N-CSR Item 1. Report to Shareholders
The Florida
TaxFree Funds
The Florida TaxFree Money Market Fund
The Florida TaxFree ShortTerm Fund
Distributor:
William R. Hough & Co.
100 Second Avenue South, Suite 800
St. Petersburg, Florida 33701-4386
(800) 557-7555
Annual Report
April 30, 2003
This report must be preceded or accompanied by a current
prospectus of The Florida TaxFree Funds.
CONTENTS
President's Message 1
The Florida TaxFree Money Market Fund Statement of Investments
Variable Rate Demand Notes 3
Municipal Bonds 5
The Florida TaxFree ShortTerm Fund Statement of Investments
Variable Rate Demand Notes 10
Municipal Bonds 11
Statements of Assets and Liabilities 16
Statements of Operations 17
Statements of Changes in Net Assets 18
Notes to Financial Statements 19
Report of Independent Accountants 25
Dear Shareholder:
125: We are pleased to present the Annual Report on The Florida TaxFree Funds.
We at The Hough Group of Funds continue to believe that either or
both of The Florida TaxFree Funds represent prudent investments for investors
who seek to reduce their federal income and Florida Intangible Tax liabilities.
The Florida TaxFree Money Market Fund
Total net assets of the Fund were $160.8 million as of April 30, 2003.
This compares with $166.8 million on April 30, 2002.
We are pleased to report that based on total return for the year ending
April 30, 2003, The Florida TaxFree Money Market Fund was ranked in the top 13%
out of a total of approximately 338 tax-free state-specific funds tracked by
iMoneyNet Inc., a respected mutual fund performance and statistical reporting
company. Rankings by iMoney Net for periods ending April 30, 2003 are as
follows:
133: 1-year total return.... 43rd out of 338, 3-year total
return...24th out of 338, 5-year total return...16th out of 338
The 7-day average yield of the Fund was 0.82% as of April 30, 2003.
For investors in the 35% federal tax bracket who have Florida intangible assets
of $200,000 or more, the tax equivalent yield was 1.36%. Had the adviser not
reimbursed certain fees and expenses, the yield and ranking would have been
lower. Past performance, however, is no guarantee of future results.
The Florida TaxFree ShortTerm Fund
As of April 30, 2003, total net assets for the Fund were $24.0 million.
The portfolio had a dollar-weighted average maturity of 2.16 years and a
30-day SEC yield of 1.45% on April 30, 2003. This yield equates to a tax
equivalent yield of 2.33% for a Floridian in the 35% federal tax bracket
with Florida intangible assets of $200,000 or more.
142:The Florida TaxFree ShortTerm Fund is a variable net asset value mutual
fund, and therefore the value of shares fluctuates with the movements of the
short-term municipal bond market. Over the past year, the bond market has
continued to be strong. The lower interest rate environment has been
beneficial to The Florida TaxFree ShortTerm Fund and has contributed to a
4.38% cumulative total return for the 12-month period ended April 30, 2003.
The main reason for this is the inverse relationship between interest rates
and bond prices. As interest rates fall, there is generally a rise in bond
prices. This relationship also usually holds true for tax-free municipal bond
funds; as interest rates decrease, the net asset value (NAV) rises and a fund's
total return increases. While the equity markets have been volatile over the
past 12 months, the municipal bond market has shown strength and has
provided solid returns for investors. The net asset value per share was $10.21
on April 30, 2003, compared with $10.14 on April 30, 2002.
The cumulative total return on the Fund since its inception
November 22, 1993 through April 30, 2003 was 50.08%. This represents
a return of 4.39% on an annualized basis. As shown on the accompanying
chart, another way of illustrating this return since inception would be that
$10,000 invested on November 22, 1993 would have grown to $15,008 on
April 30, 2003, including reinvestment of all distributions.
The Florida Intangible Tax
The Florida intangible tax is assessed against intangible assets such as
stocks, bonds, and mutual funds as of January 1 each year.
Each of The Florida TaxFree Funds will ordinarily invest at least 80%
of its assets in Florida obligations. While state-specific tax-free funds can
invest up to 20% in out-of-state issues, your Funds' portfolio management
committee intends to keep the Funds completely exempt from the Florida
Intangible Tax by investing in only Florida or other exempt issues at the
appropriate time.
We appreciate your investment in The Florida TaxFree Funds and
urge you to contact us at 1-800-557-7555 whenever we can be of assistance.
Sincerely,
W. Robb Hough, Jr.
President
The Hough Group of Funds
11. As of the date of this report, the exemption for assets subject to
the Florida intangible tax is scheduled to increase to $500,000 per
couple ($250,000 for individuals) effective July 1st.
Florida (42%)(a)
Alachua, FL, IDB, (Sabine Inc., Project),
1.45%, 09/01/15,SunTrust Bank, N.A., LOC 1,300,000 1,300,000
Broward County, FL HFA, Housing RB, (P-Floats PT-703),
1.40%, 09/01/32, FHLMC Insured 3,000,000 3,000,000
Capital Trust Agency, FL, IDB, (Seminole Tribe
of Florida Convention and Resort Hotel Facilities),
1.35%, 10/01/33, JP Morgan Chase Bank, LOC 3,000,000 3,000,000
Collier County, FL Health Facilities Auth, Hospital
RB, (Cleveland Clinic Health System Obligated
Group Guaranteed), Series 2003C-1,
1.35%, 01/01/35, J.P. Morgan Chase, LOC 1,000,000 1,000,000
Collier County, FL IDA, IDB, (Redlands Christian
Migrant Association, Inc., Project), 1.40%,
12/01/26, Bank of America, N.A., LOC 3,900,000 3,900,000
Dade County, FL IDA, Pollution Ctrl RB,
(Florida Power & Light), 1.37%, 06/01/21 3,600,000 3,600,000
Dade County, FL IDA, IDB, (Dolphins Stadium),
Series A, 1.35%, 01/01/16, Societe Generale, LOC 600,000 600,000
Florida Development Finance Corp, IDB,
DSLA Realty LC Project), Series A-1, 1.50%,
04/01/25, SunTrust Bank, N.A., LOC 1,680,000 1,680,000
Florida Development Finance Corp, IDB,
RL Smith Investments LLC Project), Series A-2,
1.50%, 04/01/25, SunTrust Bank, N.A., LOC 1,565,000 1,565,000
Florida Development Finance Corp, IDB, (Charlotte
Community Project), Series A-3, 1.40%, 02/01/21,
SunTrust Bank, N.A., LOC 1,495,000 1,495,000
Florida Gulf Coast University Foundation, Inc.,
Certificates of Participation, Series A, 1.50%,
08/01/32, Wachovia Bank, N.A., LOC 1,000,000 1,000,000
