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 811-3174
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Touchstone Tax-Free Trust
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(Exact name of registrant as specified in charter)
221 East Fourth Street, Cincinnati, Ohio 45202
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(Address of principal executive offices) (Zip code)
Patrick T. Bannigan, 221 East Fourth Street, Cincinnati, Ohio 45202
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(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 362-8000
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Date of fiscal year end: 6/30/03
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Date of reporting period: 6/30/03
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Annual Report
June 30, 2003
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[LOGO]TOUCHSTONE
INVESTMENTS
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ANNUAL REPORT
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Touchstone California Tax-Free Money Market Fund
Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Insured Tax-Free Fund
Touchstone Ohio Tax-Free Money Market Fund
Touchstone Tax-Free Intermediate Term Fund
Touchstone Tax-Free Money Market Fund
Research o Design o Select o Monitor
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Tax-Exempt
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TABLE OF CONTENTS
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Page
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Letter from the President 3
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Management Discussion and Analysis 4
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Statements of Assets and Liabilities 7
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Statements of Operations 12
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Statements of Changes in Net Assets 15
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Financial Highlights 20
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Notes to Financial Statements 29
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Portfolios of Investments:
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California Tax-Free Money Market Fund 43-45
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Florida Tax-Free Money Market Fund 46-47
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Ohio Insured Tax-Free Fund 48-49
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Ohio Tax-Free Money Market Fund 50-54
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Tax-Free Intermediate Term Fund 55-57
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Tax-Free Money Market Fund 58-60
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Notes to Portfolios of Investments 61
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Report of Independent Auditors 62
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2
LETTER FROM THE PRESIDENT
================================================================================
Dear Touchstone Investor:
We are pleased to provide you with the Touchstone Tax-Free Trust Annual Report
for the twelve months ended June 30, 2003. This update includes investment
activity and performance for Touchstone Tax-Free Money Market Fund, Touchstone
California Tax-Free Money Market Fund, Touchstone Ohio Tax-Free Money Market
Fund, Touchstone Florida Tax-Free Money Market Fund, Touchstone Tax-Free
Intermediate Term Fund and Touchstone Ohio Insured Tax-Free Fund, which meet a
variety of investment goals.
Since the recent economic recession's end in 2001, monetary policy eased
significantly as the Federal Reserve reduced interest rates 13 times, bringing
short-term rates to the lowest levels in 45 years. The most recent rate cut in
June sent short-term rates to 1.00%, thereby causing the housing market to
remain vigorous and lowering the cost of debt for both the public and the
private sector. Those rate reductions also influenced short-term yields and
money market rates.
We believe the tax-exempt sector continues to offer attractive investment
alternatives. Investors have been able to purchase high-quality, intermediate
and long-term municipal bonds at yields close to 80% to 90% of Treasuries. That
may provide tax-conscience investors an appealing tax-free yield.
Tax-free fixed income investing can provide balance and stability to your
portfolio, particularly during volatile market conditions. Mutual funds provide
the diversification that can help keep your financial strategy on course.
We at Touchstone remain optimistic about the resilience of both our economy and
our markets and are focused on positioning our Funds for success. We believe our
fund managers' disciplined approach is well suited to helping you attain your
financial objectives. Please visit our Web site, www.touchstoneinvestments.com,
for more information about Touchstone Funds and other investment products
available to you.
Thank you for your confidence in Touchstone and the opportunity to work on your
behalf.
Best Regards,
/s/ Patrick Bannigan
Patrick Bannigan
President
Touchstone Tax-Free Trust
Touchstone mutual funds are distributed by Touchstone Securities, Inc.*
*Member of NASD and SIPC.
3
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
MUNICIPAL BOND MARKET REVIEW & OUTLOOK
The fiscal year ended June 30, 2003 was characterized by continued weakness in
the economy, poor performance in the equity markets and falling interest rates.
The weak economy and corporate scandals led to poor earnings and lower equity
prices, while spreads on corporate bonds widened relative to U.S. Treasury
yields. While the corporate bond and equity markets did improve in the last
quarter of the fiscal year, the upheaval in those markets provided the backdrop
for U.S. Treasury yields to move lower as investors sought the safety provided
by U.S. Treasury securities. As an example, 10-year Treasury Notes declined
1.25% over the course of the year to a yield of 3.50% - a level not seen in more
than 40 years. The Federal Reserve cut interest rates twice during the fiscal
year, once in November and most recently in late June, for a total cut of .75%,
bringing the fed funds rate to 1.00%, which was also a historical low.
The municipal market also benefited from the difficulties in the equity and
corporate bond markets, as investors were attracted to the safety provided by
high quality municipal bonds. Investors certainly had ample opportunity, as over
$385 billion in new municipal bonds were sold over the course of the year. A
combination of low interest rates and the need for municipalities to fill budget
gaps contributed to the record amount of bonds sold. Throughout much of the
year, investor demand remained high, however, municipal bonds did under perform
relative to U.S. Treasury securities due to the huge amount of supply. For
example, 10-year municipal bond yields declined by only .80% over the period and
as a result, municipal yields were trading at yields equal to 92% of 10-year
U.S. Treasury yields by June 30, 2003.
With interest rates at historical lows and the economy expected to improve
during the second half of 2003, it is likely that interest rates will rise. The
exact timing is obviously difficult to know and the economy has certainly given
us mixed signals in the past.
Municipal yields are at historically attractive levels compared to U.S.
Treasuries and are trading at yield levels greater than 90% of comparable U.S.
Treasuries across the yield curve. In the past, when municipals have gotten this
"cheap" relative to U.S. Treasuries, the sector has typically outperformed
Treasury securities.
TOUCHSTONE OHIO INSURED TAX-FREE FUND
The Fund's total return was 8.43% for the twelve months ended June 30, 2003. The
total return for the Lehman Brothers Municipal Bond Index was 8.74% for the same
period.
The Ohio Insured Tax-Free Fund posted top quartile performance for the year
versus its peers in the Lipper Ohio Municipal Debt category which averaged of
7.59%. The Fund was able to post this performance as a result of changes we made
to the portfolio near the end of the fiscal year 2002. We executed several
trades to enhance the call protection of the portfolio. These bonds, combined
with the older, higher yielding issues in the portfolio, provided the Fund with
a combination of income and capital appreciation during the year. The Fund also
outperformed the Lehman Brothers Municipal Bond Index after factoring in the
Fund expenses. By design, the portfolio of the Ohio Insured Tax-Free Fund is
invested in high-quality municipal bonds. In addition, we tend to focus on the
20-year maturity range, which has historically provided the Fund with the best
combination of income and total return.
4
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
TOUCHSTONE TAX-FREE INTERMEDIATE TERM FUND
The Fund's total return was 7.61% for the twelve months ended June 30, 2003. The
total return for the Lehman Brothers 7 Year Municipal Bond Index was 8.85% for
the same period.
The Tax-Free Intermediate Term Fund performed well during the fiscal year ended
June 30, 2003, ranking in the second quartile of its peer group - Lipper
Intermediate Municipal Debt Funds. The Fund was able to achieve its performance
because the bulk of the portfolio was positioned in the 10-year maturity range,
which was one of the better performing maturity sectors in the market. The Fund
slightly underperformed the Lehman Brothers 7 year Municipal Bond Index after
factoring in expenses of the Fund. The Fund lost the most ground relative to the
index in the last quarter of the year, when the market sold off rather
dramatically, with the 10-year maturity range taking the brunt of the sell-off.
As mentioned above, we would expect that interest rates will begin to rise as
soon as it becomes apparent that the economy is starting to recover. With
municipal bonds trading at very attractive yield levels compared to U.S.
Treasury securities, we would expect this to help the relative performance of
the municipal market. We will continue to focus on high quality municipal bonds
with the majority of the bonds in the portfolio rated AAA.
5
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE OHIO INSURED TAX-FREE FUND - CLASS A* AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
[GRAPHIC OMITTED]
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OHIO INSURED TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION*
Class A 8.43% 5.34% 5.32% --
Class B 7.89% -- -- 6.76%
Class C 7.89% 4.65% -- 4.51%
- -----------------------------------------------------------
6/03
OHIO INSURED TAX-FREE FUND - CLASS A $16,003
LEHMAN BROTHERS MUNICIPAL BOND INDEX $18,551
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
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* The chart above represents performance of Class A shares only, which will
vary from the performance of Class B and Class C shares based on the difference
in loads and fees paid by shareholders in the different classes. Fund inception
was April 1, 1985, and the initial public offering of Class C shares commenced
on November 1, 1993. The initial public offering of Class B shares commenced on
May 1, 2001.
The performance of the above Fund does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE TAX-FREE INTERMEDIATE TERM FUND - CLASS A* AND
THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
[GRAPHIC OMITTED]
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- -----------------------------------------------------------
TAX-FREE INTERMEDIATE TERM FUND
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION*
CLASS A 7.61% 5.21% 5.04% --
CLASS B 6.87% -- -- 6.19%
CLASS C 6.71% 4.42% -- 4.13%
- -----------------------------------------------------------
6/03
TAX-FREE INTERMEDIATETERM FUND - CLASS A $15,565
LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX $18,112
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
* The chart above represents performance of Class A shares only, which will
vary from the performance of Class B and Class C shares based on the difference
in loads and fees paid by shareholders in the different classes. Fund inception
was September 10, 1981, and the initial public offering of Class C shares
commenced on February 1, 1994. The initial public offering of Class B shares
commenced on May 1, 2001.
The performance of the above Fund does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
6
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2003
================================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost ............................................. $ 70,691,061 $ 29,663,242
===========================
At market value ............................................... $ 70,691,061 $ 29,663,242
Cash ............................................................. 70,538 95,204
Interest receivable .............................................. 250,999 160,623
Other assets ..................................................... 938 1,312
---------------------------
TOTAL ASSETS ..................................................... 71,013,536 29,920,381
---------------------------
LIABILITIES
Dividends payable ................................................ 428 9,157
Payable to affiliates ............................................ 32,650 13,285
Payable for securities purchased ................................. 588,855 205,368
Other accrued expenses and liabilities ........................... 46,356 35,937
---------------------------
TOTAL LIABILITIES ................................................ 668,289 263,747
---------------------------
NET ASSETS ....................................................... $ 70,345,247 $ 29,656,634
===========================
NET ASSETS CONSIST OF:
Paid-in capital .................................................. $ 70,344,884 $ 29,656,742
Undistributed net investment income .............................. 112 --
Accumulated net realized gains (losses)
from security transactions ............................... 251 (108)
---------------------------
NET ASSETS ....................................................... $ 70,345,247 $ 29,656,634
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 70,344,893 29,656,730
===========================
Net asset value, offering price and redemption price per share ... $ 1.00 $ 1.00
===========================
See accompanying notes to financial statements.
7
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2003
================================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost ............................................. $ 62,703,922 $420,885,483
---------------------------
At market value ............................................... $ 68,513,794 $420,885,483
Cash ............................................................. 1,611 13,901
Interest receivable .............................................. 400,797 1,431,506
Receivable for capital shares sold ............................... 227,326 --
Other assets ..................................................... 2,585 6,439
---------------------------
TOTAL ASSETS ..................................................... 69,146,113 422,337,329
---------------------------
LIABILITIES
Dividends payable ................................................ 74,010 147,404
Payable to affiliates ............................................ 38,665 163,024
Payable for capital shares redeemed .............................. 25,084 --
Payable for securities purchased ................................. 1,554,765 --
Other accrued expenses and liabilities ........................... 74,278 97,339
---------------------------
TOTAL LIABILITIES ................................................ 1,766,802 407,767
---------------------------
NET ASSETS ....................................................... $ 67,379,311 $421,929,562
===========================
NET ASSETS CONSIST OF:
Paid-in Capital .................................................. $ 60,952,555 $421,918,152
Accumulated net realized gains from security transactions ........ 616,884 11,410
Net unrealized appreciation on investments ....................... 5,809,872 --
---------------------------
NET ASSETS ....................................................... $ 67,379,311 $421,929,562
===========================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares .......................... $ 59,683,175 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 4,827,306 --
===========================
Net asset value and redemption price per share ................... $ 12.36 $ --
===========================
Maximum offering price per share ................................. $ 12.98 $ --
===========================
PRICING OF CLASS B SHARES
Net assets applicable to Class B shares .......................... $ 308,411 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 24,874 --
===========================
Net asset value and redemption price per share* .................. $ 12.40 $ --
===========================
Maximum offering price per share ................................. $ 12.40 $ --
===========================
8
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
JUNE 30, 2003
================================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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PRICING OF CLASS C SHARES
Net assets applicable to Class C shares .......................... $ 7,387,725 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 595,543 --
===========================
Net asset value and redemption price per share* .................. $ 12.41 $ --
===========================
Maximum offering price per share ................................. $ 12.41 $ --
===========================
PRICING OF RETAIL SHARES
Net assets applicable to Retail shares ........................... $ -- $155,809,909
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... -- 155,795,732
===========================
Net asset value, offering price and redemption price per share* .. $ -- $ 1.00
===========================
PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional shares .................... $ -- $266,119,653
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... -- 266,108,809
===========================
Net asset value, offering price and redemption price per share* .. $ -- $ 1.00
===========================
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
9
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2003
================================================================================================
TAX-FREE TAX-FREE
INTERMEDIATE MONEY MARKET
TERM FUND FUND
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ASSETS
Investment securities:
At amortized cost ............................................. $ 39,559,115 $ 40,776,995
===========================
At market value ............................................... $ 42,319,284 $ 40,776,995
Cash ............................................................. 309 25,789
Interest receivable .............................................. 390,900 194,206
Receivable for capital shares sold ............................... 189,049 --
Other assets ..................................................... 10,742 15,146
---------------------------
TOTAL ASSETS ..................................................... 42,910,284 41,012,136
---------------------------
LIABILITIES
Dividends payable ................................................ 29,366 288
Payable for capital shares redeemed .............................. 102,565 --
Payable for securities purchased ................................. 2,039,646 877,013
Payable to affiliates ............................................ 47,463 22,504
Other accrued expenses and liabilities ........................... 40,066 45,231
---------------------------
TOTAL LIABILITIES ................................................ 2,259,106 945,036
---------------------------
NET ASSETS ....................................................... $ 40,651,178 $ 40,067,100
===========================
NET ASSETS CONSIST OF:
Paid-in Capital .................................................. $ 37,989,238 $ 40,057,188
Undistributed net investment income .............................. -- 270
Accumulated net realized gains (losses) from security transactions (98,229) 9,642
Net unrealized appreciation on investments ....................... 2,760,169 --
---------------------------
NET ASSETS ....................................................... $ 40,651,178 $ 40,067,100
===========================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares .......................... $ 35,175,909 $ 21,375,326
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 3,021,674 21,380,388
===========================
Net asset value and redemption price per share ................... $ 11.64 $ 1.00
===========================
Maximum offering price per share ................................. $ 12.22 $ --
===========================
PRICING OF CLASS B SHARES
Net assets applicable to Class B shares .......................... $ 385,683 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 33,112 --
===========================
Net asset value and redemption price per share* .................. $ 11.65 $ --
===========================
Maximum offering price per share ................................. $ 11.65 $ --
===========================
10
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
JUNE 30, 2003
================================================================================================
TAX-FREE TAX-FREE
INTERMEDIATE MONEY MARKET
TERM FUND FUND
- ------------------------------------------------------------------------------------------------
PRICING OF CLASS C SHARES
Net assets applicable to Class C shares .......................... $ 5,089,586 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 437,070 --
===========================
Net asset value and redemption price per share* .................. $ 11.64 $ --
===========================
Maximum offering price per share ................................. $ 11.64 $ --
===========================
PRICING OF CLASS S SHARES
Net assets applicable to Class S shares .......................... $ -- $ 18,691,774
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... -- 18,686,952
===========================
Net asset value and redemption price per share* .................. $ -- $ 1.00
===========================
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
11
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2003
================================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income ................................................. $ 1,063,214 $ 376,443
----------------------------
EXPENSES
Investment advisory fees ........................................ 381,243 128,622
Distribution expenses ........................................... 183,018 64,297
Transfer agent fees ............................................. 34,007 12,000
Accounting services fees ........................................ 33,000 27,000
Custodian fees .................................................. 36,166 13,473
Reports to shareholders ......................................... 15,227 2,982
Postage and supplies ............................................ 40,364 5,684
Professional fees ............................................... 21,070 9,190
Administration .................................................. 26,568 9,254
Pricing expenses ................................................ 12,004 4,843
Registration fees ............................................... 2,030 1,541
Trustees' fees and expenses ..................................... 7,860 7,972
Other expense ................................................... 575 288
----------------------------
TOTAL EXPENSES .................................................. 793,132 287,146
Fees waived by the Adviser ...................................... (221,244) (109,080)
----------------------------
NET EXPENSES .................................................... 571,888 178,066
----------------------------
NET INVESTMENT INCOME ........................................... 491,326 198,377
----------------------------
NET REALIZED GAINS FROM SECURITY TRANSACTIONS ................... 251 7,941
----------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $ 491,577 $ 206,318
============================
See accompanying notes to financial statements.
