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: 6/30/09
Date of reporting period: 6/30/09
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL
REPORT
June 30, 2009
[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](R)
SERVING UTAH INVESTORS FOR MORE THAN 15 YEARS
TAX-FREE FUND FOR UTAH
"A MORE PREDICTABLE RIDE"
August, 2009
Dear Fellow Shareholder:
We know it. And, you know it too. The United States has seen better
economic days.
Like it or not, unpleasant market cycles do occur periodically. This tends
to distract some people's focus from the longer-term objective that influenced
their investment decision in the first place.
Our shareholder and financial professional surveys have consistently
indicated over the years that the original investment objective and decision for
investors in Tax-Free Fund For Utah, has generally been aligned with the Fund's
objective: to seek as high a level of current income exempt from Utah state and
regular Federal income taxes as is consistent with preservation of capital.
How does the Fund seek to fulfill its and your investment objective?
Management of Tax-Free Fund For Utah and its municipal bond portfolio
management team believe that when you are dealing with investments, quality
counts.
As you may recall, there are nine separate credit ratings assignable to
municipal securities, ranging from the most conservative to the highly
speculative. For protection of investors' capital, the Fund intentionally limits
its purchases to securities rated (or, if unrated, deemed by the Manager to be)
investment grade quality - that is rated within the four highest credit ratings:
AAA, AA, A, AND BBB.
In general, the higher the quality rating of a municipal security, the
greater or more reliable the cash flow there is for the municipality to cover
interest and principal payments when due on the security. While exaggerated
price changes may occur in emotionally charged securities markets, they normally
are not reflective of a municipal issuer's capability to pay interest and
principal in a timely manner on any particular security. It is the cash flow and
solidness of the municipal issuer that count - and this is reflected in the
quality level of the credit rating.
NOT A PART OF THE ANNUAL REPORT
We can assure you that the Fund's portfolio management team pays
considerable attention to this factor before any security is purchased for the
portfolio as well as in conducting continuing analysis and evaluation with each
and every security once it is a part of the Fund's investment portfolio. It is
additionally important for you to know that, with any insured securities, our
portfolio management team has always sought to look beyond the insurance to the
credit quality of the underlying issuer rather than relying upon any insurance.
We fully recognize that the current times can be unsettling. However, we
hope that you are comforted to know that we belive you have a knowledgeable team
of financial experts, which has continually sought to carefully choose the
securities in the Fund's portfolio and seeks to continuously monitor your
investment in Tax-Free Fund For Utah.
Sincerely,
[PHOTO OMITTED]
/s/ Lacy B. Herrmann /s/ Diana P. Herrmann
Lacy B. Herrmann Diana P. Herrmann
Founder and Chairman Emeritus President
NOT A PART OF THE ANNUAL REPORT
[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
ANNUAL REPORT
MANAGEMENT DISCUSSION
Over the past twelve months, the financial markets have been subjected to
some of the most tumultuous events to ever shake the foundations of our
traditionally "unshakable" economy. Those are the exact same words used to open
this commentary last year. Little did we know at that time that "sub-prime"
investing would lead to the disappearance of Lehman Brothers and trigger a
decline in asset values for real estate, stocks and non-U.S. Treasury fixed
income securities. We now find ourselves in the worst recession since the 1930's
with the housing market still weak, the consumer heavily indebted, unemployment
near 10%, but the markets rebounding in anticipation of better times ahead.
During this period the municipal market has changed as states are facing
declining tax revenues and stressed budgets. A variety of questions face our
local governments in terms of revenue sources and the ability to provide for
governmental services. In addition, municipal bond insurers have lost their
financial viability and the safe AAA credit support that they provided is no
longer available. However, we believe the difficult decisions being made by our
state and local governments, although painful, will provide healthy discipline
to the budget processes for years to come.
The municipal yield curve during this time has been historically steep, a
reflection first of the flight to safety and now the uncertainty of the impact
from the enormous fiscal stimulus working through the economy. To illustrate, on
June 30, 2008 two-year municipal yields were yielding 2.68% and 30-year
municipals were yielding 4.83% for a steepness of 215 basis points (100 basis
points=1%). On June 30, 2009 two-year municipals yielded 0.98% and 30-year
municipals yielded 4.67% or a curve steepness of 369 basis points. The result
has been an inclination to buy at the longer end of the curve. Thus, the Fund's
average maturity increased from 14.4 years to 17.0 years. However, the Fund's
duration declined from 8.2 years to 7.1 years. Duration is a measure of a bond's
price sensitivity to changes in interest rates and probably the better indicator
of potential volatility.
The Fund's net asset value (Class A shares) declined from $9.73 on June
30, 2008 to $9.35 on June 30, 2009 or 3.91%. Income for the twelve months
increased from $0.421 per share to $0.451 per share. The total return for the
fiscal year equaled a modest 0.91%. However, as the range of share values
extended from a high on July 15, 2008 at $9.86 and a low of $8.41 in mid
December for a swing of almost 15%, we are content to have rebounded to
breakeven. As a comparison, the municipal bond categories as measured by Lipper
had the following twelve month returns as of June 30, 2009: General Municipals
- -0.5%; Single State Municipals +0.7%; Insured Municipals +0.9%; High Yield
Municipals -11.1%.
MANAGEMENT DISCUSSION (CONTINUED)
The Fund continues to invest across the various states given Utah tax
exemption. However, our emphasis remains on Utah obligations with 64% of the
portfolio invested in Utah obligations as of June 30, 2009. Over the past year,
we have added several non-rated and private placements, primarily charter
schools, which we feel have "value-added" in their above market yields. In these
uncertain times, credit and liquidity will take on added significance in the
coming year.
Our investment objective for Tax-Free Fund For Utah is to provide as high
a level of double tax-free income as is consistent with the preservation of
capital. To meet this objective, we will continue to strive to manage the
portfolio in such a way as to take advantage of opportunities in the Utah
marketplace which maintain income while endeavoring to minimize the price swings
of our net asset value.
PERFORMANCE REPORT
The following graph illustrates the value of $10,000 invested in the Class
A shares of Tax-Free Fund For Utah for the 10-year period ended June 30, 2009 as
compared with the Barclays Capital Quality Intermediate Municipal Bond Index
(the "Barclays Capital Index") (formerly known as the Lehman Brothers Quality
Intermediate Municipal Bond Index) and the Consumer Price Index (a cost of
living index). The performance of each of the other classes is not shown in the
graph but is included in the table below. It should be noted that the Barclays
Capital Index does not include any operating expenses nor sales charges and
being nationally oriented, does not reflect state specific bond market
performance for the limited number of states in which the Tax-Free Fund for Utah
may invest.
[Graphic of a line chart with the following information:]
TFFU TFFU
Cost of Fund Class A Shares Fund Class A Shares Barclays
Living Index no sales charge with sales charge Capital Index
6/99 10,000 10,000 9,600 10,000
6/00 10,373 10,014 9,615 10,403
6/01 10,710 10,945 10,509 11,322
6/02 10,824 11,710 11,243 12,110
6/03 11,053 12,890 12,377 13,057
6/04 11,414 12,871 12,358 13,102
6/05 11,703 13,938 13,383 13,807
6/06 12,208 13,953 13,397 13,854
6/07 12,536 14,580 13,999 14,434
6/08 13,166 14,903 14,309 15,214
6/09 12,978 15,128 14,525 16,238
AVERAGE ANNUAL TOTAL RETURN
FOR PERIODS ENDED JUNE 30, 2009
---------------------------------------------
SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION
------ ------- -------- ---------
Class A (commenced operations on 7/24/92)
With Maximum Sales Charge ....................... (3.17)% 2.39% 3.80% 4.70%
Without Sales Charge ............................ 0.91 3.22 4.23 4.95
Class C (commenced operations on 5/21/96)
With CDSC ....................................... (0.90) 2.38 3.33 3.68
Without CDSC .................................... 0.10 2.38 3.33 3.68
Class Y (commenced operations on 5/21/96)
No Sales Charge ................................. 1.13 3.44 4.44 4.80
Barclays Capital Index ............................ 6.73 4.39 4.97 5.31* (Class A)
4.99** (Class C&Y)
Total return figures shown for the Fund reflect any change in price and assume
all distributions within the period were invested in additional shares. Returns
for Class A shares are calculated with and without the effect of the initial 4%
maximum sales charge. Returns for Class C shares are calculated with and without
the effect of the 1% contingent deferred sales charge (CDSC), imposed on
redemptions made within the first 12 months after purchase. Class Y shares are
sold without any sales charge. The rates of return will vary and the principal
value of an investment will fluctuate with market conditions. Shares, if
redeemed, may be worth more or less than their original cost. A portion of each
class's income may be subject to Federal and state income taxes and/or the
Federal alternative minimum tax. Past performance is not predictive of future
investment results.
* From commencement of operations on 7/24/92.