Florida HFA, Housing RB, (Lakes of Northdale
Project), Series D, 1.41%, 06/01/07, SouthTrust
Bank of AL, LOC 2,065,000 2,065,000
Florida HFA, Housing RB, (Town Colony Development),
1983 Series E, 1.40%, 12/01/05, Credit Suisse
First Boston, LOC 1,885,000 1,885,000
Gulf Breeze, FL, Hospital RB, (Heritage
Healthcare Project), 1.45%, 01/01/24, Anchor
National Life Insurance Co., SBPA 480,000 480,000
Highlands County, FL Health Facilities Auth,
Hospital RB, (Adventist Health System / Sunbelt),
Series 2003A, 1.35%, 11/15/32, SunTrust Bank,
N.A., LOC 1,000,000 1,000,000
Jackson County, FL, Pollution Control RB,
(Gulf Power Company Project), 1.40%, 07/01/22 500,000 500,000
Jacksonville, FL Electric Auth, Electric Util RB,
Series C, 1.35%, 10/01/30, Dexia Credit Local
de France, SPBA 1,000,000 1,000,000
Lee County, FL Hospital Board of Directors,
Hospital RB, (Lee Memorial Hospital), Series D,
1.40%, 04/01/20, SunTrust Bank, N.A., Liquidity 1,800,000 1,800,000
Lee County, FL Hospital Board of Directors,
Hospital RB, (Lee Memorial Hospital), Series 1995A,
1.36%, 04/01/25, SunTrust Bank, N.A., Liquidity 2,500,000 2,500,000
Lee County, FL HFA, Housing RB, (University Club
Apartments), 1.45%, 05/15/35, SouthTrust Bank,
N.A., LOC 800,000 800,000
Martin County, FL, Solid Waste RB,
(Florida Power & Light), 1.42%, 01/01/27 2,450,000 2,450,000
Ocean Highway & Port Auth, FL, Transportation RB,
Series 1990, 1.45%, 12/01/20, Wachovia Bank,
N.A., LOC 1,500,000 1,500,000
Ocean Highway & Port Auth, FL, Transportation RB,
Series 1990, 1.45%, 12/01/20, Wachovia Bank,
N.A., LOC 700,000 700,000
Orange County, FL Health Facilities Auth, Hospital RB,
(Adventist Health Systems/Sunbelt Obligated Group),
Floater Certificates - Series 171, Series A, 1.51%,
11/15/14, FSA Insured, Morgan Stanley Dean Witter,
Liquidity Facility 6,035,000 6,035,000
Orange County, FL IDA, IDB, (Central Florida
YMCA Project), Series 2002A, 1.40%, 05/01/27,
Bank of America, N.A., LOC $1,000,000 $1,000,000
Palm Beach County, FL Health Facilities Auth,
Hospital RB, (Bethesda Healthcare System Project),
1.35%, 03/01/27, SunTrust Bank, LOC 1,000,000 1,000,000
Palm Beach County, FL, Public Improv RB,
(Jewish Community Campus Project), 1.35%, 03/01/30,
AMBAC Insured, The Northern Trust Company, SBPA 5,000,000 5,000,000
Palm Beach County, FL, Public Improv RB,
(Jewish Community Campus Project), 1.35%, 03/01/30,
The Northern Trust Company, LOC 1,200,000 1,200,000
Palm Beach County, FL, Hospital RB, (Hospice
of Palm Beach County, Inc. Project), Series 2001,
1.40%, 03/01/28, The Northern Trust Company, LOC 1,700,000 1,700,000
Palm Beach County, FL, IDB, (Henry Morrison Flagler),
1.40%, 11/01/36, The Northern Trust Bank, LOC 3,000,000 3,000,000
St. Lucie County, FL, Pollution Control,
(Florida Power & Light), 1.37%, 09/01/28 2,000,000 2,000,000
St. Lucie County, FL, IDB, (Freedom Plastics
FL Project), 1.46%, 11/01/20, LaSalle Bank,
N.A., LOC 2,300,000 2,300,000
St. Petersburg, FL, Public Improv RB, (Florida
International Museum Project), Series 1997A, 1.35%,
10/01/17, SunTrust Bank, Tampa Bay, LOC 2,975,000 2,975,000
St. Petersburg, FL Health Facilities Auth, Hospital
RB, (Menorah Manor Project), Series 1997, 1.40%,
07/01/27, SunTrust Bank, Tampa Bay, LOC 700,000 700,000
Southeast Volusia, FL Hospital District, Hospital RB,
(Bert Fish Medical Center), 1.40%, 05/01/22,
SouthTrust Bank of Alabama, N.A., LOC 600,000 600,000
Sumter County, FL IDA, IDB, (Great Southern Wood,
FL, Inc.), 1.50%, 04/01/05, SouthTrust Bank, LOC 200,000 200,000
Non-Florida (<1%) (a)
Providence, RI Housing Auth, Housing RB,
(Cathedral Square), Series B, 1.45%, 09/01/17,
Fleet Bank, LOC $570,000 $570,000
Total Variable Rate Demand Notes (Cost $67,100,000)
$67,100,000
Florida (55%)(a)
Arcadia, FL, Sales Tax RB, (Dedicated Pool
Local Government),4.80%, 12/01/03, FGIC Insured $100,000 $102,142
Bay County, FL School District, Sales Tax RB, 4.30%,
06/01/03, FSA Insured 100,000 100,258
Brevard County, FL, Public Improvement RB,
(Fourth Cent Tourist Development Tax - Florida
Marlins Training), 3.30%, 03/01/04, FGIC Insured 145,000 147,609
Brevard County, FL School District, Revenue
Anticipation Notes, 2.50%, 05/02/03 2,500,000 2,500,067
Brevard County, FL School Board, Certificates of
Participation, 2.00%, 07/01/03, AMBAC Insured 1,010,000 1,010,940
Brevard County, FL School District, Tax Anticipation
Notes, 2.25%, 06/30/03 1,000,000 1,001,318
Broward County, FL, Sales Tax RB, Commercial Paper,
1.20%, 05/06/03, Dexia Credit Local de France, LOC 2,500,000 2,500,000
Charlotte County, FL School District, Tax
Anticipation Notes, 2.25%, 06/30/03 2,000,000 2,002,949
Charlotte County, FL, Water & Sewer RB, 6.875%,
10/01/03, Pre-refunded @ 102 325,000 338,541
Collier County, FL, Gax Tax RB, 2.00%, 06/01/03,
AMBAC Insured 1,495,000 1,496,188
Duval County, FL School District, Certificates of
Participation, 4.40%, 07/01/03, FSA Insured 450,000 452,409
Escambia County, FL HFA, Housing RB, (Single
Family Mortgage), Series B, 1.15%, 09/04/03,
GNMA/FNMA Collateralized, Mandatory Tender @ 100,
Bank of America, N.A., SBPA 825,000 825,000
Florida Rural Utility Financing Commission,
Public Improv Revenue Notes, (Public Projects
Construction), Series 2002A, 3.00%, 07/15/03 3,730,000 3,739,834
Florida State Board of Education, GO Bonds,
Series D, 6.75%, 06/01/03 485,000 487,117
Florida State Board of Education, GO Bonds,
(Capital Outlay), Series F, 5.40%, 06/01/03 100,000 100,330
Florida State Board of Education, GO Bonds,
(Capital Outlay), Series A, 5.00%, 06/01/03 200,000 200,652
Florida State Board of Education, GO Bonds,
(Capital Outlay), Series C, 5.125%, 06/01/03 100,000 100,328
Florida State Board of Education, GO Bonds, (Capital
Outlay), Series A, 5.00%, 01/01/04 50,000 51,248
Florida State Board of Education, Public Improvement
RB, (Lottery Revenues), Series C, 4.00%, 07/01/03,
FGIC Insured 225,000 225,941
Florida State Board of Education, Public Improvement
RB, (Lottery Revenues), Series A, 4.50%, 07/01/03,
FGIC Insured 100,000 100,542
Florida Local Government Commission, Commercial Paper,
(Florida Association of Counties Pooled Program),
1.05%, 06/13/03, Wachovia Bank, N.A., LOC 1,964,000 1,964,000
Florida Local Government Commission, Commercial
Paper, (Florida Association of Counties Pooled
Program), 1.05%, 07/10/03, Wachovia Bank,
N.A., LOC 4,000,000 4,000,000
Florida Local Government Commission, Commercial
