI, Prerefunded to 5/15/09 @101
545,000 5.625%, 05/15/19 ....................................... Prerefunded 552,985
Hawaii Pacific Health Special Purpose VRDO*
Radian Insured
13,500,000 0.580%, 07/01/33 ....................................... Aaa/AAA 13,500,000
Hawaii State, National-re FGIC Insured Series CO
4,590,000 6.000%, 09/01/09 ....................................... Aa2/AA 4,673,020
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bond (Palama Meat
Company) Series A VRDO*, Wells Fargo Insured,
AMT
6,500,000 0.670%, 10/31/29 ....................................... NR/AAA 6,500,000
Hawaii State, National-re FGIC Insured
4,990,000 5.500%, 08/01/09 ....................................... Aa2/AA 5,073,455
500,000 5.500%, 10/01/09 ....................................... Aa2/AA 510,333
Hawaii State, National-re IBC Insured
1,000,000 6.000%, 11/01/09 ....................................... Aa2/AA 1,030,695
Hawaii State Highways
1,000,000 4.000%, 01/01/10 ....................................... Aa3/AA+ 1,011,051
Hawaii State Housing Finance & Development Corp.,
Multi Family, Lokahi Kau, VRDO*
2,300,000 0.550%, 12/01/41 ....................................... Aaa/NR 2,300,000
--------------
68,928,124
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
ILLINOIS (4.0%)
Cook County, IL Capital Improvement-Series A,
Prerefunded to 11/15/09 @101
$ 1,000,000 5.250%, 11/15/16 ....................................... Prerefunded $ 1,038,900
Illinois Educational Facilities Authority Revenue
Bond VRDO*
2,245,000 0.530%, 12/01/25 ....................................... Aaa/NR 2,245,000
Illinois Health Facilities Authority Revenue Refunding
Childrens Memorial Hospital Series A Prerefunded
to 8/15/09 @ 101
2,000,000 5.750%, 08/15/25 ....................................... Prerefunded 2,055,659
Peoria County, IL Community Unit School District
No. 323 VRDO*, FSA Insured
6,000,000 2.700%, 04/01/26 ....................................... Aaa/AAA 6,000,000
Romeoville, IL Revenue Bond VRDO*
2,100,000 0.500%, 10/01/36 ....................................... Aaa/NR 2,100,000
--------------
13,439,559
--------------
INDIANA (1.2%)
Indiana Financial Authority Health System Revenue,
Sisters St. Francis Health, VRDO*
2,000,000 0.450%, 09/01/48 ....................................... Aaa/NR 2,000,000
Indiana Health Facilities Financial Authority, Clark
Memorial Hospital, VRDO*
1,975,000 0.500%, 12/01/21 ....................................... NR/NR 1,975,000
--------------
3,975,000
--------------
IOWA (0.7%)
Iowa Financial Authority Revenue Private College
Revenue (Drake University Project) VRDO*
2,500,000 0.400%, 04/01/31 ....................................... Aaa/AAA 2,500,000
--------------
KENTUCKY (0.9%)
Breckenridge County, KY Lease Program Revenue
VRDO*
3,000,000 0.350%, 02/01/31 ....................................... VMIG1/NR 3,000,000
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
MASSACHUSETTS (1.1%)
Massachusetts State Health & Educational Facilities
Authority Revenue (Hillcrest Extended Care) Series
A VRDO*
$ 3,900,000 0.500%, 10/01/26 ....................................... Aaa/NR $ 3,900,000
--------------
MICHIGAN (0.6%)
Michigan Higher Education Facility Authority, Hope
College VRDO*
665,000 0.500%, 11/01/36 ....................................... Aaa/NR 665,000
Michigan State Hospital Finance Authority, (Mercy
Mt. Clemens) Series A Prerefunded to 5/15/09
1,250,000 5.750%, 05/15/29 ....................................... Prerefunded 1,268,506
--------------
1,933,506
--------------
MINNESOTA (5.7%)
Bloomington, MN Multi-Family Revenue Bond VRDO*
3,000,000 0.720%, 11/15/32 ....................................... Aaa/AAA 3,000,000
Inver Grove Heights, MN Senior VRDO*
1,595,000 0.500%, 05/15/35 ....................................... Aaa/AAA 1,595,000
Minneapolis, MN Revenue Guthrie Theater Project
Series A, VRDO*
800,000 0.420%, 10/01/23 ....................................... Aa2/NR 800,000
Oak Park Heights, MN Multi-Family Revenue Bond,
FHLMC Insured VRDO*
6,415,000 0.500%, 11/01/35 ....................................... Aaa/AAA 6,415,000
Plymouth, MN Multi-Family Housing VRDO*
1,395,000 0.500%, 04/15/33 ....................................... Aaa/AAA 1,395,000
St. Louis Park, MN Multi-Family Revenue Bond,
FHLMC Insured VRDO*
4,000,000 0.500%, 08/01/34 ....................................... Aaa/AAA 4,000,000
St. Paul, MN Housing & Redevelopment Authority,
Multi Family Housing, Highland Ridge Project,
FHLMC Insured VRDO*
2,000,000 0.500%, 10/01/33 ....................................... Aaa/NR 2,000,000
--------------
19,205,000
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
MISSOURI (10.4%)
Kansas City, MO Industrial Development Authority
Multi-Family - Gatehouse Apartments Project
VRDO*
$ 1,260,000 0.500%, 11/15/26 ....................................... Aaa/AAA $ 1,260,000
Kansas City, MO Industrial Development Authority
Revenue Bond, (Ewing Marion Kaufman
Foundation) VRDO*
12,260,000 0.400%, 04/01/27 ....................................... NR/AAA 12,260,000
Missouri State Development Financial Board Lease
Revenue Bond VRDO*
180,000 0.400%, 06/01/33 ....................................... VMIG1/NR 180,000
Missouri State Health and Education (St. Francis
Medical Center) Series A VRDO*
3,000,000 0.400%, 06/01/26 ....................................... NR/AAA 3,000,000
Missouri State Health & Educational Facilities
Authority Revenue Bond VRDO*
3,633,000 0.400%, 11/01/32 ....................................... NR/A-1+ 3,633,000
Missouri State, Health & Educational Facilities
Authority Revenue Bond (St. Louis University),
Series B VRDO*, SPA: Bank of America N.A.
6,550,000 0.400%, 10/01/24 ....................................... VMIG1/A-1+ 6,550,000
Missouri State Health & Educational Facilities
Authority Educational Facilities Revenue Bond,
St. Louis University VRDO*, SPA: US Bank NA
2,120,000 0.400%, 07/01/32 ....................................... VMIG1/NR 2,120,000
Missouri State Health & Educational Facilities VRDO*
2,630,000 0.400%, 10/01/33 ....................................... NR/A-1+ 2,630,000
University of Missouri University Revenue
Bond-System Facilities Series A VRDO*
1,275,000 0.400%, 11/01/31 ....................................... Aa2/A-1+ 1,275,000
University of Missouri University System Facilities
Revenue Bond, Series B VRDO*
2,300,000 0.400%, 11/01/30 ....................................... Aa2/A-1+ 2,300,000
--------------
35,208,000
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
NEVADA (4.4%)
Clark County, NV, Economic Development,
Alexander Dawson School Project, Prerefunded
to 5/15/09 @ 101
$ 6,500,000 5.500%, 05/15/20 ....................................... Prerefunded $ 6,599,864
Clark County School District, NV, National-re
Insured Series C
5,000,000 5.000%, 06/15/09 ....................................... Aa2/AA 5,032,412
Washoe, NV, Prerefunded to 12/1/09 @ 100
1,710,000 5.875%, 06/01/17 ....................................... Prerefunded 1,772,451
1,300,000 5.875%, 06/01/19 ....................................... Prerefunded 1,346,775
--------------
14,751,502
--------------
NEW JERSEY (1.4%)
New Jersey Building Authority, Prerefunded to
6/15/09 @ 100
1,215,000 5.250%, 06/15/12 ....................................... Prerefunded 1,223,993
1,785,000 5.250%, 06/15/12 ....................................... Prerefunded 1,798,212
New Jersey Economic Development Authority,
(Transportation Project Sublease) Series A
Prerefunded to 5/1/09 @ 100
1,600,000 5.300%, 05/01/12 ....................................... Prerefunded 1,604,810
--------------
4,627,015
--------------
NEW YORK (1.5%)
New York, NY, Transitional Finance Authority
Revenue Future Tax Section C Prerefunded
to 5/1/09 @ 101
1,000,000 5.500%, 05/01/25 ....................................... Prerefunded 1,013,114
New York, NY, Prerefunded to 5/01/09 @101 VRDO*
2,940,000 5.000%, 05/01/29 ....................................... Prerefunded 2,976,896
New York State Housing - Liberty Street, FHLMC
Insured VRDO*
1,070,000 0.320%, 05/01/35 ....................................... Aaa/AAA 1,070,000
--------------
5,060,010
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
NORTH CAROLINA (4.6%)
North Carolina Capital Facilities Finance Agency
Educational Facilities (Queens College) VRDO*
$ 2,400,000 0.550%, 03/01/21 ....................................... NR/NR** $ 2,400,000
North Carolina Capital Facilities Finance Agency
(Thompson's Children Home) VRDO*
1,080,000 0.550%, 12/01/20 ....................................... NR/NR** 1,080,000
North Carolina Educational Facilities Finance Agency
(Wingate University) Series 1999 VRDO*
4,240,000 0.500%, 05/01/22 ....................................... Aaa/NR 4,240,000
North Carolina Medical VRDO*
2,000,000 0.300%, 11/15/28 ....................................... Aaa/AA 2,000,000
Union County, NC, Enterprise System, FSA Insured
VRDO*
5,910,000 1.500%, 06/01/21 ....................................... Aa3/AAA 5,910,000
--------------
15,630,000
--------------
OHIO (1.5%)
