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 811-6239
Tax-Free Fund for Utah
(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: 6/30/08
Date of reporting period: 12/31/08
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
REPORT
DECEMBER 31, 2008
[LOGO OF TAX-FREE FUND FOR UTAH:
A RECTANGLE CONTAINING DESERT BOULDERS WITH THE SUN RISING BEHIND THEM](R)
TAX-FREE FUND FOR
UTAH
A TAX-FREE INCOME INVESTMENT
[LOGO OF THE AQUILA
GROUP OF FUNDS: ONE OF THE
AN EAGLE'S HEAD] AQUILA GROUP OF FUNDS(R)
[LOGO OF TAX-FREE FUND FOR UTAH:
A RECTANGLE CONTAINING DESERT BOULDERS
WITH THE SUN RISING BEHIND THEM](SM)
SERVING UTAH INVESTORS FOR MORE THAN 15 YEARS
TAX-FREE FUND FOR UTAH
"PROPER ASSET ALLOCATION -
A STRATEGY FOR ALL SEASONS"
February, 2009
The market has definitely been volatile enough recently to cause even the
most seasoned investor to ask, "What should I do now?"
We believe you will be in a better position to weather this, or any,
economic storm, if your portfolio is built with a strong foundation. In short,
is your portfolio properly allocated based on your specific needs?
As you hopefully already know, asset allocation is an investment strategy
that strives to balance risk and reward by diversifying assets according to your
specific desires. These include:
o investment time horizon (specifically your age and retirement
objectives);
o risk threshold (how much of your investment capital you are willing
to lose during a given time frame);
o financial situation (your wealth, income, expenses, tax bracket,
liquidity needs, etc.); and
o goals (the financial goals you and your family want to achieve).
Since the three main asset classes - equities, fixed-income, and cash/cash
equivalents - have different levels of risk and return, each is expected to
behave differently over time. The objective of asset allocation is to create a
diversified portfolio with an acceptable level of risk and the highest possible
return given that level of risk.
Although there is no simple formula that can find the right asset
allocation for every individual, the consensus among most financial
professionals is that asset allocation is one of the most important decisions
that investors make.
NOT A PART OF THE SEMI-ANNUAL REPORT
The way you allocate your investment among stocks, bonds, and cash/cash
equivalents will be the principal determinant of your investment results -
secondary to your selection of individual securities.
Once you and your financial professional have developed an appropriate
asset allocation for your portfolio, we believe that changes should be made
based on need, not on scary headlines.
A properly constructed portfolio with sound asset allocation should be in
a good position to weather all seasons.
Sincerely,
/s/ Lacy B. Herrmann /s/ Diana P. Herrmann
Lacy B. Herrmann Diana P. Herrmann
Founder and Chairman Emeritus President
NOT A PART OF THE SEMI-ANNUAL REPORT
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (16.7%) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
CITY, COUNTY AND STATE (7.9%)
Alamo, Texas Community College District
$ 595,000 4.375%, 02/15/25 MBIA Insured ........................... Aa2/AA $ 549,548
Anderson, Indiana San District
505,000 4.600%, 07/15/23 AMBAC Insured .......................... A3/A 473,993
Cedar City, Utah Special Improvement District
Assessment
235,000 5.050%, 09/01/10 ........................................ NR/NR* 225,309
215,000 5.200%, 09/01/11 ........................................ NR/NR* 200,840
Cedar Park, Texas
835,000 4.500%, 02/15/22 MBIA Insured ........................... A1/AA 813,975
Coral Canyon, Utah Special Service District
40,000 4.850%, 07/15/17 ........................................ NR/NR* 102,003
580,000 5.700%, 07/15/18 ........................................ NR/NR* 436,943
Dawson County, Texas Hospital District
555,000 4.375%, 02/15/24 AMBAC Insured .......................... Baa1/A 487,090
Denton County, Texas
700,000 4.500%, 07/15/24 MBIA Insured ........................... Aa1/AA+ 673,484
400,000 4.500%, 07/15/25 MBIA Insured ........................... Aa1/AA+ 376,308
1,500,000 4.250%, 07/15/27 MBIA Insured ........................... Aa1/AA+ 1,315,815
Harris County, Texas Unlimited Tax
300,000 4.500%, 10/01/23 ........................................ Aa1/AAA 294,906
Harris County, Texas Utility District #268
905,000 4.375%, 09/01/27 Radian Insured ......................... A3/BBB+ 725,285
Hurricane, Utah
65,000 5.400%, 11/01/09 Radian Insured ......................... A3/A 66,850
King County, Washington Unlimited Tax
1,000,000 4.500%, 12/01/25 FSA Insured ............................ Aaa/AAA 958,780
Laredo, Texas
300,000 4.250%, 08/15/21 AMBAC Insured .......................... Aa3/AA 291,144
500,000 4.500%, 02/15/24 AMBAC Insured .......................... Aa3/AA 481,390
McKinney, Texas
1,700,000 4.500%, 08/15/23 Syncora Guarantee Inc. Insured ......... Aa2/AA+ 1,636,437
1,375,000 5.000%, 08/15/24 AMBAC Insured .......................... Aa2/AA+ 1,395,460
695,000 4.375%, 08/15/25 MBIA Insured ........................... Aa2/AA+ 641,631
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
CITY, COUNTY AND STATE (CONTINUED)
Mesquite, Texas
$ 510,000 4.625%, 02/15/22 FSA Insured ............................ Aaa/AAA $ 510,383
San Antonio, Texas
125,000 4.750%, 02/01/24 FSA Insured ............................ Aaa/AAA 124,331
San Patricio County, Texas
450,000 4.600%, 04/01/25 AMBAC Insured .......................... Aa3/NR 426,181
Texas State
415,000 4.500%, 08/01/22 ........................................ Aa1/AA 407,136
Waco, Texas
2,560,000 4.500%, 02/01/24 MBIA Insured ........................... Aa3/AA 2,398,694
Washington County, Utah
1,250,000 5.000%, 10/01/22 MBIA Insured ........................... A1/NR 1,260,912
Williamson County, Texas
460,000 4.500%, 02/15/26 FSA Insured ............................ Aaa/AAA 426,935
--------------
Total City, County and State ............................ 17,701,763
--------------
SCHOOL DISTRICT (8.8%)
Borger, Texas Independent School District
400,000 4.500%, 02/15/24 ........................................ NR/AAA 385,112
500,000 4.500%, 02/15/25 ........................................ NR/AAA 469,695
Canutillo, Texas Independent School District
500,000 4.500%, 08/15/25 ........................................ NR/AAA 468,250
Clint, Texas Independent School District
265,000 4.250%, 02/15/28 ........................................ NR/AAA 229,736
Dripping Springs, Texas Independent School District
25,000 4.375%, 08/15/22 ........................................ Aaa/AAA 704,316
Eagle Mountain & Saginaw, Texas Independent
School District
300,000 4.750%, 08/15/21 ........................................ Aaa/AAA 304,062
525,000 4.750%, 08/15/23 ........................................ Aaa/AAA 524,428
Freemont County, Wyoming School District #14
355,000 4.500%, 06/15/26 ........................................ NR/BBB 332,759
Frisco, Texas Independent School District
1,260,000 5.000%, 07/15/26 ........................................ Aaa/NR 1,266,010
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
SCHOOL DISTRICT (CONTINUED)
Galena Park, Texas Independent School District
$ 295,000 4.625%, 08/15/25 ........................................ Aaa/NR $ 283,247
Harrisburg, South Dakota Independent School
District No. 41-2
1,370,000 4.500%, 01/15/24 FSA Insured ............................ Aa3/NR 1,323,489
Jacksboro, Texas Independent School District
815,000 4.700%, 02/15/23 ........................................ NR/AAA 814,128
La Feria, Texas Independent School District
210,000 4.400%, 02/15/24 ........................................ Aaa/NR 197,083
Lancaster, Texas School District
300,000 4.375%, 02/15/22 ........................................ Aaa/AAA 291,669
Lindale, Texas Independent School District
440,000 4.250%, 02/15/21 ........................................ NR/AAA 429,396
1,000,000 4.250%, 02/15/22 ........................................ NR/AAA 960,080
445,000 4.375%, 02/15/23 ........................................ NR/AAA 427,520
Lovejoy, Texas Independent School District
200,000 4.500%, 02/15/24 ........................................ Aaa/AAA 192,556
Muleshoe, Texas Independent School District
380,000 4.500%, 02/15/22 ........................................ NR/AAA 363,033
250,000 4.500%,0 2/15/23 ........................................ NR/AAA 235,045
200,000 4.500%, 02/15/24 ........................................ NR/AAA 185,766
220,000 4.500%, 02/15/25 ........................................ NR/AAA 202,792
Navasota, Texas Independent School District
475,000 5.000%, 08/15/23 FGIC Insured ........................... A3/NR 474,487
Prosper, Texas Independent School District
395,000 4.125%, 08/15/21 ........................................ NR/AAA 380,480
Southern, Texas Independent School District
910,000 4.500%, 02/01/26 ........................................ Aaa/AAA 845,608
Spring, Texas Independent School District
300,000 4.750%, 08/15/23 ........................................ Aaa/AAA 299,673
1,400,000 4.500%, 08/15/27 ........................................ Aaa/AAA 1,265,348
Uintah County, Utah School District
455,000 4.250%, 02/01/24 ........................................ Aaa/NR 425,252
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
SCHOOL DISTRICT (CONTINUED)
Van, Texas Independent School District
$ 750,000 4.875%, 02/15/26 ........................................ Aaa/AAA $ 747,810
Washington County, Utah
440,000 5.000%, 10/01/18 Syncora Guarantee Inc. Insured ......... A1/NR 458,660
465,000 5.000%, 10/01/19 Syncora Guarantee Inc. Insured ......... A1/NR 479,452
490,000 5.000%, 10/01/20 Syncora Guarantee Inc. Insured ......... A1/NR 500,491
510,000 5.000%, 10/01/21 Syncora Guarantee Inc. Insured ......... A1/NR 516,553
535,000 5.000%, 10/01/22 Syncora Guarantee Inc. Insured ......... A1/NR 536,546
565,000 5.000%, 10/01/23 Syncora Guarantee Inc. Insured ......... A1/NR 559,152
320,000 5.000%, 10/01/24 Syncora Guarantee Inc. Insured ......... A1/NR 314,502
Washoe County, Nevada School District
200,000 4.625%, 06/01/23 FGIC Insured ........................... Aa3/AA 194,356
Waxahachie, Texas Independent School District
605,000 4.400%, 08/15/26 ........................................ Aaa/NR 553,200
630,000 4.400%, 08/15/27 ........................................ Aaa/NR 565,148
--------------
Total School District ................................... 19,706,890
--------------
Total General Obligation Bonds .......................... 37,408,653
--------------
REVENUE BONDS (81.3%)
---------------------------------------------------------
AIRPORT (1.5%)
Clark County, Nevada Passenger Facility Charge
255,000 4.750%, 07/01/22 MBIA Insured AMT ....................... Aa3/AA 235,809
Hillsborough County, Florida Aviation Authority
2,185,000 5.250%, 10/01/23 MBIA Insured AMT ....................... Aa3/AA 1,872,982
Miami-Dade County, Florida Aviation Revenue
1,700,000 5.000%, 10/01/28 Series C MBIA Insured AMT .............. A2/AA 1,193,026
--------------
Total Airport ........................................... 3,301,817
--------------
EDUCATION (23.5%)
Broward County, Florida School Board COP
1,680,000 4.500%, 07/01/23 Series A FGIC Insured .................. A1/AA 1,513,243
Carmel, Indiana 2002 School Building Corp.