Paper, (Florida Pooled Program), Series B, 1.05%,
06/09/03, Wachovia Bank, N.A., LOC 1,783,000 1,783,000
Florida State Department of Management Services,
Public Improvement RB, (FL Facilities Pool),
Series 2002A, 3.00%, 09/01/03, FSA Insured 1,200,000 1,207,622
Florida State Department of Environmental
Protection, Public Improvement RB, (Save Our
Coast), Series 2003, 3.00%, 07/01/03,
FGIC Insured 930,000 932,951
Florida State Division of Bond Finance, Department
of General Services, Public Improvement RB,
Environmental Protection, (Preservation 2000),
Series B, 5.00%, 07/01/03, FSA Insured 280,000 281,793
Florida Municipal Loan Council, Public Improvement
RB, Series C, 3.00%, 11/01/03, MBIA Insured 950,000 957,241
Florida Municipal Loan Council, Public Improvement
RB, Series A, 4.375%, 04/01/04, MBIA Insured 100,000 103,161
Florida State Municipal Power Agency, Electric
Util RB, (Stanton II Project), 4.45%, 10/01/03,
AMBAC Insured 100,000 101,275
Florida State Turnpike Auth, Transportation RB,
(Department of Transportation), Series A, 5.50%,
07/01/03, AMBAC Insured $100,000 $100,679
Fort Lauderdale, FL, GO Bonds, 4.50%, 07/01/03 100,000 100,476
Fort Lauderdale, FL, GO Bonds, 2.00%, 07/01/03 380,000 380,317
Fort Myers, FL, Water & Sewer RB, Series A, 5.00%,
04/01/04, FGIC Insured 100,000 103,516
Gainesville, FL Utility System, Water & Sewer RB,
Series A, 4.30%, 10/01/03 50,000 50,611
Gainesville, FL Utility System, Electric Util RB,
CP Notes, Series C, 1.10%, 05/22/03, Bayerische
Landesbank, LOC 1,883,000 1,883,000
Greater Orlando, FL Aviation Auth, Transportation
RB, Series B, 3.00%, 10/01/03, FSA Insured 200,000 200,758
Jacksonville, FL Electric Auth, Water & Sewer RB,
CP Notes, Series D, 1.05%, 05/06/03, Dexia
Credit Local, SBPA 5,000,000 5,000,000
Jacksonville, FL Electric Auth, Electric Util RB,
(St. Johns River), Issue 2, Series 10, 6.50%,
10/01/03 2,025,000 2,042,044
Jacksonville, FL Electric Auth, Electric Util RB,
(St. Johns River), Issue 2, Series 16, 5.00%,
10/01/03 710,000 720,827
Jacksonville, FL Electric Auth, Electric Util RB,
Subseries D, 5.30%, 10/01/03, Pre-refunded @ 100 250,000 253,996
Jacksonville, FL Electric Auth, Electric Util RB,
Subseries D, 5.375%, 10/01/03, Pre-refunded @ 100 200,000 203,427
Jacksonville, FL, Public Improvement RB, (Excise
Tax), Series A, 4.90%, 10/01/03, FGIC Insured 200,000 202,949
Jacksonville, FL, Commercial Paper, (Florida
Power & Light), Series 1992, 1.15%, 05/22/03 5,300,000 5,300,000
Jacksonville, FL Port Auth, Transportation RB,
4.20%, 10/01/03, FGIC insured 200,000 202,027
Jacksonville, FL Port Auth, Transportation RB,
7.625%, 11/01/03, Pre-refunded @ 102 585,000 614,447
Jacksonville, FL, Public Improvement RB, (River
(City Renaissance Project), 4.50%, 10/01/03,
FGIC Insured 100,000 101,304
Kissimmee, FL Utility Auth, Electric Util RB,
5.50%, 10/01/03, Pre-refunded @ 103 280,000 290,637
Kissimmee, FL Utility Auth, Electric Util RB,
Commercial Paper, Series 2000B, 1.05%, 06/06/03,
Bank of Nova Scotia, Liquidity 6,000,000 6,000,000
Lee County, FL HFA, Housing RB, (Floater - PT-
611), 1.20%, 09/04/03, Mandatory Tender @ 100,
Merrill Lynch, Liquidity 2,805,000 2,805,000
Manatee County, FL Port Auth, Transportation RB,
Series A, 5.00%, 10/01/03, Pre-refunded @ 102 100,000 103,579
Miami-Dade County, FL, Transportation RB,
(Miami International Airport), Commercial Paper,
Series A, 1.00%, 05/13/03, J.P. Morgan Chase,
Bayerische Landesbank Girozentrale,
State StreetBank, LOC 2,514,000 2,514,000
Ocala, FL, Public Improvement RB, (Capital
Improvement), 2.00%, 10/01/03, AMBAC Insured 430,000 430,890
Ocala, FL, Public Improvement RB, (Optional
Gas Tax Rev), 2.50%, 10/01/03, AMBAC Insured 1,315,000 1,320,449
Orange County, FL School Board, Certificates
of Participation, Series A, 3.60%, 08/01/03,
MBIA Insured 100,000 100,557
Orlando & Orange County, FL Expressway Auth,
Transportation RB, (Senior Lien), 5.375%,
07/01/03, Pre-refunded @ 102 200,000 205,389
Orlando & Orange County, FL Expressway Auth,
Transportation RB, (Senior Lien), 5.25%, 07/01/03,
Pre-refunded @ 102 300,000 308,065
Orlando & Orange County, FL Expressway Auth,
Transportation RB, (Senior Lien), 5.50%,
07/01/03, Pre-refunded @ 102 490,000 503,377
Orlando & Orange County, FL Expressway Auth,
Transportation RB, (Junior Lien), 5.95%, 07/01/03,
Pre-refunded @ 100 300,000 302,067
Orlando, FL Utilities Commission, Water &
Electric RB, (Commercial Paper), Series 1999A,
1.10%, 05/19/03, J. P. Morgan Chase, LOC $6,500,000 $6,500,000
Osceola County, FL School District, GO Bonds,
2.00%, 08/01/03, FSA Insured 370,000 370,554
Palm Beach County, FL, GO Bonds, (Land
Acquisition Program), Series A, 3.50%, 06/01/03 100,000 100,158
Palm Beach County, FL, Public Improvement RB,
(Criminal Justice Facilities), 2.00%, 06/01/03 370,000 370,203
Palm Beach County, FL Health Facilities Auth,
Hospital RB, (Pooled Hospital Loan Project),
Commercial Paper, 1.00%, 05/15/03,
SunTrust Bank, LOC 2,500,000 2,500,000
Pasco County, FL, Public Improvement RB,
(Guaranteed Entitlement), 2.00%, 12/01/03,
FSA Insured 440,000 442,290
Port St. Lucie, FL, Water & Sewer RB,
(Stormwater Utility Revenues), 2.50%,
05/01/03, MBIA Insured 495,000 495,000
Putnam County, FL Development Auth, Pollution
Ctrl RB, (Seminole Electric Cooperative, Inc.),
Series D, 1.45%, 06/15/03, National Rural
Utilities Cooperative Finance Corporation,
GTY, Mandatory Tender @ 100 1,500,000 1,500,000
Putnam County, FL Development Auth,
Pollution Ctrl RB, (Seminole Electric
Cooperative, Inc.), Series H-4, 1.25%,
09/15/03, National Rural Utilities Cooperative
Finance Corporation, GTY,
Mandatory Tender @ 100 1,500,000 1,500,000
St. Lucie County, FL, GO Bonds, 4.00%, 10/01/03,
AMBAC Insured 50,000 50,575
St. Lucie County, FL, Water & Sewer RB, 5.00%,
10/01/03, Escrowed to Maturity 50,000 50,776
St. Lucie County, FL, Solid Waste RB, 2.00%,
09/01/03, AMBAC Insured 550,000 551,466
Sarasota County, FL Public Hospital Board,
Hospital RB, (Sarasota Memorial Hospital Project),
Series B, 4.60%, 10/01/03, MBIA Insured 100,000 101,401
Sarasota-Manatee, FL Airport Auth, Transportation
RB, 4.80%, 08/01/03, MBIA Insured 100,000 100,871
Seminole County, FL School District, Tax
Anticipation Notes, 2.125%, 08/19/03 1,500,000 1,503,232
South Florida Water Management District,
Special Assessment RB, (Special Obligation
Acquisition Bonds), 4.70%, 10/01/03,
MBIA Insured 100,000 101,387
Sunshine State Governmental Financing Comm,