** From commencement of operations on 5/21/96.
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
Tax-Free Fund For Utah:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Tax-Free Fund For Utah as of June 30,
2009 and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the four years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended June 30, 2005 were audited
by other auditors, whose report dated August 12, 2005 expressed an unqualified
opinion on such financial highlights.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
the Fund's internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 2009, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Tax-Free Fund For Utah as of June 30, 2009, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the four years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
August 28, 2009
- --------------------------------------------------------------------------------
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS
JUNE 30, 2009
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (12.1%) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
CITY, COUNTY AND STATE (7.1%)
Alamo, Texas Community College District
$ 595,000 4.375%, 02/15/25 National-re Insured .................... Aa2/AA $ 580,827
Anderson, Indiana San District
505,000 4.600%, 07/15/23 AMBAC Insured .......................... A3/A- 507,469
Cedar City, Utah Special Improvement District
Assessment
235,000 5.050%, 09/01/10 ........................................ NR/NR* 230,088
215,000 5.200%, 09/01/11 ........................................ NR/NR* 206,503
Cedar Park, Texas
835,000 4.500%, 02/15/22 National-re Insured .................... A1/AA- 837,722
Coral Canyon, Utah Special Service District
140,000 4.850%, 07/15/17 ........................................ NR/NR* 108,844
580,000 5.700%, 07/15/18 ........................................ NR/NR* 465,862
Dawson County, Texas Hospital District
555,000 4.375%, 02/15/24 AMBAC Insured .......................... NR/BBB+ 529,847
Denton County, Texas
700,000 4.500%, 07/15/24 National-re Insured .................... Aa1/AAA 705,138
400,000 4.500%, 07/15/25 National-re Insured .................... Aa1/AAA 401,252
1,500,000 4.250%, 07/15/27 National-re Insured .................... Aa1/AAA 1,434,360
Harris County, Texas Utility District #268
905,000 4.375%, 09/01/27 Radian Insured ......................... NR/BBB- 754,897
Hurricane, Utah
65,000 5.400%, 11/01/09 Radian Insured ......................... NR/BBB- 65,775
King County, Washington Unlimited Tax
1,000,000 4.500%, 12/01/25 FSA Insured ............................ Aa1/AAA 1,011,130
Laredo, Texas
300,000 4.250%, 08/15/21 AMBAC Insured .......................... A1/AA- 302,076
500,000 4.500%, 02/15/24 AMBAC Insured .......................... Aa3/AA 504,670
McKinney, Texas
1,700,000 4.500%, 08/15/23 Syncora Guarantee Inc. Insured ......... Aa2/AA+ 1,729,903
1,375,000 5.000%, 08/15/24 AMBAC Insured .......................... Aa2/AA+ 1,449,195
695,000 4.375%, 08/15/25 National-re Insured .................... Aa2/AA+ 698,774
Mesquite, Texas
510,000 4.625%, 02/15/22 FSA Insured ............................ Aa3/AAA 526,631
San Antonio, Texas
125,000 4.750%, 02/01/24 FSA Insured ............................ Aa1/AAA 127,628
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
CITY, COUNTY AND STATE (CONTINUED)
San Patricio County, Texas
$ 450,000 4.600%, 04/01/25 AMBAC Insured .......................... A2/NR $ 456,741
Texas State
415,000 4.500%, 08/01/22 ........................................ Aa1/AA 426,869
Waco, Texas
2,560,000 4.500%, 02/01/24 National-re Insured .................... Aa3/AA 2,567,450
Washington County, Utah
1,250,000 5.000%, 10/01/22 National-re Insured .................... A1/NR 1,281,400
Williamson County, Texas
460,000 4.500%, 02/15/26 FSA Insured ............................ Aa2/AAA 458,914
------------
Total City, County and State ............................ 18,369,965
------------
SCHOOL DISTRICT (5.0%)
Borger, Texas Independent School District
400,000 4.500%, 02/15/24 ........................................ NR/AAA 407,772
500,000 4.500%, 02/15/25 ........................................ NR/AAA 505,965
Clint, Texas Independent School District
265,000 4.250%, 02/15/28 ........................................ NR/AAA 253,475
Freemont County, Wyoming School District #14
355,000 4.500%, 06/15/26 ........................................ NR/BBB 359,427
Frisco, Texas Independent School District
1,260,000 5.000%, 07/15/26 ........................................ Aaa/NR+ 1,304,075
Galena Park, Texas Independent School District
295,000 4.625%, 08/15/25 ........................................ Aaa/NR+ 300,988
Harrisburg, South Dakota Independent School District
No. 41- 2
1,370,000 4.500%, 01/15/24 FSA Insured ............................ Aa3/NR++ 1,370,616
La Feria, Texas Independent School District
210,000 4.400%, 02/15/24 ........................................ Aaa/NR 211,966
Lindale, Texas Independent School District
440,000 4.250%, 02/15/21 ........................................ NR/AAA 447,234
1,000,000 4.250%, 02/15/22 ........................................ NR/AAA 1,011,410
445,000 4.375%, 02/15/23 ........................................ NR/AAA 451,728
Lovejoy, Texas Independent School District
200,000 4.500%, 02/15/24 ........................................ Aaa/AAA 203,092
Navasota, Texas Independent School District
475,000 5.000%, 08/15/23 National-re FGIC Insured ............... A3/NR 486,362
RATING
PRINCIPAL MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
SCHOOL DISTRICT (CONTINUED)
Prosper, Texas Independent School District
$ 395,000 4.125%, 08/15/21 ........................................ NR/AAA $ 399,349
Spring, Texas Independent School District
300,000 4.750%, 08/15/23 ........................................ Aaa/AAA 306,495
Uintah County, Utah School District
455,000 4.250%, 02/01/24 ........................................ Aaa/NR 459,978
Van, Texas Independent School District
750,000 4.875%, 02/15/26 ........................................ Aaa/AAA 779,183
Washington County, Utah
440,000 5.000%, 10/01/18 Syncora Guarantee Inc. Insured ......... Aa3/NR 462,273
465,000 5.000%, 10/01/19 Syncora Guarantee Inc. Insured ......... Aa3/NR 484,958
490,000 5.000%, 10/01/20 Syncora Guarantee Inc. Insured ......... Aa3/NR 508,924
510,000 5.000%, 10/01/21 Syncora Guarantee Inc. Insured ......... Aa3/NR 528,722
535,000 5.000%, 10/01/22 Syncora Guarantee Inc. Insured ......... Aa3/NR 550,841
565,000 5.000%, 10/01/23 Syncora Guarantee Inc. Insured ......... Aa3/NR 578,537
320,000 5.000%, 10/01/24 Syncora Guarantee Inc. Insured ......... Aa3/NR 327,069
Washoe County, Nevada School District
200,000 4.625%, 06/01/23 National-re FGIC Insured ............... Aa3/AA 202,448
------------
Total School District ................................... 12,902,887
------------
Total General Obligation Bonds .......................... 31,272,852
------------
REVENUE BONDS (85.3%)
---------------------------------------------------------
AIRPORT (2.2%)
Clark County, Nevada Passenger Facility Charge
255,000 4.750%, 07/01/22 National-re Insured AMT ................ Aa3/A+ 252,320
Greater Orlando Aviation Authority, Florida Airport
2,000,000 5.500%, 10/01/23 AMT .................................... Aa3/A+ 1,968,820
Hillsborough County, Florida Aviation Authority
2,185,000 5.250%, 10/01/23 National-re Insured AMT ................ Aa3/A+ 2,093,864
Miami-Dade County, Florida Aviation Revenue
1,700,000 5.000%, 10/01/28 Series C National-re Insured AMT ....... A2/A 1,483,539
------------
Total Airport ........................................... 5,798,543
------------
EDUCATION (32.4%)
Broward County, Florida School Board COP
1,780,000 4.500%, 07/01/23 Series A National-re FGIC Insured ...... A1/A+ 1,633,951
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
EDUCATION (CONTINUED)
Carmel, Indiana 2002 School Building Corp.
$ 1,235,000 4.300%, 01/15/23 FSA Insured ............................ Aa3/AAA $ 1,217,549
Central Washington State University System Revenue
1,265,000 4.375%, 05/01/26 FSA Insured ........................... Aa3/NR++ 1,242,015
Florida State Board of Education Public Education
210,000 4.500%, 06/01/25 FSA Insured ............................ Aa1/AAA 208,578
Hillsborough County, Florida School Board COP
560,000 4.250%, 07/01/26 National-re Insured .................... Aa3/AA- 495,538
Laredo, Texas Independent School District Public
Facility Corp.
190,000 5.000%, 08/01/24 AMBAC Insured .......................... NR/A- 193,543
La Vernia, Texas Higher Education Finance Corp.
3,596,000 6.500%, 03/12/38 ........................................ NR/NR* 2,852,383
Nevada System Higher Education COP
1,000,000 5.000%, 07/01/25 AMBAC Insured .......................... NR/AA- 1,036,960
Salt Lake County, Utah Westminster College Project
870,000 4.750%, 10/01/21 ........................................ NR/BBB 740,144
2,300,000 5.000%, 10/01/22 ........................................ NR/BBB 1,980,093
1,250,000 5.000%, 10/01/25 ........................................ NR/BBB 1,037,163
2,025,000 5.125%, 10/01/28 ........................................ NR/BBB 1,646,973
Spanish Fork City, Utah Charter School Revenue
American Leadership Academy
1,900,000 5.550%, 11/15/21 ........................................ NR/NR* 1,524,579
945,000 5.550%, 11/15/26 ........................................ NR/NR* 697,665
Texas A&M University Revenue
1,750,000 5.000%, 07/01/34 ........................................ Aaa/AAA 1,773,118
Texas State College Student Loan Revenue
100,000 5.000%, 08/01/22 AMT .................................... Aa1/AA 95,918
Texas State University System Financing Revenue
655,000 4.375%, 03/15/23 FSA Insured ............................ Aa3/AAA 656,762
Tyler, Texas Independent School District
325,000 5.000%, 02/15/26 FSA Insured ............................ Aa3/AAA 332,638
University of Nevada (University Revenues)
190,000 4.500%, 07/01/24 National-re Insured .................... Aa3/AA- 190,587
University of Utah COP
3,170,000 4.350%, 12/01/26 AMBAC Insured .......................... Aa3/AA- 3,158,398
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
EDUCATION (CONTINUED)
Utah County, Utah Charter School Revenue Lakeview
Academy
$ 315,000 5.350%, 07/15/17 Series A ............................... NR/NR* $ 271,795
Utah County, Utah Charter School Revenue Lincoln
Academy
950,000 5.450%, 06/15/17 Series A ............................... NR/NR* 829,312
Utah County, Utah Charter School Revenue
Renaissance Academy
340,000 5.350%, 07/15/17 Series A ............................... NR/NR* 286,487
Utah County, Utah School Facility Revenue,
Ranches Academy
1,320,000 6.500%, 12/21/25 ........................................ NR/NR* 1,061,465
Utah State Board of Regents Auxiliary & Campus
Facility
1,000,000 4.125%, 04/01/20 National-re Insured .................... Aa2/AA 997,800
Utah State Board of Regents Lease Revenue
410,000 4.500%, 05/01/20 AMBAC Insured ......................... NR/AA 422,107
425,000 4.500%, 05/01/21 AMBAC Insured ......................... NR/AA 436,275
450,000 4.625%, 05/01/22 AMBAC Insured ......................... NR/AA 461,750
120,000 4.650%, 05/01/23 AMBAC Insured ......................... NR/AA 122,596
Utah State Board of Regents Office Facility Revenue
450,000 5.050%, 02/01/20 National-re Insured .................... Baa1/AA 460,976
360,000 5.125%, 02/01/22 National-re Insured .................... Baa1/AA 368,636
1,045,000 5.000%, 04/01/23 National-re Insured .................... Aa3/AA- 1,087,155
Utah State Charter School Finance Authority
American Prep Academy
6,900,000 8.000%, 03/15/39 ........................................ NR/NR* 6,943,056
Utah State Charter School Finance Authority Channing
Hall Academy
1,700,000 5.750%, 07/15/22 Series A ............................... NR/NR* 1,278,961
Utah State Charter School Finance Authority Da Vinci
Academy
6,950,000 8.000%, 03/15/39 ........................................ NR/NR* 6,992,604
Utah State Charter School Finance Authority Entheos
Academy
5,930,000 6.750%, 08/15/38 ........................................ NR/NR* 4,727,100
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
EDUCATION (CONTINUED)
Utah State Charter School Finance Authority Fast
Forward High School
$ 3,108,800 6.500%, 11/15/37 ........................................ NR/NR* $ 2,330,916
Utah State Charter School Finance Authority G.
Washington Academy
1,000,000 6.750%, 07/15/28 ........................................ NR/NR* 832,250
Utah State Charter School Finance Authority Legacy
Prep Academy
5,745,000 6.750%, 06/15/38 ........................................ NR/NR* 5,770,335
7,800,000 7.250%, 06/15/39 ........................................ NR/NR* 7,908,732
Utah State Charter School Finance Authority Noah
Webster Academy
3,155,000 6.250%, 06/15/28 ........................................ NR/NR* 2,470,050
1,000,000 6.500%, 06/15/38 ........................................ NR/NR* 758,520
Utah State Charter School Finance Authority
Rockwell Charter School
1,000,000 6.750%, 08/15/28 ........................................ NR/NR* 831,050
Utah State Charter School Finance Authority Ronald
Wilson Reagan Academy
1,250,000 5.750%, 02/15/22 Series A ............................... NR/NR* 1,021,338
Utah State Charter School Finance Authority Summit
Academy
1,425,000 5.125%, 06/15/17 ........................................ NR/BBB- 1,233,623
Utah State Charter School Finance Authority Venture
Academy
7,305,000 7.250%, 11/15/38 ........................................ NR/NR* 7,105,427
Washington State University Revenue
750,000 5.000%, 10/01/19 FSA Insured ............................ Aa3/AAA 761,813
735,000 4.600%, 10/01/29 FSA Insured ............................ Aa3/AAA 734,949
Wayne Township, Indiana Marion City School
Building Corp.