12
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2003
================================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income ................................................. $ 3,076,140 $ 6,272,578
----------------------------
EXPENSES
Investment advisory fees ........................................ 321,710 1,765,063
Distribution expenses, Class A .................................. 145,820 --
Distribution expenses, Class B .................................. 2,519 --
Distribution expenses, Class C .................................. 57,620 --
Distribution expenses, Retail class ............................. -- 433,741
Distribution expenses, Institutional class ...................... -- 18
Transfer agent fees, Class A .................................... 23,715 --
Transfer agent fees, Class B .................................... 12,000 --
Transfer agent fees, Class C .................................... 12,000 --
Transfer agent fees, Retail class ............................... -- 58,867
Transfer agent fees, Institutional class ........................ -- 12,000
Accounting services fees ........................................ 52,500 67,316
Registration fees, Class A ...................................... 3,953 --
Registration fees, Class B ...................................... 3,639 --
Registration fees, Class C ...................................... 2,185 --
Registration fees, Retail Class ................................. -- 8,475
Reports to shareholders ......................................... 3,462 29,980
Postage and supplies ............................................ 35,530 82,337
Professional fees ............................................... 23,118 42,317
Custodian fees .................................................. 19,496 85,981
Pricing expenses ................................................ 9,110 21,690
Administration fees ............................................. 23,559 128,218
Trustees' fees and expenses ..................................... 8,448 7,917
Other expenses .................................................. 1,152 4,013
----------------------------
TOTAL EXPENSES .................................................. 761,536 2,747,933
Fees waived by the Adviser ...................................... (233,791) (260,745)
----------------------------
NET EXPENSES .................................................... 527,745 2,487,188
----------------------------
NET INVESTMENT INCOME ........................................... 2,548,395 3,785,390
----------------------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ................... 899,591 31,700
Net change in unrealized appreciation/depreciation on investments 2,092,804 --
----------------------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ................ 2,992,395 31,700
----------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $ 5,540,790 $ 3,817,090
============================
See accompanying notes to financial statements.
13
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2003
================================================================================================
TAX-FREE TAX-FREE
INTERMEDIATE MONEY MARKET
TERM FUND FUND
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income ................................................. $ 1,810,683 $ 498,944
----------------------------
EXPENSES
Investment advisory fees ........................................ 194,613 153,742
Distribution expenses, Class A .................................. 85,039 57,311
Distribution expenses, Class B .................................. 1,540 --
Distribution expenses, Class C .................................. 47,530 --
Distribution expenses, Class S .................................. -- 47,007
Transfer agent fees, Class A .................................... 35,100 27,285
Transfer agent fees, Class B .................................... 12,000 --
Transfer agent fees, Class C .................................... 12,000 --
Transfer agent fees, Class S .................................... -- 5,000
Accounting services fees ........................................ 46,500 30,625
Registration fees, Class A ...................................... 9,308 13,302
Registration fees, Class B ...................................... 9,135 --
Registration fees, Class C ...................................... 8,507 --
Registration fees, Class S ...................................... -- 4,735
Reports to shareholders ......................................... 13,552 15,943
Postage and supplies ............................................ 43,939 30,322
Professional fees ............................................... 18,440 22,347
Custodian fees .................................................. 13,522 21,277
Pricing expenses ................................................ 9,513 5,330
Administration fees ............................................. 14,246 12,892
Trustees' fees and expenses ..................................... 8,041 8,190
Other expenses .................................................. 284 --
----------------------------
TOTAL EXPENSES .................................................. 582,809 455,308
Fees waived and/or expenses reimbursed by the Adviser ........... (160,686) (161,203)
----------------------------
NET EXPENSES .................................................... 422,123 294,105
----------------------------
NET INVESTMENT INCOME ........................................... 1,388,560 204,839
----------------------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ................... 537,468 9,642
Net change in unrealized appreciation/depreciation on investments 888,456 --
----------------------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ................ 1,425,924 9,642
----------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $ 2,814,484 $ 214,481
============================
See accompanying notes to financial statements.
14
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
================================================================================================================
FROM OPERATIONS
Net investment income ....................... $ 491,326 $ 975,547 $ 198,377 $ 302,373
Net realized gains (losses) from
security transactions .................... 251 6,780 7,941 (120)
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS ............................... 491,577 982,327 206,318 302,253
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .................. (491,598) (975,547) (198,377) (302,373)
From net realized gains ..................... (5,641) -- -- --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS SHAREHOLDERS ............... (497,239) (975,547) (198,377) (302,373)
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................... 231,465,121 259,409,267 60,228,779 47,361,962
Reinvested distributions .................... 481,616 926,470 69,053 159,201
Payments for shares redeemed ................ (246,001,399) (245,422,313) (48,777,163) (46,083,190)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS .......... (14,054,662) 14,913,424 11,520,669 1,437,973
----------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ............................... (14,060,324) 14,920,204 11,528,610 1,437,853
NET ASSETS
Beginning of year ........................... 84,405,571 69,485,367 18,128,024 16,690,171
----------------------------------------------------------------
End of year ................................. $ 70,345,247 $ 84,405,571 $ 29,656,634 $ 18,128,024
================================================================
See accompanying notes to financial statements.
15
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================================================
OHIO
OHIO INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
================================================================================================================
FROM OPERATIONS
Net investment income ....................... $ 2,548,395 $ 2,739,517 $ 3,785,390 $ 7,113,864
Net realized gains (losses) from
security transactions .................... 899,591 470,987 31,700 (4,430)
Net change in unrealized appreciation/
depreciation on investments .............. 2,092,804 246,320 -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS .......................... 5,540,790 3,456,824 3,817,090 7,109,434
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ......... (2,351,509) (2,565,466) -- --
From net investment income, Class B ......... (8,218) (4,056) -- --
From net investment income, Class C ......... (188,668) (172,357) -- --
From net investment income, Retail .......... -- -- (1,374,359) (3,418,541)
From net investment income, Institutional ... -- -- (2,411,031) (3,695,323)
From net realized gains, Class A ............ (332,541) (92,607) -- --
From net realized gains, Class B ............ (1,419) (182) -- --
From net realized gains, Class C ............ (31,146) (7,073) -- --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ............ (2,913,501) (2,841,741) (3,785,390) (7,113,864)
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ................... 166,427,209 152,308,825 -- --
Reinvested distributions .................... 1,811,604 1,824,724 -- --
Payments for shares redeemed ................ (165,318,707) (155,158,445) -- --
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS .......... 2,920,106 (1,024,896) -- --
----------------------------------------------------------------
CLASS B
Proceeds from shares sold ................... 136,163 117,241 -- --
Reinvested distributions .................... 7,253 2,342 -- --
Payments for shares redeemed ................ (4,117) -- -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS B
SHARE TRANSACTIONS ....................... 139,299 119,583 -- --
----------------------------------------------------------------
16
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
================================================================================================================
OHIO
OHIO INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
================================================================================================================
CLASS C
Proceeds from shares sold ................... $ 2,962,425 $ 768,925 $ -- $ --
Reinvested distributions .................... 172,491 145,704 -- --
Payments for shares redeemed ................ (860,392) (562,394) -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS C
SHARE TRANSACTIONS ....................... 2,274,524 352,235 -- --
----------------------------------------------------------------
RETAIL
Proceeds from shares sold ................... -- -- 447,218,674 509,765,613
Reinvested distributions .................... -- -- 1,369,314 3,390,944
Payments for shares redeemed ................ -- -- (503,873,010) (513,635,848)
----------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
RETAIL SHARE TRANSACTIONS ................ -- -- (55,285,022) (479,291)
----------------------------------------------------------------
INSTITUTIONAL
Proceeds from shares sold ................... -- 506,126,362 606,266,764
Reinvested distributions .................... -- 159,261 446,040
Payments for shares redeemed ................ -- (450,864,267) (581,412,222)
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
INSTITUTIONAL SHARE TRANSACTIONS ......... -- -- 55,421,356 25,300,582
----------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS ................ 7,961,218 62,005 168,034 24,816,861
NET ASSETS
Beginning of year ........................... 59,418,093 59,356,088 421,761,528 396,944,667
----------------------------------------------------------------
End of year ................................. $ 67,379,311 $ 59,418,093 $ 421,929,562 $ 421,761,528
================================================================
See accompanying notes to financial statements.
17
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================================================
TAX-FREE TAX-FREE
INTERMEDIATE MONEY MARKET
TERM FUND FUND
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
================================================================================================================
FROM OPERATIONS
Net investment income ....................... $ 1,388,560 $ 1,517,221 $ 204,839 $ 405,331
Net realized gains from security transactions 537,468 162,213 9,642 46,773
Net change in unrealized appreciation/
depreciation on investments .............. 888,456 391,945 -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS .......................... 2,814,484 2,071,379 214,481 452,104
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ......... (1,246,317) (1,401,341) (181,440) (404,369)
From net investment income, Class B ......... (4,372) (1,670) -- --
From net investment income, Class C ......... (137,871) (114,210) -- --
From net investment income, Class S ......... -- -- (24,361) --
From net realized gains, Class A ............ -- -- (42,682) --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ............ (1,388,560) (1,517,221) (248,483) (404,369)
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ................... 12,754,363 12,425,340 29,377,332 37,899,916
Reinvested distributions .................... 947,167 1,102,766 220,138 396,218
Payments for shares redeemed ................ (13,135,382) (16,379,937) (31,715,452) (37,220,247)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS .......... 566,148 (2,851,831) (2,117,982) 1,075,887
----------------------------------------------------------------
CLASS B
Proceeds from shares sold ................... 333,811 57,944 -- --
Reinvested distributions .................... 2,412 1,585 -- --
Payments for shares redeemed ................ (15,334) -- -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS B
SHARE TRANSACTIONS ....................... 320,889 59,529 -- --
----------------------------------------------------------------
CLASS C
Proceeds from shares sold ................... 2,985,278 1,475,796 -- --
Reinvested distributions .................... 89,088 94,489 -- --
Payments for shares redeemed ................ (1,743,501) (1,066,023) -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CLASS C SHARE TRANSACTIONS ............... 1,330,865 504,262 -- --
----------------------------------------------------------------
18
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
================================================================================================================
TAX-FREE TAX-FREE
INTERMEDIATE MONEY MARKET
TERM FUND FUND
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
================================================================================================================
CLASS S
Proceeds from shares sold ................... $ -- $ -- $ 60,088,784 $ --
Reinvested distributions .................... -- -- 24,213 --
Payments for shares redeemed ................ -- -- (41,426,045) --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CLASS S SHARE TRANSACTIONS ............... -- -- 18,686,952 --
----------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ............................... 3,643,826 (1,733,882) 16,534,968 1,123,622
NET ASSETS
Beginning of year ........................... 37,007,352 38,741,234 23,532,132 22,408,510
----------------------------------------------------------------
End of year ................................. $ 40,651,178 $ 37,007,352 $ 40,067,100 $ 23,532,132
----------------------------------------------------------------
See accompanying notes to financial statements.
19
CALIFORNIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------
Net investment income .............................. 0.006 0.012 0.028 0.027 0.025
----------------------------------------------------------------------
Net realized gains on investments .................. 0.000(A) 0.000(A) -- -- --
----------------------------------------------------------------------
Dividends from net investment income ............... (0.006) (0.012) (0.028) (0.027) (0.025)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================
Total return ....................................... 0.65% 1.17% 2.84% 2.75% 2.56%
======================================================================
Net assets at end of year (000's) .................. $ 70,345 $ 84,406 $ 69,485 $ 62,900 $ 47,967
======================================================================
Ratio of net expenses to
average net assets .............................. 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets .............................. 0.64% 1.13% 2.84% 2.72% 2.52%
(A) Amount rounds to less than $0.0005.
See accompanying notes to financial statements.
FLORIDA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------
Net investment income .............................. 0.008 0.017 0.033 0.030 0.026
----------------------------------------------------------------------
Net realized gains (losses)
on investments .................................. 0.000(A) (0.000)(A) -- -- --
----------------------------------------------------------------------
Dividends from net investment income ............... (0.008) (0.017) (0.033) (0.030) (0.026)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================
Total return ....................................... 0.76% 1.66% 3.30% 3.05% 2.68%
======================================================================
Net assets at end of year (000's) .................. $ 29,657 $ 18,128 $ 16,690 $ 18,244 $ 21,371
======================================================================
Ratio of net expenses to
average net assets .............................. 0.69% 0.65% 0.65% 0.73% 0.75%
Ratio of net investment income to
average net assets ......................... 0.77% 1.64% 3.26% 2.98% 2.58%
(A) Amount rounds to less than $0.0005.
See accompanying notes to financial statements.
20
OHIO INSURED TAX-FREE FUND - CLASS A
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 11.94 $ 11.89 $ 11.45 $ 11.74 $ 12.37
----------------------------------------------------------------------
Income from investment operations:
Net investment income ........................... 0.49 0.53 0.56 0.58 0.58
Net realized and unrealized gains
(losses)on investments ....................... 0.49 0.07 0.44 (0.29) (0.34)
----------------------------------------------------------------------
Total from investment operations ................... 0.98 0.60 1.00 0.29 0.24
----------------------------------------------------------------------
Less distributions:
Dividends from net investment income ............ (0.49) (0.53) (0.56) (0.58) (0.58)
Distributions from net realized gains ........... (0.07) (0.02) -- -- (0.29)
----------------------------------------------------------------------
Total distributions ................................ (0.56) (0.55) (0.56) (0.58) (0.87)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 12.36 $ 11.94 $ 11.89 $ 11.45 $ 11.74
======================================================================
Total return(A) .................................... 8.43% 5.15% 8.88% 2.60% 1.81%
======================================================================
Net assets at end of year (000's) .................. $ 59,683 $ 54,348 $ 54,791 $ 59,600 $ 62,737
======================================================================
Ratio of net expenses to
average net assets .............................. 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets .............................. 4.03% 4.47% 4.77% 5.08% 4.72%
Portfolio turnover rate ............................ 24% 28% 20% 66% 26%
(A) Total returns shown exclude the effect of applicable sales loads.
See accompanying notes to financial statements.
21
OHIO INSURED TAX-FREE FUND - CLASS B
FINANCIAL HIGHLIGHTS
===============================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30,
2003 2002 2001(A)
- -----------------------------------------------------------------------------------------------
Net asset value at beginning of period ............. $ 11.95 $ 11.88 $ 11.76
----------------------------------------
Income from investment operations:
Net investment income ........................... 0.40 0.46 0.11
Net realized and unrealized gains on investments 0.52 0.09 0.12
----------------------------------------
Total from investment operations ................... 0.92 0.55 0.23
----------------------------------------
Less distributions:
Dividends from net investment income ............ (0.40) (0.46) (0.11)
Distributions from net realized gains ........... (0.07) (0.02) --
----------------------------------------
Total distributions ................................ (0.47) (0.48) (0.11)
----------------------------------------
Net asset value at end of period ................... $ 12.40 $ 11.95 $ 11.88
========================================
Total return(B) .................................... 7.89% 4.72% 1.98%(C)
========================================
Net assets at end of period (000's) ................ $ 308 $ 161 $ 40
========================================
Ratio of net expenses to average net assets ........ 1.50% 1.50% 0.50%(D)
Ratio of net investment income to
average net assets .............................. 3.26% 3.69% 1.40%(D)
Portfolio turnover rate ............................ 24% 28% 20%(D)
(A) Represents the period from the initial public offering of shares (May 1,
2001) through June 30, 2001.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
22
OHIO INSURED TAX-FREE FUND - CLASS C
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 11.96 $ 11.89 $ 11.44 $ 11.74 $ 12.37
----------------------------------------------------------------------
Income from investment operations:
Net investment income ........................... 0.40 0.44 0.47 0.49 0.49
Net realized and unrealized gains
(losses) on investments ...................... 0.52 0.09 0.45 (0.30) (0.34)
----------------------------------------------------------------------
Total from investment operations ................... 0.92 0.53 0.92 0.19 0.15
----------------------------------------------------------------------
Less distributions:
Dividends from net investment income ............ (0.40) (0.44) (0.47) (0.49) (0.49)
Distributions from net realized gains ........... (0.07) (0.02) -- -- (0.29)
----------------------------------------------------------------------
Total distributions ................................ (0.47) (0.46) (0.47) (0.49) (0.78)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 12.41 $ 11.96 $ 11.89 $ 11.44 $ 11.74
======================================================================
Total return(A) .................................... 7.89% 4.54% 8.15% 1.75% 1.05%
======================================================================
Net assets at end of year (000's) .................. $ 7,388 $ 4,910 $ 4,526 $ 3,585 $ 4,740
======================================================================
Ratio of net expenses to
average net assets .............................. 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to
average net assets ......................... 3.27% 3.72% 4.00% 4.42% 3.97%
Portfolio turnover rate ............................ 24% 28% 20% 66% 26%
(A) Total returns shown exclude the effect of applicable sales loads.
See accompanying notes to financial statements.
23
OHIO TAX-FREE MONEY MARKET FUND - RETAIL
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------
Net investment income .............................. 0.008 0.015 0.033 0.031 0.027
----------------------------------------------------------------------
Net realized gains (losses)
on investments .................................. 0.000(A) (0.000)(A) -- -- --
----------------------------------------------------------------------
Dividends from net investment income ............... (0.008) (0.015) (0.033) (0.031) (0.027)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================
Total return ....................................... 0.78% 1.47% 3.31% 3.09% 2.73%
======================================================================
Net assets at end of year (000's) .................. $ 155,810 $ 211,083 $ 211,564 $ 214,561 $ 214,691
======================================================================
Ratio of net expenses to
average net assets .............................. 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets .............................. 0.79% 1.46% 3.29% 3.04% 2.68%
(A) Amount rounds to less than $0.0005.
See accompanying notes to financial statements.
OHIO TAX-FREE MONEY MARKET FUND - INSTITUTIONAL
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------
Net investment income .............................. 0.010 0.017 0.035 0.033 0.029
----------------------------------------------------------------------
Net realized gains (losses)
on investments .................................. 0.000(A) (0.000)(A) -- -- --
----------------------------------------------------------------------
Dividends from net investment income ............... (0.010) (0.017) (0.035) (0.033) (0.029)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================
Total return ....................................... 1.03% 1.72% 3.58% 3.35% 2.98%
======================================================================
Net assets at end of year (000's) .................. $ 266,120 $ 210,679 $ 185,381 $ 132,889 $ 176,106
======================================================================
Ratio of net expenses to
average net assets .............................. 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets .............................. 1.02% 1.69% 3.52% 3.25% 2.93%
(A) Amount rounds to less than $0.0005.
See accompanying notes to financial statements.