1,235,000 4.300%, 01/15/23 FSA Insured ............................ Aa3/AAA 1,134,446
1,525,000 4.300%, 07/15/23 FSA Insured ............................ Aa3/AAA 1,398,456
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
EDUCATION (CONTINUED)
Central Washington State University System Revenue
$ 1,265,000 4.375%, 05/01/26 FSA Insured ........................... Aa3/NR $ 1,135,907
Florida State Board of Education Public Education
210,000 4.500%, 06/01/25 FSA Insured ............................ Aa1/AAA 195,271
Hillsborough County, Florida School Board COP
560,000 4.250%, 07/01/26 MBIA Insured ........................... Aa3/AA 472,858
Laredo, Texas Independent School District Public
Facility Corp.
190,000 5.000%, 08/01/24 AMBAC Insured .......................... Aa3/AA 191,404
La Vernia, Texas Higher Education Finance Corp.
3,617,000 6.500%, 03/12/38 ........................................ NR/NR* 2,593,100
Nevada System Higher Education COP
1,000,000 5.000%, 07/01/25 AMBAC Insured .......................... Aa3/AA- 1,000,580
Salt Lake County, Utah Westminster College Project
435,000 4.750%, 10/01/21 ........................................ NR/BBB 314,936
2,300,000 5.000%, 10/01/22 ........................................ NR/BBB 1,661,934
1,250,000 5.000%, 10/01/25 ........................................ NR/BBB 858,662
2,025,000 5.125%, 10/01/28 ........................................ NR/BBB 1,347,577
Texas State College Student Loan Revenue
100,000 5.000%, 08/01/22 AMT .................................... Aa1/AA 98,929
Texas State University System Financing Revenue
655,000 4.375%, 03/15/23 FSA Insured ............................ Aaa/AAA 611,665
Tyler, Texas Independent School District
325,000 5.000%, 02/15/26 FSA Insured ............................ Aaa/AAA 326,680
University of Nevada (University Revenues)
190,000 4.500%, 07/01/24 MBIA Insured ........................... Aa3/AA 180,903
University of Utah COP
3,170,000 4.350%, 12/01/26 AMBAC Insured .......................... Aa3/AA 2,882,291
Utah County, Utah Charter School Revenue
Lakeview Academy
315,000 5.350%, 07/15/17 Series A ............................... NR/NR* 255,008
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
EDUCATION (CONTINUED)
Utah County, Utah Charter School Revenue Lincoln
Academy
$ 450,000 5.450%, 06/15/17 Series A ............................... NR/NR* $ 368,941
Utah County, Utah Charter School Revenue
Renaissance Academy
340,000 5.350%, 07/15/17 Series A ............................... NR/NR* 268,583
Utah County, Utah School Facility
1,320,000 6.500%, 12/21/25 ........................................ NR/NR* 973,566
Utah State Board of Regents Auxiliary & Campus
Facility
1,000,000 4.125%, 04/01/20 MBIA Insured ........................... Aa2/AA 954,250
Utah State Board of Regents Lease Revenue
410,000 4.500%, 05/01/20 AMBAC Insured ......................... Aa3/AA 412,517
425,000 4.500%, 05/01/21 AMBAC Insured Aa3/AA 421,800
450,000 4.625%, 05/01/22 AMBAC Insured ......................... Aa3/AA 444,028
120,000 4.650%, 05/01/23 AMBAC Insured ......................... Aa3/AA 116,930
Utah State Board of Regents Office Facility Revenue
450,000 5.050%, 02/01/20 MBIA Insured ........................... A2/AA 457,780
360,000 5.125%, 02/01/22 MBIA Insured ........................... A2/AA 364,212
1,045,000 5.000%, 04/01/23 MBIA Insured ........................... Aa3/AA 1,054,948
Utah State Charter School Finance Authority
Channing Hall Academy
500,000 5.750%, 07/15/22 Series A ............................... NR/NR* 373,370
Utah State Charter School Finance Authority Entheos
Academy
5,930,000 6.750%, 08/15/38 ........................................ NR/NR* 4,282,765
Utah State Charter School Finance Authority Fast
Forward Academy
3,108,800 6.500%, 11/15/37 144A ................................... NR/NR* 2,114,792
Utah State Charter School Finance Authority G.
Washington Academy
1,000,000 6.750%, 07/15/28 ........................................ NR/NR* 759,910
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
EDUCATION (CONTINUED)
Utah State Charter School Finance Authority Legacy
Prep Academy
$ 5,780,000 6.750%, 06/15/38 ........................................ NR/NR* $ 5,743,124
Utah State Charter School Finance Authority Noah
Webster Academy
3,155,000 6.250%, 06/15/28 ........................................ NR/NR* 2,250,903
1,000,000 6.500%, 06/15/38 ........................................ NR/NR* 687,500
Utah State Charter School Finance Authority
Rockwell Charter School
1,000,000 6.750%, 08/15/28 ........................................ NR/NR* 758,730
Utah State Charter School Finance Authority Ronald
Wilson Reagan Academy
1,250,000 5.750%, 02/15/22 Series A ............................... NR/NR* 940,837
Utah State Charter School Finance Authority Summit
Academy
1,500,000 5.125%, 06/15/17 ........................................ NR/BBB- 1,241,295
Utah State Charter School Finance Authority Venture
Academy
7,305,000 7.250%, 11/15/38 ........................................ NR/NR* 6,389,537
Washington State University Revenue
735,000 4.600%, 10/01/29 FSA Insured ............................ Aaa/AAA 667,608
Weber State University, Utah Student Facilities
System
300,000 5.100%, 04/01/16 Series A (pre-refunded) ................ NR/AAA 326,895
425,000 5.250%, 04/01/19 Series A (pre-refunded) ................ NR/AAA 464,797
1,825,000 4.400%, 04/01/27 FSA Insured ............................ NR/AAA 1,669,930
--------------
Total Education ......................................... 52,683,398
--------------
HEALTHCARE (0.6%)
Harris County, Texas Health Facility Development
Corp.
145,000 5.000%, 11/15/28 AMBAC Insured .......................... Baa1/AAA 112,455
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
HEALTHCARE (CONTINUED)
Reno, Nevada Hospital Revenue, Washoe Medical
Center
$ 725,000 5.000%, 06/01/23 FSA Insured ............................ Aaa/AAA $ 625,740
680,000 5.000%, 06/01/23 FSA Insured ............................ Aaa/AAA 586,901
--------------
Total Healthcare ........................................ 1,325,096
--------------
HOUSING (14.5%)
Alaska Housing Finance Corp. Housing Revenue
1,000,000 4.700%, 06/01/27 AMT .................................... Aa2/AA 794,150
1,000,000 5.250%, 12/01/28 AMT .................................... Aa2/AA 784,690
Alaska State Local Housing Authority
500,000 5.125%, 06/01/27 Series A2 AMT .......................... Aaa/AAA 396,575
Florida Housing Finance Corp.