Commercial Paper, Series A, 1.10%, 07/02/03,
FGIC Insured, SBPA: Bank of Nova Scotia 4,539,000 4,539,000
Sunshine State Governmental Financing Comm,
Commercial Paper, Series C, 1.00%, 05/14/03,
FGIC Insured, SBPA: Toronto-Dominion Bank 1,330,000 1,330,000
Sunshine State Governmental Financing Comm,
Commercial Paper, Series G, 1.00%, 05/12/03,
MBIA Insured, SBPA: Landesbank
Hessen-Thuringen Girozentrale 2,500,000 2,500,000
Sunshine State Governmental Financing Comm,
Commercial Paper, Series F, 1.10%, 06/03/03,
AMBAC Insured, SBPA: Landesbank
Hessen-Thuringen Girozentrale 1,500,000 1,500,000
Tampa Bay, FL Water Utility System, Water
& Sewer RB, Series B, 3.90%, 10/01/03,
FGIC Insured 50,000 50,554
Tampa, FL, Public Improvement RB,
(Guaranteed Entitlement), 6.00%,
10/01/03, AMBAC Insured 250,000 255,001
Tampa, FL, Solid Waste RB, 5.00%, 10/01/03,
Pre-refunded @ 102 95,000 98,384
Tampa, FL, Solid Waste RB, 5.25%, 10/01/03,
Pre-refunded @ 102 100,000 103,683
Venice, FL, Public Improv RB, 3.25%, 07/01/03,
FGIC Insured 100,000 100,334
Non-Florida (3%) (a)
Adams County, CO School District No. 012,
GO Bonds, 6.50%, 12/15/03 $135,000 $139,518
Alabama Water Pollution Control Auth, Pollution
Control RB, (Revolving Fund Loan), Series B,
4.25%, 08/15/03, AMBAC Insured 150,000 151,302
Channelview, TX Independent School District,
GO Bonds, 2.00%, 08/15/03, PSF Guaranty 50,000 50,072
Chelan County, WA Public Utility District No. 001,
Electric Utility RB, (Chelan Hydro), Series D,
4.50%, 07/01/03 125,000 125,671
Clarksdale, MS Sewer & Wastewater Treatment
System, Water & Sewer RB, 2.00%, 10/01/03,
Radian Insured 85,000 85,263
Dallas, TX Independent School District, GO Bonds,
5.70%, 08/15/03, Pre-refunded @ 100 430,000 435,621
Howard County, MD, GO Bonds (Public Improvement),
Series A, 5.875%, 05/15/03, Pre-refunded @ 100 215,000 215,400
Johnson County, IN Hospital Association,
Hospital RB, (Hospital Building), 6.50%,
07/01/03, AMBAC Insured 515,000 519,603
Maricopa County, AZ School District, GO Bonds,
(No. 006 Washington Elementary), Series A, 3.25%,
07/01/03, FSA Insured 550,000 551,989
Michigan State Building Auth, Public Improvement
RB, Series I, 6.25% 10/01/03, AMBAC Insured 200,000 204,266
Michigan State South Central Power Agency,
Electric Utility RB, (Power Supply System), 5.60%,
11/01/03, MBIA Insured 250,000 255,591
New Jersey Health Care Facilities Financing Auth,
Hospital RB, (Kennedy Health System), Series B,
5.75%, 07/01/03, MBIA Insured 520,000 524,055
Puerto Rico, Commonwealth of, Tax and Revenue
Anticipation Notes, 2.50%, 07/30/03 1,000,000 1,002,492
Riverton, UT, Water & Sewer RB, 2.50%, 09/01/03,
FGIC Insured 235,000 235,981
San Antonio, TX Airport System, Transportation RB,
(Sub Lien - Passenger Facility), 4.00%, 07/01/03,
FGIC Insured 775,000 778,410
Santa Fe, NM, Public Improvement RB, (Gross
Receipts Tax), Series A, 4.95%, 06/01/03,
AMBAC Insured 25,000 25,065
Tennessee, State of, GO Bonds, Series A, 5.00%,
05/01/03 200,000 200,000
Total Municipal Bonds (Cost $93,374,012) $93,374,012
Total Investments (100%) (Cost $160,474,012) (a) $160,474,012
(a) Percentages indicated are based on investments.
Summary of Ratings (Unaudited):
AAA/Equivalent 98%, AA/Equivalent 2%
Average Portfolio Maturity: 37.40 Days
AMBAC Ambac Assurance Corporation
CP Commercial Paper
FGIC Financial Guaranty Insurance Corporation
FHLMC Florida Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Securities Assurance
GO General Obligation
GNMA Government National Mortgage Association
GTY Guarantee
HFA Housing Finance Authority
IDA Industrial Development Authority
IDB Industrial Development Bond
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PSF Permanent School Fund
RB Revenue Bond
SBPA Standby Bond Purchase Agreement
Variable Rate Demand Notes
Florida (6%) (a)
Collier County, FL Health Facilities Auth,
Hospital RB, (Cleveland Clinic Health System
Obligated Group Guaranteed), Series 2003C-1, 1.35%,
01/01/35, J.P. Morgan Chase, LOC $500,000 $500,000
Lee County, FL Hospital Board of
Directors, Hospital RB, (Lee Memorial Hospital),
Series 1995A, 1.36%, 04/01/25, SunTrust Bank,
N.A., Liquidity 200,000 200,000
Martin County, FL, Solid Waste RB, (Florida
Power & Light), 1.42%, 01/01/27 200,000 200,000
St. Lucie County, FL, Pollution Control, (Florida
Power & Light), 1.37%, 03/01/28 400,000 400,000
Variable Rate Demand Notes
Non-Florida (<1%) (a)
Colorado Health Facilities Auth, Hospital
RB, (The Visiting Nurses Corp. Project),
1.40%, 07/01/22, Wells Fargo Bank, LOC $100,000 $100,000
Total Variable Rate Demand Notes (Cost $1,400,000) $1,400,000
Municipal Bonds
Florida (91%) (a)
Anastasia Sanitation District, St. Johns County, FL,
Water & Sewer RB, 6.80%, 06/01/04, FGIC Insured $100,000 $106,091
Baker County, FL Hospital Auth, Hospital RB,
4.60%, 12/01/06, ACA Insured 175,000 187,667
Baker County, FL Hospital Auth, Hospital RB,
4.65%, 12/01/07, ACA Insured 120,000 129,904
Brevard County, FL, Water & Sewer RB, 5.85%,
03/01/04, Escrowed to Maturity 100,000 103,901
Broward County, FL Airport System,
Transportation RB, Series C, 5.00%,
10/01/05, AMBAC Insured 125,000 129,219
Broward County, FL Airport System,
Transportation RB, Series C, 5.20%,
10/01/07, AMBAC Insured 295,000 304,773
Capital Projects Finance Auth, FL,
Housing RB, (Capital Projects Loan
Program Florida Universities), Senior
Series F-1, 4.50%, 10/01/06, MBIA Insured 250,000 264,560
Clearwater, FL Housing Auth, Housing RB,
(Hamptons Apartments), 8.25%, 05/01/04,
Pre-refunded @ 103 590,000 643,442
Collier County, FL School Board, Certificates
of Participation, 4.50%, 02/15/06, FSA Insured 205,000 220,273
Crossings at Fleming Island Community Development
District, FL, Special Assessment Bonds, Series B,
5.15%, 05/01/03, MBIA Insured 200,000 200,000
Dade County, FL, GO Bonds, 5.25%, 11/01/04,
FGIC Insured 50,000 52,895
Dade County, FL, Transportation RB, (Seaport
Rev), 6.25%, 10/01/05, MBIA Insured 400,000 445,020
Dade County, FL, Transportation RB, (Aviation
Rev), Series Y, 5.25%, 10/01/04 100,000 103,614
Dade County, FL School Board, Certificates
of Participation, Series B, 5.60%, 08/01/06,
Pre-refunded @ 101 115,000 130,434
Dade County, FL School District, GO Bonds, 5.00%,
08/01/05, MBIA Insured 100,000 105,336
Dade County, FL, Water & Sewer RB, 4.70%,
10/01/04, FGIC Insured 50,000 51,688
Duval County, FL School District, GO Bonds,
6.30%, 08/01/07, AMBAC Insured 250,000 291,165