24
TAX-FREE INTERMEDIATE TERM FUND - CLASS A
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 11.22 $ 11.05 $ 10.68 $ 10.87 $ 11.12
----------------------------------------------------------------------
Income from investment operations:
Net investment income ........................... 0.42 0.45 0.47 0.48 0.48
Net realized and unrealized gains
(losses) on investments ...................... 0.42 0.17 0.37 (0.19) (0.25)
----------------------------------------------------------------------
Total from investment operations ................... 0.84 0.62 0.84 0.29 0.23
----------------------------------------------------------------------
Dividends from net investment income ............... (0.42) (0.45) (0.47) (0.48) (0.48)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 11.64 $ 11.22 $ 11.05 $ 10.68 $ 10.87
======================================================================
Total return(A) .................................... 7.61% 5.73% 7.99% 2.75% 2.07%
======================================================================
Net assets at end of year (000's) .................. $ 35,176 $ 33,350 $ 35,698 $ 36,817 $ 47,899
======================================================================
Ratio of net expenses to
average net assets .............................. 0.99% 0.99% 0.99% 0.99% 0.99%
Ratio of net investment income to
average net assets .............................. 3.66% 4.07% 4.31% 4.47% 4.33%
Portfolio turnover rate ............................ 46% 58% 51% 41% 51%
(A) Total returns shown exclude the effect of applicable sales loads.
See accompanying notes to financial statements.
25
TAX-FREE INTERMEDIATE TERM FUND - CLASS B
FINANCIAL HIGHLIGHTS
===============================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30,
2003 2002 2001(A)
- -----------------------------------------------------------------------------------------------
Net asset value at beginning of period ............. $ 11.23 $ 11.06 $ 10.96
----------------------------------------
Income from investment operations:
Net investment income ........................... 0.34 0.37 0.06
Net realized and unrealized gains on investments 0.42 0.17 0.10
----------------------------------------
Total from investment operations ................... 0.76 0.54 0.16
----------------------------------------
Dividends from net investment income ............... (0.34) (0.37) (0.06)
----------------------------------------
Net asset value at end of period ................... $ 11.65 $ 11.23 $ 11.06
========================================
Total return(B) .................................... 6.87% 4.96% 1.50%(C)
========================================
Net assets at end of period (000's) ................ $ 386 $ 60 $ --(D)
========================================
Ratio of net expenses to average net assets ........ 1.73% 1.74% 0.00%
Ratio of net investment income to
average net assets .............................. 2.82% 3.31% 3.56%(E)
Portfolio turnover rate ............................ 46% 58% 51%(E)
(A) Represents the period from the initial public offering of shares (May 1,
2001) through June 30, 2001.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Class B shares net assets are less than $1,000.
(E) Annualized.
See accompanying notes to financial statements.
26
TAX-FREE INTERMEDIATE TERM FUND - CLASS C
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 11.23 $ 11.06 $ 10.68 $ 10.88 $ 11.12
----------------------------------------------------------------------
Income from investment operations:
Net investment income ........................... 0.33 0.37 0.39 0.40 0.40
Net realized and unrealized gains
(losses) on investments ...................... 0.41 0.17 0.38 (0.20) (0.24)
----------------------------------------------------------------------
Total from investment operations ................... 0.74 0.54 0.77 0.20 0.16
----------------------------------------------------------------------
Dividends from net investment income ............... (0.33) (0.37) (0.39) (0.40) (0.40)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 11.64 $ 11.23 $ 11.06 $ 10.68 $ 10.88
======================================================================
Total return(A) .................................... 6.71% 4.94% 7.27% 1.88% 1.40%
======================================================================
Net assets at end of year (000's) .................. $ 5,090 $ 3,597 $ 3,043 $ 3,374 $ 4,634
======================================================================
Ratio of net expenses to
average net assets .............................. 1.74% 1.74% 1.74% 1.74% 1.74%
Ratio of net investment income to
average net assets .............................. 2.90% 3.30% 3.56% 3.72% 3.58%
Portfolio turnover rate ............................ 46% 58% 51% 41% 51%
(A) Total returns shown exclude the effect of applicable sales loads.
See accompanying notes to financial statements.
27
TAX-FREE MONEY MARKET FUND - CLASS A
FINANCIAL HIGHLIGHTS
=============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------
Net investment income .............................. 0.008 0.017 0.034 0.032 0.027
----------------------------------------------------------------------
Net realized gains on investments .................. 0.000(A) 0.000(A) -- -- --
----------------------------------------------------------------------
Dividends from net investment income ............... (0.008) (0.017) (0.034) (0.032) (0.027)
----------------------------------------------------------------------
Net asset value at end of year ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================
Total return ....................................... 0.99% 1.73% 3.45% 3.22% 2.75%
======================================================================
Net assets at end of year (000's) .................. $ 21,375 $ 23,532 $ 22,409 $ 25,194 $ 25,234
======================================================================
Ratio of net expenses to
average net assets .............................. 0.89% 0.89% 0.89% 0.89% 0.89%
Ratio of net investment income to
average net assets .............................. 0.79% 1.71% 3.42% 3.15% 2.74%
(A) Amount rounds to less than $0.0005.
See accompanying notes to financial statements.
TAX-FREE MONEY MARKET FUND - CLASS S
FINANCIAL HIGHLIGHTS
================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
PERIOD
ENDED
JUNE 30,
2003(A)
- --------------------------------------------------------------------------------
Net asset value at beginning of period ............. $ 1.000
----------
Net investment income .............................. 0.001
----------
Net realized gains on investments .................. 0.000(B)
----------
Dividends from net investment income ............... (0.001)
----------
Distributions from net realized gains .............. 0.000
----------
Net asset value at end of period ................... $ 1.000
==========
Total return ....................................... 0.13%
==========
Net assets at end of period (000's) ................ $ 18,692
==========
Ratio of net expenses to average net assets ........ 1.15%(C)
Ratio of net investment income to average net assets 0.31%(C)
(A) Represents the period from commencement of operations (February 3, 2003)
through June 30, 2003.
(B) Amount rounds to less than $0.0005.
(C) Annualized.
See accompanying notes to financial statements.
28
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
================================================================================
1. ORGANIZATION
The California Tax-Free Money Market Fund, the Florida Tax-Free Money Market
Fund, the Ohio Insured Tax-Free Fund, the Ohio Tax-Free Money Market Fund, the
Tax-Free Intermediate Term Fund and the Tax-Free Money Market Fund
(individually, a Fund, and collectively, the Funds) are each a separate series
of shares of Touchstone Tax-Free Trust (the Trust). The Trust is registered
under the Investment Company Act of 1940 (the 1940 Act) as an open-end
management investment company. The Trust was established as a Massachusetts
business trust under a Declaration of Trust dated April 13, 1981. The
Declaration of Trust, as amended, permits the Trustees to issue an unlimited
number of shares of each Fund.
The California Tax-Free Money Market Fund seeks the highest level of current
income exempt from federal and California income tax, consistent with liquidity
and stability of principal. The Fund invests primarily in high-quality,
short-term California municipal obligations issued by the State of California,
its agencies and municipalities, that pay interest that is exempt from both
federal income tax and California income tax.
The Florida Tax-Free Money Market Fund seeks the highest level of interest
income exempt from federal income tax, consistent with liquidity and stability
of principal. The Fund invests primarily in high-quality, short-term Florida
municipal obligations issued by the State of Florida, its agencies and
municipalities, that pay interest that is exempt from both federal income tax
and the Florida intangible personal property tax.
The Ohio Insured Tax-Free Fund seeks the highest level of interest income exempt
from federal income tax and Ohio personal income tax, consistent with the
protection of capital. The Fund invests primarily (at least 80% of assets) in
high quality, long-term Ohio municipal obligations, including general obligation
bonds, revenue bonds and industrial development bonds, that are protected by
insurance guaranteeing the payment of principal and interest in the event of
default.
The Ohio Tax-Free Money Market Fund seeks the highest level of current income
exempt from federal income tax and Ohio personal income tax, consistent with
liquidity and stability of principal. The Fund invests primarily in
high-quality, short-term Ohio municipal obligations issued by the State of Ohio,
its agencies and municipalities, that pay interest that is exempt from both
federal income tax and Ohio personal income tax.
The Tax-Free Intermediate Term Fund seeks high current income exempt from
federal income tax, consistent with the protection of capital. To the extent
consistent with the Fund's primary goal, capital appreciation is a secondary
goal. The Fund invests primarily in municipal obligations, including general
obligation bonds, revenue bonds and industrial development bonds, rated within
the three highest rating categories.
The Tax-Free Money Market Fund seeks the highest level of interest income exempt
from federal income tax, consistent with the protection of capital. The Fund
invests primarily in high-quality, short-term municipal obligations that pay
interest that is exempt from federal income tax.
The Ohio Tax-Free Money Market Fund offers two classes of shares: Retail shares
(sold subject to a distribution fee of up to 0.25% of average daily net assets
of Retail shares) and Institutional shares (sold without a distribution fee).
Each Retail and Institutional share of the Fund represents identical interests
in the Fund's investment portfolio and has the same rights, except that (i)
Retail shares bear the expenses of distribution fees, which will cause Retail
shares to have a higher expense ratio and to pay lower dividends than
Institutional shares; (ii) certain other class specific expenses will be borne
solely by the class to which such expenses are attributable; (iii) each class
has exclusive voting rights with respect to matters affecting only that class;
and (iv) Retail shares are
29
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
subject to a lower minimum initial investment requirement and offer certain
shareholder services not available to Institutional shares such as checkwriting
and automatic investment and systematic withdrawal plans.
The Tax-Free Intermediate Term Fund and the Ohio Insured Tax-Free Fund each
offer three classes of shares: Class A shares (sold subject to a maximum
front-end sales load of 4.75% and a distribution fee of up to 0.25% of average
daily net assets that are attributable to Class A shares), Class B shares (sold
subject to a maximum contingent deferred sales load of 5.00% for a one-year
period and incrementally reduced over time and a distribution fee of up to 1.00%
of average daily net assets that are attributable to Class B shares) and Class C
shares (sold subject to a maximum contingent deferred sales load of 1.00% for a
one-year period and a distribution fee of up to 1.00% of average daily net
assets that are attributable to Class C shares). Each Class A, Class B and Class
C share of the Fund represents identical interests in the Fund's investment
portfolio and has the same rights, except that (i) Class B and Class C shares
bear the expenses of higher distribution fees, which will cause Class B and
Class C shares to have a higher expense ratio and to pay lower dividends than
Class A shares; (ii) certain other class specific expenses will be borne solely
by the class to which such expenses are attributable; and (iii) each class has
exclusive voting rights with respect to matters relating to its own distribution
arrangements.
The Tax-Free Money Market Fund offers two classes of shares: Class A shares
(sold subject to a distribution fee of up to 0.25% of average daily net assets
of class A shares) and Class S shares (sold subject to a distribution fee of up
to 1.00% of average daily net assets that are attributable to Class S shares).
The current maximum distribution fee for Class S shares is limited to 0.60% of
average daily net assets of Class S shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Trust's significant accounting policies:
Security valuation - California Tax-Free Money Market Fund, Florida Tax-Free
Money Market Fund, Ohio Tax-Free Money Market Fund and Tax-Free Money Market
Fund securities are valued on an amortized cost basis, which approximates
market. This involves initially valuing a security at its original cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. This method of valuation is expected to enable these Funds to maintain
a constant net asset value per share. Ohio Insured Tax-Free Fund and Tax-Free
Intermediate Term Fund securities are valued at market using an independent
pricing service which generally utilizes a computerized grid matrix of
tax-exempt securities and evaluations by its staff to determine what it believes
is the fair value of the securities. On limited occasions, if the valuation
provided by the pricing service ignores certain market conditions affecting the
value of a security or the pricing service cannot provide a valuation, the fair
value of the security will be determined in good faith consistent with
procedures established by the Board of Trustees.
Share valuation - The net asset value per share of the California Tax-Free Money
Market Fund, Florida Tax-Free Money Market Fund, and the Tax-Free Money Market
Fund is calculated daily by dividing the total value of a Fund's assets, less
liabilities, by its number of shares outstanding. The net asset value per share
of each class of shares of the Ohio Insured Tax-Free Fund, Ohio Tax-Free Money
Market Fund and the Tax-Free Intermediate Term Fund is also calculated daily by
dividing the total value of the Fund's assets attributable to that class, less
liabilities attributable to that class, by the number of shares outstanding
attributable to that class.
The offering price per share of the Tax-Free Money Market Fund, the California
Tax-Free Money Market Fund, the Ohio Tax-Free Money Market Fund and the Florida
Tax-Free Money Market
30
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
Fund is equal to the net asset value per share. The maximum offering price of
Class A shares of the Tax-Free Intermediate Term Fund and the Ohio Insured
Tax-Free Fund is equal to the net asset value per share plus a sales load equal
to 4.99% of the net asset value (or 4.75% of the offering price). The offering
price of Class B and Class C shares of each Fund is equal to the net asset value
per share.
The redemption price per share of each Fund, including each class of shares with
respect to the Ohio Tax-Free Money Market Fund, the Tax-Free Intermediate Term
Fund and the Ohio Insured Tax-Free Fund, is equal to the net asset value per
share. However, Class B and Class C shares of the Tax-Free Intermediate Term
Fund and the Ohio Insured Tax-Free Fund are subject to a contingent deferred
sales load of 5.00% (incrementally reduced over time) and 1.00% (if redeemed
within a one-year period from the date of purchase), respectively, of the
original purchase price.
Investment income - Interest income is accrued as earned and includes, where
applicable, the pro rata amortization of premium or accretion of discount.
Distributions to shareholders - Dividends from net investment income are
distributed daily and paid on the last business day of each month. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Security transactions - Security transactions are accounted for on the trade
date. Gains and losses on securities sold are determined on a specific
identification basis.
When-issued securities - The Funds may purchase securities with delivery or
payments to occur at a later date. At the time the Funds enter into a commitment
to purchase a security, the transaction is recorded and the value of the
security is reflected in the net asset value. The value of the security may vary
with market fluctuations. No interest accrues to the Fund until payment takes
place. At the time the Fund enters into this type of transaction, it is required
to segregate cash or other liquid assets equal to the value of the securities
purchased. At June 30, 2003, the market value of securities segregated for these
types of transactions (Pasco, Co., FL, HFA MFH Rev. (Oak Trail Apts.)) for the
Tax-Free Intermediate Term Fund was $1,068,140.
Allocations - Investment income earned by the Fund is allocated daily to each
class of shares based on the percentage of the net asset value of settled shares
of such class to the total of the net asset value of settled shares of all
classes. Realized capital gains and losses and unrealized appreciation and
depreciation are allocated daily to each class of shares based upon the
proportionate share of total net assets of the Fund. Class specific expenses are
charged directly to the class incurring the expense. Common expenses which are
not attributable to a specific class are allocated daily to each class of shares
based upon its proportionate share of total net assets of the Fund. Expenses not
directly billed to a Fund are allocated daily to each Fund based on the
proportional share of each Fund's assets in relation to net assets of each Fund
or another reasonable measure.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax - It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its net income, the Fund will be relieved of
federal income tax on the income distributed.
31
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
Accordingly, no provision for income taxes has been made. In addition, each Fund
intends to satisfy conditions which enable it to designate the interest income
generated by its investment in municipal securities, which is exempt from
federal income tax when received by the Fund, as exempt-interest dividends upon
distribution to shareholders.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare and pay as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed amounts
from prior years.
The tax character of distributions paid for the years ended June 30, 2003 and
2002 was as follows:
- ----------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FLORIDA TAX-FREE
MONEY MARKET MONEY MARKET OHIO INSURED
FUND FUND TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002 2003 2002
From tax exempt income $ 491,486 $ 970,870 $ 198,377 $ 315,641 $ 2,548,395 $ 2,745,313
>From ordinary income 5,753 4,531 -- -- 16,402 --
>From long-term capital gains -- -- -- -- 348,704 99,862
---------------------------------------------------------------------------------------
$ 497,239 $ 975,401 $ 198,377 $ 315,641 $ 2,913,501 $ 2,845,175
=======================================================================================
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
OHIO TAX-FREE TAX-FREE TAX-FREE
MONEY MARKET INTERMEDIATE MONEY MARKET
FUND TERM FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002 2003 2002
From tax exempt income $ 3,785,390 $ 7,360,312 $ 1,388,560 $ 1,515,899 $ 205,531 $ 404,760
>From ordinary income -- -- -- -- 673 --
>From long-term capital gains -- -- -- -- 42,279 --
---------------------------------------------------------------------------------------
$ 3,785,390 $ 7,360,312 $ 1,388,560 $ 1,515,899 $ 248,483 $ 404,760
=======================================================================================
- ----------------------------------------------------------------------------------------------------------------------
32
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
The following information is computed on a tax basis for each item as of June
30, 2003:
- ------------------------------------------------------------------------------------------
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE OHIO-INSURED
MONEY MARKET MONEY MARKET TAX-FREE
FUND FUND FUND
- ------------------------------------------------------------------------------------------
Cost of portfolio investments .......... $ 70,691,061 $ 29,663,242 $ 62,703,922
Gross unrealized appreciation .......... -- -- 5,896,969
Gross unrealized depreciation .......... -- -- (87,097)
-----------------------------------------------
Net unrealized appreciation/depreciation -- -- 5,809,872
===============================================
Capital loss carryforward .............. -- (108) --
===============================================
Undistributed ordinary income .......... -- -- 49,199
===============================================
Undistributed tax exempt income ........ 540 9,157 74,010
===============================================
Undistributed long-term gains .......... 251 -- 567,685
===============================================
Other temporary differences ............ (428) (9,157) (74,010)
===============================================
Accumulated earnings (deficit) ...... $ 363 $ (108) $ 6,426,756
===============================================
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
OHIO
TAX-FREE TAX-FREE TAX-FREE
MONEY MARKET INTERMEDIATE MONEY MARKET
FUND TERM FUND FUND
- ------------------------------------------------------------------------------------------
Cost of portfolio investments .......... $ 420,885,483 $ 39,559,115 $ 40,776,995
Gross unrealized appreciation .......... -- 2,780,760 --
Gross unrealized depreciation .......... -- (20,591) --
-----------------------------------------------
Net unrealized appreciation/depreciation -- 2,760,169 --
===============================================
Capital loss carryforward .............. -- (98,229) --
===============================================
Undistributed ordinary income .......... 10,212 -- 9,642
===============================================
Undistributed tax exempt income ........ 147,404 29,366 558
===============================================
Undistributed long-term gains .......... 1,198 -- --
===============================================
Other temporary differences ............ (147,404) (29,366) (288)
===============================================
Accumulated earnings (deficit) ...... $ 11,410 $ 2,661,940 $ 9,912
===============================================
- ------------------------------------------------------------------------------------------
The difference between the cost of portfolio investments and financial statement
cost for the Funds is due to certain timing differences in the recognition of
capital losses under income tax regulations and generally accepted accounting
principles.