730,000 5.000%, 07/01/21 AMT .................................... Aa1/AA+ 636,195
1,470,000 4.550%, 07/01/22 AMT .................................... Aa1/AA+ 1,141,793
500,000 6.000%, 07/01/28 ........................................ Aa1/AA+ 492,380
Henderson, Nevada Local Improvement District
150,000 5.000%, 09/01/15 ........................................ NR/NR* 67,802
200,000 5.000%, 09/01/16 ........................................ NR/NR* 90,360
200,000 5.050%, 09/01/17 ........................................ NR/NR* 90,326
200,000 5.100%, 09/01/18 ........................................ NR/NR* 90,298
Indiana Housing & Community Development
Authority
1,290,000 4.900%, 07/01/26 AMT .................................... Aaa/NR 976,956
Indiana State Housing Finance Authority Single
Family
245,000 4.850%, 07/01/22 AMT .................................... Aaa/NR 197,823
Indianapolis, Indiana Multi-Family
470,000 4.850%, 01/01/21 AMT .................................... Aaa/NR 389,292
Miami-Dade County, Florida Housing Finance
Authority
535,000 5.000%, 11/01/23 FSA Insured AMT ........................ NR/AAA 441,423
Nevada Housing Multi-Family, LOC: US Bank
1,000,000 4.750%, 04/01/39 AMT .................................... NR/AA+ 781,770
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
HOUSING (CONTINUED)
North Dakota Housing Authority Home Mortgage
Revenue
$ 2,000,000 5.400%, 07/01/23 AMT .................................... Aa1/NR $ 1,733,620
1,000,000 5.650%, 07/01/28 AMT .................................... Aa1/NR 839,300
950,000 5.400%, 07/01/28 ........................................ Aa1/NR 858,943
Orange County, Florida Housing Finance Authority
120,000 5.150%, 03/01/22 ........................................ Aaa/NR 116,057
Seattle, Washington Housing Authority
730,000 4.400%, 11/01/21 AMT .................................... NR/AAA 573,327
Snohomish County, Washington Housing Authority
150,000 4.750%, 09/01/10 AMT .................................... NR/NR* 144,646
185,000 4.875%, 09/01/12 AMT .................................... NR/NR* 169,989
225,000 5.000%, 09/01/13 AMT .................................... NR/NR* 202,081
185,000 5.000%, 09/01/14 AMT .................................... NR/NR* 162,047
145,000 5.100%, 09/01/15 AMT .................................... NR/NR* 124,555
South Dakota Housing Development Authority
1,250,000 4.900%, 05/01/26 AMT .................................... Aa1/AAA 966,800
500,000 6.000%, 05/01/28 ........................................ Aa1/AAA 496,560
Texas State Housing Revenue
2,020,000 4.800%, 09/01/20 AMT .................................... Aaa/AAA 1,654,865
495,000 4.800%, 09/01/27 AMT .................................... Aa1/AAA 372,671
1,000,000 5.250%, 09/01/32 AMT .................................... Aa1/AAA 792,320
Utah Housing Corporation Single Family Mortgage
25,000 5.250%, 07/01/23 AMT .................................... Aa2/AA 21,072
195,000 4.875%, 07/01/23 AMT .................................... Aa3/AA- 155,499
1,275,000 5.125%, 07/01/24 AMT .................................... Aa3/AA- 1,058,008
1,015,000 5.000%, 07/01/25 AMT .................................... Aa3/AA- 808,153
120,000 5.650%, 07/01/27 AMT .................................... Aa2/AA 101,053
605,000 5.100%, 01/01/26 AMT .................................... Aa3/AA- 483,831
610,000 5.200%, 01/01/28 AMT .................................... Aa3/AA- 519,098
2,305,000 5.800%, 07/01/28 AMT .................................... Aa3/AA- 1,979,073
1,000,000 5.700%, 07/01/28 AMT .................................... Aa3/AA- 837,960
995,000 5.500%, 07/01/28 AMT ................................... Aa3/AA- 803,403
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
HOUSING (CONTINUED)
Utah Housing Corporation Single Family Mortgage
(continued)
$ 1,310,000 6.100%, 01/01/29 AMT .................................... Aa3/AA- $ 1,149,839
805,000 5.000%, 07/01/31 AMT .................................... Aa2/AA 603,959
495,000 5.000%, 01/01/32 AMT .................................... Aa2/AA 363,592
Utah State Housing Finance Agency
125,000 5.700%, 07/01/15 AMT .................................... Aa3/AA- 119,906
40,000 5.650%, 07/01/16 Series 1994C ........................... Aaa/AAA 38,416
30,000 5.400%, 07/01/16 AMT .................................... Aa2/AA 28,539
15,000 6.000%, 07/01/17 AMT .................................... Aaa/AAA 14,012
560,000 5.500%, 07/01/18 AMT .................................... Aa3/AA- 555,666
35,000 5.300%, 07/01/18 AMT .................................... Aaa/AAA 32,637
60,000 5.000%, 07/01/18 AMT .................................... Aaa/AAA 53,702
75,000 5.400%, 07/01/20 AMT .................................... Aa2/AA 64,531
140,000 5.600%, 07/01/23 AMT .................................... Aa2/AA 120,110
35,000 5.700%, 07/01/26 MBIA Insured ........................... A2/AA 35,044
Washington State Housing Finance Commission
2,290,000 4.800%, 12/01/21 AMT .................................... Aaa/NR 1,854,465
Washington State Housing Finance Commission
Single Family Mortgage
2,345,000 5.000%, 06/01/22 ........................................ Aaa/NR* 1,934,695
Wyoming Community Development Authority
Housing Revenue
2,000,000 5.000%, 12/01/22 Series 10 AMT .......................... Aa1/AA+ 1,647,600
120,000 5.000%, 12/01/22 ........................................ Aa1/AA+ 117,558
415,000 5.150%, 06/01/23 AMT .................................... Aa1/AA+ 344,994
--------------
Total Housing ........................................... 32,426,029
--------------
INDUSTRIAL DEVELOPMENT & POLLUTION CONTROL (0.5%)
Sandy City, Utah Industrial Development, H Shirley
Wright Project, Refunding Bonds, LOC
Olympus Bank
250,000 6.125%, 08/01/16 NR/AAA 250,110
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
INDUSTRIAL DEVELOPMENT & POLLUTION CONTROL
(CONTINUED)
Utah County Environmental Improvement Revenue
$ 935,000 5.050%, 11/01/17 ........................................ Baa1/BBB+ $ 907,043
--------------
Total Industrial Development & Pollution Control 1,157,153
--------------
LEASE (13.6%)
Celebration Community Development District, Florida
290,000 5.000%, 05/01/22 MBIA Insured ........................... Baa1/AA 291,546
Clark County, Nevada Improvement District Revenue
715,000 5.125%, 12/01/19 ........................................ NR/NR* 510,367
Clark County, Nevada Improvement District Special
Local Improvement #128 (Summerlin)
500,000 5.000%, 02/01/21 Series A ............................... NR/NR* 331,445
Davis County, Utah Lease Revenue DMV Project
78,000 5.400%, 11/01/17 ........................................ NR/NR* 63,111
83,000 5.450%, 11/01/18 ........................................ NR/NR* 65,606
87,000 5.500%, 11/01/19 ........................................ NR/NR* 67,365
92,000 5.550%, 11/01/20 ........................................ NR/NR* 69,787
97,000 5.600%, 11/01/21 ........................................ NR/NR* 72,137
103,000 5.650%, 11/01/22 ........................................ NR/NR* 74,772
108,000 5.700%, 11/01/23 ........................................ NR/NR* 76,910
115,000 5.700%, 11/01/24 ........................................ NR/NR* 80,375
121,000 5.750%, 11/01/25 ........................................ NR/NR* 82,631
128,000 5.750%, 11/01/26 ........................................ NR/NR* 85,736
Marion County, Indiana Convention & Recreational
Facilities Authority
390,000 5.000%, 06/01/27 MBIA Insured ........................... A2/AA 332,994
Middle Village, Florida Community Development
District Special Assessment Revenue
1,170,000 6.750%, 05/01/25 ........................................ NR/NR* 911,196
New Albany, Indiana Development Authority
500,000 4.250%, 02/01/22 ........................................ NR/A- 440,400
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
LEASE (CONTINUED)
Poinciana West, Florida Community Development
District Special Assessment Revenue
$ 1,000,000 5.875%, 05/01/22 ........................................ NR/NR* $ 732,740
Port Saint Lucie, Florida Special Assessment Revenue
Southwest Annexation District 1-B
500,000 5.000%, 07/01/27 MBIA Insured ........................... A2/AA 445,000
Red River, Texas Higher Education TCU Project
1,000,000 4.375%, 03/15/25 ........................................ Aa3/NR 873,820
Salt Lake Valley, Utah Fire Service District Lease
Revenue
610,000 5.200%, 04/01/28 ........................................ Aa3/NR 586,991
1,000,000 5.250%, 04/01/30 ........................................ Aa3/NR 942,550
South Dakota State Building Authority Revenue
500,000 4.500%, 06/01/24 FGIC Insured ........................... Baa3/AA- 455,500
Spanish Fork, Utah Charter School
1,900,000 5.550%, 11/15/21 ........................................ NR/NR* 1,425,152
Tolomato Community, Florida Development District
Special Assessment Revenue
1,000,000 6.450%, 05/01/23 ........................................ NR/NR* 703,190
Twin Creeks, Utah Special Service District BAN
12,000,000 7.250%, 07/15/10 ........................................ NR/NR* 11,488,440
Uintah County, Utah Municipal Building Authority
Lease Revenue
1,500,000 5.300%, 06/01/28 ........................................ NR/A+ 1,413,240
Utah State Building Ownership Authority
465,000 5.000%, 05/15/21 ........................................ Aa1/AA+ 471,543
1,755,000 5.250%, 05/15/23 ........................................ Aa1/AA+ 1,773,638
510,000 5.000%, 05/15/23 ........................................ Aa1/AA+ 508,934
1,845,000 5.250%, 05/15/24 ........................................ Aa1/AA+ 1,856,845
1,080,000 5.000%, 05/15/25 ........................................ Aa1/AA+ 1,057,493
West Bountiful, Utah Courthouse Revenue
410,000 5.000%, 05/01/19 ........................................ NR/A 446,900
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
LEASE (CONTINUED)
West Valley City, Utah Municipal Building Authority
Lease Revenue Refunding
$ 1,890,000 4.375%, 08/01/26 Series A FGIC Insured .................. Baa3/A+ $ 1,670,911
--------------
Total Lease ............................................. 30,409,265
--------------
TAX REVENUE (12.0%)
Aqua Isles, Florida Community Development District
Revenue
955,000 7.000%, 05/01/38 ........................................ NR/NR* 659,198
Bay County, Florida Sales Tax Revenue
175,000 4.750%, 09/01/23 FSA Insured ............................ Aa3/NR 165,951
Bountiful, Utah Special Improvement District Special
Assessment Revenue
203,000 5.000%, 06/01/14 ........................................ NR/NR* 169,676
213,000 5.150%, 06/01/15 ........................................ NR/NR* 173,810
224,000 5.300%, 06/01/16 ........................................ NR/NR* 178,123
236,000 5.500%, 06/01/17 ........................................ NR/NR* 184,238
249,000 5.650%, 06/01/18 ........................................ NR/NR* 192,168
Clark County, Nevada Improvement District
250,000 5.000%, 08/01/16 ........................................ NR/NR* 162,500
Coral Canyon, Utah Special Service District