Escambia County, FL Health Facilities Auth,
Hospital RB, (Baptist Hospital & Baptist Manor
Project), 4.40%, 10/01/03 210,000 211,909
Escambia County, FL HFA, Single Family Mortgage
RB, (Multi-County Program), 4.10%, 04/01/04,
GNMA Collateralized 120,000 122,042
Escambia County, FL Utility Auth, Water & Sewer
RB, Series B, 4.10%, 01/01/06, FGIC Insured 150,000 159,266
First Florida Governmental Financing Commission,
Public Improv RB, 4.20%, 07/01/04, AMBAC Insured 100,000 103,466
Florida Development Finance Corporation, IRB,
(FDFC Guaranty Program), 1997 Series B, 4.90%,
05/01/03, AMBAC Insured 40,000 40,000
Florida Housing Finance Corp, Housing RB,
(Homeowner Mortgage), Series 2, 3.25%, 01/01/06 450,000 454,446
Florida Gas Utility, Gas Tax RB, (Gas Project
No. 1), 4.20%, 12/01/07, FSA Insured 100,000 107,541
Florida State Department of Transportation,
GO Bonds, (Right of Way), 5.80%, 07/01/05,
Pre-refunded @ 101 125,000 137,990
Florida State Board of Education, GO Bonds,
Capital Outlay, 8.40%, 06/01/07 55,000 64,716
Florida State Board of Education, GO Bonds,
Series C, 5.40%, 06/01/03 60,000 60,185
Florida State Board of Education, GO Bonds,
Series A, 5.00%, 06/01/07 200,000 222,022
Florida State Board of Education, GO Bonds,
Capital Outlay, Series C, 4.90%, 06/01/05 100,000 101,275
Florida State Board of Education, GO Bonds,
Capital Outlay, Series E, 5.80%, 06/01/04,
Pre-refunded @ 101 150,000 159,026
Florida State Board of Education, GO Bonds,
Capital Outlay, Series A, 5.25%, 06/01/04 100,000 104,345
Florida State Board of Education, GO Bonds,
Capital Outlay, Series A, 6.00%, 01/01/05 100,000 107,551
Florida State Board of Education, GO Bonds,
Series A, 5.00%, 06/01/04 200,000 208,158
Florida State Board of Regents, Certificates
of Participation, State University System,
(FL Atlantic University Foundation, Inc.),
4.00%, 05/01/04, Asset Guaranty Insured $125,000 $128,380
Florida State Department of Transportation,
Transportation RB, (Alligator Alley), 6.25%,
07/01/06, FGIC Insured 100,000 113,721
Florida State Department of Environmental
Protection, Public Improv RB, (Preservation
2000), Series 2001A, 5.00%, 07/01/07,
FSA Insured 250,000 277,545
Florida State Division of Bond Finance,
Department of General Services, Public
Improv RB, (Department of Environmental
Protection - Preservation 2000), Series B,
5.75%, 07/01/06, FGIC Insured 450,000 504,869
Florida State Division of Bond Finance,
Department of General Services, Public Improv
RB, (Department of Environmental
Protection - Preservation 2000), Series A,
5.00%, 07/01/05, FGIC Insured 350,000 376,502
Florida State Division of Bond Finance,
Department of General Services, Public
Improv RB, (Department of Environmental
Protection - Perservation 2000), Series A,
5.75%, 07/01/05, Pre-refunded @ 101 120,000 132,343
Florida State Division of Bond Finance,
Department of General Services, Public
Improv RB, (Department of Environmental
Protection - Preservation 2000), Series A,
5.25%, 07/01/07, MBIA Insured 50,000 55,252
Florida State Turnpike Auth, Transportation RB,
Series B, 4.40%, 07/01/07, MBIA Insured 100,000 108,647
Gainesville, FL Utility System, Water &
Sewer RB, Series A, 5.30%, 10/01/06 125,000 129,249
Greater Orlando, FL Aviation Auth,
Transportation RB, (Orlando, FL Airport),
Series B, 3.25%, 10/01/06, FSA Insured 250,000 257,733
Gulf Breeze, FL, Public Improvement RB,
(Local Government Loan), Series C, 4.50%,
12/01/04, FGIC Insured, Mandatory Tender @ 100 260,000 272,862
Gulf Breeze, FL, Public Improvement RB,
(Venice Local Government Loan), 4.00%, 12/01/06,
FGIC Insured, Mandatory Tender @ 100 35,000 37,577
Halifax, FL Hospital Medical Center, Hospital RB,
Series A, 5.00%, 10/01/07, MBIA Insured 440,000 476,511
Highlands County, FL Health Facilities Auth,
Hospital RB, (Adventist Health/Sunbelt), 3.35%,
09/01/05, Mandatory Tender @ 100 500,000 513,015
Hillsborough County, FL, Water & Sewer RB,
(Capacity Special Assessment), 4.50%, 03/01/06,
FSA Insured 190,000 204,541
Hillsborough County, FL Educational Facilities
Auth, Higher Education RB, (University of Tampa
Project), 4.15%, 12/01/06, Radian Asset Assurance
Insured 225,000 241,918
Hillsborough County, FL IDA, Hospital RB,
(University Community Hospital), 5.60%,
08/15/07, MBIA Insured 50,000 53,385
Hillsborough County, FL HFA, Housing RB,
Single Family Mortgage, Series A-1, 4.25%,
04/01/07, GNMA/FNMA Collateralized 100,000 103,786
Hillsborough County, FL IDA, Hospital RB,
(H. Lee Moffitt Cancer Center Project),
Series C, 3.00%, 07/01/04 170,000 171,579
Hillsborough County, FL, Water & Sewer RB,
(Junior Lien), 5.00%, 08/01/06, AMBAC Insured 250,000 275,385
Jacksonville, FL Electric Auth, Electric Util
RB, (St. Johns River Power Park), Issue 2,
Series 18, 4.00%, 10/01/04 250,000 259,333
Jacksonville, FL, Capital Improv RB, (Gator
Bowl Project), 6.00%, 10/01/04, Pre-refunded
@ 101 165,000 177,821
Jacksonville, FL Electric Auth, Electric Util
RB, (St. Johns River), Issue 2, Series 14,
4.90%, 10/01/08 30,000 32,258
Jacksonville, FL Electric Auth, Electric Util RB,
(St. Johns River), Issue 2, Series 16, 4.50%,
10/01/07 100,000 101,945
Jacksonville, FL, Higher Education RB,
(Edward Waters College Project), 3.60%, 10/01/06,
Mandatory Tender @ 100, First Union
National Bank, LOC 655,000 655,000
Jacksonville, FL, Public Improvement RB,
(Excise Taxes), Series A, 5.25%, 10/01/06,
FGIC Insured 160,000 163,832
Jacksonville, FL Health Facilities Auth,
Hospital RB, (Charity Obligated Group),
Series A, 5.50%, 08/15/06, MBIA Insured 250,000 278,800
Jacksonville, FL Port Auth, Seaport RB,
Series 2000, 4.70%, 11/01/06, Escrowed
to Maturity 165,000 180,413
Jacksonville, FL Port Auth, Seaport RB,
Series 2000, 4.70% 11/01/06, MBIA Insured 245,000 267,099
Lafayette County, FL, Public Improv RB,
Series 2000, 4.90%, 09/01/04 $155,000 $161,205
Lauderhill, FL, Sales Tax RB, (Half Cent),
4.25%, 10/01/05, FGIC Insured 150,000 160,097
Lee County, FL School Board, Certificates of
Participation, Series A, 4.85%, 08/01/03, FSA
Insured 50,000 50,447
Lee County, FL IDA, Water & Sewer RB, (Bonita
Springs Utilities Project), 4.75%, 11/01/04,
FSA Insured 185,000 193,791
Lee County, FL IDA, Water & Sewer RB,
(Bonita Springs Utilities Project), 4.75%,
11/01/05, FSA Insured 210,000 225,971
Lee County, FL IDA, Water & Sewer RB,
(Bonita Springs Utilities Project), 3.90%,
11/01/05, AMBAC Insured 295,000 312,827
Lee County, FL Solid Waste System, Solid Waste RB,