The capital loss carryforwards as of June 30, 2003 in the table above expire as
follows:
- --------------------------------------------------------------------------------
AMOUNT EXPIRATION DATE
- --------------------------------------------------------------------------------
Florida Tax-Free Money Fund ...................... $ 108 June 30, 2010
Tax-Free Intermediate Term Fund ................... $ 98,229 June 30, 2009
- --------------------------------------------------------------------------------
33
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
The capital loss carryforwards may be utilized in the current and future years
to offset net realized capital gains, if any, prior to distributing such gains
to shareholders. During the current fiscal year the Florida Tax-Free Fund, Ohio
Tax-Free Money Market Fund and the Tax-Free Intermediate Term Fund utilized
$7,941, $15,860 and $536,723 of capital loss carryforwards, respectively.
Reclassification of capital accounts - To the extent of permanent book/tax
differences, such amounts are reclassified within the capital accounts based on
their federal tax basis treatments; temporary differences do not require such
reclassification. These reclassifications have no impact on net asset value of
the Funds. During the current fiscal year, permanent differences, primarily due
to tax treatment of distributions resulted in the following reclassifications:
- --------------------------------------------------------------------------------
ACCUMULATED
NET REALIZED
ACCUMULATED GAINS FROM ADDITIONAL
NET INVESTMENT SECURITY PAID IN
FUND NAME INCOME TRANSACTIONS CAPITAL
- --------------------------------------------------------------------------------
California Tax Free Money Market ... $ 384 $ (384) $ 0
Florida Tax Free Money Market ...... $ 0 $ 0 $ 0
Ohio Insured Tax Free .............. $ 0 $ (249,563) $ 249,563
Ohio Tax Free Money Market ......... $ 0 $ 0 $ 0
Tax Free Intermediate Term ......... $ 0 $ 0 $ 0
Tax Free Money Market .............. $ 270 $ (270) $ 0
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) were as follows for
the year ended June 30, 2003:
- --------------------------------------------------------------------------------
TAX-FREE OHIO INSURED
INTERMEDIATE TAX-FREE
TERM FUND FUND
- --------------------------------------------------------------------------------
Purchases of investment securities ............... $ 19,710,612 $ 16,470,429
===========================
Proceeds from sales and maturities of
investment securities ......................... $ 17,295,658 $ 13,827,830
===========================
- --------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
The President and certain other officers of the Trust are also officers of
Touchstone Advisors, Inc. (the Advisor), the Trust's investment advisor, or
Touchstone Securities, Inc. (the Underwriter), the Trust's principal
underwriter, and Integrated Fund Services, Inc. (Integrated), the Trust's
administrator, transfer agent and accounting services agent. The Advisor, the
Underwriter and Integrated are each wholly-owned, indirect subsidiaries of The
Western and Southern Life Insurance Company.
MANAGEMENT AGREEMENT
Each Fund's investments are managed by the Advisor under the terms of a
Management Agreement. Under the Management Agreement, each Fund pays the Advisor
a fee, computed and accrued daily and paid monthly, at an annual rate of 0.50%
of its respective average daily net assets up to $100 million, 0.45% of such net
assets from $100 million to $200 million, 0.40% of such net assets from $200
million to $300 million and 0.375% of such net assets in excess of $300 million.
34
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
The Trust and the Advisor have entered into an agreement to contractually limit
operating expenses. The maximum operating expense limit in any year with respect
to a Fund is based on a percentage of the average daily net assets of the Fund:
California Tax-Free Money Market Fund - 0.75%; Florida Tax-Free Money Market
Fund - 0.75%, effective January 7, 2003 (previously 0.65%); Ohio Tax-Free Money
Market Fund - 0.75% for Retail shares and 0.50% for Institutional shares; Ohio
Insured Tax-Free Fund - 0.75% for Class A shares, 1.50% for Class B and Class C
shares; Tax-Free Intermediate Term Fund - 0.99% for Class A shares, 1.74% for
Class B and Class C shares; Tax-Free Money Market Fund, - 0.89% for Class A
shares and 1.15% for Class S shares. The fee waivers and expense limitations
will remain in effect until at least June 30, 2004.
Pursuant to this expense limitation agreement, during the year ended June 30,
2003, the Advisor waived $221,244 of its advisory fees for the California
Tax-Free Money Market Fund; waived $109,080 of its advisory fees for the Florida
Tax-Free Money Market Fund; waived $233,791 of its advisory fees for the Ohio
Insured Tax-Free Fund; waived $260,745 of its advisory fees for the Ohio
Tax-Free Money Market Fund; waived $160,686 of its advisory fees for the
Tax-Free Intermediate Term Fund; and waived $153,742 of its advisory fees and
reimbursed $7,461 of operating expenses for the Tax-Free Money Market Fund.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, Integrated supplies executive
and regulatory compliance services, supervises the preparation of tax returns,
and coordinates the preparation of reports to and filings with the Securities
and Exchange Commission and state securities authorities and materials for
meetings of the Board of Trustees. For these services, Integrated receives a
monthly fee from each Fund.
TRANSFER AGENT AGREEMENT
The Trust has entered into a Transfer Agency Agreement between the Trust and
Integrated, the Trust's transfer agent, shareholder service agent and accounting
agent. Under the terms of the agreement, Integrated maintains the records for
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. For these services, Integrated receives a monthly fee per
shareholder account from each Fund, subject to a minimum monthly fee for each
Fund, or for each class of shares of a Fund, as applicable. In addition, each
Fund pays Integrated out-of-pocket expenses including, but not limited to,
postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement between the Trust and
Integrated, Integrated calculates the daily net asset value per share and
maintains the financial books and records of each Fund. For these services,
Integrated receives a monthly fee per fund, based on average net assets, of each
Fund subject to an additional monthly fee for each additional class of shares.
In addition, each Fund pays certain out-of-pocket expenses incurred by
Integrated in obtaining valuations of such Fund's portfolio securities.
UNDERWRITING AGREEMENT
The Underwriter is the Funds' principal underwriter and, as such, acts as
exclusive agent for distribution of the Funds' shares. Under the terms of the
Underwriting Agreement between the Trust and the Underwriter, the Underwriter
earned $10,333 and $12,309 from underwriting and broker
35
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
commissions on the sale of Class A shares of the Tax-Free Intermediate Term Fund
and the Ohio Insured Tax-Free Fund, respectively, during the year ended June 30,
2003. In addition, the Underwriter collected $2,309 and $792 of contingent
deferred sales loads on the redemption of Class B shares and C shares of the
Tax-Free Intermediate Term Fund and the Ohio Insured Tax-Free Fund,
respectively.
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution (Class A Plan) under which shares of the
California Tax-Free Money Market Fund and the Florida Tax-Free Money Market Fund
Class A shares or Retail shares of all other Funds may directly incur or
reimburse the Advisor or the Underwriter for expenses related to the
distribution and promotion of shares. The annual limitation for payment of such
expenses under the Class A Plan is 0.25% of average daily net assets
attributable to such shares.
The Trust also has a Plan of Distribution (Class B Plan) and a Plan of
Distribution (Class C Plan) under which Class B shares and Class C shares of the
Tax-Free Intermediate Term Fund and the Ohio Insured Tax-Free Fund may directly
incur or reimburse the Advisor or the Underwriter for expenses related to the
distribution and promotion of shares. The annual limitation for payment of such
expenses under each of the Class B Plan and Class C Plan is 1.00% of average
daily net assets attributable to Class B shares and Class C shares.
The Trust also has a Plan of Distribution (Class S Plan) under which Class S
shares of the Tax-Free Money Market Fund may directly incur or reimburse the
Advisor or the Underwriter for expenses related to the distribution and
promotion of shares. The annual limitation for payment of such expenses under
the Class S Plan is 1.00% of average daily net assets attributable to such
shares. The current distribution expense fee for Class S shares is limited to
0.60% of average daily net assets attributable to such shares.
36
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
5. CAPITAL SHARE TRANSACTIONS
Capital share transactions for the California Tax-Free Money Market Fund, the
Florida Tax-Free Money Market Fund, the Ohio Tax-Free Money Market Fund and the
Tax-Free Money Market Fund are identical to the dollar value of those
transactions as shown in the Statements of Changes in Net Assets. Proceeds and
payments on capital shares as shown in the Statements of Changes in Net Assets
for the Ohio Insured Tax-Free Fund and the Tax-Free Intermediate Term Fund are
the result of the following capital share transactions:
- -------------------------------------------------------------------------------------------------------
OHIO INSURED TAX-FREE INTERMEDIATE
TAX-FREE FUND TERM FUND
- -------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------
CLASS A
Shares sold ............................ 13,664,501 12,791,620 1,109,990 1,112,997
Shares reinvested ...................... 148,905 152,977 82,561 98,963
Shares redeemed ........................ (13,536,660) (13,000,795) (1,142,195) (1,470,364)
-----------------------------------------------------------
Net increase (decrease) in
shares outstanding .................. 276,746 (56,198) 50,356 (258,404)
Shares outstanding, beginning of year .. 4,550,560 4,606,758 2,971,318 3,229,722
-----------------------------------------------------------
Shares outstanding, end of year ........ 4,827,306 4,550,560 3,021,674 2,971,318
===========================================================
CLASS B
Shares sold ............................ 11,165 9,888 28,873 5,209
Shares reinvested ...................... 595 197 210 142
Shares redeemed ........................ (338) -- (1,331) --
-----------------------------------------------------------
Net increase in shares outstanding ..... 11,422 10,085 27,752 5,351
Shares outstanding, beginning of year .. 13,452 3,367 5,360 9
-----------------------------------------------------------
Shares outstanding, end of year ........ 24,874 13,452 33,112 5,360
===========================================================
CLASS C
Shares sold ............................ 241,986 64,654 261,362 132,759
Shares reinvested ...................... 14,132 12,207 7,762 8,477
Shares redeemed ........................ (70,921) (47,207) (152,387) (96,124)
-----------------------------------------------------------
Net increase in shares outstanding ..... 185,197 29,654 116,737 45,112
Shares outstanding, beginning of year .. 410,346 380,692 320,333 275,221
-----------------------------------------------------------
Shares outstanding, end of year ........ 595,543 410,346 437,070 320,333
===========================================================
- -------------------------------------------------------------------------------------------------------
37
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
6. PORTFOLIO COMPOSITION (UNAUDITED)
As of June 30, 2003, the Ohio Insured Tax-Free Fund and the Ohio Tax-Free Money
Market Fund were invested exclusively in debt obligations issued by the State of
Ohio and its political subdivisions, agencies, authorities and instrumentalities
and by other issuers, the interest from which is exempt from Ohio personal
income tax. The California Tax-Free Money Market Fund was invested exclusively
in debt obligations issued by the State of California and its political
subdivisions, agencies, authorities and instrumentalities and by other issuers,
the interest from which is exempt from California income tax. The Florida
Tax-Free Money Market Fund was 85.9% invested in debt obligations issued by the
State of Florida and its political subdivisions, agencies, authorities and
instrumentalities and by other issuers, the value of which is exempt from the
Florida intangible personal property tax. As of June 30, 2003, 30.5% of the
portfolio securities of the Tax-Free Money Market Fund were concentrated in the
State of Ohio and 11.0% in the State of Kentucky. For information regarding
portfolio composition by state for the Tax-Free Intermediate Term Fund, see the
Fund's Portfolio of Investments.
The California Tax-Free Money Market Fund, the Florida Tax-Free Money Market
Fund, the Ohio Insured Tax-Free Fund, and the Ohio Tax-Free Money Market Fund
are each non-diversified Funds under the 1940 Act. Thus, investments may be
concentrated in fewer issuers than those of a diversified fund. As of June 30,
2003, there were no concentrations of investments (10% or greater) in any one
issuer.
The California Tax-Free Money Market Fund, the Florida Tax-Free Money Market
Fund, the Ohio Tax-Free Money Market Fund and the Tax-Free Money Market Fund
each invest in municipal securities maturing in 13 months or less and having a
short-term rating in one of the top two ratings categories by at least two
nationally recognized statistical rating agencies (or by one such agency if a
security is rated by only that agency) or, if unrated, are determined by the
Adviser, under the supervision of the Board of Trustees, to be of comparable
quality.
As of June 30, 2003, 83.1% of the Ohio Insured Tax-Free Fund's long-term
portfolio securities were either (1) insured by an insurance policy obtained
from a recognized insurer which carries a rating of AAA by S&P or Aaa by
Moody's, (2) guaranteed as to the payment of interest and principal by an agency
or instrumentality of the U.S. Government or (3) secured as to the payment of
interest and principal by an escrow account consisting of obligations of the
U.S. Government. Three private insurers individually insure more than 10% of the
Ohio Insured Tax-Free Fund's portfolio securities and collectively insure 68.0%
of its portfolio securities.
As of June 30, 2003, 48.2% of the Tax-Free Intermediate Term Fund's portfolio
securities were rated AAA/Aaa [using the higher of Standard & Poor's Corporation
(S&P) or Moody's Investors Service, Inc. (Moody's) ratings], 31.5% were rated
AA/Aa, 16.5% were rated A/A, and 3.8% were rated Baa/BBB.
38
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
The concentration of investments for each Fund as of June 30, 2003, classified
by revenue source, was as follows:
- -------------------------------------------------------------------------------------------------
CALIFORNIA FLORIDA OHIO
TAX-FREE TAX-FREE OHIO TAX-FREE TAX-FREE TAX-FREE
MONEY MONEY INSURED MONEY INTERMEDIATE MONEY
MARKET MARKET TAX-FREE MARKET TERM MARKET
FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------
General Obligations .......... 3.3% 9.7% 61.6% 10.4% 27.2% 12.4%
Revenue Bonds:
Industrial Development/
Pollution Control ....... 19.5% 10.3% -- 9.5% 8.5% 24.6%
Hospital/Health Care ...... 5.4% 18.0% 9.9% 27.1% 16.9% 11.7%
Utilities ................. 11.7% 5.0% 4.4% 16.4% 3.1% 19.0%
Education ................. 7.2% 9.3% 8.0% 7.5% 10.9% 4.6%
Housing/Mortgage .......... 30.1% 32.3% 2.9% 6.5% 9.5% 5.7%
Economic Development ...... 1.7% -- -- 4.2% -- 5.7%
Public Facilities ......... 10.7% 5.1% 7.3% 3.0% 5.4% 2.3%
Transportation ............ 1.3% 1.6% 3.5% 5.1% 10.4% 1.9%
Special Tax ............... 3.2% 0.3% -- 3.7% -- 5.9%
Miscellaneous ............. 5.9% 8.4% 2.4% 6.6% 8.1% 6.2%
-------------------------------------------------------------
Total Investments ............ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
=============================================================
- -------------------------------------------------------------------------------------------------
39
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
7. MANAGEMENT OF THE TRUST (UNAUDITED)
INTERESTED TRUSTEES1
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
NAME POSITION(S) TERM OF OFFICE2 IN THE OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) TOUCHSTONE DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS FAMILY3 HELD4
- ------------------------------------------------------------------------------------------------------------------------------------
Jill T. McGruder Trustee Until President and a director of IFS 29 Director of
Touchstone Advisors, Inc. retirement at Financial Services, Inc. (a holding LaRosa's (a
221 East Fourth Street age 75 or until company), Touchstone Advisors, Inc. restaurant
Cincinnati, OH she resigns or (the Trust's investment advisor) chain).
Age: 47 is removed and Touchstone Securities, Inc.
(the Trust's distributor). She is
Trustee since Senior Vice President of The
1999 Western and Southern Life Insurance
Company and a director of Capital
Analysts Incorporated (a registered
investment advisor and
broker-dealer), Integrated Fund
Services, Inc. (the Trust's
administrator and transfer agent)
and IFS Fund Distributors, Inc. (a
registered broker-dealer). She is
also President and a director of
IFS Agency Services, Inc. (an
insurance agency), W&S Financial
Group Distributors, Inc. and Fort
Washington Brokerage Services, Inc.
(a registered broker-dealer).
- ------------------------------------------------------------------------------------------------------------------------------------
John F. Barrett Trustee Until Chairman of the Board, President 29 Director of The
The Western and Southern retirement at and Chief Executive Officer of The Andersons Inc.
Life Insurance Company age 75 or until Western and Southern Life Insurance (an agribusiness
400 Broadway he resigns or Company and Western- Southern Life and retailing
Cincinnati, OH is removed Assurance Company; Director and company),
Age: 54 Vice Chairman of Columbus Life Convergys
Trustee since Insurance Company; Director of Corporation (a
2002 Eagle Realty Group, Inc., and provider of
Chairman of Fort Washington integrated
Investment Advisors, Inc. billing
solutions,
customer care
services and
employee care
services) and
Fifth Third
Bancorp.