1,120,000 5.000%, 07/15/26 National-Re FGIC Insured ............... NR/AA+ 1,122,296
Weber State University, Utah Student Facilities System
1,825,000 4.400%, 04/01/27 FSA Insured ............................ NR/AAA 1,820,438
------------
Total Education ......................................... 84,164,367
------------
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
HEALTHCARE (0.7%)
Harris County, Texas Health Facility Development Corp.
$ 145,000 5.000%, 11/15/28 AMBAC Insured .......................... NR/A $ 121,437
Reno, Nevada Hospital Revenue, Washoe Medical
Center
725,000 5.000%, 06/01/23 FSA Insured ............................ Aa3/AAA 673,351
680,000 5.000%, 06/01/23 FSA Insured ............................ Aa3/AAA 631,557
Richmond, Indiana Hospital Revenue
250,000 5.000%, 01/01/19 ........................................ NR/AA- 251,123
------------
Total Healthcare ........................................ 1,677,468
------------
HOUSING (13.5%)
Alaska Housing Finance Corp. Housing Revenue
1,000,000 4.700%, 06/01/27 AMT .................................... Aa2/AA 899,350
1,000,000 5.250%, 12/01/28 AMT .................................... Aa2/AA 955,430
Alaska State Local Housing Authority
500,000 5.125%, 06/01/27 Series A2 AMT .......................... Aaa/AAA 473,670
Florida Housing Finance Corp.
715,000 5.000%, 07/01/21 AMT .................................... Aa1/AA+ 706,120
500,000 6.000%, 07/01/28 ........................................ Aa1/AA+ 520,950
Henderson, Nevada Local Improvement District
150,000 5.000%, 09/01/15 ........................................ NR/NR* 67,848
200,000 5.000%, 09/01/16 ........................................ NR/NR* 90,332
200,000 5.050%, 09/01/17 ........................................ NR/NR* 90,230
200,000 5.100%, 09/01/18 ........................................ NR/NR* 90,152
Indiana State Housing Finance Authority Single Family
245,000 4.850%, 07/01/22 AMT .................................... Aaa/NR+ 241,288
Indianapolis, Indiana Multi-Family
470,000 4.850%, 01/01/21 AMT .................................... Aaa/NR 466,729
Miami-Dade County, Florida Housing Finance
Authority
535,000 5.000%, 11/01/23 FSA Insured AMT ........................ Aa3/AAA 520,041
Nevada Housing Multi-Family, LOC: US Bank
995,000 4.750%, 04/01/39 AMT .................................... NR/AA- 872,177
North Dakota Housing Authority Home Mortgage
Revenue
2,000,000 5.400%, 07/01/23 AMT .................................... Aa1/NR 2,015,460
1,000,000 5.650%, 07/01/28 AMT .................................... Aa1/NR 1,001,260
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
HOUSING (CONTINUED)
North Dakota Housing Authority Home Mortgage
Revenue (continued)
$ 950,000 5.400%, 07/01/28 ........................................ Aa1/NR $ 969,427
2,000,000 4.750%, 07/01/31 AMT .................................... Aa1/NR 1,736,740
Orange County, Florida Housing Finance Authority
115,000 5.150%, 03/01/22 ........................................ Aaa/NR 114,826
Seattle, Washington Housing Authority
730,000 4.400%, 11/01/21 AMT .................................... NR/AAA 658,599
Snohomish County, Washington Housing Authority
150,000 4.750%, 09/01/10 AMT .................................... NR/NR* 147,005
185,000 4.875%, 09/01/12 AMT .................................... NR/NR* 174,181
225,000 5.000%, 09/01/13 AMT .................................... NR/NR* 207,707
185,000 5.000%, 09/01/14 AMT .................................... NR/NR* 166,831
145,000 5.100%, 09/01/15 AMT .................................... NR/NR* 128,279
South Dakota Housing Development Authority
2,750,000 4.900%, 05/01/26 AMT .................................... Aa1/AAA 2,547,408
500,000 6.000%, 05/01/28 ........................................ Aa1/AAA 523,285
Texas State Housing Revenue
495,000 4.800%, 09/01/27 AMT .................................... Aa1/AAA 447,752
990,000 5.250%, 09/01/32 AMT .................................... Aa1/AAA 960,260
Utah Housing Corporation Single Family Mortgage
25,000 5.250%, 07/01/23 AMT .................................... Aa2/AA 24,926
195,000 4.875%, 07/01/23 AMT .................................... Aa3/AA- 185,683
1,275,000 5.125%, 07/01/24 AMT .................................... Aa3/AA- 1,245,675
1,015,000 5.000%, 07/01/25 AMT .................................... Aa2/AA- 983,494
605,000 5.100%, 01/01/26 AMT .................................... Aa3/AA- 583,426
120,000 5.650%, 07/01/27 AMT .................................... Aa2/AA 120,266
610,000 5.200%, 01/01/28 AMT .................................... Aa3/AA- 582,898
2,305,000 5.800%, 07/01/28 AMT .................................... Aa3/AA- 2,330,055
1,000,000 5.700%, 07/01/28 AMT .................................... Aa3/AA 1,004,820
995,000 5.500%, 07/01/28 AMT .................................... Aa3/AA- 981,160
675,000 4.700%, 07/01/28 AMT .................................... Aa3/AA- 619,205
1,310,000 6.100%, 01/01/29 AMT .................................... Aa3/AA- 1,340,759
805,000 5.000%, 07/01/31 AMT .................................... Aa2/AA 718,776
495,000 5.000%, 01/01/32 AMT .................................... Aa2/AA 434,759
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
HOUSING (CONTINUED)
Utah State Housing Finance Agency
$ 125,000 5.700%, 07/01/15 AMT .................................... Aa3/AA- $ 124,508
40,000 5.650%, 07/01/16 Series 1994C ........................... Aaa/AAA 40,144
30,000 5.400%, 07/01/16 AMT .................................... Aa2/AA 29,405
15,000 6.000%, 07/01/17 AMT .................................... Aaa/AAA 15,080
560,000 5.500%, 07/01/18 AMT .................................... Aa3/AA- 562,414
35,000 5.300%, 07/01/18 AMT .................................... Aaa/AAA 35,283
60,000 5.000%, 07/01/18 AMT .................................... Aaa/AAA 60,028
75,000 5.400%, 07/01/20 AMT .................................... Aa2/AA 75,605
140,000 5.600%, 07/01/23 AMT .................................... Aa2/AA 141,030
35,000 5.700%, 07/01/26 National-re Insured .................... A2/A 35,069
Wyoming Community Development Authority
Housing Revenue
2,000,000 5.000%, 12/01/22 Series 10 AMT .......................... Aa1/AA+ 1,973,020
2,920,000 5.625%, 12/01/38 ........................................ Aa1/AA+ 2,951,186
------------
Total Housing ........................................... 34,992,011
------------
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 250,768
Utah County Environmental Improvement Revenue
1,025,000 5.050%, 11/01/17 ........................................ Baa1/BBB+ 1,046,576
------------
Total Industrial Development & Pollution Control ........ 1,297,344
------------
LEASE (11.9%)
Celebration Community Development District, Florida
290,000 5.000%, 05/01/22 National-re Insured .................... Baa1/A 238,200
Clark County, Nevada Improvement District Revenue
705,000 5.125%, 12/01/19 ........................................ NR/NR* 529,533
Clark County, Nevada Improvement District Special
Local Improvement #128 (Summerlin)
500,000 5.000%, 02/01/21 Series A ............................... NR/NR* 301,850
Davis County, Utah Lease Revenue DMV Project
78,000 5.400%, 11/01/17 ........................................ NR/NR* 67,075
83,000 5.450%, 11/01/18 ........................................ NR/NR* 69,996
87,000 5.500%, 11/01/19 ........................................ NR/NR* 72,117
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
LEASE (CONTINUED)
Davis County, Utah Lease Revenue DMV Project
(continued)
$ 92,000 5.550%, 11/01/20 ........................................ NR/NR* $ 75,170
97,000 5.600%, 11/01/21 ........................................ NR/NR* 77,917
103,000 5.650%, 11/01/22 ........................................ NR/NR* 80,953
108,000 5.700%, 11/01/23 ........................................ NR/NR* 83,433
115,000 5.700%, 11/01/24 ........................................ NR/NR* 87,362
121,000 5.750%, 11/01/25 ........................................ NR/NR* 89,921
128,000 5.750%, 11/01/26 ........................................ NR/NR* 93,510
Marion County, Indiana Convention & Recreational
Facilities Authority
405,000 5.000%, 06/01/27 National-re Insured .................... Baa1/A 376,431
Middle Village, Florida Community Development
District Special Assessment Revenue
1,130,000 6.750%, 05/01/25 ........................................ NR/NR* 912,622
New Albany, Indiana Development Authority
500,000 4.250%, 02/01/22 ........................................ NR/A- 475,925
Poinciana West, Florida Community Development
District Special Assessment Revenue
1,000,000 5.875%, 05/01/22 ........................................ NR/NR* 759,330
Port Saint Lucie, Florida Special Assessment Revenue
Southwest Annexation District 1- B
500,000 5.000%, 07/01/27 National-re Insured .................... Baa1/A 436,030
Red River, Texas Higher Education TCU Project
1,000,000 4.375%, 03/15/25 ........................................ Aa3/NR++ 963,070
Salt Lake Valley, Utah Fire Service District Lease
Revenue
610,000 5.200%, 04/01/28 ........................................ Aa3/NR++ 624,573
1,000,000 5.250%, 04/01/30 ........................................ Aa3/NR++ 1,014,610
South Dakota State Building Authority Revenue
500,000 4.500%, 06/01/24 National-re FGIC Insured ............... NR/AA- 495,695
Tolomato Community, Florida Development
District Special Assessment Revenue
1,000,000 6.450%, 05/01/23 ........................................ NR/NR* 741,800
Tooele County, Utah Municipal Building Authority
School District Lease Revenue
1,000,000 5.000%, 06/01/28 ........................................ A3/A+ 946,130
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
LEASE (CONTINUED)
Twin Creeks, Utah Special Service District BAN
$ 12,000,000 7.250%, 07/15/10 ........................................ NR/NR* $ 11,736,000
Uintah County, Utah Municipal Building Authority
Lease Revenue
1,500,000 5.300%, 06/01/28 ........................................ NR/A+ 1,512,630
Utah State Building Ownership Authority
465,000 5.000%, 05/15/21 ........................................ Aa1/AA+ 486,097
1,755,000 5.250%, 05/15/23 ........................................ Aa1/AA+ 1,827,306
510,000 5.000%, 05/15/23 ........................................ Aa1/AA+ 527,921
1,845,000 5.250%, 05/15/24 ........................................ Aa1/AA+ 1,914,464
1,080,000 5.000%, 05/15/25 ........................................ Aa1/AA+ 1,107,529
West Bountiful, Utah Courthouse Revenue
410,000 5.000%, 05/01/19 ........................................ NR/A 456,027
West Valley City, Utah Municipal Building Authority
Lease Revenue Refunding
1,890,000 4.375%, 08/01/26 Series A National-re FGIC Insured ...... NR/A+ 1,833,508
------------
Total Lease ............................................. 31,014,735
------------
TAX REVENUE (11.0%)
Aqua Isles, Florida Community Development District
Revenue
945,000 7.000%, 05/01/38 ........................................ NR/NR* 663,910
Bay County, Florida Sales Tax Revenue
175,000 4.750%, 09/01/23 FSA Insured ............................ Aa3/NR++ 165,823
Bountiful, Utah Special Improvement District Special
Assessment Revenue
203,000 5.000%, 06/01/14 ........................................ NR/NR* 177,932
213,000 5.150%, 06/01/15 ........................................ NR/NR* 183,059
224,000 5.300%, 06/01/16 ........................................ NR/NR* 188,574
236,000 5.500%, 06/01/17 ........................................ NR/NR* 195,708
249,000 5.650%, 06/01/18 ........................................ NR/NR* 204,735
Clark County, Nevada Improvement District
250,000 5.000%, 08/01/16 ........................................ NR/NR* 170,590
Coral Canyon, Utah Special Service District
110,000 5.000%, 07/15/13 ........................................ NR/NR* 102,738
250,000 5.500%, 07/15/18 ........................................ NR/NR* 197,747