110,000 5.000%, 07/15/13 ........................................ NR/NR* 99,321
250,000 5.500%, 07/15/18 ........................................ NR/NR* 185,278
Henderson, Nevada Local Improvement District
100,000 4.500%, 09/01/12 ........................................ NR/NR* 85,739
300,000 5.000%, 09/01/14 ........................................ NR/NR* 240,483
300,000 5.000%, 09/01/15 ........................................ NR/NR* 231,882
240,000 5.000%, 03/01/16 ........................................ NR/NR* 183,257
Holladay, Utah Redevelopment Agency
2,977,500 4.900%, 12/30/20 ........................................ NR/NR* 2,186,021
Jordanelle, Utah Special Service District
186,000 5.000%, 11/15/14 ........................................ NR/NR* 156,499
196,000 5.100%, 11/15/15 ........................................ NR/NR* 161,251
206,000 5.200%, 11/15/16 ........................................ NR/NR* 165,140
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
TAX REVENUE (CONTINUED)
Jordanelle, Utah Special Service District (continued)
$ 216,000 5.300%, 11/15/17 ........................................ NR/NR* $ 169,115
228,000 5.400%, 11/15/18 ........................................ NR/NR* 176,062
240,000 5.500%, 11/15/19 ........................................ NR/NR* 181,560
253,000 5.600%, 11/15/20 ........................................ NR/NR* 187,301
268,000 5.700%, 11/15/21 ........................................ NR/NR* 194,217
283,000 5.800%, 11/15/22 ........................................ NR/NR* 201,148
299,000 6.000%, 11/15/23 ........................................ NR/NR* 210,454
Jordanelle, Utah Special Service Improvement
District
175,000 8.000%, 10/01/11 ........................................ NR/NR* 174,578
La Verkin, Utah Sales and Franchise Tax Revenue
571,000 5.100%, 07/15/27 ........................................ NR/NR* 405,524
Lehi, Utah Sales Tax
790,000 5.000%, 06/01/24 FSA Insured ............................ Aaa/AAA 800,033
Mesquite, Nevada New Special Improvement
District
240,000 5.300%, 08/01/11 ........................................ NR/NR* 220,675
175,000 4.600%, 08/01/11 ........................................ NR/NR* 157,560
185,000 4.750%, 08/01/12 ........................................ NR/NR* 160,262
220,000 4.900%, 08/01/13 ........................................ NR/NR* 184,028
135,000 5.250%, 08/01/17 ........................................ NR/NR* 99,411
300,000 5.350%, 08/01/19 ........................................ NR/NR* 208,989
130,000 5.400%, 08/01/20 ........................................ NR/NR* 88,300
475,000 5.500%, 08/01/25 ........................................ NR/NR* 293,403
Mountain Regional Water District, Utah Special
Assessment
1,320,000 7.000%, 12/01/18 ........................................ NR/NR* 990,858
Mountain Regional Water, Utah Special Service
District
2,000,000 5.000%, 12/15/20 MBIA Insured ........................... A2/AA 1,836,040
North Ogden, Utah Sales Tax Revenue
195,000 5.000%, 11/01/24 Syncora Guarantee Inc. Insured ......... A3/A+ 201,240
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
TAX REVENUE (CONTINUED)
Payson City, Utah Sales Tax Revenue
$ 445,000 5.000%, 08/01/21 FSA Insured ............................ Aaa/AAA $ 459,703
Pembroke Harbor, Florida Community Development
District Revenue
1,820,000 7.000%, 05/01/38 ........................................ NR/NR* 1,256,273
Salt Lake City, Utah Sales Tax
955,000 5.000%, 02/01/21 ........................................ NR/AAA 984,175
1,005,000 5.000%, 02/01/22 ........................................ NR/AAA 1,026,045
1,060,000 5.000%, 02/01/23 ........................................ NR/AAA 1,076,027
1,115,000 5.000%, 02/01/24 ........................................ NR/AAA 1,126,585
Sandy City, Utah Sales Tax
605,000 5.000%, 09/15/20 AMBAC Insured .......................... Aa3/AA+ 619,484
South Weber City, Utah
525,000 5.000%, 01/15/24 MBIA Insured ........................... Aaa/AA 539,773
Springville, Utah Special Assessment Revenue
400,000 5.500%, 01/15/17 ........................................ NR/NR* 313,628
457,000 5.650%, 01/15/18 ........................................ NR/NR* 352,388
483,000 5.800%, 01/15/19 ........................................ NR/NR* 364,177
510,000 5.900%, 01/15/20 ........................................ NR/NR* 376,319
540,000 6.000%, 01/15/21 ........................................ NR/NR* 389,891
Wasatch County, Utah Building Authority
130,000 5.000%, 10/01/15 ........................................ A3/NR 136,352
135,000 5.000%, 10/01/16 ........................................ A3/NR 140,586
Wasatch County, Utah Sales Tax
205,000 5.000%, 12/01/16 AMBAC Insured .......................... Aa3/AA 216,734
210,000 5.000%, 12/01/17 AMBAC Insured .......................... Aa3/AA 220,687
225,000 5.000%, 12/01/18 AMBAC Insured .......................... Aa3/AA 234,119
Washington City, Utah Sales Tax
680,000 5.250%, 11/15/17 AMBAC Insured .......................... Aa3/AA 731,456
Weber County, Utah Sales Tax
385,000 5.000%, 07/01/23 AMBAC Insured .......................... Aa3/NR 385,762
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
TAX REVENUE (CONTINUED)
West Valley City, Utah Redevelopment Agency
$ 1,625,000 5.000%, 03/01/21 ........................................ NR/A- $ 1,670,792
320,000 5.000%, 03/01/22 ........................................ NR/A- 326,429
350,000 5.000%, 03/01/23 ........................................ NR/A- 355,159
1,000,000 5.000%, 03/01/24 ........................................ NR/A- 1,009,950
--------------
Total Tax Revenue ....................................... 27,033,787
--------------
TRANSPORTATION (2.9%)
Alaska State International Airport Revenue
175,000 5.000%, 10/01/24 AMBAC Insured AMT ...................... Aa3/A+ 145,240
Florida State Turnpike Authority Turnpike Revenue
500,000 4.500%, 07/01/22 MBIA Insured ........................... Aa2/AA 477,290
Miami-Dade County, Florida Aviation Revenue
600,000 5.000%, 10/01/24 FGIC Insured AMT ....................... A2/A- 453,300
Port of Seattle, Washington Revenue
1,095,000 5.100%, 04/01/24 AMT FGIC Insured ....................... Aa2/AA- 919,220
Utah Transit Authority Sales Tax & Transportation
Revenue
3,300,000 4.125%, 06/15/21 FSA Insured ............................ Aaa/AAA 3,204,432
1,450,000 4.125%, 06/15/22 FSA Insured ............................ Aaa/AAA 1,361,231
--------------
Total Transportation .................................... 6,560,713
--------------
UTILITY (7.9%)
Alaska Industrial Development & Export Authority
400,000 4.625%, 12/01/16 AMBAC Insured AMT ...................... Baa1/A 347,628
Cowlitz County, Washington Public Utility District
Electric Revenue
1,000,000 4.500%, 09/01/26 MBIA Insured ........................... A3/AA 889,990
Eagle Mountain, Utah Gas & Electric
1,385,000 4.250%, 06/01/20 Radian Insured ......................... A3/BBB+ 1,281,914
1,440,000 5.000%, 06/01/21 Radian Insured ......................... A3/BBB+ 1,424,203
1,515,000 5.000%, 06/01/22 Radian Insured ......................... A3/BBB+ 1,477,383
Garland, Texas Water & Sewer
440,000 4.500%, 03/01/21 AMBAC Insured .......................... Baa1/AA 430,703
Indianapolis, Indiana Gas Utility
290,000 5.000%, 08/15/24 AMBAC Insured .......................... Aa3/AA 289,986
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
UTILITY (CONTINUED)
Intermountain Power Agency Utilities Light & Power
Service, Utah
$ 1,380,000 5.000%, 07/01/19 MBIA Insured ........................... A2/AA $ 1,398,119
250,000 5.250%, 07/01/23 ........................................ A1/A 248,245
JEA, Florida Electric System Revenue
500,000 5.000%, 10/01/26 ........................................ Aa3/A+ 487,335
Manti City, Utah Electric System Revenue
603,000 5.750%, 02/01/17 ........................................ NR/NR* 510,657
Murray City, Utah Utility Electric Revenue
1,340,000 5.000%, 06/01/25 AMBAC Insured .......................... Aa3/NR 1,364,683
Orem, Utah Water & Storm Sewer Revenue
1,000,000 5.000%, 07/15/26 ........................................ NR/AA 1,003,750
Pleasant Grove City, Utah Water Revenue
760,000 4.625%, 12/01/23 FSA Insured ............................ Aaa/AAA 720,206
Rockport, Indiana Pollution Control Revenue
Indiana Michigan Power Company Project
1,500,000 4.625%, 06/01/25 Series A FGIC Insured .................. A3/BBB 1,111,650
Salem, Utah Electric Revenue
140,000 5.400%, 11/01/09 ........................................ NR/NR* 142,934
Santa Clara Utah Storm Drain Revenue
877,000 5.100%, 09/15/26 ........................................ NR/NR* 579,776
Southern Utah Valley Power System
210,000 5.250%, 09/15/13 MBIA Insured ........................... A2/AA 228,455
225,000 5.250%, 09/15/14 MBIA Insured ........................... A2/AA 243,949
235,000 5.250%, 09/15/15 MBIA Insured ........................... A2/AA 252,061
185,000 5.125%, 09/15/21 MBIA Insured ........................... A2/AA 189,386
Tacoma, Washington Solid Waste Utility Revenue
1,000,000 5.000%, 12/01/23Syncora Guarantee Inc. Insured .......... A3/AA- 970,310
Utah Assessed Municipal Power System
1,000,000 5.000%, 04/01/21 FSA Insured ............................ Aaa/AAA 1,021,340
Washington, Utah Electric Revenue
985,000 5.000%, 09/01/21 Syncora Guarantee Inc. Insured ......... A3/NR 1,017,722
--------------
Total Utility ........................................... 17,632,385
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
WATER AND SEWER (4.3%)
Eagle Mountain, Utah Water and Sewer
$ 690,000 4.750%, 11/15/25 MBIA Insured ........................... Baa1/AA $ 665,891
Jacksonville, Florida Water and Sewer System
Revenue
250,000 4.625%, 10/01/22 ........................................ Aa3/AA- 240,508
Mesquite, Texas Waterworks & Sewer
225,000 4.500%, 03/01/24 FSA Insured ............................ Aaa/AAA 216,137
Murray City, Utah Sewer and Water
440,000 5.000%, 10/01/19 AMBAC Insured .......................... Aa3/NR 453,231
Pleasant Grove, Utah Water Revenue
450,000 4.300%, 12/01/20 MBIA Insured ........................... A2/AA 431,892
Smithfield, Utah Water Revenue
90,000 4.750%, 06/01/17 ........................................ NR/NR* 72,726
94,000 4.800%, 06/01/18 ........................................ NR/NR* 74,270
99,000 4.850%, 06/01/19 ........................................ NR/NR* 76,544
103,000 4.900%, 06/01/20 ........................................ NR/NR* 77,994
108,000 5.000%, 06/01/21 ........................................ NR/NR* 81,747
114,000 5.050%, 06/01/22 ........................................ NR/NR* 85,265
120,000 5.100%, 06/01/23 ........................................ NR/NR* 88,800
126,000 5.150%, 06/01/24 ........................................ NR/NR* 92,362
132,000 5.200%, 06/01/25 ........................................ NR/NR* 95,957
139,000 5.250%, 06/01/26 ........................................ NR/NR* 100,315
Upper Trinity Regional Water District, Texas
205,000 4.500%, 08/01/20 AMBAC Insured .......................... Aa3/AA 202,265