- ------------------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
- ------------------------------------------------------------------------------------------------------------------------------------
J. Leland Brewster II Trustee Until Retired Senior Partner of Frost 29 Director of
5155 Ivyfarm Road retirement in Brown Todd LLC (a law firm). Consolidated
Cincinnati, OH 2005 or until Health Services,
Age: 74 he resigns or Inc.
is removed
Trustee Since
2000
- ------------------------------------------------------------------------------------------------------------------------------------
William O. Coleman Trustee Until Retired Vice President of The 29 Director of
c/o Touchstone Advisors, Inc. retirement at Procter & Gamble Company. A Trustee LCA-Vision (a
221 East Fourth Street age 75 or until of The Procter & Gamble Profit laser vision
Cincinnati, OH he resigns or Sharing Plan and the Procter & correction
Age: 73 is removed Gamble Employee Stock Ownership company) and
Plan. Millennium
Trustee since Bancorp.
1999
- ------------------------------------------------------------------------------------------------------------------------------------
Phillip R. Cox Trustee Until President and Chief Executive 29 Director of the
105 East Fourth Street retirement at Officer of Cox Financial Corp. (a Federal Reserve
Cincinnati, OH age 75 or until financial services company). Bank of
Age: 55 he resigns or Cleveland;
is removed Broadwing, Inc.
(a communications
Trustee since company); and
1999 Cinergy
Corporation (a
utility company)
- ------------------------------------------------------------------------------------------------------------------------------------
40
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
INDEPENDENT TRUSTEES1(CONTINUED):
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
NAME POSITION(S) TERM OF OFFICE2 IN THE OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) TOUCHSTONE DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS FAMILY3 HELD4
- ------------------------------------------------------------------------------------------------------------------------------------
H. Jerome Lerner Trustee Until Principal of HJL Enterprises (a 29 None
4700 Smith Road retirement at privately held investment company);
Cincinnati, OH age 75 or until Chairman of Crane Electronics, Inc.
Age: 64 he resigns or (a manufacturer of electronic
is removed connectors).
Trustee since
1989
- ------------------------------------------------------------------------------------------------------------------------------------
Oscar P. Robertson Trustee Until President of Orchem, Inc. (a 29 Director of
621 Tusculum Avenue retirement at chemical specialties distributor), Countrywide
Cincinnati, OH age 75 or until Orpack Stone Corporation (a Credit
Age: 64 he resigns or corrugated box manufacturer) and Industries, Inc.
is removed ORDMS (a solution planning firm).
Trustee since
1995
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Stautberg Trustee Until Retired Partner of KPMG LLP (a 29 Trustee of Good
4815 Drake Road retirement at certified public accounting firm). Samaritan
Cincinnati, OH age 75 or until He is Vice President of St. Xavier Hospital,
Age: 68 he resigns or High School. Bethesda
is removed Hospital and
Tri-Health, Inc.
Trustee since
1999
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Zanotti Trustee Until CEO and Chairman of Avaton, Inc. (a 29 None
5400 Waring Drive retirement at wireless entertainment company).
Cincinnati, OH age 75 or until CEO and Chairman of Astrum Digital
Age: 54 he resigns or Information (an information
is removed monitoring company) from 2000 until
2001; President of Great American
Trustee since Life Insurance Company from 1999
2002 until 2000; A Director of Chiquita
Brands International, Inc. until
2000; Senior Executive of American
Financial Group, Inc. (a financial
services company) from 1996 until
1999.
- ------------------------------------------------------------------------------------------------------------------------------------
1 Ms. McGruder, as President and a director of Touchstone Advisors, Inc., the
Trust's investment advisor, and Touchstone Securities, Inc., the Trust's
distributor, is an "interested person" of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act. Mr. Barrett, as President and Chairman of
The Western and Southern Life Insurance Company and Western-Southern Life
Assurance Company, parent companies of Touchstone Advisors, Inc. and
Touchstone Securities, Inc., and Chairman of Fort Washington Investment
Advisors, Inc., a Trust sub-advisor, is an "interested person" of the Trust
within the meaning of Section 2(a)(19) of the 1940 Act.
2 Each Trustee is elected to serve until the age of 75 or after five years of
service, whichever is greater, or until he/she resigns or is removed.
3 The Touchstone Funds consist of six series of the Trust, six series of the
Touchstone Strategic Trust, eleven series of Touchstone Variable Series
Trust and six series of Touchstone Investment Trust.
4 Each Trustee is also a Trustee of Touchstone Variable Series Trust,
Touchstone Investment Trust and Touchstone Strategic Trust.
41
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
PRINCIPAL OFFICERS1:
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
NAME POSITION(S) TERM OF OFFICE2 IN THE OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) TOUCHSTONE DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS FAMILY3 HELD4
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick T. Bannigan President Until Senior Vice President of Touchstone 29 None
Touchstone Advisors, Inc. retirement at Advisors, Inc. and Touchstone
221 East Fourth Street age 75 or until Securities, Inc.; Senior Vice
Cincinnati, OH he resigns or President of Evergreen Investment
Age: 37 is removed Services until March 2002.
President since
2002
- ------------------------------------------------------------------------------------------------------------------------------------
Michael S. Spangler Vice Until Vice President of Touchstone 29 None
Touchstone Advisors, Inc. President retirement at Advisors, Inc. and Touchstone
221 East Fourth Street age 75 or until Securities, Inc.; Vice President of
Cincinnati, OH he resigns or Evergreen Investment Services until
Age: 36 is removed July 2002.
Vice President
since 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Brian E. Hirsch Vice Until Director of Compliance of Fort 29 None
Touchstone Advisors, Inc. President retirement at Washington Brokerage Services, Inc.
221 East Fourth Street age 75 or until Chief Compliance Officer of Puglisi
Cincinnati, OH he resigns or & Co. from May 2001 until August
Age: 46 is removed 2002; Vice President - Compliance
of Palisade Capital Management from
Vice President June 1997 until January 2000.
since 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Terrie A. Wiedenheft Controller Until Senior Vice President, Chief 29 None
Touchstone Advisors, Inc. retirement at Financial Officer and Treasurer of
221 East Fourth Street age 75 or until Integrated Fund Services, Inc., IFS
Cincinnati, OH she resigns or Fund Distributors, Inc. and Fort
Age: 40 is removed Washington Brokerage Services, Inc.
She is Chief Financial Officer of
Controller IFS Financial Services, Inc.,
since 2000 Touchstone Advisors, Inc. and
Touchstone Securities, Inc. and
Assistant Treasurer of Fort
Washington Investment Advisors,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Scott A. Englehart Treasurer Until President of Integrated Fund 29 None
Integrated Fund Services, Inc. retirement at Services, Inc. and IFS Fund
221 East Fourth Street age 75 or until Distributors, Inc. From 1998 until
Cincinnati, OH he resigns or 2000, he was a Director, Transfer
Age: 40 is removed Agency and Mutual Fund Distribution
for Nationwide Advisory Services,
Treasurer since Inc.
2000
- ------------------------------------------------------------------------------------------------------------------------------------
Tina H. Bloom Secretary Until Vice President - Managing Attorney 29 None
Integrated Fund Services, Inc. retirement at of Integrated Fund Services, Inc.
221 East Fourth Street age 75 or until and IFS Fund Distributors, Inc.
Cincinnati, OH she resigns or
Age: 34 is removed
Secretary since
1999
- ------------------------------------------------------------------------------------------------------------------------------------
1 Each officer also holds the same office with Touchstone Investment Trust,
Touchstone Variable Series Trust and Touchstone Strategic Trust.
2 Each Trustee is elected to serve until the age of 75 or after five years of
service, whichever is greater, or until he/she resigns or is removed.
3 The Touchstone Funds consist of six series of the Trust, six series of the
Touchstone Strategic Trust, eleven series of Touchstone Variable Series
Trust and six series of Touchstone Investment Trust.
4 Each Trustee is also a Trustee of Touchstone Variable Series Trust,
Touchstone Investment Trust and Touchstone Strategic Trust.
The Statement of Additional Information contains additional information about
the Trustees and is available without charge upon request by calling
1-800-543-0407.
42
CALIFORNIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 20.8% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 475,000 Northern California Pwr. Agcy. Rev. (Geothermal Proj. No. 3) ......... 4.750 07/01/03 $ 475,000
200,000 Orange Co., CA, Revcovery COP ........................................ 5.100 07/01/03 200,000
150,000 Puerto Rico Aqueduct & Swr. Auth. Rev ................................ 4.500 07/01/03 150,000
370,000 Puerto Rico Pub. Bldg. Auth. Escrowed to Maturity .................... 4.700 07/01/03 370,000
270,000 San Diego, CA, USD COP (Capt. Proj. Phase X)
Escrowed to Maturity ................................................. 5.200 07/01/03 270,000
125,000 Southern California Met. Wtr. Dist. Wtrwks. Rev ...................... 4.450 07/01/03 125,000
500,000 Southern California Pub. Pwr. Auth. Spl. Oblig.
Crossover Refunded ................................................... 5.800 07/01/03 500,000
100,000 California HFA Rev. (Home Mtg.) ...................................... 5.000 08/01/03 100,291
125,000 Coronado, CA, USD UT GO .............................................. 4.000 08/01/03 125,257
110,000 Dinuba, CA, Fin. Auth. Lease Rev. (Pub. Works Proj.) ................. 1.750 08/01/03 109,994
165,000 Folsom, CA, UT GO .................................................... 1.100 08/01/03 165,000
125,000 Murrieta, CA, Redev. Agcy. Proj. Tax Allocation ...................... 1.400 08/01/03 125,000
340,000 Oxnard, CA, USD UT GO ................................................ 2.000 08/01/03 340,267
375,000 Puerto Rico Muni. Fin. Agcy. UT GO ................................... 5.000 08/01/03 376,138
300,000 San Francisco, CA, City & Co. Redev. Fin. Auth.
Tax Allocation Prerefunded @ 100 ..................................... 5.600 08/01/03 301,126
150,000 Santa Ana, CA, USD UT GO ............................................. 3.000 08/01/03 150,179
395,000 Los Angeles, CA, Dept. Wtr. & Pwr. Elec. Plt. Rev.
Prerefunded @ 102 .................................................... 4.750 08/15/03 404,636
170,000 Sacramento, CA, Muni. Util. Dist. Elec. Rev .......................... 3.000 08/15/03 170,336
330,000 Emeryville, CA, Pub. Fin. Auth. Rev. (Emeryville Redev. Proj.) ....... 2.000 09/01/03 330,332
400,000 Fontana, CA, Redev. Agcy. Tax Allocation (Southwest Indl. Pk.)
Prerefunded @ 102 .................................................... 6.125 09/01/03 415,675
475,000 Los Angeles, CA, GO Prerefunded @ 101 ................................ 5.800 09/01/03 483,125
250,000 Los Angeles, CA, GO Prerefunded @ 101 ................................ 6.000 09/01/03 254,555
250,000 San Mateo Co., CA, Cmnty. College Dist. GO ........................... 3.000 09/01/03 250,780
500,000 South San Francisco, CA, Impts. Fin. Auth. Rev.
(Conference Ctr. Proj.) Prerefunded @ 100 ............................ 6.900 09/01/03 504,615
535,000 Upland, CA, Cmnty. Redev. Agcy. Tax Allocation ....................... 2.000 09/01/03 535,803
375,000 West Sacramento, CA, Redev. Agcy. Tax Allocation ..................... 4.625 09/01/03 377,193
200,000 Alameda, CA, Corridor Trans. Auth. Rev ............................... 4.500 10/01/03 201,747
100,000 Los Angeles Co., CA, Pub. Wrks. Fin. Auth. Rev.
Escrowed to Maturity ................................................. 5.625 10/01/03 101,084
1,025,000 Sunnyvale, CA, Sld. Wst. Rev ......................................... 3.000 10/01/03 1,029,823
100,000 Hawthorne, CA, Sch. Dist. GO ......................................... 4.400 11/01/03 101,131
1,000,000 Long Beach, CA, Brd. Fin. Auth. Tax Allocation Rev ................... 2.250 11/01/03 1,002,486
500,000 Alameda Co., CA, COP (Santa Rita Jail Proj.)
Prerefunded @ 102 .................................................... 5.700 12/01/03 524,216
100,000 Los Angeles, CA, MFH Rev. (Earthquake Rehab. Proj.) .................. 5.250 12/01/03 101,638
200,000 Poway, CA, COP (City Office Bldg. Proj.) ............................. 3.000 01/01/04 201,737
770,000 Imperial Co., CA, Trans. Auth. Sales Tax Rev ......................... 2.000 03/01/04 774,329
585,000 Norco, CA, Redev. Agcy. Tax Allocation ............................... 2.000 03/01/04 588,855
465,000 Trinity Co., CA, Pub. Util. Dist. COP ................................ 3.000 04/01/04 470,878
890,000 San Francisco, CA, City & Co. Arpt. Rev. Prerefunded @ 101 ........... 6.000 05/01/04 939,062
300,000 Long Beach, CA, Hbr. Rev ............................................. 4.000 05/14/04 307,541
125,000 Fullerton, CA, Sch. Dist. COP ........................................ 3.800 06/01/04 128,187
43
CALIFORNIA TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 20.8% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 100,000 San Mateo Co., CA, Trans. Dist ....................................... 4.200 06/01/04 $ 102,915
100,000 Vallejo City, CA, USD COP ............................................ 2.000 06/01/04 100,910
200,000 Los Angeles, CA, USD UT GO ........................................... 4.000 07/01/04 205,955
140,000 Sacramento, CA, USD UT GO ............................................ 7.000 07/01/04 148,265
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS .................. $ 14,641,061
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES - 74.9% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 400,000 California Pollution Fin. Auth. Res. Recovery Rev.
(Burney Forest Prod. Proj. A) ........................................ 0.990 07/01/03 $ 400,000
1,000,000 California St. HFA Rev ............................................... 0.950 07/01/03 1,000,000
600,000 Irvine Ranch, CA, Wtr. Dist. Rev ..................................... 0.850 07/01/03 600,000
1,515,000 Los Angeles, CA, Reg. Arpt. (LAX) .................................... 1.030 07/01/03 1,515,000
2,000,000 Newport Beach, CA, Rev. (Hoag. Mem. Presbyterian Hosp.) .............. 0.950 07/01/03 2,000,000
1,300,000 Orange Co., CA, Sani. Dist. COP ...................................... 0.850 07/01/03 1,300,000
300,000 Orange Co., CA, Sant. Dist. COP ...................................... 0.850 07/01/03 300,000
800,000 Rancho Mirage, CA, Joint Pwr. Fin. Auth. Rev.
(Eisenhower Med. Ctr.) Ser. B ........................................ 0.950 07/01/03 800,000
2,000,000 ABAG Fin. Auth. Nonprofit Corps. MFH Rev. (Vintage Chateau) .......... 1.150 07/02/03 2,000,000
1,000,000 California Health Fac. Auth. (Catholic Healthcare) ................... 1.000 07/02/03 1,000,000
325,000 California Infrastructure & Econ. Dev.
(Independent System Oper.) ........................................... 1.000 07/02/03 325,000
1,555,000 California Pollution Control Fin. Auth. Sld. Wst. Disp. Rev.
(Mission Trail Wst. Sys.) ............................................ 1.150 07/02/03 1,555,000
600,000 California St. UT GO ................................................. 0.940 07/02/03 600,000
275,000 Huntington Park, CA, Pub. Fin. Auth. Lease Rev ....................... 1.250 07/02/03 275,000
2,060,000 Long Beach, CA, Brd. Fin. Auth. Lease Rev.
(Long Beach Museum of Art) ........................................... 0.950 07/02/03 2,060,000
1,600,000 Modesto, CA, MFH Rev. (Westdale Commons) ............................. 0.900 07/02/03 1,600,000
2,000,000 San Francisco, CA, City & Co. Redev. Agcy. MFA Rev.
(Bayside Village Prog.) .............................................. 1.020 07/02/03 2,000,000
3,500,000 San Rafael, CA, IDR (Phoenix American, Inc.) ......................... 1.050 07/02/03 3,500,000
1,600,000 Vacaville, CA, IDA IDR (Leggett & Platt, Inc.) ....................... 1.050 07/02/03 1,600,000
3,020,000 California HFA MFH Rev ............................................... 1.050 07/03/03 3,020,000
240,000 California Infrastructure & Econ. Dev. IDR
(Metrotile Mfg. Proj.) ............................................... 1.350 07/03/03 240,000
1,300,000 California Statewide Cmnty. Dev. MFH (Pavillion Apts.) ............... 0.950 07/03/03 1,300,000
1,500,000 Emeryville, CA, Redev. Agcy. MFA Rev. (Bay St. Apts.) ................ 1.000 07/03/03 1,500,000
1,400,000 Hanford, CA, Swr. Rev ................................................ 1.900 07/03/03 1,400,000
3,000,000 Los Angeles, CA, Wtr. & Pwr. Rev ..................................... 0.850 07/03/03 3,000,000
400,000 Los Angeles, CA, Wtr. & Pwr. Rev ..................................... 0.850 07/03/03 400,000
1,450,000 Riverside Co., CA, IDA (Advance Business Graphics) ................... 1.150 07/03/03 1,450,000
1,300,000 Riverside Co., CA, IDA (Advanced Business Graphics) Ser. B ........... 1.150 07/03/03 1,300,000
1,400,000 Sacramento Co., CA, MFH Rev .......................................... 0.850 07/03/03 1,400,000
2,800,000 Sacramento, CA, USD COP .............................................. 1.050 07/03/03 2,800,000
800,000 San Bernardino Co., CA, Capt. Impt. COP .............................. 0.900 07/03/03 800,000
1,000,000 San Francisco, CA, City & Co. Redev. Agcy. MFA Rev.