Ohio State Highway
5,000,000 5.200%, 02/01/10 ....................................... Aa1/AA+ 5,195,767
--------------
OREGON (2.6%)
Multnomah County, OR Hospital Facilities VRDO*
2,500,000 0.450%, 11/01/34 ....................................... Aa1/NR 2,500,000
Oregon State Facilities Authority Revenue
Peacehealth VRDO*
5,000,000 0.320%, 05/01/47 ....................................... NR/AAA 5,000,000
Oregon State Health Housing Educational & Cultural
VRDO*
1,200,000 0.250%, 12/01/15 ....................................... NR/AAA 1,200,000
--------------
8,700,000
--------------
PENNSYLVANIA (2.6%)
Emmaus, PA General Authority VRDO*
1,300,000 0.420%, 03/01/24 ....................................... NR/A-1+ 1,300,000
Erie, PA Water Authority Revenue, FSA Insured VRDO*
3,685,000 1.700%, 12/01/36 ....................................... Aa3/AAA 3,685,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
PENNSYLVANIA (CONTINUED)
Pennsylvania State
$ 2,500,000 5.000%, 01/15/10 ....................................... Aa2/AA $ 2,589,731
Philadelphia, PA School District Prerefunded to
4/1/09 @ 100
1,275,000 5.250%, 04/01/15 ....................................... Prerefunded 1,275,000
--------------
8,849,731
--------------
SOUTH DAKOTA (1.8%)
South Dakota State & Educational Facilities Authority
Revenue (Regional Health) VRDO*
6,000,000 0.400%, 09/01/27 ....................................... Aaa/NR 6,000,000
--------------
TENNESSEE (0.6%)
Metropolitan Government Nashville & Davidson
County, TN Prerefunded to 5/15/09 @101
2,150,000 5.125%, 11/15/12 ....................................... Prerefunded 2,179,811
--------------
TEXAS (6.5%)
Bexar County, TX Housing Financial Corp., Multi-
Family Housing Revenue, Northwest Trails
Apartments, FNMA Insured VRDO*
1,800,000 0.500%, 12/15/34 ....................................... Aaa/NR 1,800,000
Garland, TX Independent School District
2,000,000 5.000%, 02/15/10 ....................................... Aaa/AAA 2,078,441
Houston, TX, Prerefunded to 10/15/09 @ 102
750,000 6.250%, 10/15/19 ....................................... Prerefunded 786,724
Humble, TX School District Prerefunded to 2/15/10
@ 100
3,245,000 5.500%, 02/15/19 ....................................... Prerefunded 3,387,861
McKinney, TX, Prerefunded to 2/15/10 @ 100
5,505,000 5.375%, 02/15/20 ....................................... Prerefunded 5,741,340
North Texas State University, FSA Insured
840,000 5.250%, 04/15/09 ....................................... Aaa/AAA 841,146
TEXAS (continued)
Odesa, TX, Water & Sewer Revenue, Prerefunded
to 4/1/09 @ 100
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
TEXAS (CONTINUED)
$ 2,400,000 5.375%, 04/01/13 ....................................... Prerefunded $ 2,400,000
Travis, TX, Prerefunded to 11/15/09 @ 101
4,600,000 6.250%, 11/15/14 ....................................... Prerefunded 4,813,526
--------------
21,849,038
VIRGINIA (1.8%)
--------------
Portsmouth, VA, FSA Insured
2,000,000 5.000%, 07/01/09 ....................................... Aaa/AAA 2,016,489
Virginia Commonwealth, Prerefunded to 5/15/09
@101
1,000,000 5.700%, 05/15/19 ....................................... Prerefunded 1,014,526
Virginia State, Public School Authority Financing
Series A Prerefunded to 8/01/09 @ 101
2,100,000 5.000%, 08/01/16 ....................................... Prerefunded 2,144,260
York County, VA, Prerefunded to 6/01/09 @101
1,000,000 5.875%, 06/01/24 ....................................... Prerefunded 1,016,425
--------------
6,191,700
--------------
WASHINGTON (1.0%)
Snohomish County, WA Prerefunded to 12/1/09 @ 100
1,000,000 5.700%, 12/01/14 ....................................... Prerefunded 1,031,018
Washington State Housing Finance Commission,
Northwest School Project, VRDO*
2,310,000 0.550%, 06/01/32 ....................................... Aaa/NR 2,310,000
--------------
3,341,018
--------------
WISCONSIN (1.1%)
Ashwaubenon, WI, Community Development
Authority, Arena Project Prerefunded to 6/1/09
@ 100
1,370,000 5.800%, 06/01/29 ....................................... Prerefunded 1,381,063
Green Bay, WI, Prerefunded to 6/01/09 @100
2,250,000 5.250%, 06/01/24 ....................................... Prerefunded 2,264,515
--------------
3,645,578
--------------
SHARES INVESTMENT COMPANIES (9.4%): VALUE
- --------------- -------------------------------------------------------- --------------
31,538,000 Dreyfus Tax-Exempt Cash Management Money Market,
Institutional Share Class ........................... $ 31,538,000
403,000 Goldman Sachs Financial Square Tax-Free Money
Market Fund Institutional Share Class ............... 403,000
--------------
31,941,000
--------------
Total Investments (Amortized Cost $336,640,263***) ....... 99.5% 336,640,263
Other assets less liabilities ............................ 0.5 1,634,932
----- --------------
NET ASSETS ............................................... 100.0% $ 338,275,195
===== ==============
* Variable rate demand obligations (VRDOs) are payable upon demand within
the same day for securities with daily liquidity or seven days for
securities with weekly liquidity.
** Fitch rating - AA-/F1+
*** Cost for Federal income tax and financial reporting purposes is identical.
PORTFOLIO DISTRIBUTION (UNAUDITED)
PERCENT OF
PORTFOLIO
---------
Alabama 1.1%
Arizona 1.7
Arkansas 0.2
California 2.4
Colorado 2.5
Connecticut 3.1
District of Columbia 0.6
Florida 2.1
Hawaii 20.5
Illinois 4.0
Indiana 1.2
Iowa 0.7
Kentucky 0.9
Massachusetts 1.2
Michigan 0.6
Minnesota 5.7
Missouri 10.5
Nevada 4.4
New Jersey 1.4
New York 1.5
North Carolina 4.6
Ohio 1.5
Oregon 2.6
Pennsylvania 2.6
South Dakota 1.8
Tennessee 0.6
Texas 6.5
Virginia 1.8
Washington 1.1
Wisconsin 1.1
Investment Companies 9.5
-----
100.0%
=====
Note: National Public Finance Guarantee Corporation (National-re) is the new
name for MBIA Inc.'s U.S. public finance platform.
PORTFOLIO ABBREVIATIONS:
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Corporation
FHLMC - Federal Home Loan Mortgage Corp.
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance
IBC - Insured Bond Certificates
MBIA - Municipal Bond Investors Assurance
National-re - National Public Finance Guarantee Corporation
National-re FGIC - Reinsured FGIC bonds
NR - Not Rated
SPA - Standby Bond Purchase Agreement
VRDO - Variable Rate Demand Obligation
See accompanying notes to financial statements.
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
PRINCIPAL
AMOUNT U. S. GOVERNMENT AGENCY OBLIGATIONS (72.0%): VALUE
- --------------- ----------------------------------------------------------- -------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (27.2%):
$ 50,000,000 0.29%, 04/01/09 ........................................... $ 50,000,000
58,000,000 0.35%, 05/04/09 ........................................... 57,981,392
50,000,000 5.25%, 05/21/09 ........................................... 50,302,029
50,000,000 0.36%, 06/30/09 ........................................... 49,955,000
50,000,000 0.41%, 07/27/09 ........................................... 49,933,375
-------------
258,171,796
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (44.8%):
80,000,000 0.29%, 04/20/09 ........................................... 79,987,756
120,000,000 0.15%, 04/27/09 ........................................... 119,987,000
120,000,000 0.16%, 04/30/09 ........................................... 119,984,533
20,000,000 4.20%, 06/08/09 ........................................... 20,119,329
30,000,000 4.57%, 06/15/09 ........................................... 30,220,220
20,000,000 5.13%, 07/13/09 ........................................... 20,262,805
35,000,000 0.50%, 07/30/09 ........................................... 34,941,667
-------------
425,503,310
-------------
Total U.S. Government Agency Obligations 683,675,106
-------------
FDIC GUARANTEED SECURITIES (4.3%):
Bank of America TLGP
21,500,000 1.41%, 12/23/10 (A) ....................................... 21,500,000
General Electric TLGP
7,000,000 1.46%, 07/08/10 (A) ....................................... 7,000,000
Keycorp
5,000,000 1.97%, 12/15/10 (A) ....................................... 5,003,888
Suntrust Bank FDIC
7,500,000 1.97%, 12/16/10 (A) ....................................... 7,512,732
-------------
41,016,620
-------------
SHARES INVESTMENT COMPANIES (23.3%):
- --------------- -----------------------------------------------------------
145,010,772 Goldman Sachs Financial Square Government Money
Market Fund, Institutional Share Class ................. 145,010,772
JPMorgan U.S. Government Money Market Fund, Premier Share
78,237,400 Class .................................................. 78,237,400
-------------
223,248,172
-------------
Total Investments (Amortized Cost $947,939,898*) . 99.8% $ 947,939,898
Other assets less liabilities .................... 0.2 1,801,575
----- -------------
NET ASSETS ....................................... 100.0% $ 949,741,473
===== =============
* Cost for Federal income tax and financial reporting purposes is identical.