5.25%, 10/01/07, MBIA Insured 500,000 551,550
Lee, FL Memorial Health System, Hospital RB,
Series A, 4.00%, 04/01/07, FSA Insured 250,000 266,265
Leesburg, FL, Hospital RB, (Leesburg Regional
Medical Center), Series B, 5.30%, 07/01/03 85,000 85,446
Lee County, FL School District, GO Bonds,
5.20%, 07/01/07 100,000 102,630
Martin County, FL Health Facilities Auth,
Hospital RB, (Martin Memorial Medical Center),
Series B, 5.25%, 11/15/07, MBIA Insured 250,000 281,225
Miami Beach, FL Health Facilities Auth, Hospital
RB, (South Shore Hospital), Series A, 4.30%,
08/01/03, ACA Insured 130,000 130,871
Miami Beach, FL, Water & Sewer RB, 5.375%,
09/01/08, FSA Insured 250,000 274,785
Miami-Dade County, FL School Board, Certificates
of Participation, Series C, 5.25%,
08/01/06, FSA Insured 100,000 110,705
Miami-Dade County, FL Solid Waste System,
Solid Waste RB, 4.20%, 10/01/05, AMBAC Insured 75,000 79,913
Naples, FL, Hospital RB, (Naples Community
Hospital, Inc. Project), 4.90%, 10/01/04,
MBIA Insured 200,000 206,820
North Miami, FL Health Facilities Auth,
Hospital RB, (Catholic Health Services
Obligation Group), 5.10%, 08/15/04, SunTrust
Bank, Central Florida, LOC 190,000 196,483
Northern Palm Beach County, FL Improvement
District, Public Improv RB, (Water Control
& Improvement - Unit Development 18), 4.30%,
08/01/05, MBIA Insured 50,000 53,162
Orange County, FL Health Facilities Auth,
Hospital RB, (Orlando Regional Healthcare),
Series A, 6.25%, 10/01/07, Escrowed
to Maturity 235,000 276,045
Orange County, FL Health Facilities Auth,
Hospital RB, (Adventist Health System),
5.50%, 11/15/03 250,000 254,663
Orange County, FL, Public Improvement RB,
(Tourist Development Tax), 5.00%, 10/01/06,
AMBAC Insured 25,000 27,622
Orange County, FL HFA, Housing RB, (Homeowner
Rev), Series A-1, 4.95%, 09/01/05 35,000 35,929
Orange County, FL HFA, Housing RB, (Homeowner
Rev), Series B, 2.80%, 09/01/05, GNMA/FNMA
Collateralized 150,000 151,074
Orange County, FL HFA, Housing RB, (Homeowner
Rev), Series B, 3.15%, 09/01/06, GNMA/FNMA
Collateralized 155,000 156,411
Orlando, FL, Water & Sewer RB, (Wastewater
System), Series A, 3.25%, 10/01/08,
AMBAC Insured 170,000 176,282
Orlando & Orange County, FL Expressway
Auth, Transportation RB, Senior Lien,
5.375%, 07/01/08, AMBAC Insured 25,000 25,681
Osceola County, FL HFA, Multifamily
Housing RB, (Tierra Vista Apartments
Project), Series A, 4.85%, 06/01/03,
FSA Insured 55,000 55,102
Osceola County, FL, Sales Tax RB, 3.95%,
04/01/04, FSA Insured 150,000 153,854
Osceola County, FL School Board,
Certificates of Participation, Series A,
(Four Corners Charter School), 5.00%,
08/01/05, MBIA Insured 215,000 231,749
Palm Beach County, FL, Public Improv RB,
(Criminal Justice Facilities), 5.375%,
06/01/07, FGIC Insured 250,000 281,168
Palm Beach County, FL Health Facilities
Auth, Hospital RB, (The Waterford Project),
Series 1997, 5.00%, 10/01/03 150,000 149,933
Palm Beach County, FL, Hospital RB, (Lourdes
- -Noreen Mckeen Residence for Geriatric Care,
Inc.), 3.50%, 12/01/07, Radian Asset
Assurance Insured 250,000 261,635
Palm Beach, FL HFA, Housing RB, (Lake Crystal
Apts Project), 4.20%, 12/01/04, FHLMC
Collateralized $130,000 $133,852
Pinellas County, FL HFA, Single Family
Mortgage RB, Series 1997C, 5.05%, 09/01/07,
GNMA Collateralized 40,000 41,378
Pinellas County, FL HFA, Single Family
Mortgage RB, (Multi-County Program), Series A,
3.70%, 09/01/06, GNMA/FNMA Collateralized 90,000 92,090
Pinellas County, FL HFA, Single Family Mortgage
RB, (Multi-County Program), Series A, 2.05%,
09/01/06, GNMA/FNMA Collateralized 155,000 154,899
Plantation, FL Health Facilities Auth,
Hospital RB, (Covenant Village of FL, Inc.),
4.35%, 12/01/03 100,000 100,914
Reedy Creek, FL Improvement District, Public
Improv RB, Series A, 5.00%, 06/01/07,
AMBAC Insured 135,000 149,865
St. Lucie County, FL, Sales Tax RB, 4.50%,
10/01/04, FGIC Insured 50,000 51,627
St. Lucie County, FL School Board,
Certificates of Participation, 5.00%, 07/01/03,
Escrowed to Maturity 25,000 25,153
St. Lucie County, FL School Board, Certificates
of Participation, 5.00%, 07/01/03, FSA Insured 30,000 30,181
St. Petersburg, FL, Water & Sewer RB, (Utility
Tax Revenue), 5.00%, 06/01/07, AMBAC Insured 250,000 277,528
Sarasota County, FL, Public Improv RB,
(Infrastructure Sales Surtax Rev), 3.80%,
09/01/04, FSA Insured 125,000 129,199
Seminole County, FL School Board, Certificates
of Participation, Series A, 6.125%, 07/01/04,
Pre-refunded @ 102 285,000 306,954
South Broward Hospital District, FL,
Hospital RB, 4.95%, 05/01/03, AMBAC Insured 50,000 50,000
South Broward Hospital District, FL, Hospital RB,
5.05%, 05/01/04, AMBAC Insured 100,000 102,000
South Lake County, FL Hospital District,
Hospital RB, (South Lake Hospital, Inc.), 4.625%,
10/01/04 65,000 67,472
Sunrise, FL, Water & Sewer RB, Series A, 5.75%,
10/01/06, Pre-refunded @ 101 100,000 114,539
Sunrise Lakes, FL, GO Bonds, (Phase 4
Recreation Dist), 4.125%, 08/01/04, AMBAC
Insured 100,000 103,572
Tallahassee, FL, Electric Util RB, Series A,
4.00%, 10/01/04, FSA Insured 100,000 103,833
Tampa, FL Health System, Hospital RB,
(Catholic Health East), Series A-3, 4.25%,
11/15/08, MBIA Insured 150,000 162,560
Tampa, FL Sports Auth, Public Improvement RB,
(Interlocal Agreement - Tampa Bay), 5.10%,
04/01/05, Escrowed to Maturity 50,000 53,515
Tampa, FL, Water & Sewer RB, 5.00%, 10/01/08,
FGIC Insured 50,000 54,137
Turtle Run, FL Community Development District,
Special Assessment RB, (Water Management Benefit),
5.00%, 05/01/05, MBIA Insured 210,000 224,906
Venice, FL, Hospital RB, (Bon Secours Health
System Project), 5.10%, 08/15/05, MBIA Insured 100,000 107,983
Venice, FL, Hospital RB, (Bon Secours Health
System Project), 5.30%, 08/15/07, MBIA Insured 215,000 239,598
Volusia County, FL Health Facilities Auth,
Hospital RB, (John Knox Project), Series A,
5.50%, 06/01/05, Asset Guaranty Insured 300,000 322,793
West Orange, FL Healthcare District, Hospital
RB, Series 1999A, 5.00%, 02/01/04 500,000 510,114
Municipal Bonds
Non-Florida (3%) (a)
Puerto Rico Commonwealth Medical Services
Administration, Certificates of Participation,
Series 2002, 2.75%, 12/01/03 $235,000 $235,126
Virgin Islands Port Auth, Transportation RB,
(Rohlsen Terminal), Series 1998A, 4.35%,
09/01/03 455,000 458,457
Total Municipal Bonds (Cost $21,891,574) $22,470,797
Total Investments (100%) (Cost $23,291,574) (a) $23,870,797
(a) Percentages indicated are based on investments.