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
TAX REVENUE (CONTINUED)
Henderson, Nevada Local Improvement District
$ 100,000 4.500%, 09/01/12 ........................................ NR/NR* $ 89,407
300,000 5.000%, 09/01/14 ........................................ NR/NR* 253,098
295,000 5.000%, 09/01/15 ........................................ NR/NR* 241,103
235,000 5.000%, 03/01/16 ........................................ NR/NR* 190,305
Holladay, Utah Redevelopment Agency
2,877,500 4.900%, 12/30/20 ........................................ NR/NR* 2,268,966
Jordanelle, Utah Special Service District
186,000 5.000%, 11/15/14 ........................................ NR/NR* 164,270
196,000 5.100%, 11/15/15 ........................................ NR/NR* 170,022
206,000 5.200%, 11/15/16 ........................................ NR/NR* 175,077
216,000 5.300%, 11/15/17 ........................................ NR/NR* 179,991
228,000 5.400%, 11/15/18 ........................................ NR/NR* 187,993
240,000 5.500%, 11/15/19 ........................................ NR/NR* 194,455
253,000 5.600%, 11/15/20 ........................................ NR/NR* 201,757
268,000 5.700%, 11/15/21 ........................................ NR/NR* 209,691
283,000 5.800%, 11/15/22 ........................................ NR/NR* 217,576
299,000 6.000%, 11/15/23 ........................................ NR/NR* 227,847
Jordanelle, Utah Special Service Improvement District
175,000 8.000%, 10/01/11 ........................................ NR/NR* 175,819
La Verkin, Utah Sales and Franchise Tax Revenue
571,000 5.100%, 07/15/27 ........................................ NR/NR* 451,473
Lehi, Utah Sales Tax
790,000 5.000%, 06/01/24 FSA Insured ............................ Aa3/AAA 821,616
Mesquite, Nevada New Special Improvement District
240,000 5.300%, 08/01/11 ........................................ NR/NR* 227,501
175,000 4.600%, 08/01/11 ........................................ NR/NR* 163,093
185,000 4.750%, 08/01/12 ........................................ NR/NR* 166,863
220,000 4.900%, 08/01/13 ........................................ NR/NR* 192,595
135,000 5.250%, 08/01/17 ........................................ NR/NR* 105,925
300,000 5.350%, 08/01/19 ........................................ NR/NR* 224,058
130,000 5.400%, 08/01/20 ........................................ NR/NR* 95,187
475,000 5.500%, 08/01/25 ........................................ NR/NR* 319,095
Mountain Regional Water District, Utah Special
Assessment
1,320,000 7.000%, 12/01/18 ........................................ NR/NR* 1,053,004
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
TAX REVENUE (CONTINUED)
Mountain Regional Water, Utah Special Service District
$ 2,000,000 5.000%, 12/15/20 National-re Insured .................... Baa1/A+ $ 1,918,420
North Ogden, Utah Sales Tax Revenue
195,000 5.000%, 11/01/24 Syncora Guarantee Inc. Insured ......... NR/A+ 206,838
Payson City, Utah Sales Tax Revenue
445,000 5.000%, 08/01/21 FSA Insured ............................ Aa3/AAA 473,565
Pembroke Harbor, Florida Community Development
District Revenue
1,800,000 7.000%, 05/01/38 ........................................ NR/NR* 1,217,160
Salt Lake City, Utah Sales Tax
955,000 5.000%, 02/01/21 ........................................ NR/AAA 1,014,477
1,005,000 5.000%, 02/01/22 ........................................ NR/AAA 1,061,893
1,060,000 5.000%, 02/01/23 ........................................ NR/AAA 1,114,049
1,115,000 5.000%, 02/01/24 ........................................ NR/AAA 1,167,305
Sandy City, Utah Sales Tax
605,000 5.000%, 09/15/20 AMBAC Insured .......................... NR/AA+ 624,941
South Weber City, Utah
525,000 5.000%, 01/15/24 National-re Insured .................... Baa1/A 552,521
Springville, Utah Special Assessment Revenue
2005 Series
400,000 5.500%, 01/15/17 ........................................ NR/NR* 324,444
423,000 5.650%, 01/15/18 ........................................ NR/NR* 336,433
446,000 5.800%, 01/15/19 ........................................ NR/NR* 349,700
472,000 5.900%, 01/15/20 ........................................ NR/NR* 365,446
500,000 6.000%, 01/15/21 ........................................ NR/NR* 383,040
Springville, Utah Special Assessment Revenue
2007 Series
34,000 5.650%, 01/15/18 ........................................ NR/NR* 27,042
37,000 5.800%, 01/15/19 ........................................ NR/NR* 29,011
38,000 5.900%, 01/15/20 ........................................ NR/NR* 29,422
40,000 6.000%, 01/15/21 ........................................ NR/NR* 30,643
Vernal City, Utah Sales Tax Revenue
515,000 4.750%, 09/01/31 Assured Guaranty Insured ............... NR/AAA 491,866
300,000 4.875%, 09/01/34 Assured Guaranty Insured ............... NR/AAA 285,981
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
TAX REVENUE (CONTINUED)
Wasatch County, Utah Building Authority
$ 130,000 5.000%, 10/01/15 ........................................ A3/NR $ 137,398
135,000 5.000%, 10/01/16 ........................................ A3/NR 141,384
Wasatch County, Utah Sales Tax
205,000 5.000%, 12/01/16 AMBAC Insured .......................... NR/A+ 217,072
210,000 5.000%, 12/01/17 AMBAC Insured .......................... NR/A+ 220,842
225,000 5.000%, 12/01/18 AMBAC Insured .......................... NR/A+ 234,776
Washington City, Utah Sales Tax
680,000 5.250%, 11/15/17 AMBAC Insured .......................... NR/A 732,530
Weber County, Utah Sales Tax
385,000 5.000%, 07/01/23 AMBAC Insured .......................... A2/NR 394,348
West Valley City, Utah Redevelopment Agency
1,625,000 5.000%, 03/01/21 ........................................ NR/A- 1,662,619
320,000 5.000%, 03/01/22 ........................................ NR/A- 325,651
350,000 5.000%, 03/01/23 ........................................ NR/A- 354,270
1,000,000 5.000%, 03/01/24 ........................................ NR/A- 1,008,260
------------
Total Tax Revenue ....................................... 28,651,950
------------
TRANSPORTATION (2.2%)
Alaska State International Airport Revenue
175,000 5.000%, 10/01/24 AMBAC Insured AMT ...................... Aa3/NR++ 159,484
Florida State Turnpike Authority Turnpike Revenue
500,000 4.500%, 07/01/22 National-re Insured .................... Aa2/AA- 496,115
Indiana Finance Authority Highway Revenue
1,950,000 4.500%, 12/01/25 National-Re FGIC Insured ............... Aa2/AA+ 1,940,971
Miami-Dade County, Florida Aviation Revenue
600,000 5.000%, 10/01/24 National-re FGIC Insured AMT ........... A2/A 543,060
Port of Seattle, Washington Revenue
1,095,000 5.100%, 04/01/24 AMT National-re FGIC Insured ........... Aa2/AA- 1,053,204
Utah Transit Authority Sales Tax & Transportation
Revenue
1,450,000 4.125%, 06/15/22 FSA Insured ............................ Aa3/AAA 1,450,377
------------
Total Transportation .................................... 5,643,211
------------
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
UTILITY (6.5%)
Alaska Industrial Development & Export Authority
$ 400,000 4.625%, 12/01/16 AMBAC Insured AMT ...................... NR/BBB $ 357,104
Cowlitz County, Washington Public Utility District
Electric Revenue
1,000,000 4.500%, 09/01/26 National-re Insured .................... A3/A 959,500
Eagle Mountain, Utah Gas & Electric
1,385,000 4.250%, 06/01/20 Radian Insured ......................... NR/BBB- 1,204,091
1,440,000 5.000%, 06/01/21 Radian Insured ......................... NR/BBB- 1,334,851
1,515,000 5.000%, 06/01/22 Radian Insured ......................... NR/BBB- 1,389,103
Garland, Texas Water & Sewer
440,000 4.500%, 03/01/21 AMBAC Insured .......................... NR/AA 445,504
Indianapolis, Indiana Gas Utility
505,000 5.000%, 08/15/24 AMBAC Insured .......................... Aa3/A+ 505,096
Intermountain Power Agency Utilities Light & Power
Service, Utah
250,000 5.250%, 07/01/23 ........................................ A1/A+ 253,132
JEA, Florida Electric System Revenue
500,000 5.000%, 10/01/26 ........................................ Aa3/A+ 500,905
Manti City, Utah Electric System Revenue
603,000 5.750%, 02/01/17 ........................................ NR/NR* 547,705
Murray City, Utah Utility Electric Revenue
1,340,000 5.000%, 06/01/25 AMBAC Insured .......................... A2/NR 1,401,506
Orem, Utah Water & Storm Sewer Revenue
1,000,000 5.000%, 07/15/26 ........................................ NR/AA 1,051,890
Pleasant Grove City, Utah Water Revenue
760,000 4.625%, 12/01/23 FSA Insured ............................ NR/AAA 787,238
Rockport, Indiana Pollution Control Revenue Indiana
Michigan Power Company Project
1,500,000 4.625%, 06/01/25 Series A FGIC Insured .................. Baa2/BBB 1,204,995
Salem, Utah Electric Revenue
140,000 5.400%, 11/01/09 ........................................ NR/NR* 141,281
Santa Clara Utah Storm Drain Revenue
877,000 5.100%, 09/15/26 ........................................ NR/NR* 635,667
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
UTILITY (CONTINUED)
Southern Utah Valley Power System
$ 210,000 5.250%, 09/15/13 National-re Insured .................... Baa1/A $ 230,038
225,000 5.250%, 09/15/14 National-re Insured .................... Baa1/A 244,436
235,000 5.250%, 09/15/15 National-re Insured .................... Baa1/A 252,303
185,000 5.125%, 09/15/21 National-re Insured .................... Baa1/A 191,786
St. George, Utah Electric Revenue
250,000 5.000%, 06/01/38 FSA Insured ............................ Aa3/NR++ 249,230
Tacoma, Washington Solid Waste Utility Revenue
1,000,000 5.000%, 12/01/23 Syncora Guarantee Inc. Insured ......... A2/AA 1,020,410
Utah Assessed Municipal Power System
1,000,000 5.000%, 04/01/21 FSA Insured ............................ Aa3/AAA 1,033,970
Washington, Utah Electric Revenue
985,000 5.000%, 09/01/21 Syncora Guarantee Inc. Insured ......... Baa1/NR 1,039,796
------------
Total Utility ........................................... 16,981,537
------------
WATER AND SEWER (4.4%)
Eagle Mountain, Utah Water and Sewer
690,000 4.750%, 11/15/25 National-re Insured .................... Baa1/A+ 706,215
Jacksonville, Florida Water and Sewer System Revenue
160,000 4.625%, 10/01/22 ........................................ Aa3/AA- 156,962
Mesquite, Texas Waterworks & Sewer
225,000 4.500%, 03/01/24 FSA Insured ............................ Aa3/AAA 227,531
Murray City, Utah Sewer and Water
440,000 5.000%, 10/01/19 AMBAC Insured .......................... A2/NR 457,138
Ogden City, Utah Sewer & Water Revenue
750,000 4.625%, 06/15/38 FSA Insured ............................ Aa3/NR++ 685,815
Pleasant Grove, Utah Water Revenue
450,000 4.300%, 12/01/20 National-re Insured .................... Baa1/A+ 450,266
Smithfield, Utah Water Revenue
90,000 4.750%, 06/01/17 ........................................ NR/NR* 78,507
94,000 4.800%, 06/01/18 ........................................ NR/NR* 80,630
99,000 4.850%, 06/01/19 ........................................ NR/NR* 83,530
103,000 4.900%, 06/01/20 ........................................ NR/NR* 85,787
108,000 5.000%, 06/01/21 ........................................ NR/NR* 90,278
RATING
PRINCIPAL MOODY'S/
AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE
- --------------- --------------------------------------------------------- --------- ------------
WATER AND SEWER (CONTINUED)
Smithfield, Utah Water Revenue (continued)
$ 126,000 5.150%, 06/01/22 ........................................ NR/NR* $ 104,493
132,000 5.200%, 06/01/23 ........................................ NR/NR* 108,701
139,000 5.250%, 06/01/24 ........................................ NR/NR* 113,756
114,000 5.050%, 06/01/25 ........................................ NR/NR* 92,794
120,000 5.100%, 06/01/26 ........................................ NR/NR* 97,324
Upper Trinity Regional Water District, Texas
205,000 4.500%, 08/01/20 AMBAC Insured .......................... A3/A- 207,310