(A) Variable interest rate - subject to periodic change.
Abbreviations:
FDIC - Federal Deposit Insurance Corp.
TLGP - Temporary Liquidity Guarantee Program
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
U.S. Government Agency Obligations ............... 72.1%
FDIC Guaranteed Securities ....................... 4.3
Investment Companies ............................. 23.6
-----
100.0%
=====
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2009
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
-------------- -------------- --------------
ASSETS:
Investments at value and amortized cost (note 2) ......................... $ 461,548,951 $ 336,640,263 $ 947,939,898
Cash ..................................................................... -- 704,441 --
Interest receivable ...................................................... 319,178 1,831,565 1,962,562
Other assets ............................................................. 67,301 43,145 139,419
-------------- -------------- --------------
Total Assets .......................................................... 461,935,430 339,219,414 950,041,879
-------------- -------------- --------------
LIABILITIES:
Adviser and Administrator fees payable ................................... 200,669 115,938 229,024
Payable for investment securities purchased .............................. -- 714,161 --
Dividends payable ........................................................ 77,388 79,058 33,878
Distribution fees payable ................................................ 26,014 15,976 14,296
Accrued expenses ......................................................... 28,578 19,086 23,208
-------------- -------------- --------------
Total Liabilities ..................................................... 332,649 944,219 300,406
-------------- -------------- --------------
NET ASSETS ............................................................... $ 461,602,781 $ 338,275,195 $ 949,741,473
============== ============== ==============
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share ............................................. $ 4,613,161 $ 3,382,249 $ 9,497,988
Additional paid-in capital ............................................... 456,716,130 334,844,802 940,370,053
Accumulated net realized gain (loss) on investments ...................... 273,490 48,144 (126,568)
-------------- -------------- --------------
$ 461,602,781 $ 338,275,195 $ 949,741,473
============== ============== ==============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ............................................................ $ 333,059,412 $ 267,793,336 $ 624,855,545
============== ============== ==============
Shares outstanding .................................................... 333,074,305 267,754,351 624,890,574
============== ============== ==============
Net asset value per share ............................................. $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Service Shares Class:
Net Assets ............................................................ $ 128,543,369 $ 70,481,859 $ 324,885,928
============== ============== ==============
Shares outstanding .................................................... 128,241,776 70,470,517 324,908,221
============== ============== ==============
Net asset value per share ............................................. $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2009
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
------------ ------------ ------------
INVESTMENT INCOME:
Interest income ............................................................ $ 10,469,476 $ 5,631,501 $ 24,528,413
------------ ------------ ------------
EXPENSES:
Investment Adviser fees (note 3) ........................................... 2,017,318 994,657 5,140,036
Administrator fees (note 3) ................................................ 579,670 263,474 1,129,971
Distribution fees (note 3) ................................................. 379,809 191,054 1,935,107
Treasury Guarantee Program (note 10) ....................................... 100,620 65,995 323,779
Trustees' fees and expenses ................................................ 99,726 79,386 261,033
Legal fees (note 3) ........................................................ 58,865 40,749 130,082
Fund accounting fees ....................................................... 36,667 37,647 37,679
Registration fees and dues ................................................. 24,406 6,453 48,374
Insurance .................................................................. 24,203 16,484 114,980
Custodian fees (note 5) .................................................... 21,200 10,628 12,099
Auditing and tax fees ...................................................... 17,500 17,500 17,500
Shareholders' reports ...................................................... 11,082 4,405 15,095
Transfer and shareholder servicing agent fees .............................. 10,944 11,358 10,204
Chief Compliance Officer (note 3) .......................................... 4,016 4,016 4,016
Miscellaneous .............................................................. 13,091 7,550 33,292
------------ ------------ ------------
Total expenses ............................................................. 3,399,117 1,751,356 9,213,247
Advisory fee reductions (note 3) ........................................... -- (25,841) (432,867)
Administrative fee reductions (note 3) ..................................... -- (7,494) (95,135)
Distribution fees waived (note 3) .......................................... (3,333) -- (311,593)
Expenses paid indirectly (note 5) .......................................... (117) (3,465) (901)
------------ ------------ ------------
Net expenses .................................................................... 3,395,667 1,714,556 8,372,751
------------ ------------ ------------
Net investment income ........................................................... 7,073,809 3,916,945 16,155,662
Net realized gain (loss) from securities transactions ........................... 272,310 48,127 (128,439)
------------ ------------ ------------
Net change in net assets resulting from operations .............................. $ 7,346,119 $ 3,965,072 $ 16,027,223
============ ============ ============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
CASH FUND TAX-FREE FUND GOVERNMENT FUND
------------------------------ ------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008
-------------- -------------- -------------- -------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ........... $ 7,073,809 $ 18,013,611 $ 3,916,945 $ 7,246,100 $ 16,155,662 $ 75,571,521
Net realized gain (loss)
from securities transactions .. 272,310 -- 48,127 17 (128,439) --
-------------- -------------- -------------- -------------- -------------- --------------
Net change in net assets
resulting from operations ..... 7,346,119 18,013,611 3,965,072 7,246,117 16,027,223 75,571,521
-------------- -------------- -------------- -------------- -------------- --------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares ............... (5,234,452) (12,330,517) (3,080,560) (5,399,668) (8,441,617) (32,166,752)
Service Shares ................ (1,839,357) (5,683,094) (846,721) (1,818,985) (7,714,045) (43,404,769)
-------------- -------------- -------------- -------------- -------------- --------------
Total dividends to shareholders
from net investment income .. (7,073,809) (18,013,611) (3,927,281) (7,218,653) (16,155,662) (75,571,521)
-------------- -------------- -------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ............... 586,094,563 562,646,046 297,423,045 284,550,654 1,048,227,518 1,643,427,314
Service Shares ................ 661,761,287 528,686,800 84,233,267 102,239,090 1,910,256,960 2,659,302,311
-------------- -------------- -------------- -------------- -------------- --------------
1,247,855,850 1,091,332,846 381,656,312 386,789,744 2,958,484,478 4,302,729,625
-------------- -------------- -------------- -------------- -------------- --------------
Reinvested dividends:
Original Shares ............... 54,292 208,192 16,421 33,682 49,069 191,143
Service Shares ................ 1,839,320 5,683,053 846,669 1,818,753 7,714,011 43,404,774
-------------- -------------- -------------- -------------- -------------- --------------
1,893,612 5,891,245 863,090 1,852,435 7,763,080 43,595,917
-------------- -------------- -------------- -------------- -------------- --------------
Cost of shares redeemed:
Original Shares ............... (576,550,258) (526,645,395) (254,794,881) (230,094,077) (1,231,324,372) (1,520,979,513)
Service Shares ................ (676,405,429) (558,678,949) (85,614,774) (121,406,410) (2,691,525,231) (2,683,075,444)
-------------- -------------- -------------- -------------- -------------- --------------
(1,252,955,687) (1,085,324,344) (340,409,655) (351,500,487) (3,922,849,603) (4,204,054,957)
-------------- -------------- -------------- -------------- -------------- --------------
Change in net assets
from capital share transactions (3,206,225) 11,899,747 42,109,747 37,141,692 (956,602,045) 142,270,585
-------------- -------------- -------------- -------------- -------------- --------------
Total change in net assets ...... (2,933,915) 11,899,747 42,147,538 37,169,156 (956,730,484) 142,270,585
NET ASSETS:
Beginning of period ........... 464,536,696 452,636,949 296,127,657 258,958,501 1,906,471,957 1,764,201,372
-------------- -------------- -------------- -------------- -------------- --------------
End of period* ................ $ 461,602,781 $ 464,536,696 $ 338,275,195 $ 296,127,657 $ 949,741,473 $1,906,471,957
============== ============== ============== ============== ============== ==============
* Includes undistributed
(distributions in excess of) net
investment income of: $ -- $ -- $ -- $ 10,336 $ -- $ --
============== ============== ============== ============== ============== ==============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2009
1. ORGANIZATION
Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940 (the "1940 Act") as an open-end investment company.