(Derek Silva Cmnty.) ................................................. 1.000 07/03/03 1,000,000
300,000 San Jacinto, CA, USD COP ............................................. 1.050 07/03/03 300,000
44
CALIFORNIA TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES - 74.9% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 1,000,000 San Jose, CA, MFH Rev. (Somerset Park) ............................... 1.050 07/03/03 $ 1,000,000
1,250,000 Sausalito, CA, MFH Rev. (Rotary Village Sr. Hsg.) .................... 1.000 07/03/03 1,250,000
1,960,000 Sweetwater, CA, USD COP .............................................. 0.900 07/03/03 1,960,000
600,000 Upland, CA, Apt. Dev. Rev. (Mtn. Springs) ............................ 0.870 07/03/03 600,000
400,000 California PCR Fin. Auth. Rev. (Southdown, Inc.) ..................... 1.100 07/15/03 400,000
3,100,000 California PCR Fin. Auth. Rev. (Southdown, Inc.) ..................... 1.100 07/15/03 3,100,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................... $ 52,650,000
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT COMMERCIAL PAPER - 4.8% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 3,400,000 California Infras. Econ. Dev. Bank (Salvation Army) EDR .............. 1.080 01/28/04 $ 3,400,000
------------
TOTAL INVESTMENT SECURITIES - 100.5%
(Amortized Cost $70,691,061) ......................................... $ 70,691,061
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.5%) ....................... (345,814)
------------
NET ASSETS - 100.0% .................................................. $ 70,345,247
============
See accompanying notes to portfolio of investments and notes to financial
statements.
45
FLORIDA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 24.5% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 100,000 Florida St. Brd. Fin. Dept. General Svcs. Rev ........................ 4.400 07/01/03 $ 100,000
125,000 Florida St. Brd. Fin. Dept. General Svcs. Rev ........................ 4.500 07/01/03 125,000
100,000 Florida St. Brd. Fin. Dept. General Svcs. Rev ........................ 5.250 07/01/03 100,000
125,000 Florida St. Brd. Fin. Dept. General Svcs. Rev ........................ 6.000 07/01/03 125,000
225,000 Florida St. Brd. Fin. Dept. General Svcs. Rev. (Dept. Natural
Resources) Prerefunded @ 101 ......................................... 5.500 07/01/03 227,250
100,000 Florida St. Dept. of Trans. Alligator Alley Rev ...................... 6.000 07/01/03 100,000
100,000 Florida St. Dept. of Trans. GO (Right of Way)
Prerefunded @ 101 .................................................... 5.350 07/01/03 101,000
185,000 Florida St. Tpk. Auth. Rev. Prerefunded @ 101 ........................ 5.000 07/01/03 186,850
150,000 Orlando & Orange Co., FL, Expwy. Auth. Rev.
Prerefunded @ 102 .................................................... 5.500 07/01/03 153,000
425,000 Seminole Co., FL, Sch. Brd. COP ...................................... 3.600 07/01/03 425,000
1,000,000 Duval Co., FL, Sch. Dist. GO ......................................... 6.000 08/01/03 1,003,880
1,000,000 Hernando Co., FL, Sch. Dist. GO ...................................... 2.500 08/01/03 1,000,903
100,000 Massachusetts St. GO Prerefunded @ 102 ............................... 4.900 08/01/03 102,307
350,000 Hempstead, NY, GO .................................................... 4.000 08/15/03 351,221
195,000 Maricopa Co., AZ, PCR (Public Svc. Co. - Palo Verde)
Prerefunded @ 102 .................................................... 6.375 08/15/03 200,808
100,000 Fort Lauderdale, FL, Excise Tax Impt ................................. 4.000 09/01/03 100,471
130,000 Harrisburg, PA, Auth. Res. Prerefunded @ 102 ......................... 5.875 09/01/03 134,350
125,000 New Brunswick, NJ, Pkg. Auth. Rev .................................... 4.900 09/01/03 125,762
165,000 Amherst, NY, IDA Lease Rev ........................................... 4.850 10/01/03 166,496
300,000 Jacksonville, FL, Elec. Auth. Rev. Ser. D Prerefunded @ 100 .......... 5.375 10/01/03 302,681
100,000 Aspen, CO, Sales Tax Rev ............................................. 3.750 11/01/03 100,776
500,000 Jacksonville, FL, Health Facs. (Daughters of Charity) ................ 4.750 11/15/03 506,285
100,000 King Co., WA, Swr. LT GO Prerefunded @ 102 ........................... 6.200 01/01/04 104,473
200,000 Florida State Brd. Ed. Capital Outlay ................................ 4.000 06/01/04 205,368
220,000 Missouri State COP (Bonne Terre Prison) .............................. 4.000 06/01/04 224,888
650,000 St. Petersburg, FL, Util. Tax Rev .................................... 5.000 06/01/04 673,406
150,000 Florida State Brd. Ed. Lottery Rev ................................... 5.000 07/01/04 155,802
150,000 Seminole Co., FL, Sch. Brd. COP Prerefunded @ 102 .................... 5.900 07/01/04 160,265
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS .................. $ 7,263,242
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES - 62.3% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 500,000 Arvada, CO, Wtr. Util. Rev ........................................... 1.300 07/01/03 $ 500,000
900,000 Broward Co., FL, Health Facs. Auth. Rev. (John Knox Village) ......... 1.150 07/01/03 900,000
200,000 Jacksonville, FL, Elec. Auth. Rev. Ser. C ............................ 1.000 07/01/03 200,000
600,000 Jacksonville, FL, Elec. Auth. Rev. Ser. F ............................ 1.000 07/01/03 600,000
100,000 Jacksonville, FL, Elect. Auth. Rev. Ser. B ........................... 1.000 07/01/03 100,000
110,000 Manatee Co., FL, PCR (Florida Pwr. & Light Co. Proj.) ................ 0.950 07/01/03 110,000
100,000 Municipal Secs. Trust Ctfs. Ser. 2001-161
(Florida Brd. of Educ.) .............................................. 1.030 07/01/03 100,000
500,000 Municiple Secs. Trust Ctfs., Ser. 2001-160
(Florida Brd. of Educ.) .............................................. 1.030 07/01/03 500,000
500,000 Putnam Co., FL, Dev. Auth. Pollution Ctrl. Rev. ,
(Florida Pwr. & Light Co. Proj.) ..................................... 0.950 07/01/03 500,000
46
FLORIDA TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES - 62.3% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 100,000 University Athletic Assn., FL Cap. Impt. Rev.
(Univ. of FL Stadium Proj.) .......................................... 1.150 07/01/03 $ 100,000
1,305,000 Broward Co., FL, HFA MFH Rev. (Fisherman's Landing) .................. 0.950 07/02/03 1,305,000
250,000 Broward Co., FL, HFA MFH Rev. (Jacaranda Village Apts.) .............. 0.950 07/02/03 250,000
300,000 Broward Co., FL, HFA MFH Rev. (Margate Invts. Proj.) ................. 0.950 07/02/03 300,000
1,115,000 Broward Co., FL, HFA MFH Rev. (Reflections Apts. Proj.) .............. 0.950 07/02/03 1,115,000
500,000 Clay Co., FL, HFA MFH Rev. (Bluff Hsg.) .............................. 0.950 07/02/03 500,000
365,000 Florida HFA MFH Rev. (Carlton Arms II Proj.) ......................... 1.120 07/02/03 365,000
500,000 Flowood, MS, MFM ..................................................... 0.950 07/02/03 500,000
500,000 Jacksonville, FL, Capt. Proj. Rev .................................... 0.900 07/02/03 500,000
500,000 Lee Co., FL, IDR Educ. Fac. Rev. (Canterbury School Proj.) ........... 1.000 07/02/03 500,000
405,000 Marion Co., FL, HFA Rev. (Paddock Apts.) ............................. 0.950 07/02/03 405,000
240,000 University of South Florida Fndtn., Inc. COP ......................... 1.030 07/02/03 240,000
150,000 University of South Florida Fndtn., Inc. COP ......................... 1.030 07/02/03 150,000
700,000 Voluisa Co., FL, HFA MFH Rev. (Anatole Apts.) ........................ 0.950 07/02/03 700,000
500,000 Broward Co., FL, HFA MFH Rev. (Southern Pointe Proj.) ................ 0.950 07/03/03 500,000
800,000 Broward Co., FL, HFA MFH Rev. (Waters Edge Proj.) .................... 0.950 07/03/03 800,000
235,000 Dade Co., FL, IDA Rev. (Spectrum Programs, Inc. Proj.) ............... 1.050 07/03/03 235,000
415,000 Duval Co., FL, HFA MFH Mtg. Rev. (Glades Apt. Proj.) ................. 0.950 07/03/03 415,000
950,000 Duval Co., FL, HFA MFH Rev. (Sunbeam Road Proj.) ..................... 0.950 07/03/03 950,000
200,000 Gulf Breeze, FL, Rev. (Local Govt.) .................................. 1.000 07/03/03 200,000
350,000 Gulf Breeze, FL, Rev. (Muni Bond) .................................... 1.000 07/03/03 350,000
300,000 Harvard, IL, Health Care (Harvard Memorial Hosp.) .................... 1.300 07/03/03 300,000
150,000 Jacksonville, FL, Health Facs. Rev. (River Garden Covers Proj.) ...... 1.050 07/03/03 150,000
1,255,000 Orange County, FL, Health Facs. (Adventist Health Sys.) .............. 0.950 07/03/03 1,255,000
1,400,000 Orlando & Orange Co., FL, Expwy. Auth. Rev ........................... 0.900 07/03/03 1,400,000
800,000 Palm Beach Co., FL, Rev. (Henry Morrison Flagler) .................... 1.000 07/03/03 800,000
500,000 Palm Beach Co., FL, Sch. Brd. COP .................................... 0.900 07/03/03 500,000
200,000 University of North Florida 1998 Parking Rev. Bonds .................. 1.100 07/03/03 200,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................... $ 18,495,000
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS - 13.2% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 460,000 Corpus Christi, TX, IDC Econ. Dev. Rev. (TX Air Invt. Co. Proj.) ..... 1.800 08/01/03 $ 460,000
500,000 Sabine River, TX, IDA (Northeast TX Elec. Coop.) ..................... 1.250 08/15/03 500,000
1,000,000 ABN AMRO Munitops Trust Cert. (FL Dept. of Trans.) ................... 1.650 09/03/03 1,000,000
1,400,000 Putnam Co., FL, Dev. Auth. PCR, Ser. H-1
(Seminole Elec. Coop.) ............................................... 1.050 12/15/03 1,400,000
545,000 Eastern Sts. Tax Exmp. Mtg. Brd. Tr. Adjustable Rate Ctfs ............ 5.190 03/01/04 545,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS ...................................... $ 3,905,000
------------
TOTAL INVESTMENT SECURITIES - 100.0%
(Amortized Cost $29,663,242) ......................................... $ 29,663,242
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.0%) ....................... (6,608)
------------
NET ASSETS - 100.0% .................................................. $ 29,656,634
============
See accompanying notes to portfolio of investments and notes to financial
statements.
47
OHIO INSURED TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 90.6% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 230,000 Summit Co., OH, GO, Prerefunded @ 100 ................................ 6.900 08/01/03 $ 231,173
500,000 Ohio St. Bldg. Auth. Rev. (Juvenile Correctional Bldg.),
Prerefunded @ 102 .................................................... 6.600 10/01/04 544,570
1,095,000 West Clermont, OH, LSD GO, Prerefunded @ 102 ......................... 6.900 12/01/05 1,261,593
1,000,000 Summit Co., OH, GO Prerefunded @ 101 ................................. 6.000 12/01/10 1,225,830
190,000 Cuyahoga Co., OH, Hosp. Rev. (University Hosp.)
Escrowed to Maturity ................................................. 9.000 06/01/11 243,690
365,000 Bexley, OH, CSD GO ................................................... 7.125 12/01/11 474,825
250,000 Westerville, OH, GO .................................................. 6.450 12/01/11 256,078
500,000 Strongsville, OH, CSD GO ............................................. 5.375 12/01/12 587,915
530,000 Ottawa Co., OH, GO ................................................... 5.750 12/01/14 588,682
1,000,000 Portage Co., OH, GO .................................................. 6.200 12/01/14 1,084,730
400,000 Warren, OH, Waterworks Rev ........................................... 5.500 11/01/15 474,268
1,000,000 Buckeye Valley, OH, LSD GO ........................................... 6.850 12/01/15 1,269,560
700,000 Columbus-Polaris Hsg. Corp. Rev., Prerefunded @ 100 .................. 7.400 01/01/16 890,785
750,000 Montgomery Co., OH, Hosp. Rev. (Miami Valley Hosp.) .................. 6.250 11/15/16 767,895
1,260,000 Cleveland, OH, Airport Sys. Rev ...................................... 5.125 01/01/17 1,346,953
750,000 Butler Co., OH, Trans. Impt. Dist .................................... 5.125 04/01/17 810,443
500,000 Toledo, OH, Sewer Sys. Rev ........................................... 6.350 11/15/17 542,665
1,000,000 Springfield, OH, CSD GO .............................................. 5.000 12/01/17 1,095,750
655,000 Twinsburg, OH, Park & Land GO ........................................ 5.500 12/01/17 740,301
1,000,000 Ohio St. Bldg. Auth. Rev. (Adult Correctional Bldg.) ................. 5.250 10/01/18 1,088,990
1,000,000 University of Cincinnati, OH, General Receipts Rev ................... 5.750 06/01/19 1,140,950
1,000,000 Lucas Co., OH, Hsg. Dev. Corp. (Northgate Apts.) ..................... 5.950 07/01/19 1,025,690
1,000,000 Lorain Co., OH, Hosp. Rev. (Catholic Health Partners) ................ 5.500 09/01/19 1,103,010
1,000,000 Lucas Co., OH, Hosp. Rev. (Promedia Health) .......................... 5.625 11/15/19 1,116,950
1,000,000 Avon Lake, OH, CSD GO ................................................ 5.500 12/01/19 1,123,860
2,145,000 Brunswick, OH, CSD GO ................................................ 5.750 12/01/19 2,470,052
745,000 Crawford Co., OH, GO ................................................. 4.750 12/01/19 773,273
2,000,000 Hamilton, OH, CSD GO ................................................. 5.500 12/01/19 2,247,719
1,250,000 Kings, OH, LSD GO .................................................... 5.950 12/01/19 1,451,763
1,085,000 West Clermont, OH, LSD GO ............................................ 5.000 12/01/19 1,165,898
500,000 Akron, OH, GO ........................................................ 5.800 11/01/20 569,815
1,000,000 Greene Co., OH, Sewer Sys. Rev ....................................... 5.625 12/01/20 1,134,800
1,500,000 Nordonia Hills, OH, CSD GO ........................................... 5.375 12/01/20 1,651,515
715,000 Sylvania, OH, CSD GO ................................................. 4.750 12/01/20 743,049
850,000 West Chester Twp., OH, GO ............................................ 5.000 12/01/20 908,123
1,210,000 Cincinnati, OH, Tech. College Rev .................................... 5.250 10/01/21 1,315,936
525,000 Kings, OH, LSD GO .................................................... 6.050 12/01/21 611,688
500,000 Lake, OH, LSD GO (Stark Co.) ......................................... 5.750 12/01/21 567,535
1,000,000 Monroe, OH, LSD Sch. Impt. GO ........................................ 5.000 12/01/21 1,061,670
805,000 Ottawa Co., OH, GO ................................................... 4.750 12/01/21 832,402
1,500,000 Hamilton Co., OH, Swr. Sys. Rev ...................................... 4.750 12/01/22 1,538,400
500,000 Morgan, OH, LSD GO ................................................... 5.750 12/01/22 571,515
1,200,000 Ross Twp., OH, LSD GO ................................................ 5.000 12/01/22 1,274,052
1,250,000 Scioto Valley, OH, LSD GO ............................................ 5.650 12/01/22 1,420,638
250,000 Ohio St. Higher Ed. Fac. Comm. Rev. (Xavier Univ.) ................... 5.000 05/01/23 263,493
1,000,000 Akron, OH, Var. Purp. GO ............................................. 5.000 12/01/23 1,052,130
48
OHIO INSURED TAX-FREE FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 90.6% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Dayton, OH, CSD UT GO ................................................ 4.750 12/01/23 $ 2,044,399
1,000,000 Hamilton, OH, CSD GO ................................................. 5.625 12/01/24 1,115,330
1,000,000 Hilliard, OH, CSD GO ................................................. 5.750 12/01/24 1,133,460
1,000,000 Kings, OH, LSD GO .................................................... 5.650 12/01/24 1,104,670
1,250,000 Ohio St. University General Receipts Rev ............................. 5.750 12/01/24 1,405,975
1,000,000 University of Akron, OH, General Receipts Rev ........................ 4.750 01/01/25 1,019,160
1,750,000 Eaton, OH, CSD GO .................................................... 5.000 12/01/25 1,847,422
1,500,000 Marysville, OH, EVSD GO .............................................. 5.000 12/01/25 1,577,010
1,000,000 Plain, OH, LSD GO .................................................... 5.000 12/01/25 1,049,100
500,000 Independence, OH, LSD Sch. Impt. GO .................................. 4.750 12/01/26 509,095
1,000,000 Hilliard, OH, CSD GO ................................................. 5.750 12/01/28 1,133,810
915,000 Licking Heights, OH, LSD GO .......................................... 6.400 12/01/28 1,166,643
250,000 Pickerington, OH, CSD GO ............................................. 5.000 12/01/28 260,648
1,000,000 Erie Co., OH, Hosp. Fac. Rev. (Fireland Reg. Med. Ctr.) .............. 5.625 08/15/32 1,035,450
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS .................. $ 61,064,794
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES - 7.3% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 1,300,000 Ohio St. Wtr. Dev. Auth. Rev ......................................... 0.900 12/01/18 $ 1,300,000
3,000,000 Hamilton, OH, Elec. Rev .............................................. 0.980 10/15/23 3,000,000
200,000 Cleveland, OH, Arpt. Sys. Rev ........................................ 1.050 01/01/31 200,000
400,000 Ohio St. Higher Edl. Fac. Rev. (Case Western) ........................ 0.950 10/01/31 400,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................... $ 4,900,000
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS - 3.7% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 2,500,000 Butler Co., OH, Hosp. Fac. Rev. (Middletown Regional Hosp.) .......... 3.000 11/01/07 $ 2,500,000
------------
CASH EQUIVALENTS - 0.1%
$ 49,000 Merrill Lynch Institutional Tax-Exempt Fund .......................... $ 49,000
------------
TOTAL INVESTMENT SECURITIES - 101.7%
(Amortized Cost $62,703,922) ......................................... $ 68,513,794
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.7%) ....................... (1,134,483)
------------
NET ASSETS - 100.0% .................................................. $ 67,379,311
============
See accompanying notes to portfolio of investments and notes to financial
statements.