Utah Water Finance Agency Revenue
200,000 5.250%, 07/01/16 AMBAC Insured .......................... NR/NR* 214,298
310,000 5.000%, 10/01/17 AMBAC Insured .......................... NR/NR* 325,159
510,000 5.000%, 07/01/18 AMBAC Insured .......................... A2/NR 532,052
105,000 5.000%, 10/01/20 AMBAC Insured .......................... NR/NR* 108,184
830,000 4.500%, 10/01/22 AMBAC Insured .......................... A1/NR 835,370
740,000 5.125%, 07/01/23 AMBAC Insured .......................... NR/NR* 757,560
870,000 4.500%, 10/01/23 AMBAC Insured .......................... A1/NR 871,253
2,570,000 5.000%, 10/01/25 AMBAC Insured .......................... A2/NR 2,626,334
1,400,000 4.500%, 10/01/28 AMBAC Insured .......................... A1/NR 1,354,374
------------
Total Water and Sewer ................................... 11,451,621
------------
Total Revenue Bonds ..................................... 221,672,787
------------
Total Investments (cost $266,345,809 - note 4) .......... 97.4% 252,945,639
Other assets less liabilities ........................... 2.6 6,831,716
------- ------------
Net Assets .............................................. 100.0% $259,777,355
======= ============
PERCENT OF
PORTFOLIO DISTRIBUTION BY QUALITY RATING (UNAUDITED) PORTFOLIO**
---------------------------------------------------- ----------
Aaa of Moody's or AAA of S&P ....................... 14.9%
Aa of Moody's or AA of S&P ......................... 29.7
A of Moody's or S&P ................................ 12.9
Baa of Moody's or BBB of S&P ....................... 6.3
Not rated* ......................................... 36.2
-----
100.0%
=====
* 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.
** Calculated using the highest rating of the two rating services.
FITCH RATINGS
-------------
+ AAA
++ AA
+++ A
Note: National Public Finance Guarantee Corporation (National-re) is the
new name for Municipal Bond Investors Assurance (MBIA) Inc.'s U.S. public
finance platform.
PORTFOLIO ABBREVIATIONS:
------------------------
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
National-re - National Public Finance Guarantee Corporation National-re -
FGIC-Reinsured FGIC bonds NR - Not Rated
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2009
ASSETS
Investments at value (cost $266,345,809) ................................................... $ 252,945,639
Cash ....................................................................................... 2,820,275
Interest receivable ........................................................................ 3,967,988
Receivable for Fund shares sold ............................................................ 998,570
Receivable from Manager .................................................................... 520,626
Receivable for investment securities sold .................................................. 35,000
Other assets ............................................................................... 15,353
------------------
Total assets ............................................................................... 261,303,451
------------------
LIABILITIES
Payable for Fund shares redeemed ........................................................... 540,763
Deferred income payable .................................................................... 479,768
Dividends payable .......................................................................... 242,087
Management fees payable .................................................................... 88,571
Distribution and service fees payable ...................................................... 66,537
Accrued expenses ........................................................................... 108,370
------------------
Total liabilities .......................................................................... 1,526,096
------------------
NET ASSETS .................................................................................... $ 259,777,355
==================
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value $0.01 per share ........ $ 277,819
Additional paid-in capital ................................................................. 274,875,070
Net unrealized depreciation on investments (note 4) ........................................ (13,400,170)
Accumulated net realized loss on investments ............................................... (2,069,547)
Accumulated net investment income .......................................................... 94,183
------------------
$ 259,777,355
==================
CLASS A
Net Assets ................................................................................. $ 166,182,505
==================
Capital shares outstanding ................................................................. 17,780,903
==================
Net asset value and redemption price per share ............................................. $ 9.35
==================
Maximum offering price per share (100/96 of $9.35 adjusted to nearest cent) ................ $ 9.74
==================
CLASS C
Net Assets ................................................................................. $ 49,700,167
==================
Capital shares outstanding ................................................................. 5,319,409
==================
Net asset value and offering price per share ............................................... $ 9.34
==================
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) .............................................. $ 9.34*
==================
CLASS Y
Net Assets ................................................................................. $ 43,894,683
==================
Capital shares outstanding ................................................................. 4,681,565
==================
Net asset value, offering and redemption price per share ................................... $ 9.38
==================
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 2009
INVESTMENT INCOME:
Interest income .............................................. $ 13,108,548
Other income ................................................. 40,858
-------------
13,149,406
Expenses:
Management fee (note 3) ...................................... $ 1,181,829
Distribution and service fees (note 3) ....................... 665,916
Transfer and shareholder servicing agent fees ................ 141,693
Trustees' fees and expenses (note 8) ......................... 104,563
Shareholders' reports and proxy statements ................... 36,943
Legal fees (note 3) .......................................... 36,927
Fund accounting fees ......................................... 26,112
Custodian fees (note 6) ...................................... 21,113
Auditing and tax fees ........................................ 16,301
Registration fees and dues ................................... 14,030
Insurance .................................................... 10,113
Chief compliance officer (note 3) ............................ 4,040
Miscellaneous ................................................ 32,978
-----------
Total expenses ............................................... 2,292,558
Management fee waived (note 3) ............................... (315,336)
Expenses paid indirectly (note 6) ............................ (33,184)
-----------
Net expenses ................................................. 1,944,038
-------------
Net investment income ........................................ 11,205,368
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from securities transactions ............... (1,800,263)
Change in unrealized depreciation on investments ............. (7,737,307)
-----------
Net realized and unrealized gain (loss) on investments ....... (9,537,570)
-------------
Net increase in net assets resulting from operations ......... $ 1,667,798
=============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
JUNE 30, 2009 JUNE 30, 2008
------------- -------------
OPERATIONS:
Net investment income ........................................... $ 11,205,368 $ 9,139,922
Net realized gain (loss) from securities transactions ........... (1,800,263) 638,898
Change in unrealized depreciation on investments ................ (7,737,307) (4,614,006)
------------- -------------
Change in net assets from operations ......................... 1,667,798 5,164,814
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 10):
Class A Shares:
Net investment income ........................................... (7,531,262) (6,459,904)
Class C Shares:
Net investment income ........................................... (1,461,117) (1,040,811)
Class Y Shares:
Net investment income ........................................... (2,370,878) (1,961,979)
------------- -------------
Change in net assets from distributions ...................... (11,363,257) (9,462,694)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 7):
Proceeds from shares sold ....................................... 86,962,093 55,700,331
Reinvested dividends and distributions .......................... 6,415,663 5,703,447
Cost of shares redeemed ......................................... (62,672,341) (45,261,625)
------------- -------------
Change in net assets from capital share transactions ......... 30,705,415 16,142,153
------------- -------------
Change in net assets ......................................... 21,009,956 11,844,273
NET ASSETS:
Beginning of period ............................................... 238,767,399 226,923,126
------------- -------------
End of period* .................................................... $ 259,777,355 $ 238,767,399
============= =============
* Includes undistributed net investment income of: ................ $ 94,183 $ 30,192
============= =============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
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 (details of which can be found in the schedule of
investments), used to value the Fund's net assets as of June 30, 2009:
VALUATION INPUTS INVESTMENTS IN SECURITIES
---------------- -------------------------
Level 1 - Quoted Prices ..................... $ --
Level 2 - Other Significant Observable Inputs
Municipal Bonds .......................... 252,945,639
Level 3 - Significant Unobservable Inputs ... --
--------------
Total ....................................... $ 252,945,639
==============
c) ACCOUNTING PRONOUNCEMENTS: In April 2009, the Financial Accounting
Standards Board ("FASB") issued FASB Staff Position No. 157-4,
"Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 provides
additional guidance for estimating fair value in accordance with FASB
Statement of Financial Accounting Standards No. 157, "Fair Value
Measurements" ("FAS 157"), when the volume and level of activity for the
asset or liability have significantly decreased as well as guidance on
identifying circumstances that indicate a transaction is not orderly. FSP
157-4 is effective for fiscal years and interim periods ending after June
15, 2009. The adoption of FSP 157-4 did not have an impact on the Fund's
financial statements and the Fund has made the required additional
disclosures.
In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" (SFAS No.
165). The Fund adopted SFAS No. 165 which requires an entity to recognize
in the financial statements the effects of all subsequent events that
provide additional evidence about conditions that existed at the date of
the balance sheet. For non-recognized subsequent events that must be
disclosed to keep financial statements from being misleading, an entity is
required to disclose the nature of the event as well as an estimate of its
financial effect, or a statement that such an estimate cannot be made. In
addition, SFAS No. 165 requires an entity to disclose the date through
which subsequent events have been evaluated. The Fund has evaluated
subsequent events through the issuance of its financial statements on
August 28, 2009.