The Trust consists of the following three investment portfolios (referred
to individually as a "Fund" and collectively as the "Funds"): Pacific Capital
Cash Assets Trust ("Cash Fund") (a diversified portfolio which commenced
operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust
("Tax-Free Fund") (a non-diversified portfolio which commenced operations on
April 4, 1989), and Pacific Capital U.S. Government Securities Cash Assets Trust
("Government Fund") (a diversified portfolio which commenced operations on April
4, 1989). The Trust is authorized to issue for each Fund an unlimited number of
shares of $0.01 par value in two classes of shares; the Original Shares Class
and the Service Shares Class. The Original Shares Class includes all currently
outstanding shares of each Fund that were issued prior to January 20, 1995, the
date on which the Capital structure was changed to include two classes rather
than one. The two classes of shares are substantially identical, except that
Service Shares bear the fees that are payable under the Trust's Distribution
Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America.
a) PORTFOLIO VALUATION: Each Fund's portfolio securities are valued by the
amortized cost method permitted in accordance with Rule 2a-7 under the
1940 Act, which, after considering accrued interest thereon, approximates
market. Under this method, a portfolio security is valued at cost adjusted
for amortization of premiums and accretion of discounts. Amortization of
premiums and accretion of discounts are included in interest income.
b) FAIR VALUE MEASUREMENTS: The Funds adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 157, "Fair Value
Measurements" ("SFAS 157"), effective April 1, 2008. SFAS 157 established
a three-tier hierarchy of inputs to establish classification of fair value
measurements for disclosure purposes. Inputs may be observable or
unobservable. Observable inputs reflect the assumptions market
participants would use in pricing the asset or liability developed based
on market data obtained from sources independent of the reporting entity.
Unobservable inputs reflect the reporting entity's own assumptions about
the assumptions market participants would use in pricing the asset or
liability developed based on the best information available in the
circumstances. The Funds' investments are assigned levels based upon the
observability.
The three-tier hierarchy of inputs is summarized below:
Level 1 - quoted prices in active markets for identical securities
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 - significant unobservable inputs (including the Funds' own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities.
The following is a summary of the valuation inputs, representing 100% of
the Funds' investments, used to value the Funds' net assets as of March
31, 2009:
VALUATION INPUTS INVESTMENTS IN SECURITIES
---------------- -------------------------
CASH FUND TAX-FREE FUND GOVERNMENT FUND
--------- ------------- ---------------
Level 1 - Quoted Prices ......... $ -- $ -- $ --
Level 2 - Other Significant
Observable Inputs .... 461,548,951 336,640,263 947,939,898
Level 3 - Significant
Unobservable Inputs .. -- -- --
------------ ------------ ------------
Total ........................... $461,548,951 $336,640,263 $947,939,898
============ ============ ============
c) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and losses
from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted for
amortization of premiums and accretion of discounts as discussed in 2a
above.
d) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The net
asset value per share for each class of each Fund's shares is determined
as of 4:00 p.m. New York time on each day that the New York Stock Exchange
and the custodian are open by dividing the value of the assets of the Fund
allocable to that class less Fund liabilities allocable to the class and
any liabilities charged directly to the class, exclusive of surplus, by
the total number of shares of the class outstanding.
e) MULTIPLE CLASS ALLOCATIONS: Investment income, realized and unrealized
gains and losses, if any, and expenses other than class specific expenses,
are allocated daily to each class of shares based upon the proportion of
net assets of each class. Class specific expenses are borne by the
affected class. Service fee payments under Rule 12b-1 are borne solely by
and charged to the Service Shares based on net assets of that class.
f) FEDERAL INCOME TAXES: It is the policy of each Fund to continue to qualify
as a regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain
investment companies. Each Fund intends to make distributions of income
and securities profits sufficient to relieve it from all, or substantially
all, Federal income and excise taxes.
The Funds adopted FASB Interpretation No. 48 "Accounting for Uncertainty
in Income Taxes" ("FIN 48"). Management has reviewed the tax positions for
each of the open tax years (2006-2009) and has determined that
implementation of FIN 48 did not have a material impact on the Funds'
financial statements.
g) REPURCHASE AGREEMENTS: It is each Fund's policy to monitor closely the
creditworthiness of all firms with which it enters into repurchase
agreements, and to take possession of, or otherwise perfect its security
interest in, securities purchased under agreements to resell. The
securities purchased under agreements to resell are marked to market every
business day in order to compare the value of the collateral to the amount
of the "loan" (repurchase agreements being defined as "loans" in the 1940
Act), including the accrued interest earned thereon. If the value of the
collateral is less than 102% of the loan plus the accrued interest
thereon, additional collateral is required from the borrower.
h) USE OF ESTIMATES: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ from
those estimates.
i) RECLASSIFICATION OF CAPITAL ACCOUNTS: Accounting principles generally
accepted in the United States of America require that certain components
of net assets relating to permanent differences be reclassified between
financial and tax reporting. These reclassifications have no effect on net
assets or net asset value per share. There were no reclassifications for
the year ended March 31, 2009.
j) ACCOUNTING PRONOUNCEMENT: In April 2009, the Financial Accounting
Standards Board ("FASB") issued FASB Staff Position No. 157-4,
"Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 provides
additional guidance for estimating fair value in accordance with FASB
Statement of Financial Accounting Standards No. 157, "Fair Value
Measurements" ("FAS 157"), when the volume and level of activity for the
asset or liability have significantly decreased as well as guidance on
identifying circumstances that indicate a transaction is not orderly. FSP
157-4 is effective for fiscal years and interim periods ending after June
15, 2009. Management is currently evaluating the impact the adoption of
FSP 157-4 will have on the Funds' financial statement disclosures.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
The Asset Management Group of Bank of Hawaii (the "Adviser"), serves as
Investment Adviser to the Funds. In this role, under Investment Advisory
Agreements, the Adviser supervises the Funds' investments and provides various
services. Aquila Investment Management LLC (the "Administrator"), a wholly-owned
subsidiary of Aquila Management Corporation, the Trust's founder and sponsor,
serves as the Administrator for the Trust under Administration Agreements with
the Funds. The Administrator provides all administrative services to the Funds
other than those relating to the investment portfolios. Specific details as to
the nature and extent of the services provided by the Adviser and the
Administrator are more fully defined in the Prospectus and Statement of
Additional Information of the Trust. Prior to July 16, 2008, the Adviser and the
Administrator each received a fee for their respective services which was paid
monthly and computed on the net assets of each Fund as of the close of business
each day at the following rates:
Cash Fund - On net assets up to $325 million, the fee was paid to the
Adviser and the Administrator at the annual rate of 0.33% and 0.17%,
respectively, and on net assets above that amount at the annual rate of
0.43% and 0.07%, respectively.
Tax-Free Fund - On net assets up to $95 million, the fee was paid to the
Adviser and the Administrator at the annual rate of 0.27% and 0.13%,
respectively, and on net assets above that amount at the annual rate of
0.33% and 0.07%, respectively.
Government Fund - On net assets up to $60 million, the fee was paid to the
Adviser and the Administrator at the annual rate of 0.27% and 0.13%,
respectively, and on net assets above that amount at the annual rate of
0.33% and 0.07%, respectively.
Prior to July 16, 2008, the agreements with both the Adviser and the
Administrator contained a provision that the management fees would be reduced,
but not below zero, by an amount equal to the pro-rata portion (based upon the
aggregate fees of the Adviser and the Administrator) of the amount, if any, by
which the total expenses of each Fund in any fiscal year, exclusive of taxes,
interest and brokerage fees, exceeded the lesser of (i) 2.5% of the first $30
million of average annual net assets of such fund plus 2% of the next $70
million of such assets and 1.5% of its average annual net assets in excess of
$100 million, or (ii) 25% of the Fund's total annual investment income. For the
period, April 1, 2008 through July 15, 2008, the contractual reduction required
on Advisory and Administrator fees amounted to $25,841 and $7,494, respectively,
for the Tax-Free Fund, and $156,519 and $34,309, respectively, for the
Government Fund. No such reduction in fees was required for the Cash Fund.
On July 16, 2008, the shareholders approved new Advisory and
Administrative agreements for each Fund. The new agreements eliminated the fee
limitations described above and reduced the
overall management fees for assets exceeding certain thresholds, thereby
providing shareholders with the benefits of economies of scale:
Cash Fund - On net assets up to $400 million, the fee is paid to the
Adviser and the Administrator at the annual rate of 0.397% and 0.103%,
respectively, and on net assets above that amount at the annual rate of
0.364% and 0.086%, respectively.
Tax-Free Fund - On net assets up to $300 million, the fee is paid to the
Adviser and the Administrator at the annual rate of 0.318% and 0.082%,
respectively, and on net assets above that amount at the annual rate of
0.285% and 0.065%, respectively.
Government Fund - On net assets up to $1,900 million, the fee is paid to
the Adviser and the Administrator at the annual rate of 0.328% and 0.072%,
respectively, and on net assets above that amount at the annual rate of
0.295% and 0.055%, respectively.
During the period, the Adviser and the Administrator (see note 3b below)
took action to maintain a positive yield for shareholders of the Funds. In
response to current market conditions, the Adviser and the Administrator have
waived and may continue to waive management fees. Additionally, distribution and
service fees have been reduced. While there is no contractual or other
requirement that such waivers and/or reductions in fees occur or continue, the
Adviser and the Administrator have informed the Trust that they intend to
continue to take reasonably practicable steps to maintain a positive yield for
shareholders of each of the Funds. Details of the waivers and reductions during
the period are as follows:
Advisory Administration Distribution
Fund Fee Fee Fee (note 3b) Total
-------------------------------------------------------------------------
Cash Fund $ -- $ -- $ 3,333 $ 3,333
Government Fund $276,348 $ 60,826 $311,593 $648,767
Under a Compliance Agreement with the Administrator, the Administrator is
compensated for Chief Compliance Officer related services provided to enable the
Trust to comply with Rule 38a-1 of the Investment Company Act of 1940.