Summary of Ratings (Unaudited): AAA/Equivalent 78%, AA/Equivalent 12%
A/Equivalent 4%, BBB/Equivalent 3%, Other 3%
Average Portfolio Maturity: 2.16 Years
ACA ACA Financial Guaranty
AMBAC Ambac Assurance Corporation
CP Commercial Paper
FDFC Florida Development Financial Corporation
FGIC Financial Guaranty Insurance Corporation
FHLMC Florida Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Securities Assurance
GO General Obligation
GNMA Government National Mortgage Association
HFA Housing Finance Authority
IDA Industrial Development Authority
IRB Industrial Revenue Bond
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
RB Revenue Bond
Statements of Assets and Liabilities
Money Fund ShortTerm Fund
ASSETS
Investments in securities,
at value (cost $160,474,012 and
$23,291,574 respectively) $160,474,012 $23,870,797
Cash 93,777 6,848
Receivables:
Interest 597,871 288,994
Fund shares sold 108,269 --
Total assets 161,273,929 24,166,639
LIABILITIES
Payable for investment
securities purchased 308,066 109,291
Dividend payable 106,446 82,522
Funds advanced by manager 68,781 10,038
Total liabilities 483,293 201,851
NET ASSETS
Paid in capital 160,791,670 23,318,329
Net unrealized appreciation of investments -- 579,223
Accumulated net investment income 2,519 10,611
Accumulated net realized gain/(loss) (3,553) 56,625
Net assets $160,790,636 $23,964,788
Number of shares outstanding 160,942,869 2,346,274
Net asset value, offering price and
redemption price per share $ 1.00 10.21
Statements of Operations
Money Fund ShortTerm Fund
INVESTMENT INCOME
Income:
Interest $2,424,057 $802,951
Expenses:
Distribution and
service fees (Note 2) 89,721 15,645
Investment advisory fee (Note 2)847,544 140,819
Custodian fees (Note 3) 28,253 11,758
Transfer agency fees
and expenses (Note 2) 104,353 19,006
Printing costs 7,263 521
Professional fees 22,426 19,738
Insurance 3,629 495
Registration and filing fees 26,581 15,997
Trustees' fees and expenses 14,945 3,955
Securities valuation fees 17,260 30,305
Total expenses 1,161,975 258,239
Expense reimbursements and
fee reductions (Note 2) (368,675) (148,206)
Custodian fees paid
indirectly (Note 3) (713) (430)
Net expenses 792,587 109,603
Net investment income $ 1,631,470 $ 693,348
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss)
on investments $ (3,553) $ 144,664
Unrealized appreciation
on investments -- 195,518
Net realized and unrealized
gain/(loss) on investments (3,553) 340,182
Increase in net assets
from operations $ 1,627,917 $ 1,033,530
Money Fund Short Term Fund
Year Ended Year Ended Year Ended Year Ended
4/30/03 4/30/02 4/30/03 4/30/02
INCREASE (DECREASE)
IN NET ASSETS
Operations:
Net investment
income ... $1,631,470 $ 3,084,050 $ 693,348 $ 949,008
Net realized
gain/(loss) on
investments (3,553) 49,175 144,664 173,217
Unrealized appreciation
Of investments -- -- 195,518 104,757
Increase in net
assets from
operations 1,627,917 3,133,225 1,033,530 1,226,982
Distributions to
shareholders from:
Net investment
income... (1,631,470) (3,084,050) (693,348) (949,008)
Net realized
gains ... (41,247) -- (151,534) (105,789)
Fund share
Transactions
(Note 4) (6,012,535) 14,457,025 1,410,951 (6,291,399)
Net increase
(decrease)
in net assets (6,057,335) 14,506,200 1,599,599 (6,119,214)
Net Assets:
Beginning of
year 166,847,971 152,341,771 22,365,189 28,484,403
End of year $160,790,636 $166,847,971 $23,964,788 $22,365,189
Notes to Financial Statements
1. Summary of Accounting Policies
The Florida TaxFree Money Market Fund (the "Money Fund") and The Florida
TaxFree ShortTerm Fund (the "ShortTerm Fund") are series of The Hough
Group of Funds (the "Trust"), which was organized as a Massachusetts
Business Trust on July 22, 1993. The Trust is registered as an open-end
non-diversified management investment company and commenced operations
on November 22, 1993. Both Funds
seek a high level of current interest income, exempt from federal
income tax, as is
consistent with the preservation of capital and liquidity,
and both are intended to be exempt from Florida intangible property tax.
Each Fund is considered to be a separate entity for financial reporting and
tax purposes. Their financial statements are prepared in accordance with
accounting principles generally accepted in the United States
of America for investment
companies as follows:
Valuation of Securities
For the Money Fund, investments are stated at amortized cost. Under this
valuation method, a portfolio instrument is valued at cost and any discount
or premium is amortized to the maturity of the instrument.
For the ShortTerm Fund, municipal obligations are stated on the basis of
valuations provided by an independent pricing service approved by the Board
of Trustees, which considers information with respect to transactions in
bonds, quotations from bond dealers, market transactions in comparable
securities and various relationships between securities in determining
value.
Variable Rate Demand Notes
The Funds have invested in certain variable interest demand notes, which
are redeemable at specified intervals upon demand. The securities are secured
as to principal and interest by bank letters of credit or corporate
or insurance
company guarantees. The maturity of these instruments for the
purpose of calculating the portfolio's weighted average maturity is
considered to be the greater of the period until the interest rate is
adjusted or until the principal can be recovered by demand.
Securities Traded on a When-Issued Basis or Delayed Delivery Bonds
The Funds may trade on a when-issued or delayed delivery basis, with
payment and delivery scheduled for a future date. These transactions
are subject to market fluctuations and are subject to the risk that the
value at delivery may be more or less than the trade date purchase price.
Although the Funds will generally purchase these securities with the
intention of acquiring such securities, they may sell such securities
before the settlement date.
Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
to distribute all of its income to its shareholders. Therefore, no
provision for federal income tax is required.
Dividends and Distributions
Dividends from investment income (excluding realized gains and losses
if any) are declared daily and paid monthly. Distributions of net
realized gains, if any, on the sales of investments are recorded on the
ex-dividend date, and are made after the close of the Fund's fiscal year
and in November, December and/or January, as declared by the Board of
Trustees. Dividends paid from net investment income for the year ended
April 30, 2003 are exempt from federal income taxes. However, certain
shareholders may be subject to the Alternative Minimum Tax (AMT).
General
Securities transactions are accounted for on the trade date (the date
an order to buy or sell is executed). Interest income, including
amortization of premium and accretion of discount, is recorded on the
accrual basis. Realized gains or losses from securities transactions
are recorded on the identified cost basis.
In the normal course of business each Fund enters into contracts that
contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these
arrangements is unknown, as this would involve future claims that may
be made against the Funds and/or its affiliates that have not yet
occurred. However, based on experience, the Funds expect the risk of
loss to be remote.
Expenses
Expenses arising in connection with each Fund are allocated directly
to the respective Fund, if specifically identifiable. Other expenses
are allocated between the Funds in proportion to the relative net
assets of each Fund.
Accounting 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 amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
2. Investment Management Fees and Other Transactions with Affiliate
Under its investment advisory agreements, William R. Hough & Co. (WRH)
provides the Funds with investment research, advice, and supervision,
and manages the business affairs of each Fund. For these services, the
Money Fund and ShortTerm Fund have agreed to pay WRH a monthly fee at
an annual rate of .50% and .60%, respectively, of their average net
assets. For the year ended April 30, 2003, management fees totaled
$847,544 and $140,819 for the Money Fund and ShortTerm Fund, respectively.
The Funds also compensate WRH for services provided under a Transfer
Agency and Fund Accounting Agreement at the rate of $18 per account
per year. During the year ended April 30, 2003, fees under this
agreement amounted to $64,403 and $4,870 for the Money Fund and the
ShortTerm Fund, respectively. However, these and all other expenses
of the Funds were paid by WRH to the extent that they exceeded .40%
(.50% effective September 1, 2002) of each Fund's average daily net
assets. Expenses in excess of .50% of each Fund's average daily net
assets, exclusive of interest, taxes, expenses of withholding taxes,
brokerage commissions, extraordinary expenses and distribution fees
payable by a fund under its distribution and service plan, will
continue to be paid by WRH until notice is otherwise provided to
shareholders. To the extent that actual expenses in future years
are less than the maximum .50% expense limitation, the Funds may be
required to reimburse WRH for expenses paid in excess of the limitation
during the prior three years, subject to the .50% expense limitation.
At April 30, 2003, $1,336,149 and $468,710 in reimbursed expenses were
subject to recapture by WRH through April 30, 2006, for the Money Fund
and ShortTerm Fund, respectively. Amounts subject to recapture expire
as follows:
4/30/2004 4/30/2005 4/30/2006
Money Fund $464,465 $503,009 $368,675
ShortTerm Fund $150,561 $169,943 $148,206
The Funds have adopted Distribution and Service Plans (the "Plans")
under Securities and Exchange Commission Rule 12b-1, which authorize
each Fund to pay WRH up to .25% of its annual average net assets for
shareholder support services or sales activities. The amounts
reported as distribution and service fees in the Statements of
Operations represent Fund distribution costs, such as advertising,
printing, and dealer commissions, all of which were paid by WRH,
and are included in expense reimbursements and fee reductions.
During the year ended April 30, 2003, the Money Fund and the
ShortTerm Fund paid $598 and $147, respectively, to WRH for
brokerage fees on executions of portfolio investment transactions.
Fees are paid to Trustees of the Trust at the rate of $1,000 per
year plus $500 per quarterly meeting and $400 per audit meeting
per trustee.
3. Custodian Fees Paid Indirectly
For the year ended April 30, 2003, custodian fees were reduced by
earnings credits of $713 and $430 on average daily cash balances
for the Money Market Fund and the ShortTerm Fund, respectively.