Utah Water Finance Agency Revenue
200,000 5.250%, 07/01/16 AMBAC Insured .......................... Aa3/NR 213,354
310,000 5.000%, 10/01/17 AMBAC Insured .......................... Aa3/NR 325,029
510,000 5.000%, 07/01/18 AMBAC Insured .......................... Aa3/NR 529,477
Utah Water Finance Agency Revenue
105,000 5.000%, 10/01/20 AMBAC Insured .......................... Aa3/NR 107,178
830,000 4.500%, 10/01/22 AMBAC Insured .......................... Aa3/NR 784,981
100,000 5.125%, 07/01/23 AMBAC Insured .......................... Aa3/NR 101,287
870,000 4.500%, 10/01/23 AMBAC Insured .......................... Aa3/NR 806,594
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- --------------
WATER AND SEWER (SCONTINUED)
Utah Water Finance Agency Revenue (continued)
$ 2,570,000 5.000%, 10/01/25 AMBAC Insured .......................... Aa3/NR $ 2,510,016
1,400,000 4.500%, 10/01/28 AMBAC Insured .......................... Aa3/NR 1,235,640
--------------
Total Water and Sewer ................................... 9,669,460
--------------
Total Revenue Bonds ..................................... 182,199,103
--------------
Total Investments (cost $249,637,356 - note 4) .......... 98.0% 219,607,756
Other assets less liabilities ........................... 2.0 4,405,992
----- --------------
Net Assets .............................................. 100.0% $ 224,013,748
===== ==============
PERCENT OF
PORTFOLIO DISTRIBUTION BY QUALITY RATING PORTFOLIO+
---------------------------------------- ----------
Aaa of Moody's or AAA of S&P ............................ 22.1%
Aa of Moody's or AA of S&P .............................. 36.4
A of Moody's or S&P ..................................... 10.0
Baa of Moody's or BBB of S&P ............................ 3.0
Not rated* .............................................. 28.5
-----
100.0%
=====
+ Calculated using the highest rating of the two rating
services.
* Any security not rated (NR) by any of the approved credit
rating services has been determined by the Manager to have
sufficient quality to be ranked in the top four credit ratings
if a credit rating were to be assigned by a rating service.
PORTFOLIO ABBREVIATIONS:
------------------------
ACA - American Capital Assurance Financial Guaranty Corp.
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax
COP - Certificates of Participation
FGIC - Financial Guaranty Insurance Co.
FSA - Financial Security Assurance
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance
NR - Not Rated
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2008 (unaudited)
ASSETS
Investments at value (cost $249,637,356) ........................................... $ 219,607,756
Cash ............................................................................... 1,155,587
Interest receivable ................................................................ 3,775,471
Receivable for investment securities sold .......................................... 765,000
Receivable for Fund shares sold .................................................... 357,010
Other assets ....................................................................... 6,157
-------------
Total assets ....................................................................... 225,666,981
-------------
LIABILITIES
Dividends payable .................................................................. 1,115,312
Payable for Fund shares redeemed ................................................... 296,255
Management fees payable ............................................................ 74,868
Distribution and service fees payable .............................................. 50,493
Payable for investment securities purchased ........................................ 40,625
Accrued expenses ................................................................... 75,680
-------------
Total liabilities .................................................................. 1,653,233
-------------
NET ASSETS ............................................................................ $ 224,013,748
=============
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value $0.01 per share $ 256,208
Additional paid-in capital ......................................................... 255,825,684
Net unrealized depreciation on investments (note 4) ................................ (30,029,600)
Accumulated net realized loss on investments ....................................... (1,972,049)
Distrbutions in excess of net investment income .................................... (66,495)
-------------
$ 224,013,748
=============
CLASS A
Net Assets ......................................................................... $ 139,904,114
=============
Capital shares outstanding ......................................................... 16,012,387
=============
Net asset value and redemption price per share ..................................... $ 8.74
=============
Maximum offering price per share (100/96 of $8.74 adjusted to nearest cent) ........ $ 9.10
=============
CLASS C
Net Assets ......................................................................... $ 32,649,374
=============
Capital shares outstanding ......................................................... 3,737,986
=============
Net asset value and offering price per share ....................................... $ 8.73
=============
Redemption price per share (*a charge of 1% is imposed on the redemption
proceeds of the shares, or on the original price, whichever is lower, if redeemed
during the first 12 months after purchase) ...................................... $ 8.73*
=============
CLASS Y
Net Assets ......................................................................... $ 51,460,260
=============
Capital shares outstanding ......................................................... 5,870,432
=============
Net asset value, offering and redemption price per share ........................... $ 8.77
=============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2008 (unaudited)
INVESTMENT INCOME:
Interest income $ 6,291,715
Expenses:
Management fee (note 3) $ 586,322
Distribution and service fees (note 3) 314,525
Transfer and shareholder servicing agent fees 59,813
Trustees' fees and expenses (note 8) 54,774
Legal fees (note 3) 24,780
Shareholders' reports and proxy statements 21,191
Custodian fees (note 6) 15,172
Fund accounting fees 13,163
Registration fees and dues 9,862
Auditing and tax fees 7,814
Insurance 5,098
Chief compliance officer (note 3) 2,024
Miscellaneous 20,270
------------
Total expenses 1,134,808
Management fee waived (note 3) (213,054)
Expenses paid indirectly (note 6) (32,588)
------------
Net expenses 889,166
------------
Net investment income 5,402,549
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from securities transactions (906,514)
Change in unrealized depreciation on investments (24,366,737)
------------
Net realized and unrealized gain (loss) on investments (25,273,251)
------------
Net increase in net assets resulting from operations $(19,870,702)
============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 2008 Year Ended
(unaudited) June 30, 2008
----------------- -----------------
OPERATIONS:
Net investment income ......................................... $ 5,402,549 $ 9,139,922
Net realized gain (loss) from securities transactions ......... (906,514) 638,898
Change in unrealized depreciation on investments .............. (24,366,737) (4,614,006)
----------------- -----------------
Change in net assets from operations ....................... (19,870,702) 5,164,814
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS (note 10):
Class A Shares:
Net investment income ......................................... (3,651,709) (6,459,904)
Class C Shares:
Net investment income ......................................... (636,448) (1,040,811)
Class Y Shares:
Net investment income ......................................... (1,211,079) (1,961,979)
----------------- -----------------
Change in net assets from distributions .................... (5,499,236) (9,462,694)
----------------- -----------------
CAPITAL SHARE TRANSACTIONS (note 7):
Proceeds from shares sold ..................................... 39,384,658 55,700,331
Reinvested dividends and distributions ........................ 2,516,893 5,703,447
Cost of shares redeemed ....................................... (31,285,264) (45,261,625)
----------------- -----------------
Change in net assets from capital share transactions ....... 10,616,287 16,142,153
----------------- -----------------
Change in net assets ....................................... (14,753,651) 11,844,273
NET ASSETS:
Beginning of period ........................................... 238,767,399 226,923,126
----------------- -----------------
End of period* ................................................ $ 224,013,748 $ 238,767,399
================= =================
* Includes distributions in excess of net investment income and
undistributed net investment income, respectively, of: ...... $ (66,495) $ 30,192
================= =================
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 (unaudited)
1. ORGANIZATION
Tax-Free Fund For Utah (the "Fund"), a non-diversified, open-end
investment company, was organized on December 12, 1990 as a Massachusetts
business trust and commenced operations on July 24, 1992. The Fund is authorized
to issue an unlimited number of shares and, since its inception to May 21, 1996,
offered only one class of shares. On that date, the Fund began offering two
additional classes of shares, Class C and Class Y Shares. All shares outstanding
prior to that date were designated as Class A Shares and are sold with a
front-payment sales charge and bear an annual distribution fee. Class C Shares
are sold with a level-payment sales charge with no payment at time of purchase
but level service and distribution fees from date of purchase through a period
of six years thereafter. A contingent deferred sales charge of 1% is assessed to
any Class C shareholder who redeems shares of this Class within one year from
the date of purchase. Class C Shares, together with a pro-rata portion of all
Class C Shares acquired through reinvestment of dividends and other
distributions paid in additional Class C Shares, automatically convert to Class
A Shares after 6 years. The Class Y Shares are only offered to institutions
acting for an investor in a fiduciary, advisory, agency, custodian or similar
capacity and are not offered directly to retail investors. Class Y Shares are
sold at net asset value without any sales charge, redemption fees, contingent
deferred sales charge or distribution or service fees. On October 31, 1997, the
Fund established Class I Shares which are offered and sold only through
financial intermediaries and are not offered directly to retail investors. Class
I Shares are sold at net asset value without any sales charge, redemption fees,
or contingent deferred sale charge. Class I Shares carry a distribution and
service fee. As of the report date, there were no Class I Shares outstanding.