Specific details as to the nature and extent of the services provided by
the Adviser and the Administrator are more fully defined in the Trust's
Prospectus and Statement of Additional Information.
b) DISTRIBUTION AND SERVICE FEES:
Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain
distribution or service fees by the Service Shares Class of the respective Fund.
Such payments are made to "Designated Payees" - broker-dealers, other financial
institutions and service providers who have entered into appropriate agreements
with the Distributor and which have rendered assistance in the distribution
and/or retention of the respective Fund's Service Shares or in the servicing of
Service Share accounts. The total payments under this part of a Fund's Plan may
not exceed 0.25% of its average annual assets represented by Service Shares. No
such payments will be made by the Original Share Class. For the year ended March
31, 2009, the fees incurred pursuant to the Plan were as follows: the Cash Fund
incurred fees of $379,809 of which $3,333 was waived; the Tax-Free Fund incurred
fees of $191,054 of which none was waived; and the Government Fund incurred fees
of $1,935,107 of which $311,593 was waived. Specific details about each Plan are
more fully defined in the Prospectus and Statement of Additional Information of
the Trust.
Under Distribution Agreements, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of each Fund's shares. No
compensation or fees are paid to the Distributor for such share distribution.
c) OTHER RELATED PARTY TRANSACTIONS:
For the year ended March 31, 2009, the following amounts were incurred for
legal fees allocable to Butzel Long PC, counsel to the Trust, for legal services
in conjunction with the respective Fund's ongoing operations: Cash Fund $56,407;
Tax-Free Fund $39,252; Government Fund $122,520. The Secretary of the Trust is a
shareholder in that firm.
4. GUARANTEES OF CERTAIN COMMERCIAL PAPER
Various banks and other institutions have issued irrevocable letters of
credit or guarantees for the benefit of the holders of certain commercial paper.
Payment at maturity of principal and interest of certain commercial paper held
by the Funds is supported by such letters of credit or guarantees.
5. EXPENSES
The Funds have negotiated an expense offset arrangement with their
custodian, wherein they receive credit toward the reduction of custodian fees
and other expenses whenever there are uninvested cash balances. The Statements
of Operations reflect the total expenses before any offset, the amount of offset
and the net expenses.
6. PORTFOLIO ORIENTATION
Since the Tax-Free Fund has a significant portion of its investments in
obligations of issuers within Hawaii, it is subject to possible risks associated
with economic, political, or legal developments or industrial or regional
matters specifically affecting Hawaii and whatever effects these may have upon
Hawaii issuers' ability to meet their obligations.
7. INCOME TAX INFORMATION AND DISTRIBUTIONS
The Funds declare dividends daily from net investment income and make
payments monthly in additional shares at the net asset value per share, in cash,
or a combination of both, at the shareholder's option.
In the Government Fund as of March 31, 2009, there were post-October
capital loss deferrals of $152,592, which will be recognized in the following
year.
The tax character of distributions during fiscal 2009 and 2008 were as
follows:
Cash Fund Tax-Free Fund Government Fund
-------------------------- -------------------------- --------------------------
2009 2008 2009 2008 2009 2008
----------- ----------- ----------- ----------- ----------- -----------
Ordinary income ........... $ 7,073,809 $18,391,172 $ -- $ 17 $16,155,662 $76,602,203
Net tax-exempt income ..... -- -- 3,927,281 7,290,811 -- --
Capital gain .............. -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total ..................... $ 7,073,809 $18,391,172 $ 3,927,281 $ 7,290,828 $16,155,662 $76,602,203
=========== =========== =========== =========== =========== ===========
As of March 31, 2009, the components of distributable earnings on a tax
basis were as follows:
Tax-Free Government
Cash Fund Fund Fund
--------- --------- ----------
Undistributed ordinary income .......... $ 350,878 $ 48,144 $ 59,902
Undistributed tax exempt income ........ -- 79,058 --
Post October capital loss .............. -- -- (152,592)
Accumulated net realized loss
on investments ....................... -- -- --
--------- --------- ---------
$ 350,878 $ 127,202 $ (92,690)
========= ========= =========
8. RECENT DEVELOPMENT RELATED TO THE TAX-FREE FUND
Over the past year, municipal bond insurance companies have been under
review by the three major rating agencies: Standard & Poor's Moody's and Fitch.
The ratings of some of the insurance companies have now either been downgraded
and/or have a negative outlook. The financial markets continue to assess the
severity of the losses caused by the subprime credit crisis and its impact on
municipal bond insurance companies and the prices of insured municipal
securities.
9. CONDITIONAL CREDIT PLEDGE
During the period of September 16, 2008 through November 9, 2008, the Cash
Fund was provided with support for certain of its holdings by Bank of Hawaii
Corporation ("BOHC"), a Delaware Corporation and parent company of the Adviser.
As a result, the aggregate market value of the Cash Fund's holdings increased.
This support included conditional credit pledges ("Pledges"), which were
provided on a daily basis, as needed.
BOHC's daily Pledges to the Cash Fund supported the value of one or more
portfolio holdings, when needed, in order to maintain the amortized cost value
of the relevant securities. If the Cash Fund was required to sell or liquidate
such holdings (which was never the case), BOHC pledged to fund the deficiency
between the amortized cost of each holding and the proceeds received, up to a
limit not to exceed an amount stated daily. Each Pledge expired on the following
day at 4 PM EDT
and BOHC reserved the right to cancel the Pledges prior to that time if it
determined that extraordinary circumstances affecting its exposure under the
Pledges had occurred.
The mark-to-market net asset value per share is calculated using the
market value of all securities in the Cash Fund. Had the Cash Fund not received
support for the designated securities, which had market values less than their
amortized cost, the Cash Fund's mark-to-market net asset value per share (under
Rule 2a-7) would have fallen below one dollar.
BOHC has no obligation to issue these Pledges in the future.
10. TREASURY GUARANTEE PROGRAM
In late September 2008, the U. S. Treasury announced the establishment of
a Temporary Money Market Funds Guarantee Program (the "Program"). The Program is
intended to add stability to the financial markets and to reassure money market
fund investors by protecting the value of those shares of participating money
market funds regulated by the Securities and Exchange Commission's Rule 2a-7 as
of the close of business on September 19, 2008.
The Program was subject to expiration on December 18, 2008 unless extended
by the Secretary of the Treasury, potentially through the close of business on
September 18, 2009. The initial three-month phase of the Program cost 0.01% of
the net asset value of participating funds.
The U.S. Treasury has subsequently announced two extensions of its
Program, the final phase of which begins on April 30th and extends through the
close of business on September 18, 2009. Each of the two extensions has been at
a cost of 0.015% of the net asset value of the participating Funds on September
19, 2008. Participation in the extensions has only been available to those funds
participating in the prior phases of the Program.
The Pacific Capital Funds of Cash Assets Trust have viewed the Program as
helpful in bringing additional stability to the credit markets of which money
market funds are a critical component. Accordingly, the Board of Trustees of the
Pacific Capital Funds of Cash Assets Trust unanimously approved participation in
the Program. All three money market funds, Cash Assets Trust, Tax-Free Cash
Assets Trust and U.S. Government Securities Cash Assets Trust (the "Funds"), are
covered under the Program through April 30, 2009. Cash Assets Trust and Tax-Free
Cash Assets Trust will additionally be covered through September 18, 2009. Since
U.S. Government Securities Cash Assets Trust invests primarily in agencies and
direct obligations of the U.S. Government, it was determined that the Fund would
not participate in the final phase of the Program.
Costs to participate in each of the phases of the Program are being borne
by the participating Funds.
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.014 0.043+ 0.046+ 0.032+ 0.014+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.014) (0.043) (0.046) (0.032) (0.014)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 1.42% 4.35% 4.75% 3.20% 1.36%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 333 $ 323 $ 287 $ 286 $ 366
Ratio of expenses to average net assets ............. 0.57% 0.57% 0.57% 0.58% 0.37%
Ratio of net investment income to
average net assets ................................ 1.39% 4.23% 4.65% 3.09% 1.39%
The expense and net investment income ratios without the effect of the 2005 Adviser's and Administrator's contractual caps on
fees and the 2009 waiver of a portion of distribution fees, were (note 3):
Ratio of expenses to average net assets ............. 0.57% ++ ++ ++ 0.57%
Ratio of net investment income to
average net assets ................................ 1.39% ++ ++ ++ 1.19%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.57% 0.56% 0.57% 0.58% 0.37%#
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.012 0.040+ 0.044+ 0.029+ 0.011+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.012) (0.040) (0.044) (0.029) (0.011)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 1.18% 4.09% 4.49% 2.94% 1.11%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 129 $ 141 $ 166 $ 169 $ 166
Ratio of expenses to average net assets ............. 0.82% 0.82% 0.82% 0.83% 0.61%
Ratio of net investment income to
average net assets ................................ 1.20% 3.98% 4.40% 2.91% 1.12%
The expense and net investment income ratios without the effect of the 2005 Adviser's and Administrator's contractual caps on
fees and the 2009 waiver of a portion of distribution fees, were (note 3):
Ratio of expenses to average net assets ............. 0.82% ++ ++ ++ 0.81%
Ratio of net investment income to
average net assets ................................ 1.20% ++ ++ ++ 0.91%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.82%0 0.81% 0.81% 0.83% 0.61%#