49
OHIO TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 17.7% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 3,300,000 Clermont Co., OH, GO BANS ............................................ 1.850 07/01/03 $ 3,300,000
600,000 American Muni. Pwr. OH, Inc. BANS (Village of Bremen Proj.) .......... 2.100 07/10/03 600,000
810,000 American Muni. Pwr. OH, Inc. BANS (Village of Deshler Proj.) ......... 2.100 07/10/03 810,000
1,500,000 Greenhills, OH, GO BANS .............................................. 2.000 07/25/03 1,500,303
500,000 Chillicothe, OH, GO BANS ............................................. 2.200 08/01/03 500,168
1,000,000 Liberty Township, OH, GO BANS ........................................ 2.160 08/12/03 1,000,409
1,700,000 Monroe, OH, GO BANS .................................................. 1.970 08/20/03 1,700,853
3,900,000 Ohio St. University General Receipts BANS ............................ 1.690 09/03/03 3,903,972
2,359,990 Jackson Co., OH, GO BANS ............................................. 1.950 09/11/03 2,360,676
860,716 Wyoming, OH, GO BANS ................................................. 2.250 09/12/03 861,994
428,000 Richland Co., OH, GO BANS ............................................ 2.050 10/01/03 428,480
550,000 Wilmington, OH, GO BANS (Lowes Road Construction) .................... 1.840 10/02/03 550,360
4,300,000 American Muni. Pwr. OH, Inc. BANS (Genoa Village Proj.) .............. 1.800 10/09/03 4,300,000
860,000 American Muni. Pwr. OH, Inc. BANS (St. Marys City Proj.) ............. 1.700 10/09/03 860,000
1,000,000 Highland Heights, OH, GO BANS ........................................ 2.000 10/09/03 1,001,220
350,000 Fairfield, OH, CSD GO TANS ........................................... 2.540 10/23/03 350,745
1,150,000 Mason, OH, GO BANS ................................................... 1.800 10/23/03 1,150,887
2,195,000 Olmsted Falls, OH, GO BANS ........................................... 1.900 10/23/03 2,196,694
635,000 Granville, OH, GO BANS ............................................... 2.090 10/28/03 635,593
2,430,000 American Muni. Pwr. OH, Inc. BANS (Pioneer Village Proj.) ............ 2.000 10/30/03 2,430,000
385,000 Avon Lake, OH, GO BANS ............................................... 1.430 11/05/03 385,237
615,000 American Muni. Pwr. OH, Inc. BANS (Village of Yellow Springs) ........ 2.100 11/06/03 615,000
1,000,000 Bucyrus, OH, Waterworks Sys. Fac ..................................... 1.990 11/13/03 1,000,509
250,000 Oakwood, OH, GO BANS ................................................. 2.250 11/13/03 250,182
5,200,000 American Muni. Pwr. OH, Inc. BANS (City of Galion Proj.) ............. 2.250 11/14/03 5,205,727
1,600,000 American Muni. Pwr. OH, Inc. BANS (Monroeville Proj.) ................ 1.850 11/26/03 1,600,000
2,125,000 American Muni. Pwr. OH, Inc. BANS (Shelby Proj.) ..................... 1.700 11/26/03 2,125,000
4,900,000 Eastlake, OH, GO BANS ................................................ 2.250 12/03/03 4,912,335
665,000 American Muni. Pwr. OH, Inc. BANS (Amherst Elec. Sys.) ............... 1.600 12/04/03 665,000
2,421,000 American Muni. Pwr. OH, Inc. BANS (Bowling Green Proj.) .............. 1.650 12/04/03 2,421,000
4,523,000 Deerfield Township, OH, GO BANS ...................................... 2.000 12/04/03 4,527,773
420,000 American Muni. Pwr. OH, Inc. BANS (Hubbard Proj.) .................... 1.450 12/19/03 420,000
795,000 American Muni. Pwr. OH, Inc. (Brewster Village) ...................... 1.300 01/15/04 795,000
1,250,000 Dover, OH, Muni. Elec. Sys. Impt. GO ................................. 1.750 01/15/04 1,253,021
1,400,000 Willard, OH, GO BANS ................................................. 2.000 01/29/04 1,404,825
970,000 American Muni. Pwr. OH, Inc. (Woodsfield Village) .................... 1.400 02/05/04 970,000
375,000 Hamilton, OH, CSD GO BANS ............................................ 1.500 02/26/04 375,610
255,000 Fairborn, OH, CSD GO BANS ............................................ 2.000 03/02/04 256,096
280,000 American Muni. Pwr. OH, Inc. (Bradner Village) ....................... 1.300 03/18/04 280,000
1,200,000 American Muni. Pwr. OH, Inc. (Lodi Village) .......................... 1.200 03/18/04 1,200,000
550,000 Hamilton, OH, GO BANS ................................................ 2.000 03/25/04 552,985
500,000 Crestline, OH, Swr. Impt. GO ......................................... 1.680 03/31/04 501,594
773,992 Licking Heights, OH, LSD GO BANS ..................................... 2.050 04/22/04 778,630
2,937,833 Deerfield Twp., OH, GO BANS .......................................... 1.550 05/13/04 2,944,115
250,000 Miami Co., OH, Hosp. Fac. (Upper Valley Medical Center) .............. 5.200 05/15/04 258,789
3,450,000 Hillsboro, OH, CSD GO BANS ........................................... 1.780 05/20/04 3,465,979
4,260,000 Willard, OH, GO BANS ................................................. 1.460 05/20/04 4,267,812
783,800 London, OH, GO BANS .................................................. 1.910 06/03/04 787,076
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS .................. $ 74,661,649
------------
50
Ohio Tax-Free Money Market Fund
(Continued)
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES - 73.8% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 1,300,000 Cuyahoga Co., OH, EDR (The Cleveland Orchestra Proj.) ................ 0.950 07/01/03 $ 1,300,000
1,000,000 Cuyahoga Co., OH, Hosp. Rev. (University Hosp.) ...................... 0.860 07/01/03 1,000,000
3,110,000 Cuyahoga Co., OH, IDR (S&R Playhouse Realty) ......................... 1.150 07/01/03 3,110,000
7,000,000 Cuyahoga Co., OH, Rev. (Cleveland Clinic) ............................ 1.000 07/01/03 7,000,000
1,200,000 Delaware Co., OH, IDR (Radiation Sterilizers, Inc.) .................. 1.200 07/01/03 1,200,000
9,300,000 Montgomery Co., OH, (Miami Valley Hosp.) ............................. 1.000 07/01/03 9,300,000
2,400,000 Muskingum Co., OH, IDR (Elder-Beerman) ............................... 1.150 07/01/03 2,400,000
4,670,000 Ohio St. Air Quality (OH Edison) ..................................... 0.950 07/01/03 4,670,000
5,425,000 Ohio St. Air Quality Dev. (CG&E) ..................................... 0.950 07/01/03 5,425,000
2,600,000 Ohio St. Air Quality Dev. PCR (Timken Co.) ........................... 1.050 07/01/03 2,600,000
1,900,000 Ohio St. Higher Educ. Fac. Comm. Rev ................................. 0.950 07/01/03 1,900,000
4,300,000 Ohio St. Higher Educ. Fac. Rev. (Case Western Rsrv.) ................. 0.950 07/01/03 4,300,000
9,925,000 Trumbull Co., OH, Health Care
(Shepard of Valley Lutheran Home) .................................... 1.050 07/01/03 9,925,000
2,400,000 ABN AMRO Munitops Trust Cert. (Westerville, OH CSD GO) ............... 1.010 07/02/03 2,400,000
875,000 Centerville, OH, Health Care Rev. (Bethany Lutheran Vlg. Proj.) ...... 1.030 07/02/03 875,000
2,800,000 Cleveland, OH, Airport Sys. Rev ...................................... 1.050 07/02/03 2,800,000
700,000 Clinton Co., OH, Hosp. Rev. Pooled Fin. Prog ......................... 1.400 07/02/03 700,000
1,915,000 Cuyahoga Co., OH, Educ. Fac. Rev.
(United Cerebral Palsy Assoc.) ....................................... 1.100 07/02/03 1,915,000
500,000 Delaware Co., OH, IDR (MRG Ltd. Proj.) ............................... 1.550 07/02/03 500,000
1,385,000 Erie Co., OH, IDR (Toft Dairy, Inc.) ................................. 1.100 07/02/03 1,385,000
750,000 Greene Co., OH, Health Care Fac. Rev. (Green Oaks Proj.) ............. 1.100 07/02/03 750,000
500,000 Hamilton Co., OH, Econ. Dev. Rev.
(Gen. Protestant Orphan Home) ........................................ 1.060 07/02/03 500,000
870,000 Hamilton Co., OH, Health Care Fac. Rev.
(Aloysius Orphanage Proj.) ........................................... 1.100 07/02/03 870,000
600,000 Hamilton Co., OH, Hosp. Fac. Rev. (Health Alliance) .................. 0.970 07/02/03 600,000
1,850,000 Hamilton Co., OH, Hosp. Fac. Rev. (Health Alliance) .................. 0.970 07/02/03 1,850,000
400,000 Hamilton Co., OH, Hosp. Fac. Rev. (Health Alliance) .................. 1.000 07/02/03 400,000
4,000,000 Lake Co., OH, Hosp. Fac. Rev. (Lake Hosp. Sys., Inc.) ................ 1.080 07/02/03 4,000,000
1,735,000 Lorain Co., OH, IDR (EMH Med. Ctr. Proj.) ............................ 1.100 07/02/03 1,735,000
500,000 Meigs Co., OH, IDR (MRG Ltd. Proj.) .................................. 1.550 07/02/03 500,000
1,070,000 Monroe, OH, IDR (Magnode Corp.) ...................................... 1.700 07/02/03 1,070,000
2,000,000 Montgomery Co., OH, EDR (Dayton Art Institute) ....................... 1.050 07/02/03 2,000,000
8,300,000 Ohio St. GO (Infrastructure Impt.) ................................... 0.950 07/02/03 8,300,000
2,050,000 Ohio St. Water Dev. Auth. Rev. (Timken Co.) .......................... 1.000 07/02/03 2,050,000
1,000,000 Ohio St. Wtr. Dev. Auth. PCR (Cleveland Elec.) ....................... 1.000 07/02/03 1,000,000
500,000 Orrville, OH, Hosp. Fac. Rev. (Orrville Hosp.) ....................... 1.030 07/02/03 500,000
3,800,000 Puerto Rico Elec. Pwr. Auth. Rev. Muni. Secs. Trust Rcpts ............ 0.950 07/02/03 3,800,000
14,310,000 Puerto Rico Elec. Pwr. Auth. Rev. Muni. Secs. Trust Rcpts ............ 0.950 07/02/03 14,310,000
2,315,000 Scioto Co., OH, Hosp. Rev. (VHA Cent., Inc.) Ser. E .................. 0.950 07/02/03 2,315,000
3,975,000 Scioto Co., OH, Hosp. Rev. (VHA Cent., Inc.) Ser. G .................. 0.950 07/02/03 3,975,000
2,600,000 Summit, OH, Civic Fac. Rev. (YMCA Proj.), Ser. 1997 .................. 1.100 07/02/03 2,600,000
500,000 Wyandot Co., OH, IDR (MRG Ltd. Proj.), Ser. 1985 ..................... 1.550 07/02/03 500,000
325,000 Akron, Bath & Copley, OH, Joint Twnsp. Hosp. Rev.
(Visiting Nurse Svcs. Proj.) ......................................... 1.060 07/03/03 325,000
1,900,000 Ashtabula Co., OH, Hosp. Fac. Rev.
(Ashtabula Co. Med. Ctr. Proj.) ...................................... 1.040 07/03/03 1,900,000
51
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES - 73.8% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 4,000,000 Athens Co., OH, Port. Auth. Hsg. Rev.
(University Hsg. for Ohio, Inc. Proj.) ............................... 1.040 07/03/03 $ 4,000,000
1,885,000 Butler Co., OH, Hosp. Fac. Rev.
(Berkley Square Retirement Ctr. Proj.) ............................... 1.050 07/03/03 1,885,000
2,800,000 Cambridge, OH, Hosp. Fac. Rev. (Southwestern
Ohio Regional Medical) ............................................... 1.060 07/03/03 2,800,000
1,115,000 Carroll Co., OH, Health Care Fac. Rev. (St. Johns Villa Proj.) ....... 1.060 07/03/03 1,115,000
360,000 Columbus, OH, GO ..................................................... 0.900 07/03/03 360,000
200,000 Columbus, OH, Sewer Rev .............................................. 1.000 07/03/03 200,000
140,000 Coshocton Co., OH, Hosp. Fac. Rev.
(Echoing Hills Village, Inc. Proj.) .................................. 1.100 07/03/03 140,000
1,695,000 Cuyahoga Co., OH, Civic Fac. Rev. (West Side Ecumenical) ............. 1.100 07/03/03 1,695,000
10,000,000 Cuyahoga Co., OH, Health Care Fac. Rev.
(Gardens of McGregor) ................................................ 1.050 07/03/03 10,000,000
3,330,000 Delaware Co., OH, Health Care Fac. Rev. (Sarah Moore Home) ........... 1.130 07/03/03 3,330,000
1,715,000 Franklin Co., OH, EDR (Columbus Montessori Educ. Ctr.) ............... 1.080 07/03/03 1,715,000
2,360,000 Franklin Co., OH, EDR (Dominican Sisters) ............................ 1.100 07/03/03 2,360,000
2,015,000 Franklin Co., OH, Health Care Fac. Rev.
(Heinzerling Foundation) ............................................. 1.100 07/03/03 2,015,000
960,000 Franklin Co., OH, Health Care Fac. Rev.
(Lifeline Organ Procurement) ......................................... 1.100 07/03/03 960,000
870,000 Franklin Co., OH, Hosp. Rev. (US Health Corp.) ....................... 0.950 07/03/03 870,000
400,000 Franklin Co., OH, IDR (Columbus College) ............................. 1.100 07/03/03 400,000
1,005,000 Franklin Co., OH, IDR (Ohio Girl Scouts) ............................. 1.100 07/03/03 1,005,000
1,800,000 Fulton, OH, IDR (Polycraft, Inc.) .................................... 1.300 07/03/03 1,800,000
1,700,000 Geauga Co., OH, Health Care Fac. Rev. (Heather Hill Proj.) ........... 1.080 07/03/03 1,700,000
1,178,900 Hamilton Co., OH, EDR (Cincinnati Assoc. for
the Performing Arts) ................................................. 1.050 07/03/03 1,178,900
1,895,000 Hamilton Co., OH, EDR (Union Inst. Proj.) ............................ 1.100 07/03/03 1,895,000
2,900,000 Hamilton Co., OH, Health Care Fac. Rev. (Episcopal Proj.) ............ 0.900 07/03/03 2,900,000
4,000,000 Hamilton Co., OH, Hosp. Fac Rev. (Episcopal Retirement Proj.) ........ 1.020 07/03/03 4,000,000
1,350,000 Hamilton Co., OH, Hosp. Fac. Rev. (Beechwood Home Proj.) ............. 1.050 07/03/03 1,350,000
7,400,000 Hamilton Co., OH, Hosp. Fac. Rev.
(Children's Hosp. Medical Center) .................................... 1.020 07/03/03 7,400,000
1,000,000 Hamilton Co., OH, Hosp. Fac. Rev.
(Childrens Hosp. Medical Center) ..................................... 1.020 07/03/03 1,000,000
6,200,000 Hamilton Co., OH, Hosp. Fac. Rev. (Drake Center, Inc.) ............... 1.020 07/03/03 6,200,000
4,700,000 Hamilton Co., OH, Hosp. Fac. Rev.
(Episcopal Retirement Proj.) ......................................... 1.020 07/03/03 4,700,000
5,920,000 Hamilton Co., OH, Sales Tax Floater Ctfs., Ser. 356 .................. 1.040 07/03/03 5,920,000
14,600,000 Hamilton, OH, Elec. Rev .............................................. 0.980 07/03/03 14,600,000
2,944,000 Hamilton, OH, MFH Rev. (Knollwood Village Apts.) Ser. A .............. 1.040 07/03/03 2,944,000
1,963,000 Hamilton, OH, MFH Rev. (Knollwood Village Apts.) Ser. B .............. 1.040 07/03/03 1,963,000
2,623,000 Hancock Co., OH, MFM Rev. (Crystal Glen Apts. Proj. Phase II) ........ 1.040 07/03/03 2,623,000
5,105,000 Lima, OH, Hosp. Fac. & Impt. Rev. (Lima Memorial Hosp.) .............. 1.100 07/03/03 5,105,000
165,000 Lucas Co., OH, IDR (Assoc. Proj.) .................................... 1.200 07/03/03 165,000
175,000 Lucas Co., OH, Rev. (Sunshine Children's Home) ....................... 1.060 07/03/03 175,000
830,000 Mahoning Co., OH, Health Care Fac. Rev. (Ohio Heart Institute) ....... 1.100 07/03/03 830,000
4,000,000 Mahoning Co., OH, Hosp. Fac. (Forum Health Oblig.) ................... 1.000 07/03/03 4,000,000
90,000 Marion Co., OH, Hosp. Impt. Rev. (Pooled Lease Proj.) ................ 1.040 07/03/03 90,000
52
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES - 73.8% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 2,920,000 Marion Co., OH, Hosp. Impt. Rev. (Pooled Lease Proj.) ................ 1.040 07/03/03 $ 2,920,000
1,150,000 Mason, OH, Tax Increment Fin. Rev. (Central Park Proj.) .............. 1.100 07/03/03 1,150,000
2,000,000 Middleburg Heights, OH, Hosp. Rev. (Southwest Gen. Health) ........... 1.060 07/03/03 2,000,000
1,305,000 Montgomery Co., OH, Health Care Rev.