All classes of shares represent interests in the same portfolio of investments
and are identical as to rights and privileges but differ with respect to the
effect of sales charges, the distribution and/or service fees borne by each
class, expenses specific to each class, voting rights on matters affecting a
single class and the exchange privileges of each class.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.
a) PORTFOLIO VALUATION: Municipal securities which have remaining maturities
of more than 60 days are valued each business day based upon information
provided by a nationally prominent independent pricing service and
periodically verified through other pricing services. In the case of
securities for which market quotations are readily available, securities
are valued by the pricing service at the mean of bid and asked quotations.
If market quotations or a valuation from the pricing service is not
readily available, the security is valued at fair value determined in good
faith under procedures established by and under the general supervision of
the Board of Trustees. Securities which mature in 60 days or less are
valued at amortized cost if their term to
maturity at purchase is 60 days or less, or by amortizing their unrealized
appreciation or depreciation on the 61st day prior to maturity, if their
term to maturity at purchase exceeds 60 days.
b) FAIR VALUE MEASUREMENTS: The Fund adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 157, "Fair Value
Measurements" ("SFAS 157"), effective July 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 Fund's investments are assigned levels based upon the
observability.
The three-tier hierarchy 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 Fund's 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 Fund's investments, used to value the Fund's net assets as of December
31, 2008:
Valuation Inputs Investments in Securities
---------------- -------------------------
Level 1 - Quoted Prices ..................... $ --
Level 2 - Other Significant Observable Inputs 219,607,756
Level 3 - Significant Unobservable Inputs ... --
-------------
Total ....................................... $ 219,607,756
=============
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 premium and accretion of original issue and market
discount.
d) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment
companies. The Fund intends to make distributions of income and securities
profits sufficient to relieve it from all, or substantially all, Federal
income and excise taxes.
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
("FIN 48") was adopted on December 31, 2007. Management has reviewed the
tax positions for each of the open tax years (2004-2008) and has
determined that the implementation of FIN 48 did not have a material
impact on the Fund's financial statements.
e) MULTIPLE CLASS ALLOCATIONS: All income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses are
allocated daily to each class of shares based on the relative net assets
of each class. Class-specific expenses, which include distribution and
service fees and any other items that are specifically attributed to a
particular class, are charged directly to such class.
f) 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.
g) ACCOUNTING PRONOUNCEMENT: In March 2008, Statement of Financial Accounting
Standards No. 161, "Disclosures about Derivative Instruments and Hedging
Activities" ("SFAS 161") was issued and is effective for fiscal years
beginning after November 15, 2008. SFAS 161 is intended to improve
financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative
instruments affect an entity's results of operations and financial
position. Management is currently evaluating the implications of SFAS
161and its impact, if any, on the Fund's financial statement disclosures.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
Aquila Investment Management LLC (the "Manager"), a wholly-owned
subsidiary of Aquila Management Corporation, the Fund's founder and sponsor,
serves as the Manager for the Fund under an Advisory and Administration
Agreement with the Fund. Under the Advisory and Administration Agreement, the
Manager provides all investment management and administrative services to the
Fund. The Manager's services include providing the office of the Fund and all
related services as well as managing relationships with all the various support
organizations to the Fund such as the shareholder servicing agent, custodian,
legal counsel, fund accounting agent, auditors and distributor. For its
services, the Manager is entitled to receive a fee which is payable monthly and
computed as of the close of business each day at the annual rate of 0.50 of 1%
on the Fund's average net assets.
For the six months ended December 31, 2008, the Fund incurred management
fees of $586,322 of which $213,054 was waived. The Manager has contractually
undertaken to waive fees and/or reimburse Fund expenses during the period July
1, 2008 through June 30, 2009 so that total Fund expenses would not exceed 0.83%
for Class A Shares, 1.63% for Class C Shares or 0.63% for Class Y Shares. A
similar contractual undertaking is intended to be in place through the period
ended June 30, 2010.
Under a Compliance Agreement with the Manager, the Manager is compensated
for Chief Compliance Officer related services provided to enable the Fund 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 Manager are more fully defined in the Fund's Prospectus and Statement of
Additional Information.
b) DISTRIBUTION AND SERVICE FEES:
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 (the "Rule") under the Investment Company Act of 1940, as amended. Under
one part of the Plan, with respect to Class A Shares, the Fund is authorized to
make distribution fee payments to broker-dealers or others ("Qualified
Recipients") selected by Aquila Distributors, Inc. (the "Distributor")
including, but not limited to, any principal underwriter of the Fund, with which
the Distributor has entered into written agreements contemplated by the Rule and
which have rendered assistance in the distribution and/or retention of the
Fund's shares or servicing of shareholder accounts. The Fund makes payment of
this service fee at the annual rate of 0.20% of the Fund's average net assets
represented by Class A Shares. For the six months ended December 31, 2008,
distribution fees on Class A Shares amounted to $153,538, of which the
Distributor retained $4,185.
Under another part of the Plan, the Fund is authorized to make payments
with respect to Class C Shares to Qualified Recipients which have rendered
assistance in the distribution and/or retention of the Fund's Class C shares or
servicing of shareholder accounts. These payments are made at the annual rate of
0.75% of the Fund's average net assets represented by Class C Shares and for the
six months ended December 31, 2008, amounted to $120,740. In addition, under a
Shareholder Services Plan, the Fund is authorized to make service fee payments
with respect to Class C Shares to Qualified Recipients for providing personal
services and/or maintenance of shareholder accounts. These payments are made at
the annual rate of 0.25% of the Fund's average net assets represented by Class C
Shares and for the six months ended December 31, 2008 amounted to $40,247. The
total of these payments with respect to Class C Shares amounted to $160,987, of
which the Distributor retained $30,859.
Specific details about the Plans are more fully defined in the Fund's
Prospectus and Statement of Additional Information.
Under a Distribution Agreement, the Distributor serves as the exclusive
distributor of the Fund's shares. Through agreements between the Distributor and
various brokerage and advisory firms ("intermediaries"), the Fund's shares are
currently sold primarily through the facilities of intermediaries having offices
within Utah, with the bulk of sales commissions inuring to such intermediaries.
For the six months ended December 31, 2008, total commissions on sales of Class
A Shares amounted to $229,347, of which the Distributor received $19,077.
c) OTHER RELATED PARTY TRANSACTIONS:
For the six months ended December 31, 2008, the Fund incurred $24,577 of
legal fees allocable to Butzel Long PC, counsel to the Fund, for legal services
in conjunction with the Fund's ongoing operations. The Secretary of the Fund is
a shareholder of that firm.
4. PURCHASES AND SALES OF SECURITIES
During the six months ended December 31, 2008, purchases of securities and
proceeds from the sales of securities aggregated $46,209,547 and $32,212,280,
respectively.
At December 31, 2008, the aggregate tax cost for all securities was
$249,601,560. At December 31, 2008, the aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost amounted
to $411,899 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $30,405,703, for a
net unrealized depreciation of $29,993,804.
5. PORTFOLIO ORIENTATION
Since the Fund may invest entirely in double tax-free municipal
obligations of issuers within Utah, it is subject to possible risks associated
with economic, political, or legal developments or industrial or regional
matters specifically affecting Utah and whatever effects these may have upon
Utah issuers' ability to meet their obligations.
The Fund is also permitted to invest in tax-free municipal obligations
meeting comparable quality standards of issuers in certain states that do not
tax the interest on obligations of Utah issuers and that provide income which is
exempt from both regular Federal and Utah income taxes. At December 31, 2008,
the Fund had 59% of its net assets invested in State of Utah municipal issues.
6. EXPENSES
The Fund has negotiated an expense offset arrangement with its custodian
wherein it receives credit toward the reduction of custodian fees and other Fund
expenses whenever there are
uninvested cash balances. The Statement of Operations reflects the total
expenses before any offset, the amount of offset and the net expenses.
7. CAPITAL SHARE TRANSACTIONS
Transactions in Capital Shares of the Fund were as follows:
Six Months Ended
December 31, 2008 Year Ended
(unaudited) June 30, 2008
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
CLASS A SHARES:
Proceeds from shares sold 1,819,267 $ 16,713,898 2,834,849 $ 28,003,392
Reinvested distributions 188,903 1,754,990 417,757 4,128,043
Cost of shares redeemed . (2,254,001) (19,837,905) (2,020,117) (19,970,653)
------------ ------------ ------------ ------------
Net change ........... (245,831) (1,369,017) 1,232,489 12,160,782
------------ ------------ ------------ ------------
CLASS C SHARES:
Proceeds from shares sold 783,901 7,194,901 796,274 7,849,550
Reinvested distributions 36,087 334,445 64,603 638,158
Cost of shares redeemed . (363,564) (3,391,960) (699,234) (6,926,362)
------------ ------------ ------------ ------------
Net change ........... 456,424 4,137,386 161,643 1,561,346
------------ ------------ ------------ ------------
CLASS Y SHARES:
Proceeds from shares sold 1,702,873 15,475,859 2,002,683 19,847,389
Reinvested distributions 46,284 427,458 94,661 937,246
Cost of shares redeemed . (873,398) (8,055,399) (1,843,176) (18,364,610)
------------ ------------ ------------ ------------
Net change ........... 875,759 7,847,918 254,168 2,420,025
------------ ------------ ------------ ------------
Total transactions in Fund
shares .................. 1,086,352 $ 10,616,287 1,648,300 $ 16,142,153
============ ============ ============ ============
8. TRUSTEES' FEES AND EXPENSES
At December 31, 2008 there were 7 Trustees, one of which is affiliated
with the Manager and is not paid any fees. The total amount of Trustees' service
and attendance fees paid during the six months ended December 31, 2008 was
$37,556, to cover carrying out their responsibilities and attendance at
regularly scheduled quarterly Board Meetings and meetings of the Independent
Trustees held prior to each quarterly Board Meeting. When additional meetings
(Audit, Nominating, Shareholder and special meetings) are held, meeting fees are
paid to those Trustees in attendance. Trustees are reimbursed for their expenses
such as travel, accommodations, and meals incurred in connection with attendance
at Board Meetings and the Annual Meeting of Shareholders. For the six months
ended December 31, 2008, such meeting-related expenses amounted to $17,218.