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
0 Net of waiver of a portion of distribution fees.
# Net of contractual caps on fees.
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.013 0.029+ 0.030+ 0.022+ 0.011+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.013) (0.029) (0.030) (0.022) (0.011)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 1.35% 2.90% 3.09% 2.21% 1.16%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 268 $ 225 $ 171 $ 133 $ 134
Ratio of expenses to average net assets ............. 0.48% 0.47% 0.50% 0.50% 0.29%
Ratio of net investment income to
average net assets ................................ 1.28% 2.80% 3.04% 2.20% 1.17%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees
and the waiver of a portion of distribution fees were (note 3):
Ratio of expenses to average net assets ............. 0.49% ++ ++ ++ 0.49%
Ratio of net investment income to
average net assets ................................ 1.27% ++ ++ ++ 0.96%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.48%# 0.47% 0.49% 0.50% 0.28%#
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.011 0.026+ 0.028+ 0.019+ 0.009+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.011) (0.026) (0.028) (0.019) (0.009)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 1.10% 2.64% 2.83% 1.96% 0.90%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 70 $ 71 $ 88 $ 93 $ 72
Ratio of expenses to average net assets ............. 0.73% 0.72% 0.75% 0.75% 0.53%
Ratio of net investment income to
average net assets ................................ 1.10% 2.55% 2.78% 1.94% 0.92%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees
and the waiver of a portion of distribution fees were (note 3):
Ratio of expenses to average net assets ............. 0.74% ++ ++ ++ 0.75%
Ratio of net investment income to
average net assets ................................ 1.09% ++ ++ ++ 0.71%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.73%# 0.72% 0.75% 0.75% 0.53%#
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
# Net of contractual caps on fees.
See accompanying notes to financial statements.
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.010 0.042+ 0.047+ 0.032+ 0.014+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.010) (0.042) (0.047) (0.032) (0.014)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 1.03% 4.30% 4.80% 3.25% 1.41%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 625 $ 808 $ 685 $ 429 $ 354
Ratio of expenses to average net assets ............. 0.43% 0.43% 0.44% 0.45% 0.27%
Ratio of net investment income to
average net assets ................................ 1.06% 4.18% 4.72% 3.25% 1.42%
The expense and net investment income ratios without the effect of Adviser's and Administrator's contractual caps on fees
and/or 2009 voluntary waiver of a portion of distribution fees were (note 3):
Ratio of expenses to average net assets ............. 0.47% ++ ++ ++ 0.45%
Ratio of net investment income to
average net assets ................................ 1.03% ++ ++ ++ 1.24%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.43%#0 0.43% 0.44% 0.45% 0.27%#
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
-------- -------- -------- -------- --------
Net asset value, beginning of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............................... 0.008 0.040+ 0.045+ 0.030+ 0.012+
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................ (0.008) (0.040) (0.045) (0.030) (0.012)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return .......................................... 0.84% 4.04% 4.54% 3.00% 1.16%
Ratios/supplemental data
Net assets, end of period (in millions) ............. $ 325 $ 1,099 $ 1,079 $ 887 $ 578
Ratio of expenses to average net assets ............. 0.64% 0.68% 0.69% 0.70% 0.52%
Ratio of net investment income to
average net assets ................................ 1.00% 3.93% 4.46% 3.02% 1.16%
The expense and net investment income ratios without the effect of Adviser's and Administrator's contractual caps on fees
and/or 2009 voluntary waiver of a portion of distribution fees were (note 3):
Ratio of expenses to average net assets ............. 0.71% ++ ++ ++ 0.70%
Ratio of net investment income to
average net assets ................................ 0.92% ++ ++ ++ 0.98%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............. 0.64%#0 0.68% 0.69% 0.70% 0.52%#
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
# Net of contractual caps on fees.
0 Net of voluntary waiver of Adviser's and Administrator's fees and in the
case of the Service Shares, waiver of a portion of distribution fees.
See accompanying notes to financial statements.
ADDITIONAL INFORMATION (UNAUDITED)
TRUSTEES AND OFFICERS(1)(2)
NUMBER OF
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
INTERESTED TRUSTEE(6)
Diana P. Herrmann Vice Chair Vice Chair and Chief Executive Officer of 12 ICI Mutual Insurance
New York, NY of the Board Aquila Management Corporation, Founder Company
(02/25/58) of Trustees of the Aquila Group of Funds and parent of
since 2003, Aquila Investment Management LLC,
President Administrator since 2004, President since
since 1998 1997, Chief Operating Officer, 1997-2008,
and Trustee a Director since 1984, Secretary since 1986
since 2004 and previously its Executive Vice President,
Senior Vice President or Vice President,
1986-1997; Chief Executive Officer and
Vice Chair since 2004, President and
Manager of the Administrator since 2003,
and Chief Operating Officer of the
Administrator, 2003-2008; Chair, Vice Chair,
President, Executive Vice President or Senior
Vice President of funds in the Aquila Group
of Funds since 1986; Director of the
Distributor since 1997; Governor,
Investment Company Institute (a trade
organization for the U.S. mutual fund
industry dedicated to protecting shareholder
interests and educating the public about
investing) and head of its Small Funds
Committee since 2004; active in charitable
and volunteer organizations.
NUMBER OF
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
NON-INTERESTED TRUSTEES
Theodore T. Mason Chair of the Executive Director, East Wind Power 8 Trustee, Premier VIT.
New York, NY Board of Partners LTD since 1994 and Louisiana
(11/24/35) Trustees Power Partners, 1999-2003; Treasurer, Fort
since 2004 Schuyler Maritime Alumni Association, Inc.,
and Trustee successor to Alumni Association of SUNY
since 1984 Maritime College, since 2004 (President,
2002-2003, First Vice President, 2000-2001,
Second Vice President, 1998-2000) and
director of the same organization since
1997; Director, STCM Management
Company, Inc., 1973-2004; twice national
officer of Naval Reserve Association,
Commanding Officer of four naval reserve
units and Captain, USNR (Ret); director, The
Navy League of the United States New York
Council since 2002; trustee, The Maritime
Industry Museum at Fort Schuyler, 2000-2004;
and Fort Schuyler Maritime Foundation, Inc.,
successor to the Maritime College at Fort
Schuyler Foundation, Inc., since 2000.
Thomas W. Courtney Trustee President, Courtney Associates, Inc., a 5 Chairman of the Board of
Sewickley, PA since 1984 venture capital firm, since 1988. Oppenheimer Quest
(08/1 7/3 3) Value Funds Group,
Oppenheimer Small Cap
Value Fund,
Oppenheimer Midcap
Fund, and Oppenheimer
Rochester Group of
Funds; Chairman oft he
Board of Premier VIT.
NUMBER OF
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
Stanley W. Hong Trustee President, Waste Management of Hawaii, 4 Trustee, Pacific Capital
Honolulu, HI since 1993 Inc. and Corporate Vice President - Hawaii Funds(R), which includes
(04/05/36) Area for Waste Management, Inc., 2001- 12 bond and stock funds;
2005; Trustee, The King William Charles First Insurance Co. of
Lunalilo Trust Estate since 2001; President Hawaii, Ltd., Lanihau
and Chief Executive Officer, The Chamber Properties, Ltd., The
of Commerce of Hawaii, 1996-2001; Westye Group - West
Director PBS - Hawaii Foundation since (Hawaii), Inc., Heald
1998; Regent, Chaminade University of Education LLC.
Honolulu since 1991; Trustee, the Nature
Conservancy of Hawaii since 1998; Trustee,
Child and Family Service since 2005;
Director, The East West Center Foundation
since 2006; St. Louis School since 2007;
and a director of other corporate and
community organizations.
Russell K. Okata Trustee Executive Director, Hawaii Government 5 Trustee, Pacific Capital
Honolulu, HI since 1993 Employees Association AFSCME Local 152, Funds(R), which includes
(03/22/44) AFL-CIO 1981-2007; International Vice 12 bond and stock funds.
President, American Federation of State,
County and Municipal Employees, AFL-CIO
1981-2007; director of various civic and
charitable organizations.
Douglas Philpotts Trustee Retired; formerly director, Chairman of the 4 Trustee, Pacific Capital
Honolulu, HI since 1992 Board and President of Hawaiian Trust Funds(R), which includes
(11/21/31) Company, Limited, a predecessor of The 12 bond and stock funds.
Asset Management Group of Bank of Hawaii;
present or former director of various Hawaii-
based civic and charitable organizations.
Oswald K. Stender Trustee Director, Hawaiian Electric Industries, Inc., 4 Trustee, Pacific Capital
Honolulu, HI since 1993 a public utility holding company, 1993- Funds(R), which includes
(10/08/31) 2004; trustee, the Bernice Pauahi Bishop 12 bond and stock funds;
Estate 1990-1999; trustee, Office of director, Grace Pacific
Hawaiian Affairs and a member or trustee of Corporation, an asphalt
several community organizations. paving company, ACE
Trucking Inc. and
Hawaiian Telecom, a
telephone company
(communications).