4. Fund Shares
The Funds have authorized an unlimited number of shares at no par
value. Transactions in Fund shares for the year's ended April
30, 2003 and 2002 are as follows:
Money Fund* ShortTerm Fund
Shares Amount
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
4/30/03 4/30/02 4/30/03 4/30/02 4/30/03 4/30/02
Sold 432,376,137 428,171,372 2,149,066 1,698,475 21,951,567 17,238,730
Issued
on
reinvested
dividends 1,599,401 3,069,993 73,320 97,914 750,482 993,670
Redeemed(439,988,073)416,784,340)(2,082,121)(2,414,685)(21,291,098)(24,523,799)
Net
Increase
(decrease)(6,012,535) 14,457,025 140,265 (618,296) 1,410,951 (6,291,399)
* All at $1.00 per share
5. Investment Transactions
Purchases and sales/maturities of investment securities
(excluding short-term securities) for the ShortTerm
Fund for the year ended April 30, 2003
were $9,414,652 and $8,618,652, respectively.
6. Federal Income Taxes and Distributions to Shareholders
At April 30, 2003, the cost of securities for federal income tax purposes was
approximately the same as that for financial reporting purposes. Market value
includes net unrealized appreciation over tax cost of
$579,223 for the Short Term
Fund, which consists of aggregate gross unrealized appreciation and
(depreciation) of $583,863 and ($4,640), respectively. Income and capital
gain distributions are determined in accordance with income tax
regulations, which may differ from accounting principles generally accepted
in the United States of America. Accordingly, the character of
distributions and
composition of net assets for tax purposes may differ from that reflected in
the accompanying financial statements. The differences between book-basis
and tax-basis distributions and undistributed gains are attributed primarily
to market discount accretion. As of April 30, 2003, the fund had net tax
basis capital loss carryforwards in the aggregate of $3,553. These capital
loss carryforwards may be applied to any net taxable capital gain until
their expiration date of April 30, 2011.
For income tax purposes, distributions paid during the fiscal years ended
April 30, 2003 and 2002 were as follows:
Distributions paid from:
2003 2002
Money Fund ShortTerm Fund Money Fund ShortTerm Fund
Ordinary Income $43,766 $43,138 --- $6,753
Tax Exempt
Income $1,628,951 $693,348 $3,084,050 $949,008
Long-Term
Capital Gains -- $108,396 --- $99,036
As of April 30, 2003, the components of distributable earnings on a tax
basis were as follows:
Money Fund ShortTerm Fund
Undistributed
Ordinary Income -- $14,106
Undistributed
Tax-Exempt
Income $108,965 $76,454
Undistributed
Long Term
Capital Gains -- $56,625
Capital Loss
Carryforwards ($3,553) --
Net Unrealized
Appreciation -- $579,223
7. Financial Highlights
Money Fund*
Per share operating Year Year Year Year Year
performance(For a share Ended Ended Ended Ended Ended
outstanding throughout 4/30/03 4/30/02 4/30/01 4/30/00 4/30/99
the year)
Net asset value,
beginning of year.... $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment
operations:
Net investment income.. 0.010 0.019 0.036 0.032 0.030
Less distributions from:
Net investment income.. (0.010) (0.019) (0.036)(0.031) (0.030)
Return of capital.. -- -- -- (0.001) --
Total distributions (0.010) (0.019) (0.030) (0.032) (0.030)
Net asset value,
end of year.... $1.00 $1.00 $1.00 $1.00 $1.00
Total return .... .99% 1.89% 3.70% 3.26% 3.02%
Ratios/supplemental data
Net assets at end
of year (000's)... $160,791 $166,848 $152,342 $137,051 $160,410
Ratios to average
daily net assets
Expenses.... .47% .40% .40% .40% .39%
Expenses
(before
reimbursement) .. .69% .70% .74% .70% .73%
Net investment
income............ .96% 1.84% 3.63% 3.11% 2.96%
* Per share amounts have been calculated using the monthly average share method.
7. Financial Highlights (continued)
ShortTerm Fund*
Per share operating performance
(for a share outstanding throughout the year)
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/03 4/30/02 4/30/01 4/30/00 4/30/99
Net asset value,
beginning of year $10.14 $10.09 $9.84 $10.11 $10.05
Income from investment
operations:
Net Investment income 0.30 0.38 0.41 0.41 0.40
Net realized and
unrealized gain (loss)
on investments 0.13 0.10 0.25 (0.27) 0.06
Total from investment
Operations 0.43 0.48 0.66 0.14 0.46
Less distributions
from:
Net investment income (0.30) (0.38) (0.41) (0.40) (0.40)
Net realized gains (0.06) (0.05) -- -- --
Return of capital -- -- -- (0.01) --
Total distributions (0.36) (0.43) (0.41) (0.41) (0.40)
Net asset value,
end of year $10.21 $10.14 $10.09 $9.84 $10.11
Total return 4.38% 4.77% 6.79% 1.39% 4.71%
Ratios/supplemental
data
Net assets at end
of year (000's) $23,965 $22,365 $28,484 $32,779 $29,356
Ratios to average daily net assets
Expenses .47% .40% .40% .40% .39%
Expenses
before reimbursement 1.10% 1.07% .92% .91% .93%
Net investment income 2.95% 3.73% 4.07% 3.97% 4.00%
Portfolio turnover
Rate 41.6% 62.1% 26.0% 32.2% 25.6%
* Per share amounts have been calculated using the monthly average share
method.
The Board of Trustees and Shareholders of
The Florida TaxFree Funds
In our opinion, the accompanying statements of assets and liabilities,
including the statements of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of The
Florida TaxFree Money Market Fund and The Florida TaxFree ShortTerm
Fund (constituting The Hough Group of Funds, hereafter referred to as the
"Fund") at April 30, 2003, the results of each of their operations for
the year then ended, the changes in each of their net assets for each of the
two years 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. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at April
30, 2003 by correspondence with the custodian and broker, provide a
reasonable basis for our opinion. The financial highlights for the
year ended April 30, 1999 were audited by other independent accountants
whose report dated May 27, 1999 expressed an unqualified opinion on
those financial statements.
PricewaterhouseCoopers LLP
New York, New York
June 4, 2003
Interested Trustee
W. Robb Hough, Jr., age 50
Current Positions Held with the Funds: President and Chairman
Term of Office and Length of Time Served: Indefinitely until successor
is elected. Chairman since November 1993; President since May 1996.
Principal Occupations During the Past Five Years: President, William R.
Hough & Co.
Number of Portfolios Overseen Within the Fund Complex: 2
Other Directorships Held Outside the Fund Complex: Director and
President, William R. Hough & Co.
Independent Trustees
Daniel Calabria, age 67
Current Positions Held with the Funds: Trustee
Term of Office and Length of Time Served: Indefinitely until
successor is elected. Trustee since November 1993.
Principal Occupations During the Past Five Years: Retired; Trustee for
various mutual funds
Number of Portfolios Overseen Within the Fund Complex: 2
Other Directorships Held Outside the Fund Complex: Trustee, IDEX Mutual
Funds; Trustee, Aegon/Transamerica Series Funds.
William C. James, age 76
Current Positions Held with the Funds: Trustee
Term of Office and Length of Time Served: Indefinitely until successor
is elected. Trustee since November 1993.
Principal Occupations During the Past Five Years: Retired, Private Investor
Number of Portfolios Overseen Within the Fund Complex: 2
Other Directorships Held Outside the Fund Complex: None
James T. Lang, age 81
Current Positions Held with the Funds: Trustee
Term of Office and Length of Time Served: Indefinitely until successor
is elected. Trustee since November 1993.
Principal Occupations During the Past Five Years: Financial Manager of U.S.
Department of Commerce Grants to World Trade Association of Florida, Financial
Consultant, Trustee of various individual trusts.
Number of Portfolios Overseen Within the Fund Complex: 2
Other Directorships Held Outside the Fund Complex: Vice Chairman of the
Pinellas County Educational Facilities Authority
Peter B. Wells, age 48
Current Positions Held with the Funds: Trustee
Term of Office and Length of Time Served: Indefinitely until successor
is elected. Trustee since May 2000.
Principal Occupations During the Past Five Years: Certified Public
Accountant, Wells, Houser, Schatzel & Thomas, P.A., formerly named
Peel, Schatzel & Wells, P.A.
Number of Portfolios Overseen Within the Fund Complex: 2
Other Directorships Held Outside the Fund Complex: None
N-CSR Item 9. Controls and Procedures
(a)Based on an evaluation of the disclosure controls and procedures (as defined
in rule 30a-2(c) under the Act), the Principal Executive Officer and
Treasurer of the Trust have concluded that such disclosure controls and
procedures are effectively designed to ensure that information required to
be disclosed by the Trust is accumulated and communicated to the Trust's
management to allow timely decisions regarding required disclosure.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.