The Fund has adopted the provisions of Statement of Financial Accounting
Standards No. 161, "Disclosures about Derivative Instruments and Hedging
Activities" ("SFAS 161"), effective June 30, 2009. SFAS 161 requires
enhanced disclosures about a fund's derivative and hedging activities,
including how such activities are accounted for and their effect on a
fund's financial position, performance and cash flows. The Fund does not
invest in derivative instruments or engage in hedging activities. As a
result, SFAS l61 did not impact the Fund's financial statements.
d) 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. In connection with certain bonds, fee income is recognized by
the Fund on a daily basis over the life of the bonds.
e) 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 (2006-2009) and
has determined that implementation of FIN 48 did not have a material
impact on the Fund's financial statements.
f) 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.
g) 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.
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 year ended June 30, 2009, the Fund incurred management fees of
$1,181,829 of which $315,336 was waived. The Manager contractually undertook 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, 0.97% for Class I Shares or 0.63% for Class Y
Shares. Comparable expense limitations are in place for fiscal 2010.
The Manager has agreed to pay the Fund $520,626 in installments (with
interest) over a maximum period of 58 months related to fees paid by the issuers
of certain bonds held by the Fund.
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 year ended June 30, 2009, distribution
fees on Class A Shares amounted to $307,967, of which the Distributor retained
$9,051.
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
year ended June 30, 2009, amounted to $268,462. 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 year ended June 30, 2009 amounted to $89,487. The total of these payments
with respect to Class C Shares amounted to $357,949, of which the Distributor
retained $62,617.
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 year ended June 30, 2009, total commissions on sales of Class A Shares
amounted to $600,319, of which the Distributor received $50,624.
c) OTHER RELATED PARTY TRANSACTIONS:
For the year ended June 30, 2009, the Fund incurred $36,847 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 year ended June 30, 2009, purchases of securities and proceeds
from the sales of securities aggregated $88,447,483 and $57,113,623,
respectively.
At June 30, 2009, the aggregate tax cost for all securities was
$266,292,485. At June 30, 2009, the aggregate gross unrealized appreciation for
all securities in which there is an excess of value over tax cost amounted to
$2,246,532 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $15,593,378, for a
net unrealized depreciation of $13,346,846.
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. At least 50% of the Fund's
assets will always consist of obligations of Utah-based issuers. At June 30,
2009, the Fund had 62% of its net assets invested in municipal obligations
issued by the State of Utah.
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.
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:
Year Ended Year Ended
June 30, 2009 June 30, 2008
---------------------------- ----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
CLASS A SHARES:
Proceeds from shares sold ........... 4,236,182 $ 38,937,661 2,834,849 $ 28,003,392
Reinvested distributions ............ 481,016 4,432,815 417,757 4,128,043
Cost of shares redeemed ............. (3,194,513) (28,482,023) (2,020,117) (19,970,653)
------------ ------------ ------------ ------------
Net change ........................ 1,522,685 14,888,453 1,232,489 12,160,782
------------ ------------ ------------ ------------
CLASS C SHARES:
Proceeds from shares sold ........... 2,776,510 25,642,043 796,274 7,849,550
Reinvested distributions ............ 100,741 927,564 64,603 638,158
Cost of shares redeemed ............. (839,404) (7,773,249) (699,234) (6,926,362)
------------ ------------ ------------ ------------
Net change ........................ 2,037,847 18,796,358 161,643 1,561,346
------------ ------------ ------------ ------------
CLASS Y SHARES:
Proceeds from shares sold ........... 2,448,286 22,382,389 2,002,683 19,847,389
Reinvested distributions ............ 114,773 1,055,284 94,661 937,246
Cost of shares redeemed ............. (2,876,167) (26,417,069) (1,843,176) (18,364,610)
------------ ------------ ------------ ------------
Net change ........................ (313,108) (2,979,396) 254,168 2,420,025
------------ ------------ ------------ ------------
Total transactions in Fund
shares .............................. 3,247,424 $ 30,705,415 1,648,300 $ 16,142,153
============ ============ ============ ============
8. TRUSTEES' FEES AND EXPENSES
At June 30, 2009 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 year ended June 30, 2009 was $73,000, 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 year ended June
30, 2009, such meeting-related expenses amounted to $31,563.
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 $221,880, decreased accumulated net realized loss on investments by
$796,251 and decreased additional paid-in capital in the amount of $1,018,131 at
June 30, 2009. This adjustment had no impact on the Fund's aggregate net assets
at June 30, 2009. 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, 2009, the Fund had a capital loss carryover of $902,608 of
which $15,469 expires on June 30, 2011, $253,815 expires on June 30, 2012 and
$633,324 expires on June 30, 2017. 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. At June 30, 2009 there were post-October capital loss deferrals of
$1,166,939, which will be recognized in the following year.
The tax character of distributions:
Year Ended June 30,
2009 2008
------------- --------------
Net tax-exempt income $ 11,141,377 $ 9,144,508
Ordinary income 221,880 318,186
------------- --------------
$ 11,363,257 $ 9,462,694
============= ==============
As of June 30, 2009, the components of distributable earnings on a tax
basis were as follows:
Undistributed tax-exempt income $ 248,139
Undistributed taxable income 34,807
Accumulated net realized loss (902,608)
Unrealized depreciation (13,346,846)
Other temporary differences (1,409,026)
-------------
$ (15,375,534)
=============
The difference between book basis and tax basis unrealized appreciation is
attributable primarily to premium/discount adjustments. The difference
between book basis and tax basis undistributed income is due to the timing
difference in recognizing dividends paid.
11. RECENT DEVELOPMENT
Since December 2007, municipal bond insurance companies have been under
review by the three major rating agencies: Standard & Poor's, Moody's and Fitch.
The ratings of most 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
---------------------------------------------------------------
Year Ended June 30,
---------------------------------------------------------------
2009 2008 2007 2006 2005
--------- --------- --------- --------- ---------
Net asset value, beginning of period ........................... $ 9.73 $ 9.91 $ 9.87 $ 10.26 $ 9.91
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ...................................... 0.44++ 0.41++ 0.40+ 0.40+ 0.41+
Net gain (loss) on securities (both realized
and unrealized) ........................................ (0.37) (0.17) 0.05 (0.37) 0.38
--------- --------- --------- --------- ---------
Total from investment operations ........................... 0.07 0.24 0.45 0.03 0.79
--------- --------- --------- --------- ---------
Less distributions (note 10):
Dividends from net investment income ....................... (0.45) (0.42) (0.41) (0.42) (0.44)
Distributions from capital gains ........................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total distributions ........................................ (0.45) (0.42) (0.41) (0.42) (0.44)
--------- --------- --------- --------- ---------
Net asset value, end of period ................................. $ 9.35 $ 9.73 $ 9.91 $ 9.87 $ 10.26
========= ========= ========= ========= =========
Total return (not reflecting sales charge) ..................... 0.91% 2.45% 4.60% 0.28% 8.06%
Ratios/supplemental data
Net assets, end of period (in thousands) ................... $ 166,182 $ 158,125 $ 148,894 $ 142,227 $ 126,091
Ratio of expenses to average net assets .................... 0.75% 0.63% 0.68% 0.64% 0.59%
Ratio of net investment income to average
net assets ............................................. 4.80% 4.09% 3.89% 3.90% 3.98%
Portfolio turnover rate .................................... 24.64% 18.83% 17.36% 9.61% 8.68%
The expense and net investment income ratios without the effect of the waiver of
a portion of the management fee were (note 3):
Ratio of expenses to average net assets .................... 0.87% 0.90% 0.96% 0.93% 0.97%
Ratio of net investment income to average
net assets ............................................. 4.68% 3.82% 3.61% 3.61% 3.60%
The expense ratios after giving effect to the waiver and expense offset for
uninvested cash balances were (note 3):
Ratio of expenses to average net assets .................... 0.74% 0.61% 0.66% 0.61% 0.56%
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ Per share amounts have been calculated using the daily average shares
method.
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Class C
-------------------------------------------------------------------
Year Ended June 30,
-------------------------------------------------------------------
2009 2008 2007 2006 2005
--------- --------- --------- --------- ---------
Net asset value, beginning of period ............. $ 9.72 $ 9.91 $ 9.87 $ 10.26 $ 9.91
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ........................ 0.37++ 0.33++ 0.32+ 0.32+ 0.32+
Net gain (loss) on securities (both
realized and unrealized) ................. (0.37) (0.18) 0.05 (0.37) 0.38
--------- --------- --------- --------- ---------
Total from investment operations ................. -- 0.15 0.37 (0.05) 0.70
--------- --------- --------- --------- ---------
Less distributions (note 10):
Dividends from net investment income.......... (0.38) (0.34) (0.33) (0.34) (0.35)
Distributions from capital gains ............. -- -- -- -- --
--------- --------- --------- --------- ---------
Total distributions .......................... (0.38) (0.34) (0.33) (0.34) (0.35)
--------- --------- --------- --------- ---------
Net asset value, end of period ................... $ 9.34 $ 9.72 $ 9.91 $ 9.87 $ 10.26
========= ========= ========= ========= =========
Total return (not reflecting sales charge) ....... 0.10% 1.53% 3.77% (0.52)% 7.20%
Ratios/supplemental data
Net assets, end of period (in thousands) ..... $ 49,700 $ 31,906 $ 30,905 $ 33,791 $ 27,581
Ratio of expenses to average net assets ...... 1.55% 1.43% 1.48% 1.44% 1.39%
Ratio of net investment income to
average net assets ....................... 3.99% 3.29% 3.10% 3.10% 3.18%
Portfolio turnover rate ...................... 24.64% 18.83% 17.36% 9.61% 8.68%
The expense and net investment income ratios without the effect of the waiver of
a portion of the management fee were (note 3):
Ratio of expenses to average net assets ...... 1.67% 1.70% 1.76% 1.72% 1.77%
Ratio of net investment income to
average net assets ....................... 3.88% 3.02% 2.81% 2.81% 2.80%
The expense ratios after giving effect to the waiver and expense offset for
uninvested cash balances were (note 3):
Ratio of expenses to average net assets ...... 1.54% 1.42% 1.46% 1.41% 1.36%
Class Y
-------------------------------------------------------------------
Year Ended June 30,
-------------------------------------------------------------------
2009 2008 2007 2006 2005
--------- --------- --------- --------- ---------
Net asset value, beginning of period ............. $ 9.76 $ 9.94 $ 9.90 $ 10.29 $ 9.94
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ........................ 0.46++ 0.43++ 0.41+ 0.42+ 0.42+
Net gain (loss) on securities (both
realized and unrealized) ................. (0.37) (0.17) 0.07 (0.37) 0.39
--------- --------- --------- --------- ---------
Total from investment operations ................. 0.09 0.26 0.48 0.05 0.81
--------- --------- --------- --------- ---------
Less distributions (note 10):
Dividends from net investment income.. ....... (0.47) (0.44) (0.44) (0.44) (0.46)
Distributions from capital gains ............. -- -- -- -- --
--------- --------- --------- --------- ---------
Total distributions .......................... (0.47) (0.44) (0.44) (0.44) (0.46)
--------- --------- --------- --------- ---------
Net asset value, end of period ................... $ 9.38 $ 9.76 $ 9.94 $ 9.90 $ 10.29
========= ========= ========= ========= =========
Total return (not reflecting sales charge) ....... 1.13% 2.67% 4.80% 0.49% 8.27%
Ratios/supplemental data
Net assets, end of period (in thousands) ..... $ 43,895 $ 48,737 $ 47,124 $ 39,791 $ 17,928
Ratio of expenses to average net assets ...... 0.55% 0.43% 0.48% 0.44% 0.39%
Ratio of net investment income to
average net assets ....................... 5.00% 4.29% 4.09% 4.10% 4.15%
Portfolio turnover rate ...................... 24.64% 18.83% 17.36% 9.61% 8.68%
The expense and net investment income ratios without the effect of the waiver of
a portion of the management fee were (note 3):
Ratio of expenses to average net assets ...... 0.67% 0.70% 0.76% 0.72% 0.77%
Ratio of net investment income to
average net assets ....................... 4.88% 4.02% 3.81% 3.82% 3.78%
The expense ratios after giving effect to the waiver and expense offset for
uninvested cash balances were (note 3):
Ratio of expenses to average net assets ...... 0.54% 0.42% 0.46% 0.41% 0.37%
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ Per share amount calculated using the daily average shares method.