NUMBER OF
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
OTHER INDIVIDUALS
CHAIRMAN EMERITUS(8)
Lacy B. Herrmann Founder and Founder and Chairman of the Board, Aquila N/A N/A
New York, NY Chairman Management Corporation, the sponsoring
(05/12/29) Emeritus organization and parent of the Manager or
since 2004, Administrator and/or Adviser or Sub-Adviser
Trustee, to each fund of the Aquila Group of Funds;
1984-2004, Chairman of the Manager or Administrator
and Chairman and/or Adviser or Sub-Adviser to each since
of the Board 2004; Founder and Chairman Emeritus of
of Trustees, each fund in the Aquila Group of Funds;
1984-2003 previously Chairman and a Trustee of each
fund in the Aquila Group of Funds since its
establishment until 2004 or 2005; Director
of the Distributor since 1981 and formerly
Vice President or Secretary, 1981-1998;
Trustee Emeritus, Brown University and the
Hopkins School; active in university, school
and charitable organizations.
OFFICERS
Charles E. Childs, III Executive Vice Executive Vice President of all funds in the N/A N/A
New York, NY President since Aquila Group of Funds and the Administrator
(04/01/57) 2003 and the Administrator's parent since 2003;
Executive Vice President and Chief Operating
Officer of the Administrator's parent since
2008; formerly Senior Vice President,
corporate development, Vice President,
Assistant Vice President and Associate of the
Administrator's parent since 1987; Senior
Vice President, Vice President or Assistant
Vice President of the Aquila Money-Market
Funds, 1988-2003.
Sherri Foster Vice President Senior Vice President, Hawaiian Tax-Free N/A N/A
Lahaina, HI since 1997 Trust since 1993 and formerly Vice President
(07/27/50) or Assistant Vice President; Vice President
since 1997 and formerly Assistant Vice
President of the three Aquila Money-Market
Funds; Vice President, Aquila Rocky
Mountain Equity Fund since 2006;
Registered Representative of the Distributor
since 1985.
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
John M. Herndon Vice President Assistant Secretary of the Aquila Group of N/A N/A
New York, NY since 1990 Funds since 1995 and Vice President of the
(12/17/39) and Assistant three Aquila Money-Market Funds since 1990;
Secretary Vice President of the Administrator or its
since 1995 predecessor and current parent since 1990.
Robert W. Anderson Chief Chief Compliance Officer of the Trust and N/A N/A
New York, NY Compliance each of the other funds in the Aquila Group
(08/23/40) Officer of Funds, the Administrator and the
since 2004 Distributor since 2004, Compliance Officer
and Assistant of the Administrator or its predecessor and
Secretary current parent 1998-2004; Assistant
since 2000 Secretary of the Aquila Group of Funds
since 2000.
Joseph P. DiMaggio Chief Chief Financial Officer of the Aquila Group N/A N/A
New York, NY Financial of Funds since 2003 and Treasurer since
(11/06/56) Officer 2000.
since 2003
and Treasurer
since 2000
Edward M.W. Hines Secretary Shareholder of Butzel Long, a professional N/A N/A
New York, NY since 1984 corporation, counsel to the Trust, since 2007;
(12/16/39) Partner of Hollyer Brady Barrett & Hines
LLP, its predecessor as counsel, 1989-2007;
Secretary of the Aquila Group of Funds.
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
Lori A. Vindigni Assistant Assistant Treasurer of the Aquila Group of N/A N/A
New York, NY Treasurer Funds since 2000; Assistant Vice President
(11/02/66) since 2000 of the Administrator or its predecessor and
current parent since 1998; Fund Accountant
of the Aquila Group of Funds, 1995-1998.
- ----------
(1) The Trust's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free) or by visiting the EDGAR Database at the SEC's
internet site at www.sec.gov.
(2) From time to time Bank of Hawaii may enter into normal investment
management, commercial banking and lending arrangements with one or more of the
Trustees of the Trust and their affiliates. The Asset Management Group of Bank
of Hawaii is the Trust's investment adviser.
(3) The mailing address of each Trustee and officer is c/o Pacific Capital
Funds(R) of Cash Assets Trust, 380 Madison Avenue, Suite 2300, New York, NY
10017.
(4) Because the Trust does not routinely hold annual meetings, each Trustee
holds office for an indeterminate term. The term of office of each officer is
one year.
(5) Includes certain Aquila-sponsored funds that are dormant and have no public
shareholders.
(6) Ms. Herrmann is an interested person of the Trust as an officer of the
Trust, as a director, officer and shareholder of the Administrator's corporate
parent, as an officer and Manager of the Administrator, and as a shareholder and
director of the Distributor. Ms. Herrmann is the daughter of Lacy B. Herrmann,
the Founder and Chairman Emeritus of the Trust.
(7) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Municipal Bond
Funds"; Aquila Rocky Mountain Equity Fund is an equity fund; Aquila Three Peaks
High Income Fund is a high income corporate bond fund; considered together,
these 12 funds, which do not include the dormant funds described in footnote 5,
are called the "Aquila Group of Funds."
(8) The Chairman Emeritus may attend Board meetings but has no voting power.
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED)
As a shareholder of the Trust, you may incur ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. The table
below is intended to help you understand your ongoing costs (in dollars) of
investing in each of the Funds and to compare these costs with the ongoing costs
of investing in other mutual funds.
The table below is based on an investment of $1,000 invested on October 1,
2008 and held for the six months ended March 31, 2009.
ACTUAL EXPENSES
This table provides information about actual account values and actual
expenses. You may use the information provided in this table, together with the
amount you invested, to estimate the expenses that you paid over the period. To
estimate the expenses you paid on your account, divide your ending account value
by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6),
then multiply the result by the number under the heading entitled "Expenses Paid
During the Period".
SIX MONTHS ENDED MARCH 31, 2009
BEGINNING ENDING EXPENSES
ACTUAL ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 0.34% $1,000.00 $1,003.40 $ 2.95
Service Shares 0.22% $1,000.00 $1,002.20 $ 4.19
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 0.41% $1,000.00 $1,004.10 $ 2.50
Service Shares 0.29% $1,000.00 $1,002.90 $ 3.75
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 0.15% $1,000.00 $1,001.50 $ 2.25
Service Chares 0.09% $1,000.00 $1,000.90 $ 3.29
- --------------------------------------------------------------------------------
(1) ASSUMES REINVESTMENT OF ALL DIVIDENDS. TOTAL RETURN IS NOT ANNUALIZED, AS
IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
(2) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.59% AND 0.84%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.50% AND
0.75%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.45% AND 0.66%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD,
MULTIPLIED BY 182/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED) (CONTINUED)
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio and an assumed rate of
return of 5.00% per year before expenses, which is not the actual return of each
of the respective Funds. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use the information provided in this table to compare the
ongoing costs of investing in the portfolios of the Trust and other mutual
funds. To do so, compare this 5.00% hypothetical example relating to the
respective Fund with the 5.00% hypothetical examples that appear in the
shareholder reports of other mutual funds.
SIX MONTHS ENDED MARCH 31, 2009
HYPOTHETICAL
ANNUALIZED BEGINNING ENDING EXPENSES
TOTAL ACCOUNT ACCOUNT PAID DURING
RETURN VALUE VALUE THE PERIOD
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000.00 $1,021.99 $ 2.97
Service Shares 5.00% $1,000.00 $1,020.74 $ 4.23
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 5.00% $1,000.00 $1,022.44 $ 2.52
Service Shares 5.00% $1,000.00 $1,021.19 $ 3.78
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 5.00% $1,000.00 $1,022.72 $ 2.27
Service Chares 5.00% $1,000.00 $1,021.67 $ 3.33
- --------------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.59% AND 0.84%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.50% AND
0.75%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.45% AND 0.66%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD,
MULTIPLIED BY 182/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
This information is presented in order to comply with a requirement of the
Internal Revenue Code. NO CURRENT ACTION ON THE PART OF SHAREHOLDERS IS
REQUIRED.
For the fiscal year ended March 31, 2009, $3,927,281 of dividends paid by
the Tax-Free Fund were exempt-interest dividends. For the Cash Fund and the
Government Fund all of the dividends paid were ordinary dividend income.
Prior to January 31, 2009, shareholders were mailed the appropriate tax
form(s) which contained information on the status of distributions paid for the
2008 CALENDAR YEAR.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquila Group of Funds
produce is automatically sent to you and all other shareholders. Specifically,
you are routinely sent the entire list of portfolio securities of your Trust
twice a year in the semi-annual and annual reports you receive. Additionally, we
prepare, and have available portfolio listings at the end of each quarter.
Whenever you may be interested in seeing a listing of your Trust's portfolios
other than in your shareholder reports, please check our website
http://www.aquilafunds.com or call us at 1-800-437-1020.
The Trust additionally files a complete list of its portfolio holdings for
each of the three portfolios with the SEC for the first and third quarters of
each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC
website at http://www.sec.gov. You may also review or, for a fee, copy the forms
at the SEC's Public Reference Room in Washington, D.C. or by calling
800-SEC-0330.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY VOTING RECORD (UNAUDITED)
The three portfolios of the Trust do not invest in equity securities.
Accordingly, there were no matters relating to a portfolio security considered
at any shareholder meeting held during the 12 months ended June 30, 2008 with
respect to which any of the three portfolios of the Trust were entitled to vote.