9. SECURITIES TRADED ON A WHEN-ISSUED BASIS
The Fund may purchase or sell securities on a when-issued basis.
When-issued transactions arise when securities are purchased or sold by the Fund
with payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. Beginning on the date the Fund enters into a
when-issued transaction, cash or other liquid securities are segregated in an
amount equal to or greater than the amount of the when-issued transaction. These
transactions are subject to market fluctuations and their current value is
determined in the same manner as for other securities.
10. INCOME TAX INFORMATION AND DISTRIBUTIONS
The Fund declares dividends daily from net investment income and makes
payments monthly. Net realized capital gains, if any, are distributed annually
and are taxable. These distributions are paid in additional shares at the net
asset value per share, in cash, or in a combination of both, at the
shareholder's option.
The Fund intends to maintain, to the maximum extent possible, the
tax-exempt status of interest payments received from portfolio municipal
securities in order to allow dividends paid to shareholders from net investment
income to be exempt from regular Federal and State of Utah income taxes.
However, due to differences between financial statement reporting and Federal
income tax reporting requirements, distributions made by the Fund may not be the
same as the Fund's net investment income, and/or net realized securities gains.
In this regard, the Fund increased undistributed net investment income in the
amount of $318,186 and decreased additional paid-in capital in the amount of
$318,186 at June 30, 2008. This adjustment had no impact on the Fund's aggregate
net assets at June 30, 2008. Further, a small portion of the dividends may,
under some circumstances, be subject to taxes at ordinary income rates. For
certain shareholders some dividend income may, under some circumstances, be
subject to the alternative minimum tax.
At June 30, 2008, the Fund had a capital loss carryover of $1,065,535 of
which $796,250 expires on June 30, 2009, $15,469 expires on June 30, 2011, and
$253,816 expires on June 30, 2012. This carryover is available to offset future
net realized gains on securities transactions to the extent provided for in the
Internal Revenue Code. To the extent that this loss is used to offset future
realized capital gains, it is probable that the gains so offset will not be
distributed.
The tax character of distributions:
Year Ended June 30,
2008 2007
---------- ----------
Net tax-exempt income $9,144,508 $8,484,772
Ordinary income 318,186 454,426
---------- ----------
$9,462,694 $8,939,198
========== ==========
As of June 30, 2008, the components of distributable earnings on a tax
basis were as follows:
Undistributed tax-exempt income $ 249,163
Accumulated net realized loss (1,065,535)
Unrealized depreciation (5,632,671)
Other temporary differences (249,163)
-----------
$(6,698,206)
===========
At June 30, 2008, the difference between book basis and tax basis
unrealized appreciation was attributable primarily to the treatment of accretion
of discounts and amortization of premiums. The difference between book basis and
tax basis undistributed income is due to the timing of distributions.
11. RECENT DEVELOPMENT
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 bonds.
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Class A
--------------------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/08 ----------------------------------------------------------------
(unaudited) 2008 2007 2006 2005 2004
-------- -------- -------- -------- -------- --------
Net asset value, beginning of period .......... $ 9.73 $ 9.91 $ 9.87 $ 10.26 $ 9.91 $ 10.31
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ...................... 0.22++ 0.41+ 0.40+ 0.40+ 0.41+ 0.43++
Net gain (loss) on securities (both realized
and unrealized) ......................... (0.99) (0.17) 0.05 (0.37) 0.38 (0.37)
-------- -------- -------- -------- -------- --------
Total from investment operations ........... (0.77) 0.24 0.45 0.03 0.79 0.06
-------- -------- -------- -------- -------- --------
Less distributions (note 10):
Dividends from net investment income ....... (0.22) (0.42) (0.41) (0.42) (0.44) (0.46)
Distributions from capital gains ........... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions ........................ (0.22) (0.42) (0.41) (0.42) (0.44) (0.46)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ................ $ 8.74 $ 9.73 $ 9.91 $ 9.87 $ 10.26 $ 9.91
======== ======== ======== ======== ======== ========
Total return (not reflecting sales charge) .... (7.98)%* 2.45% 4.60% 0.28% 8.06% 0.54%
Ratios/supplemental data
Net assets, end of period (in thousands) ... $139,904 $158,125 $148,894 $142,227 $126,091 $ 94,103
Ratio of expenses to average net assets .... 0.72%** 0.63% 0.68% 0.64% 0.59% 0.48%
Ratio of net investment income to average
net assets .............................. 4.63%** 4.09% 3.89% 3.90% 3.98% 4.19%
Portfolio turnover rate .................... 14.36%* 18.83% 17.36% 9.61% 8.68% 15.98%
The expense and net investment income ratios without the effect of the waiver of a portion of the management fee and the expense
reimbursement were (note 3):
Ratio of expenses to average net assets .... 0.87%** 0.90% 0.96% 0.93% 0.97% 0.94%
Ratio of net investment income to average
net assets .............................. 4.48%** 3.82% 3.61% 3.61% 3.60% 3.73%
The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets .... 0.69%** 0.61% 0.66% 0.61% 0.56% 0.47%
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ Per share amounts have been calculated using the daily average shares
method.
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS (continued)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Class C
--------------------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/08 ----------------------------------------------------------------
(unaudited) 2008 2007 2006 2005 2004
-------- -------- -------- -------- -------- --------
Net asset value, beginning of period ...... $ 9.72 $ 9.91 $ 9.87 $ 10.26 $ 9.91 $ 10.30
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income .................. 0.18++ 0.33++ 0.32+ 0.32+ 0.32+ 0.34+
Net gain (loss) on securities (both
realized and unrealized) ............ (0.99) (0.18) 0.05 (0.37) 0.38 (0.36)
-------- -------- -------- -------- -------- --------
Total from investment operations .......... (0.81) 0.15 0.37 (0.05) 0.70 (0.02)
-------- -------- -------- -------- -------- --------
Less distributions (note 10):
Dividends from net investment income ... (0.18) (0.34) (0.33) (0.34) (0.35) (0.37)
Distributions from capital gains ....... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions .................... (0.18) (0.34) (0.33) (0.34) (0.35) (0.37)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............ $ 8.73 $ 9.72 $ 9.91 $ 9.87 $ 10.26 $ 9.91
======== ======== ======== ======== ======== ========
Total return (not reflecting sales charge) (8.37)%* 1.53% 3.77% (0.52)% 7.20% (0.16)%
Ratios/supplemental data
Net assets, end of period (in thousands) $ 32,649 $ 31,906 $ 30,905 $ 33,791 $ 27,581 $ 21,961
Ratio of expenses to average net assets 1.51%** 1.43% 1.48% 1.44% 1.39% 1.27%
Ratio of net investment income to
average net assets .................. 3.83%** 3.29 3.10% 3.10% 3.18% 3.38%
Portfolio turnover rate ................ 14.36%* 18.83 17.36% 9.61% 8.68% 15.98%
The expense and net investment income ratios without the effect of the waiver of a portion of the management fee and the expense
reimbursement were (note 3):
Ratio of expenses to average net assets 1.67%** 1.70% 1.76% 1.72% 1.77% 1.74%
Ratio of net investment income to
average net assets .................. 3.68%** 3.02% 2.81% 2.81% 2.80% 2.93%
The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets 1.49%** 1.42% 1.46% 1.41% 1.36% 1.27%
Class Y
--------------------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/08 ----------------------------------------------------------------
(unaudited) 2008 2007 2006 2005 2004
-------- -------- -------- -------- -------- --------
Net asset value, beginning of period ...... $ 9.76 $ 9.94 $ 9.90 $ 10.29 $ 9.94 $ 10.34
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income .................. 0.23++ 0.43++ 0.41+ 0.42+ 0.42+ 0.44++
Net gain (loss) on securities (both
realized and unrealized) ............ (0.99) (0.17) 0.07 (0.37) 0.39 (0.36)
-------- -------- -------- -------- -------- --------
Total from investment operations .......... (0.76) 0.26 0.48 0.05 0.81 0.08
-------- -------- -------- -------- -------- --------
Less distributions (note 10):
Dividends from net investment income ... (0.23) (0.44) (0.44) (0.44) (0.46) (0.48)
Distributions from capital gains ....... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions .................... (0.23) (0.44) (0.44) (0.44) (0.46) (0.48)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............ $8,77 $ 9.76 $ 9.94 $ 9.90 $ 10.29 $ 9.94
======== ======== ======== ======== ======== ========
Total return (not reflecting sales charge) (7.85)%* 2.67% 4.80% 0.49% 8.27% 0.76%
Ratios/supplemental data
Net assets, end of period (in thousands) $ 51,460 $ 48,737 $ 47,124 $ 39,791 $ 17,928 $ 8,233
Ratio of expenses to average net assets 0.52%** 0.43% 0.48% 0.44% 0.39% 0.28%
Ratio of net investment income to
average net assets .................. 4.84%** 4.29% 4.09% 4.10% 4.15% 4.41%
Portfolio turnover rate ................ 14.36%* 18.83% 17.36% 9.61% 8.68% 15.98%
The expense and net investment income ratios without the effect of the waiver of a portion of the management fee and the expense
reimbursement were (note 3):
Ratio of expenses to average net assets 0.67%** 0.70% 0.76% 0.72% 0.77% 0.74%
Ratio of net investment income to
average net assets .................. 4.69%** 4.02% 3.81% 3.82% 3.78% 3.95%
The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets 0.49%** 0.42% 0.46% 0.41% 0.37% 0.27%
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ Per share amounts have been calculated using the daily average shares
method.