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 January 1,
2009 and held for the six months ended June 30, 2009.
ACTUAL EXPENSES
This table provides information about actual account values and actual
expenses. You may use the information provided in this table, together with the
amount you invested, to estimate the expenses that you paid over the period. To
estimate the expenses you paid on your account, divide your ending account value
by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6),
then multiply the result by the number under the heading entitled "Expenses Paid
During the Period".
SIX MONTHS ENDED JUNE 30, 2009
ACTUAL
TOTAL RETURN BEGINNING ENDING EXPENSES
WITHOUT ACCOUNT ACCOUNT PAID DURING
SALES CHARGES(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
Class A 9.66% $1,000.00 $1,096.60 $4.11
- --------------------------------------------------------------------------------
Class C 9.24% $1,000.00 $1,092.40 $8.25
- --------------------------------------------------------------------------------
Class Y 9.75% $1,000.00 $1,097.50 $3.07
- --------------------------------------------------------------------------------
(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 0.79%, 1.59% AND
0.59% FOR THE FUND'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 181/365 (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 JUNE 30, 2009
HYPOTHETICAL
ANNUALIZED BEGINNING ENDING EXPENSES
TOTAL ACCOUNT ACCOUNT PAID DURING
RETURN VALUE VALUE THE PERIOD(1)
- --------------------------------------------------------------------------------
Class A 5.00% $1,000.00 $1,020.88 $3.96
- --------------------------------------------------------------------------------
Class C 5.00% $1,000.00 $1,016.91 $7.95
- --------------------------------------------------------------------------------
Class Y 5.00% $1,000.00 $1,021.87 $2.96
- --------------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.79%, 1.59% AND
0.59% FOR THE FUND'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 181/365 (TO
REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 your Fund's entire list of portfolio securities twice a
year in the semi-annual and annual reports you receive. Additionally, under Fund
policies, the Manager publicly discloses the complete schedule of the Fund's
portfolio holdings, as of each calendar quarter, generally by the 15th day after
the end of each calendar quarter. Such information remains accessible until the
next schedule is made publicly available. You may obtain a copy of the Fund's
portfolio holding schedule for the most recently completed period by visiting
the Fund's website at www.aquilafunds.com. The Fund also discloses its five
largest holdings by value as of the close of the last business day of each
calendar month in a posting to its website on the 5th business day following the
month end. This information remains on the website until the next such posting.
Whenever you wish to see a listing of your Fund's portfolio other than in your
shareholder reports, please check our website (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, D.C. or by calling 1-800-SEC-0330.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 2009 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
This information is presented in order to comply with a requirement of the
Internal Revenue Code AND NO ACTION ON THE PART OF SHAREHOLDERS IS REQUIRED.
For the fiscal year ended June 30, 2009, $11,141,377 of dividends paid by
Tax-Free Fund For Utah, constituting 98.05% of total dividends paid during the
fiscal year ended June 30, 2009, were exempt-interest dividends, and the balance
was ordinary dividend income.
Prior to January 31, 2009, shareholders were mailed the appropriate tax
form(s) which contained information on the status of distributions paid for the
2008 CALENDAR YEAR.
Prior to January 31, 2010, shareholders will be mailed the appropriate tax
form(s) which will contain information on the status of distributions paid for
the 2009 CALENDAR YEAR.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED)
TURSTEES AND OFFICERS(1)
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
INTERESTED TRUSTEE(4)
Diana P. Herrmann Trustee Vice Chair and Chief Executive Officer of 12 ICI Mutual Insurance
New York, NY since 1997 Aquila Management Corporation, Founder of Company
(02/25/58) and President the Aquila Group of Funds(5) and parent of
since 1998 Aquila Investment Management LLC, Manager
since 2004, President since 1997, Chief
Operating Officer, 1997-2008, a Director
since 1984, Secretary since 1986 and
previously its Executive Vice President,
Senior Vice President or Vice President,
1986-1997; Chief Executive Officer and Vice
Chair since 2004, President and Manager of
the Manager since 2003, and Chief Operating
Officer of the Manager, 2003-2008; Chair,
Vice Chair, President, Executive Vice
President or Senior Vice President of funds
in the Aquila Group of Funds since 1986;
Director of the Distributor since 1997;
Governor, Investment Company Institute (a
trade organization for the U.S. mutual fund
industry dedicated to protecting shareholder
interests and educating the public about
investing) and head of its Small Funds
Committee since 2004; active in charitable
and volunteer organizations.
NON-INTERESTED TRUSTEES
Gary C. Cornia Chair of the Dean, Marriott School of Management, Brigham 4 Lincoln Institute of
Orem, UT Board of Young University, since 2008; Director, Land Policy, Cambridge,
(06/24/48) Trustees Romney Institute of Public Management, MA
since 2005 Marriott School of Management, 2004 - 2008;
and Trustee Professor, Marriott School of Management,
since 1993 1980 - present; Past President, the National
Tax Association; Fellow, Lincoln
Institute of Land Policy, 2002 -
present; Associate Dean, Marriott
School of Management, Brigham
Young University, 1991-2000;
member, Utah Governor's Tax Review
Committee since 1993.
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
Tucker Hart Adams Trustee President, The Adams Group, Inc., an 3 Griffis/Blessings, Inc.
Colorado Springs, CO since 2006 economic consulting firm, since 1989; (commercial property
(01/11/38) formerly Chief Economist, United Banks of development and
Colorado; currently or formerly active with management); Kachi
numerous professional and community Partners (middle market
organizations. buyouts); Colorado
Health Facilities
Authority
Thomas A. Christopher Trustee Vice President of Robinson, Hughes & 4 None
Danville, KY since 2006 Christopher, C.P.A.s, P.S.C., since 1977;
(12/19/47) President, A Good Place for Fun, Inc., a
sports facility, since 1987;
currently or formerly active with
various professional and community
organizations.
Lyle W. Hillyard Trustee President of the law firm of Hillyard, 2 None
Logan, UT since 2003 Anderson & Olsen, Logan, Utah, since 1967;
(09/25/40) member of Utah Senate, 1985 to present, in
the following positions:
President, 2000, Senate Majority
Leader, 1999-2000, Assistant
Majority Whip, 1995-1998; served
as Chairman of the following Utah
Senate Committees: Tax and
Revenue, Senate Judiciary
Standing, Joint Executive
Appropriations, and Senate Rules;
currently serves as Co-Chair,
Joint Executive Appropriations.
John C. Lucking Trustee President, Econ-Linc, an economic consulting 3 None
Phoenix, AZ since 2004 firm, since 1995; formerly Consulting
(05/20/43) Economist, Bank One Arizona and Chief
Economist, Valley National Bank;
member, Arizona's Joint
Legislative Budget Committee
Economic Advisory Panel and the
Western Blue Chip Economic
Forecast Panel; Board member,
Northern Arizona University
Foundation since 1997; member,
various historical, civic and
economic associations.
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
Anne J. Mills Trustee President, Loring Consulting Company since 4 None
Castle Rock, CO since 1994 2001; Vice President for Business Management
(12/23/38) and CFO, Ottawa University, 1992-2001,
2006-2008; IBM Corporation,
1965-1991; currently active with
various charitable, educational
and religious organizations.
OTHER INDIVIDUALS CHAIRMAN EMERITUS(6)
Lacy B. Herrmann Founder and Founder and Chairman of the Board, Aquila N/A N/A
New York, NY Chairman Management Corporation, the sponsoring
(05/12/29) Emeritus organization and parent of the Manager or
since 2005, Administrator and/or Adviser or Sub-Adviser
Chairman of to each fund of the Aquila Group of Funds;
the Board Chairman of the Manager or Administrator
of Trustees, and/or Adviser or Sub-Adviser to each since
1992-2005 2004; Founder and Chairman Emeritus of each
fund in the Aquila Group of Funds;
previously Chairman and a Trustee
of each fund in the Aquila Group
of Funds since its establishment
until 2004 or 2005; Director of
the Distributor since 1981 and
formerly Vice President or
Secretary, 1981-1998; Director or
trustee, Premier VIT, 1994 - 2009;
Director or trustee of Oppenheimer
Quest Value Funds Group,
Oppenheimer Small Cap Value Fund,
Oppenheimer Midcap Fund, 1987 -
2009, and Oppenheimer Rochester
Group of Funds, 1995 - 2009;
Trustee Emeritus, Brown University
and the Hopkins School; active in
university, school and charitable
organizations.
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
Officers
Charles E. Childs, III Executive Vice Executive Vice President of all funds in the N/A N/A
New York, NY President Aquila Group of Funds and the Manager and
(04/01/57) since 2003 the Manager's parent since 2003; Executive
Vice President and Chief Operating
Officer of the Manager and the
Manager's parent since 2008;
formerly Senior Vice President,
corporate development, Vice
President, Assistant Vice
President and Associate of the
Manager's parent since 1987;
Senior Vice President, Vice
President or Assistant Vice
President of the Aquila
Money-Market Funds, 1988-2003.
Maryann Bruce Senior Vice President, Aquila Distributors, Inc., since N/A N/A
Cornelius, NC President since 2008; Senior Vice President of each of the
(04/01/60) 2009 equity and bond funds in the Aquila Group of
Funds since 2009; Executive
Managing Director, Evergreen
Investments, 2004 - 2007,
President, Evergreen Investment
Services, Inc., 1999 - 2007;
President and CEO, Allstate
Financial Distributors, Inc., 1998
- 1999; Senior Vice President and
Director Financial Institution
Division, OppenheimerFunds, Inc.,
1990 - 1998, Regional Vice
President, 1987 - 1990; Vice
President and Mutual Fund
Marketing Manager, J.C. Bradford &
Company, 1982 - 1987.
Todd W. Curtis Vice President Senior Vice President and Portfolio Manager, N/A N/A
Phoenix, AZ since 2009 Tax-Free Trust of Arizona, since August
(06/08/49) 2004; Vice President and Portfolio Manager,
Churchill Tax-Free Fund of
Kentucky, since 2009, backup
portfolio manager, 2004-2009; Vice
President and Portfolio Manager,
Tax-Free Fund For Utah, since
2009; Vice President and Portfolio
Manager, Banc One Investment
Advisors, Inc. and its
predecessors, 1981-2004.