Applicable regulations require us to inform you that the foregoing proxy voting
information is available on the SEC website at http://www.sec.gov.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIVACY NOTICES (UNAUDITED)
PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST
OUR PRIVACY POLICY. In providing services to you as an individual who owns or is
considering investing in shares of the Trust, we collect certain non-public
personal information about you. Our policy is to keep this information strictly
safeguarded and confidential, and to use or disclose it only as necessary to
provide services to you or as otherwise permitted by law. Our privacy policy
applies equally to former shareholders and persons who inquire about the Trust.
INFORMATION WE COLLECT. "Non-public personal information" is personally
identifiable financial information about you as an individual or your family.
The kinds of non-public personal information we have about you may include the
information you provide us on your share purchase application or in telephone
calls or correspondence with us, and information about your fund transactions
and holdings, how you voted your shares and the account where your shares are
held.
INFORMATION WE DISCLOSE. We disclose non-public personal information about you
to companies that provide necessary services to us, such as the Trust's transfer
agent, distributor, investment adviser or sub-adviser, as permitted or required
by law, or as authorized by you. Any other use is strictly prohibited. We do not
sell information about you or any of our fund shareholders to anyone.
NON-CALIFORNIA RESIDENTS: We also may disclose some of this information to
another fund in the Aquila Group of Funds (or its service providers) under joint
marketing agreements that permit the funds to use the information only to
provide you with information about other funds in the Aquila Group of Funds or
new services we are offering that may be of interest to you.
CALIFORNIA RESIDENTS ONLY: In addition, unless you "opt-out" of the following
disclosures using the form that was mailed to you under separate cover, we may
disclose some of this information to another fund in the Aquila Group of Funds
(or its service providers) under joint marketing agreements that permit the
funds to use the information only to provide you with information about other
funds in the Aquila Group of Funds or new services we are offering that may be
of interest to you.
HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to non-public personal
information about you to only those persons who need it to provide services to
you or who are permitted by law to receive it. We maintain physical, electronic
and procedural safeguards to protect the confidentiality of all non-public
personal information we have about you.
If you have any questions regarding our Privacy Policy, please contact us at
1-800-437-1020.
AQUILA DISTRIBUTORS, INC.
AQUILA INVESTMENT MANAGEMENT LLC
This Privacy Policy also has been adopted by Aquila Distributors, Inc. and
Aquila Investment Management LLC and applies to all non-public information about
you that each of these companies may obtain in connection with services provided
to the Trust or to you as a shareholder of the Trust.
- --------------------------------------------------------------------------------
(THIS PAGE INTENTIONALLY LEFT BLANK)
INVESTMENT ADVISER
Asset Management Group of Bank of Hawaii
P.O. Box 3170 o Honolulu, Hawaii 96802
ADMINISTRATOR
Aquila Investment Management LLC
380 Madison Avenue, Suite 2300 o New York, New York 10017
BOARD OF TRUSTEES
Theodore T. Mason, Chair
Diana P. Herrmann, Vice Chair
Thomas W. Courtney
Stanley W. Hong
Russell K. Okata
Douglas Philpotts
Oswald K. Stender
FOUNDER AND CHAIRMAN EMERITUS
Lacy B. Herrmann
OFFICERS
Diana P. Herrmann, President
Charles E. Childs, III, Executive Vice President
Sherri Foster, Vice President
Robert W. Anderson, Chief Compliance Officer
Joseph P. DiMaggio, Chief Financial Officer and Treasurer
Edward M.W. Hines, Secretary
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300 o New York, New York 10017
TRANSFER AND SHAREHOLDER SERVICING AGENT
PNC Global Investment Servicing
101 Sabin Street o Pawtucket, RI 02860
CUSTODIAN
JPMorgan Chase Bank, N.A.
1111 Polaris Parkway o Columbus, Ohio 43240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400 o Philadelphia, PA 19103
Further information is contained in the Prospectus
which must precede or accompany this report.
ITEM 2. CODE OF ETHICS.
(a) As of March 31, 2009 (the end of the reporting period) the
Trust has adopted a code of ethics that applies to the Trust's
principal executive officer(s)and principal financial officer(s)
and persons performing similar functions ("Covered Officers") as
defined in the Aquila Group of Funds Code of Ethics for Principal
Executive and Senior Financial Officers under Section 406 of the
Sarbanes-Oxley Act of 2002;
(f)(1) Pursuant to Item 10(a)(1), a copy of the Trust's Code of
Ethics that applies to the Trust's principal executive officer(s)
and principal financial officer(s) and persons performing similar
functions is included as an exhibit to its annual report on this
Form N-CSR;
(f)(2) The text of the Trust's Code of Ethics that applies to the
Trust's principal executive officer(s) and principal financial
officer(s) and persons performing similar functions has been
posted on its Internet website which can be found at the Trust's
Internet address at aquilafunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1)(ii) The Board of Trustees of the Fund has determined that
it does not have at least one audit committee financial expert
serving on its audit committee. The Fund does not have such a
person serving on the audit committee because none of the persons
currently serving as Trustees happens to have the technical
accounting and auditing expertise included in the definition of
"audit committee financial expert" recently adopted by the Securities
and Exchange Commission in connection with this Form N-CSR, and the
Board has not heretofore deemed it necessary to seek such a person
for election to the Board.
The primary mission of the Board, which is that of oversight over
the operations and affairs of the Fund, confronts the Trustees with
a wide and expanding range of issues and responsibilities. The
Trustees believe that, accordingly, it is essential that the Board's
membership consist of persons with as extensive experience as possible
in fulfilling the duties and responsibilities of mutual fund directors
and audit committee members and, ideally, with extensive experience
and background relating to the economic and financial sectors and
securities in which the Fund invests, including exposure to the
financial and accounting matters commonly encountered with respect
to those sectors and securities. The Board believes that its current
membership satisfies those criteria. It recognizes that it would
also be helpful to have a member with the relatively focused accounting
and auditing expertise reflected in the applicable definition of
"audit committee financial expert," just as additional members with
similarly focused technical expertise in other areas relevant to
the Fund's operations and affairs would also contribute added value.
However, the Board believes that the Fund is better served, and its
assets better employed, by a policy of hiring experts in various
the specialized area of technical accounting and
auditing matters, if and as the Board identifies the need, rather
than by seeking to expand its numbers by adding technical experts
in the areas constituting its domain of responsibility. The Fund's
Audit Committee Charter explicitly authorizes the Committee to
retain such experts as it deems necessary in fulfilling its duties
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
a) Audit Fees - The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the Registrant's
annual financial statements were $13,000 in 2008 and $13,600 in 2009.
b) Audit Related Fees - There were no amounts billed for audit-related
fees over the past two years.
c) Tax Fees - The Registrant was billed by the principal accountant
$1,500 and $1,600 in 2008 and 2009, respectively, for return preparation
and tax compliance.
d) All Other Fees - There were no additional fees paid for audit and
non-audit services other than those disclosed in a) thorough c) above.
e)(1) Currently, the audit committee of the Registrant pre-approves audit
services and fees on an engagement-by-engagement basis
e)(2) None of the services described in b) through d) above were approved
by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X, all were pre-approved on an engagement-by-engagement basis.
f) No applicable.
g) There were no non-audit services fees billed by the Registrant's accountant
to the Registrant's investment adviser or distributor over the past two years
h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included in Item 1 above
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Board of Directors of the Registrant has adopted a Nominating
Committee Charter which provides that the Nominating Committee (the 'Committee')
may consider and evaluate nominee candidates properly submitted by shareholders
if a vacancy among the Independent Trustees of the Registrant occurs and if,
based on the Board's then current size, composition and structure, the Committee
determines that the vacancy should be filled. The Committee will consider
candidates submitted by shareholders on the same basis as it considers and
evaluates candidates recommended by other sources. A copy of the qualifications
and procedures that must be met or followed by shareholders to properly submit
a nominee candidate to the Committee may be obtained by submitting a request
in writing to the Secretary of the Registrant.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the
Investment Company Act of 1940) as of a date within 90 days of
the fling of this report, the registrant's chief financial and
executive officers have concluded that the disclosure controls
and procedures of the registrant are appropriately designed to
ensure tat information required to be disclosed in the
registrant's reports that are filed under the Securities Exchange
Act of 1934 are accumulated and communicated t registrant's
management, including its principal executive officer(s) and
principal financial officer(s), to allow timely decisions regarding
required disclosure and is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms
adopted by the Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation, including no significant deficiencies or material
weaknesses that required corrective action.
ITEM 12. EXHIBITS.
(a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and
Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act
of 2002.
(a)(2) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the Investment
Company Act of 1940.
(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(b) under the Investment
Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the registrant has
duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CASH ASSETS TRUST
By: /s/ Diana P. Herrmann
- ----------------------------------
Vice Chair, President and Trustee
June 3, 20009
By: /s/ Joseph P. DiMaggio
- ------------------------------------
Chief Financial Officer and Treasurer
June 3, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By: /s/ Diana P. Herrmann
- ----------------------------------
Diana P. Herrmann
Vice Chair, President and Trustee
June 3, 2009
By: /s/ Joseph P. DiMaggio
- ------------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
June 3, 2009
CASH ASSETS TRUST
EXHIBIT INDEX
(a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and
Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act
of 2002.
(a) (2) Certifications of principal executive officer
and principal financial officer as required by Rule 30a-2(a)
under the Investment Company Act of 1940.
(b) Certification of chief executive officer and chief financial
officer as required by Rule 30a-2(b) of the Investment Company Act
of 1940.