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED)
As a shareholder of the Fund, you may incur two types of costs: (1)
transaction costs, including front-end sales charges with respect to Class A
shares or contingent deferred sales charges ("CDSC") with respect to Class C
shares; and (2) ongoing costs, including management fees; distribution and/or
service (12b-1) fees; and other Fund expenses. The table below is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund 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 July 1,
2008 and held for the six months ended December 31, 2008.
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 DECEMBER 31, 2008
ACTUAL
TOTAL RETURN BEGINNING ENDING EXPENSES
WITHOUT ACCOUNT ACCOUNT PAID DURING
SALES CHARGES(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
Class A (7.98)% $1,000.00 $920.20 $3.34
- --------------------------------------------------------------------------------
Class C (8.37)% $1,000.00 $916.30 $7.20
- --------------------------------------------------------------------------------
Class Y (7.85)% $1,000.00 $921.50 $2.37
- --------------------------------------------------------------------------------
(1) ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, IF
ANY, AT NET ASSET VALUE AND DOES NOT REFLECT THE DEDUCTION OF THE
APPLICABLE SALES CHARGES WITH RESPECT TO CLASS A SHARES OR THE APPLICABLE
CONTINGENT DEFERRED SALES CHARGES ("CDSC") WITH RESPECT TO CLASS C SHARES.
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 0.69%, 1.49% AND
0.49% FOR THE FUND'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 184/365 (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 Fund's actual return.
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 Fund and other mutual funds. To do so, compare this 5.00% hypothetical
example relating to the Fund with the 5.00% hypothetical examples that appear in
the shareholder reports of other mutual funds.
Please note that the expenses shown in the table below are meant to
highlight your ongoing costs only and do not reflect any transactional costs
with respect to Class A shares. The example does not reflect the deduction of
contingent deferred sales charges ("CDSC") with respect to Class C shares.
Therefore, the table is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different mutual funds. In
addition, if these transaction costs were included, your costs would have been
higher.
SIX MONTHS ENDED DECEMBER 31, 2008
HYPOTHETICAL
ANNUALIZED BEGINNING ENDING EXPENSES
TOTAL ACCOUNT ACCOUNT PAID DURING
RETURN VALUE VALUE THE PERIOD(1)
- --------------------------------------------------------------------------------
Class A 5.00% $1,000.00 $1,021.73 $3.52
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Class C 5.00% $1,000.00 $1,017.69 $7.58
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Class Y 5.00% $1,000.00 $1,022.74 $2.50
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(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.69%, 1.49% AND
0.49% FOR THE FUND'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 184/365 (TO
REFLECT THE ONE-HALF YEAR PERIOD).
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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 Fund
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 Fund's portfolio
other than in your shareholder reports, please check our website
http://www.aquilafunds.com or call us at 1-800-437-1020.
The Fund additionally files a complete list of its portfolio holdings 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, DC or by calling 1-800-SEC-0330.
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PROXY VOTING RECORD (UNAUDITED)
The Fund does 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 the Fund was
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.
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ADDITIONAL INFORMATION (UNAUDITED)
RENEWAL OF THE ADVISORY AND ADMINISTRATION AGREEMENT
Renewal until December 31, 2009 of the Advisory and Administration
Agreement (the "Advisory Agreement") between the Fund and the Manager was
approved by the Board of Trustees and the independent Trustees in December,
2008. At a meeting called and held for that purpose at which a majority of the
independent Trustees were present in person, the following materials were
considered:
o A copy of the agreement to be renewed;
o A term sheet describing the material terms of the agreement;
o The Annual Report of the Fund for the year ended June 30, 2008;
o A report, prepared by the Manager and provided to the Trustees in
advance of the meeting for the Trustees' review, containing data
about the performance of the Fund, data about its fees, expenses and
purchases and redemptions of capital shares together with
comparisons of such data with similar data about other comparable
funds, as well as data as to the profitability of the Manager; and
o Quarterly materials reviewed at prior meetings on the Fund's
performance, operations, portfolio and compliance.
The Trustees reviewed materials relevant to, and considered the following
factors:
THE NATURE, EXTENT, AND QUALITY OF THE SERVICES PROVIDED BY THE MANAGER
The Manager has provided local management of the Fund's portfolio. The
Trustees noted that the Manager employed Mr. Thomas S. Albright and Mr. Kimball
Young as co-portfolio managers for the Fund and has established facilities for
credit analysis of the Fund's portfolio securities. Mr. Young, based in Salt
Lake City, has extensive municipal bond underwriting experience and has provided
local information regarding specific holdings in the Fund's portfolio. Mr.
Albright has over 25 years of investment management experience. The portfolio
managers have also been available to and have met with the brokerage and
financial planner community and with investors and prospective investors to
provide them with information generally about the Fund's portfolio, with which
to assess the Fund as an investment vehicle for residents of Utah in light of
prevailing interest rates and local economic conditions.
The Board considered that the Manager had provided all services the Board
deemed necessary or appropriate, including the specific services that the Board
has determined are required for the Fund, given that its purpose is to provide
shareholders with as high a level of current income exempt from Utah state and
regular Federal income taxes as is consistent with preservation of capital.
The Manager has additionally provided all administrative services to the
Fund. The Board considered the nature and extent of the Manager's supervision of
third-party service providers, including the Fund's shareholder servicing agent
and custodian. The Board considered that the Manager had established and
maintained a strong culture of ethical conduct and regulatory compliance.
The Board concluded that the services provided were appropriate and
satisfactory and that the Fund would be well served if they continued.
Evaluation of this factor weighed in favor of renewal of the Advisory Agreement.
THE INVESTMENT PERFORMANCE OF THE FUND AND THE MANAGER
The Board reviewed each aspect of the Fund's performance and compared its
performance with that of its competitors, with national averages and the
benchmark index. It was noted that the materials provided by the Manager
indicated that the Fund had investment performance that was comparable to that
of all single-state tax-free municipal bond funds nationwide, including funds of
a comparable asset size for one-, five- and ten-year periods.
The Board considered these results to be consistent with the purposes of
the Fund.
The Board concluded that the performance of the Fund, in light of market
conditions, was satisfactory. Evaluation of this factor indicated to the
Trustees that renewal of the Advisory Agreement would be appropriate.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
MANAGER AND ITS AFFILIATES FROM THE RELATIONSHIP WITH THE FUND
The information provided in connection with renewal contained expense data
for the Fund and its competitors as well as data for all single-state tax-free
municipal bond funds nationwide, including data for all such front-end load
funds of a comparable asset size. The materials also showed the profitability to
the Manager of its services to the Fund.
The Board noted that the Manager was currently waiving a portion of its
fees and had been since the Fund's inception. Additionally, it was noted that
the Manager had contractually undertaken to waive fees and/or reimburse Fund
expenses during the period July 1, 2008 through June 30, 2009 so that total Fund
expenses would not exceed 0.83 of 1% for Class A Shares. The Manager had
indicated that it intended to continue waiving fees as necessary in order that
the Fund would remain competitive.
The Board compared the expense and fee data with respect to the Fund to
similar data about other funds that it found to be relevant. The Board concluded
that the expenses of the Fund and the fees paid were similar to and were
reasonable as compared to those being paid by single-state tax-free municipal
bond funds nationwide, and by the Fund's competitors.
The Board further concluded that the profitability to the Manager and the
Distributor did not argue against approval of the fees to be paid under the
Advisory Agreement.
THE EXTENT TO WHICH ECONOMIES OF SCALE WOULD BE REALIZED AS THE FUND GROWS
Data provided to the Trustees showed that the Fund's asset size had been
increasing in recent years. The Trustees also noted that the materials indicated
that the Fund's fees were already lower than those of its peers, including those
with breakpoints. Additionally, the Trustees noted that the Manager was
currently waiving a substantial portion of its fees. Evaluation of these factors
indicated to the Board that the Advisory Agreement should be renewed without
addition of breakpoints at this time.
BENEFITS DERIVED OR TO BE DERIVED BY THE MANAGER AND ITS AFFILIATES FROM THE
RELATIONSHIP WITH THE FUND
The Board observed that, as is generally true of most fund complexes, the
Manager and its affiliates, by providing services to a number of funds including
the Fund, were able to spread costs as they would otherwise be unable to do. The
Board noted that while that produces efficiencies and increased profitability
for the Manager and its affiliates, it also makes their services available to
the Fund at favorable levels of quality and cost which are more advantageous to
the Fund than would otherwise have been possible.
FOUNDERS
Lacy B. Herrmann, Chairman Emeritus
Aquila Management Corporation
MANAGER
AQUILA investment MANAGEMENT LLC
380 Madison Avenue, Suite 2300
New York, New York 10017
BOARD OF TRUSTEES
Gary C. Cornia, Chair
Anne J. Mills, Vice Chair
Tucker Hart Adams
Thomas A. Christopher
Diana P. Herrmann
Lyle W. Hillyard
John C. Lucking
OFFICERS
Diana P. Herrmann, President
Kimball L. Young, Senior Vice President
and Co-Portfolio Manager
Thomas S. Albright, Senior Vice President
and Co-Portfolio Manager
M. Kayleen Willis, 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
New York, New York 10017
TRANSFER AND SHAREHOLDER SERVICING AGENT
PNC Global Investment Servicing
101 Sabin Street
Pawtucket, RI 02860
CUSTODIAN
JPMORGAN CHASE BANK, N.A.
1111 Polaris Parkway
Columbus, Ohio 43240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400
Philadelphia, PA 19103
Further information is contained in the Prospectus,
which must precede or accompany this report.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTING FEES AND SERVICES.
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 filing 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
that information required to be disclosed in the registrant's reports that are
filed under the Securities Exchange Act of 1934 are accumulated and communicated
to 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)(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.
TAX-FREE FUND FOR UTAH
By: /s/ Diana P. Herrmann
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President and Trustee
March 4, 2009
By: /s/ Joseph P. DiMaggio
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Chief Financial Officer and Treasurer
March 4, 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
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Diana P. Herrmann
President and Trustee
March 4, 2009
By: /s/ Joseph P. DiMaggio
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Joseph P. DiMaggio
Chief Financial Officer and Treasurer
March 4, 2009
TAX-FREE FUND FOR UTAH
EXHIBIT INDEX
(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.