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
Mary Kayleen Willis Vice President Vice President, Tax-Free Fund For Utah since N/A N/A
Salt Lake City, UT since 2003 September 2003, Assistant Vice President,
(06/11/63) 2002-2003; Vice President, Aquila Rocky
Mountain Equity Fund, since 2004.
Robert W. Anderson Chief Chief Compliance Officer of the Fund and N/A N/A
New York, NY Compliance each of the other funds in the Aquila Group
(08/23/40) Officer of Funds, the Manager and the Distributor
since 2004 since 2004, Compliance Officer of the and
Assistant Manager or its predecessor and current
Secretary parent 1998-2004; Assistant Secretary of the
since 2000 Aquila Group of Funds since 2000.
Joseph P. DiMaggio Chief Chief Financial Officer of each fund in the N/A N/A
New York, NY Financial Aquila Group of Funds since 2003 and
(11/06/56) Officer Treasurer since 2000.
since 2003
and Treasurer
since 2000
Edward M. W. Hines Secretary Shareholder of Butzel Long, a professional N/A N/A
New York, NY since 1992 corporation, counsel to the Fund, since
(12/16/39) 2007; Partner of Hollyer Brady Barrett &
Hines LLP, its predecessor as
counsel, 1989-2007; Secretary of
each fund in the Aquila Group of
Funds.
John M. Herndon Assistant Assistant Secretary of each fund in the N/A N/A
New York, NY Secretary Aquila Group of Funds since 1995 and Vice
(12/17/39) since 1995 President of the three Aquila Money-Market
Funds since 1990; Vice President
of the Manager or its predecessor
and current parent since 1990.
NUMBER OF OTHER DIRECTORSHIPS
POSITIONS PORTFOLIOS HELD BY TRUSTEE (THE
HELD WITH IN FUND POSITION HELD IS A
NAME, FUND AND PRINCIPAL COMPLEX DIRECTORSHIP UNLESS
ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN INDICATED
AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE OTHERWISE.)
- ----------------- ---------- ------------------- ---------- -----------
Lori A. Vindigni Assistant Assistant Treasurer of each fund in the N/A N/A
New York, NY Treasurer Aquila Group of Funds since 2000; Assistant
(11/02/66) since 2000 Vice President of the Manager or its
predecessor and current parent
since 1998; Fund Accountant for
the Aquila Group of Funds,
1995-1998.
- ----------
(1) The Fund's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll-free) or by visiting www.aquilafunds.com or the EDGAR
Database at the SEC's internet site at www.sec.gov.
(2) The mailing address of each Trustee and officer is c/o Tax-Free Fund For
Utah, 380 Madison Avenue, New York, NY 10017. (3) Each Trustee holds office
until the next annual meeting of shareholders or until his or her successor is
elected and qualifies. The term of office of each officer is one year.
(4) Ms. Herrmann is an interested person of the Fund as an officer of the Fund,
as a director, officer and shareholder of the Manager's corporate parent, as an
officer and Manager of the Manager, and as a shareholder and director of the
Distributor. Ms. Herrmann is the daughter of Lacy B. Herrmann, the Founder and
Chairman Emeritus of the Fund.
(5) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Municipal Bond
Funds"; Aquila Rocky Mountain Equity Fund is an equity fund; Aquila Three Peaks
High Income Fund is a high income corporate bond fund; considered together,
these 12 funds are called the "Aquila Group of Funds." (6) The Chairman Emeritus
may attend Board meetings but has no voting power.
- --------------------------------------------------------------------------------
PRIVACY NOTICE (UNAUDITED)
TAX-FREE FUND FOR UTAH
OUR PRIVACY POLICY. In providing services to you as an individual who owns or is
considering investing in shares of the Fund, we collect certain non-public
personal information about you. Our policy is to keep this information strictly
safeguarded and confidential, and to use or disclose it only as necessary to
provide services to you or as otherwise permitted by law. Our privacy policy
applies equally to former shareholders and persons who inquire about the Fund.
INFORMATION WE COLLECT. "Non-public personal information" is personally
identifiable financial information about you as an individual or your family.
The kinds of non-public personal information we have about you may include the
information you provide us on your share purchase application or in telephone
calls or correspondence with us, and information about your fund transactions
and holdings, how you voted your shares and the account where your shares are
held.
INFORMATION WE DISCLOSE. We disclose non-public personal information about you
to companies that provide necessary services to us, such as the Fund's transfer
agent, distributor, investment adviser or sub-adviser, if any, as permitted or
required by law, or as authorized by you. Any other use is strictly prohibited.
We do not sell information about you or any of our fund shareholders to anyone.
NON-CALIFORNIA RESIDENTS: We also may disclose some of this information to
another fund in the Aquila Group of Funds (or its service providers) under joint
marketing agreements that permit the funds to use the information only to
provide you with information about other funds in the Aquila Group of Funds or
new services we are offering that may be of interest to you.
CALIFORNIA RESIDENTS ONLY: In addition, unless you "opt-out" of the following
disclosures using the form that was mailed to you under separate cover, we may
disclose some of this information to another fund in the Aquila Group of Funds
(or its service providers) under joint marketing agreements that permit the
funds to use the information only to provide you with information about other
funds in the Aquila Group of Funds or new services we are offering that may be
of interest to you.
HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to non-public personal
information about you to only those persons who need it to provide services to
you or who are permitted by law to receive it. We maintain physical, electronic
and procedural safeguards to protect the confidentiality of all non-public
personal information we have about you.
If you have any questions regarding our Privacy Policy, please contact us at
1-800-437-1020.
AQUILA DISTRIBUTORS, INC.
AQUILA INVESTMENT MANAGEMENT LLC
This Privacy Policy also has been adopted by Aquila Distributors, Inc. and
Aquila Investment Management LLC and applies to all non-public information about
you that each of these companies may obtain in connection with services provided
to the Fund or to you as a shareholder of the Fund.
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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
Tucker Hart Adams
Thomas A. Christopher
Diana P. Herrmann
Lyle W. Hillyard
John C. Lucking
Officers
Diana P. Herrmann, President
Maryann Bruce, Senior Vice President
Todd W. Curtis, Vice President and 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.
(a) As of June 30, 2009 (the end of the reporting period) the
Trust has adopted a code of ethics that applies to the Trust's
principal executive officer(s)and principal financial officer(s)
and persons performing similar functions ("Covered Officers") as
defined in the Aquila Group of Funds Code of Ethics for Principal
Executive and Senior Financial Officers under Section 406 of the
Sarbanes-Oxley Act of 2002;
(f)(1) Pursuant to Item 10(a)(1), a copy of the Trust's Code of
Ethics that applies to the Trust's principal executive officer(s)
and principal financial officer(s) and persons performing similar
functions is included as an exhibit to its annual report on this
Form N-CSR;
(f)(2) The text of the Trust's Code of Ethics that applies to the
Trust's principal executive officer(s) and principal financial
officer(s) and persons performing similar functions has been
posted on its Internet website which can be found at the Trust's
Internet address at aquilafunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1)(ii) The Board of Trustees of the Fund has determined that
it does not have at least one audit committee financial expert
serving on its audit committee. The Fund does not have such a
person serving on the audit committee because none of the persons
currently serving as Trustees happens to have the technical
accounting and auditing expertise included in the definition of
"audit committee financial expert" recently adopted by the Securities
and Exchange Commission in connection with this Form N-CSR, and the
Board has not heretofore deemed it necessary to seek such a person
for election to the Board.
The primary mission of the Board, which is that of oversight over
the operations and affairs of the Fund, confronts the Trustees with
a wide and expanding range of issues and responsibilities. The
Trustees believe that, accordingly, it is essential that the Board's
membership consist of persons with as extensive experience as possible
in fulfilling the duties and responsibilities of mutual fund directors
and audit committee members and, ideally, with extensive experience
and background relating to the economic and financial sectors and
securities in which the Fund invests, including exposure to the
financial and accounting matters commonly encountered with respect
to those sectors and securities. The Board believes that its current
membership satisfies those criteria. It recognizes that it would
also be helpful to have a member with the relatively focused accounting
and auditing expertise reflected in the applicable definition of
"audit committee financial expert," just as additional members with
similarly focused technical expertise in other areas relevant to
the Fund's operations and affairs would also contribute added value.
However, the Board believes that the Fund is better served, and its
assets better employed, by a policy of hiring experts in various
the specialized area of technical accounting and
auditing matters, if and as the Board identifies the need, rather
than by seeking to expand its numbers by adding technical experts
in the areas constituting its domain of responsibility. The Fund's
Audit Committee Charter explicitly authorizes the Committee to
retain such experts as it deems necessary in fulfilling its duties
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
a) Audit Fees - The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the Registrant's
annual financial statements were $14,000 in 2008 and $14,700 in 2009.
b) Audit Related Fees - There were no amounts billed for audit-related
fees over the past two years.
c) Tax Fees - The Registrant was billed by the principal accountant
$3,000 and $3,100 in 2008 and 2009, respectively, for return preparation
and tax compliance.
d) All Other Fees - There were no additional fees paid for audit and
non-audit services other than those disclosed in a) thorough c) above.
e)(1) Currently, the audit committee of the Registrant pre-approves audit
services and fees on an engagement-by-engagement basis
e)(2) None of the services described in b) through d) above were approved
by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X, all were pre-approved on an engagement-by-engagement basis.
f) No applicable.
g) There were no non-audit services fees billed by the Registrant's accountant
to the Registrant's investment adviser or distributor over the past two years
h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included in Item 1 above
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Board of Directors of the Registrant has adopted a Nominating
Committee Charter which provides that the Nominating Committee (the 'Committee')
may consider and evaluate nominee candidates properly submitted by shareholders
if a vacancy among the Independent Trustees of the Registrant occurs and if,
based on the Board's then current size, composition and structure, the Committee
determines that the vacancy should be filled. The Committee will consider
candidates submitted by shareholders on the same basis as it considers and
evaluates candidates recommended by other sources. A copy of the qualifications
and procedures that must be met or followed by shareholders to properly submit
a nominee candidate to the Committee may be obtained by submitting a request
in writing to the Secretary of the Registrant.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940) as of a date within 90 days of the 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)(1) Aquila Group of Funds Code of Ethics for Principal Executive and
Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act
of 2002.
(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of
1940.
(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the registrant has
duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TAX-FREE FUND FOR UTAH
By: /s/ Diana P. Herrmann
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President and Trustee
September 8, 2009
By: /s/ Joseph P. DiMaggio
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Chief Financial Officer and Treasurer
September 8, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934
And the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Diana P. Herrmann
- -----------------------------------
Diana P. Herrmann
President and Trustee
September 8, 2009
By: /s/ Joseph P. DiMaggio
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Joseph P. DiMaggio
Chief Financial Officer and Treasurer
September 8, 2009
TAX-FREE FUND FOR UTAH
EXHIBIT INDEX
(a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and
Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act
of 2002.
(a) (2) Certifications of principal executive officer
and principal financial officer as required by Rule 30a-2(a)
under the Investment Company Act of 1940.
(b) Certification of chief executive officer and chief financial
officer as required by Rule 30a-2(b) of the Investment Company Act
of 1940.