(Comm. Blood Center Proj.) ........................................... 1.100 07/03/03 1,305,000
3,100,000 Montgomery Co., OH, Ltd. Oblig. Rev. (St.Vincent de Paul Proj.) ...... 1.030 07/03/03 3,100,000
200,000 Ohio St. Higher Educ. Fac. Rev. (Malone College) ..................... 1.060 07/03/03 200,000
4,100,000 Ohio St. Higher Educ. Fac. Rev. (Pooled Fin.) ........................ 1.100 07/03/03 4,100,000
3,900,000 Ohio St. Higher Educ. Fac. Rev. (Pooled Fin.) ........................ 1.100 07/03/03 3,900,000
500,000 Ohio St. Higher Educ. Fac. Rev. (Pooled Fin.) ........................ 1.100 07/03/03 500,000
4,620,000 Ohio St. Turnpike Rev ................................................ 1.040 07/03/03 4,620,000
10,000,000 Ohio St. Univ., Ser. 1997 ............................................ 1.000 07/03/03 10,000,000
1,575,000 Ottawa Co., OH, Hosp. Fac. Rev. (Lutheran
Home of Mercy Proj.) ................................................. 1.060 07/03/03 1,575,000
5,200,000 Puerto Rico Childrens Trust Fund ..................................... 1.000 07/03/03 5,200,000
13,000,000 Puerto Rico Commonwealth Hwy. & Trans. Auth .......................... 0.980 07/03/03 13,000,000
500,000 Rickenbacker, OH, Port. Auth. Rev. (Rickenbacker
Holdings, Inc.) ...................................................... 1.100 07/03/03 500,000
4,935,000 Sharonville, OH, IDR (Duke Realty Proj.) ............................. 1.150 07/03/03 4,935,000
1,590,000 Summit Co., OH, Health Care Fac. Rev. (Evant, Inc. Proj.) ............ 1.060 07/03/03 1,590,000
320,000 Summit Co., OH, IDR (Go-Jo Ind., Inc. Proj.) ......................... 1.100 07/03/03 320,000
5,000,000 Summit Co., OH, Port. Auth. Rev. (Suuma Health Sys.
Hosp. Proj.) ......................................................... 1.030 07/03/03 5,000,000
3,995,000 Univ. of Akron, OH, General Receipts ................................. 1.040 07/03/03 3,995,000
1,600,000 Warren Co., OH, IDR (Liquid Container Proj.) ......................... 1.050 07/03/03 1,600,000
1,580,000 Westlake, OH, EDR (Oaks Dev. Co. Proj.) .............................. 1.060 07/03/03 1,580,000
4,900,000 Woodlawn, OH, EDR (Goodwill Ind. Proj.) .............................. 1.050 07/03/03 4,900,000
2,435,000 Miami Co., OH, Hosp. Fac. Rev. (Upper Valley Medical Center) ......... 1.000 07/04/03 2,435,000
2,500,000 Hamilton Co., OH, IDR (ADP System) ................................... 1.400 07/15/03 2,500,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES .............................. $310,868,900
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS - 3.7% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 700,000 Clermont Co., OH, EDR (Eastgate Partnership) ......................... 1.850 09/01/03 $ 700,000
4,045,000 Cuyahoga Co., OH, IDR (Halle Office Bldg.) ........................... 1.210 10/01/03 4,045,000
1,125,000 Clermont Co., OH, EDR (John Q. Hammons Proj.) ........................ 1.400 11/01/03 1,125,000
2,570,000 Ohio St. HFA MFH (Lincoln Park) ...................................... 1.750 11/01/03 2,570,000
2,760,000 Richland Co., OH, IDR (Mansfield Sq. Proj.) .......................... 1.500 11/15/03 2,760,000
855,000 Scioto Co., OH, Health Care Rev. (Hillview Retirement) ............... 1.350 12/01/03 854,934
3,000,000 ABN AMRO Munitops Trust Cert. 1998-I8
(Cleveland Water Works) .............................................. 1.210 12/10/03 3,000,000
700,000 Gallia Co., OH, IDR (Jackson Pike Assoc.) ............................ 1.450 12/15/03 700,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS ...................................... $ 15,754,934
------------
53
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT COMMERCIAL PAPER - 4.6% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 3,000,000 Ohio St. Higher Educ. (Case Western Reserve Univ.) ................... 1.050 08/01/03 $ 3,000,000
12,900,000 Lorain Co., OH, Hosp. Rev. (Catholic Hlth. Partners) ................. 1.100 10/06/03 12,900,000
3,700,000 Lorain Co., OH, Hosp. Rev. (Catholic Hlth. Partners) ................. 1.150 12/01/03 3,700,000
------------
TOTAL COMMERCIAL PAPER ............................................... $ 19,600,000
------------
TOTAL INVESTMENT SECURITIES - 99.8%
(Amortized Cost $420,885,483) ........................................ $420,885,483
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.2% ......................... 1,044,079
------------
NET ASSETS- 100.0% ................................................... $421,929,562
============
See accompanying notes to portfolio of investments and notes to financial
statements.
54
TAX-FREE INTERMEDIATE TERM FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT MUNICIPAL OBLIGATIONS - 104.0% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.3%
$ 450,000 Houston Co., AL, UT GO Warrants ...................................... 5.350 10/15/11 $ 519,242
------------
ARKANSAS - 2.0%
775,000 Little Rock, AR, Healthcare Rev. (Baptist Health) .................... 5.000 09/01/14 828,351
------------
COLORADO - 2.7%
1,065,000 Superior Metro. Dist. No. 1 CO, Water & Sewer
ARPB Mandatory Put ................................................... 5.500 12/01/04 1,111,285
------------
FLORIDA - 12.3%
805,000 Florida HFA MFH Sr. Lien, Ser. I-1 ................................... 6.100 01/01/09 865,447
1,000,000 Greater Orlando Aviation Auth. Orlando, FL, Arpt. Facs. Rev .......... 5.250 10/01/09 1,123,120
400,000 Gulf Breeze, FL, Rev. (Miami Beach) Mandatory Put .................... 5.000 12/01/12 448,532
1,000,000 Jacksonville, FL, Elect. Auth. Rev ................................... 1.000 10/01/30 1,000,000
1,000,000 Pasco Co., FL, HFA MFH Rev. (Oak Trail Apts.) ........................ 5.500 06/01/08 1,068,140
455,000 Pensacola, FL, Airport Rev. .......................................... 5.400 10/01/07 510,442
------------
5,015,681
------------
ILLINOIS - 1.5%
500,000 Chicago, IL, Met. Water Reclamation Dist. Escrowed to Maturity ....... 7.000 01/01/11 623,770
------------
INDIANA - 1.3%
500,000 Indiana HFA Multi-Unit Mtg. Prog. Rev ................................ 6.600 01/01/12 511,375
------------
IOWA - 0.3%
130,000 Cedar Rapids, IA, Hosp. Fac. Rev. (St. Luke's Methodist
Hosp.)Escrowed to Maturity ........................................... 6.000 08/15/09 133,338
------------
KANSAS - 3.0%
1,055,000 Sedgwick Co., KS, USD UT GO .......................................... 5.000 11/01/10 1,203,934
------------
MASSACHUSETTS - 0.9%
345,000 Massachusetts St. Ind. Fin. Agy. Rev. (Hudner Assoc.) ................ 5.000 01/01/08 365,821
------------
MISSISSIPPI - 2.5%
250,000 Misissippi St. Capt. Impt. GO Prerefunded @ 100 ...................... 5.000 11/01/08 285,190
335,000 Mississippi Business Fin. Corp. IDR (Bomaine Corp.) .................. 5.200 05/01/11 348,993
365,000 Mississippi Business Fin. Corp. IDR (Bomaine Corp.) .................. 5.300 05/01/12 379,553
------------
1,013,736
------------
NEBRASKA - 0.0%
5,000 Nebraska Invest. Fin. Auth. Rev. (Foundation for Educ.
Fund), Escrowed to Maturity .......................................... 7.000 11/01/09 5,072
------------
NEVADA - 1.3%
495,000 Las Vegas, NV, Spl. Impt. Dist. Rev .................................. 5.250 06/01/12 540,629
------------
55
TAX-FREE INTERMEDIATE TERM FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT MUNICIPAL OBLIGATIONS - 104.0% (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
NEW YORK - 4.1%
$ 200,000 Hempstead Town, NY, GO ............................................... 5.000 02/15/10 $ 220,422
1,250,000 New York St. Twy. Auth. Svc. Contract Rev ............................ 5.500 04/01/13 1,439,550
------------
1,659,972
------------
OHIO - 50.5%
275,000 Akron, OH, GO ........................................................ 6.000 11/01/11 327,415
1,000,000 Bowling Green St. University, OH, General Receipts ................... 5.750 06/01/12 1,163,940
1,000,000 Butler Co., OH, Hosp. Fac. Rev. (Middletown Regional Hosp.) .......... 3.000 11/01/17 1,000,000
465,000 Cincinnati, OH, Police & Fireman's Disability GO ..................... 5.750 12/01/16 538,754
325,000 Columbus, OH, GO ..................................................... 4.750 06/15/10 356,535
374,530 Columbus, OH, Special Assessment GO .................................. 5.050 04/15/08 414,092
1,000,000 Cuyahoga Co., OH, Mtg. Rev. (West Tech. Apts. Proj.) ................. 5.100 09/20/10 1,082,690
415,000 Dublin, OH, Var. Purp. Impt. GO ...................................... 6.000 12/01/15 489,090
500,000 Erie Co., OH, Hosp. Facs. Rev., (Fireland Regl. Med. Ctr.) ........... 6.000 08/15/13 569,930
1,005,000 Franklin Co., OH, Health Care Rev. (First Comm. Village) ............. 6.000 06/01/06 1,073,963
1,075,000 Franklin Co., OH, Hosp. Rev. Impt. (Childrens Hosp. Proj.) ........... 5.500 05/01/12 1,248,871
1,000,000 Franklin Co., OH, Rev. (Online Computer Library Ctr.) ................ 4.650 10/01/11 1,069,540
1,000,000 Hamilton Co., OH, Sewer Sys. Rev ..................................... 5.500 12/01/11 1,178,410
1,000,000 Indian Hill, OH, EVSD GO ............................................. 5.250 12/01/14 1,135,280
1,000,000 Lorain Co., OH, Hosp. Rev. (Catholic Health) ......................... 5.625 10/01/11 1,125,540
230,000 Lorain, OH, LT GO .................................................... 4.500 12/01/14 248,890
250,000 Lorain, OH, LT GO .................................................... 4.625 12/01/15 269,275
480,000 Midview, OH, LSD COP ................................................. 4.250 11/01/09 513,883
95,000 Ohio St. EDR Ohio Enterprise Bond Fd. (Cheryl & Co.) ................. 5.500 12/01/04 98,304
115,000 Ohio St. EDR Ohio Enterprise Bond Fd. (Smith Steelite Proj.) ......... 5.600 12/01/03 116,918
500,000 Ohio St. IDR (Bomaine Corporation Proj.) ............................. 5.500 11/01/07 511,030
275,000 Ohio St. Pub. Facs. Comm. Mental Health .............................. 5.200 06/01/12 310,274
540,000 Ohio St. Revitalization Proj ......................................... 5.000 10/01/08 612,592
1,000,000 Ohio St. University General Receipts Rev ............................. 5.125 12/01/11 1,137,110
615,000 Ohio St. University General Receipts Rev ............................. 5.750 12/01/13 728,916
1,035,000 Reading, OH, Rev. (St. Mary's Educ. Institute) ....................... 5.550 02/01/10 1,170,306
530,000 Toledo, OH, GO ....................................................... 6.000 12/01/06 606,150
660,000 West Chester Twp., OH, GO ............................................ 5.500 12/01/14 763,785
600,000 West Clermont, OH, LSD GO Partially Prerefunded @ 100 ................ 6.150 12/01/08 665,436
------------
20,526,919
------------
PENNSYLVANIA - 4.6%
250,000 Lehigh Co., PA, Indl. Dev. Auth. Poll. Ctl. Rev. (PPL Elec. Utils.) .. 3.125 11/01/08 256,030
500,000 Pennsylvania Fin. Auth. Muni. Capital Impt. Proj. Rev ................ 6.600 11/01/09 518,470
1,000,000 Pennsylvania St. Higher Educ. Facs. (St. Josephs College) ............ 5.000 05/01/11 1,081,890
------------
1,856,390
------------
SOUTH CAROLINA - 4.5%
1,000,000 Richland Co., SC, (Intl. Paper Co.), Ser. A .......................... 4.250 10/01/07 1,044,560
725,000 Richland-Lexington, SC, Airport Dist. Rev. (Columbia Metro.) ......... 6.000 01/01/08 767,608
------------
1,812,168
------------
TENNESSEE - 6.4%
500,000 Memphis-Shelby Co., TN, Arpt. Spl. Facs. Rev. (Federal
Express Corp.) ....................................................... 5.050 09/01/12 537,950
1,000,000 Montgomery Co., TN, UT GO ............................................ 4.500 05/01/11 1,095,460
835,000 Shelby Co., TN, Sports Auth. (Memphis Arena Proj.), Ser. A ........... 5.500 11/01/13 970,813
------------
2,604,223
------------
56
TAX-FREE INTERMEDIATE TERM FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT MUNICIPAL OBLIGATIONS - 104.0% (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
TEXAS - 4.8%
$ 500,000 Austin, TX, Hotel Occupancy Tax, Rev., Ref-Sub Lien .................. 5.750 11/15/12 $ 587,240
585,000 Denton Co., TX, Permanent Impt. GO ................................... 5.000 07/15/12 648,922
87,311 Midland, TX, HFC Rev., Ser. A-2 ...................................... 8.450 12/01/11 93,761
515,000 Robinson, TX, ISD GO ................................................. 5.750 08/15/10 596,025
10,000 San Antonio, TX, Elec. & Gas Rev., Escrowed to Maturity .............. 5.000 02/01/12 11,430
------------
1,937,378
------------
TOTAL MUNICIPAL OBLIGATIONS .......................................... $ 42,269,284
------------
CASH EQUIVALENTS - 0.1%
$ 50,000 Merrill Lynch Institutional Tax-Exempt Fund .......................... $ 50,000
------------
TOTAL INVESTMENT SECURITIES - 104.1%
(Amortized Cost $39,559,115) ......................................... $ 42,319,284
LIABILITIES IN EXCESS OF OTHER ASSETS - (4.1%) ....................... (1,668,106)
------------
NET ASSETS - 100.0% .................................................. $ 40,651,178
============
See accompanying notes to portfolio of investments and notes to financial
statements.
57
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003
=========================================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 37.3% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 475,000 Delaware St. Health Fac. Auth. Rev. (Kent General Hosp.),
Prerefunded @ 102 .................................................... 5.250 07/01/03 $ 484,500
180,000 Delaware St. Health Fac. Auth. Rev. (Kent General Hosp.),
Prerefunded @ 102 .................................................... 5.250 07/01/03 183,600
200,000 Pennsylvania St. Higher Ed. Assistance Agcy. Student Ln. Rev ......... 2.350 07/01/03 200,000
200,000 Pennsylvania St. Higher Ed. Assistance Agcy. Student Ln. Rev ......... 2.700 07/01/03 200,000
100,000 Savannah, GA, Hosp. Auth. Rev. (St. Joseph Hosp. Proj.),
Prerefunded @ 102 .................................................... 6.200 07/01/03 102,000
240,000 Hudson Co., NJ, Impt. Auth. Lease Rev. (Union City Lease Proj.) ...... 4.250 07/15/03 240,265
425,000 Bucyrus, OH, GO (Storm Water Drainage Sys.) .......................... 2.500 07/16/03 425,043
350,000 Bellefontaine, OH, GO BANS (South Main Street) ....................... 2.100 07/31/03 350,144
1,080,000 Breathitt Co., KY, Justice Ctr. Corp. Rev. BANS ...................... 2.500 08/01/03 1,079,999
245,000 Potter Co., PA, Hosp. Auth. Rev. (Charles Cole Memorial Hosp.) ....... 5.200 08/01/03 245,686
160,000 San Antonio, TX, LT GO, Prerefunded @100 ............................. 4.000 08/01/03 160,367
120,000 Richland Co., OH, GO BANS ............................................ 2.650 08/13/03 120,112
100,000 Dallas, TX, ISD, Prerefunded @ 100 ................................... 5.600 08/15/03 100,539
100,000 Dripping Springs, TX, ISD ............................................ 7.500 08/15/03 100,774
250,000 Rib Mountain, WI, UT GO .............................................. 3.000 09/01/03 250,738
105,000 South Dakota St. Health & Ed. Fac. Auth. Rev.
(Westhills Village), Prerefunded @ 102 ............................... 7.250 09/01/03 108,144
100,000 Connecticut St. Spl. Tax Oblig. Rev., Prerefunded @ 101.5 ............ 4.600 10/01/03 101,591
750,000 Symmes Twp., OH, BANS ................................................ 2.000 10/15/03 751,295
300,000 North Randall, OH, Temp. Bonds ....................................... 2.100 10/17/03 300,219
250,000 Marathon Co., WI, UT GO .............................................. 2.500 11/01/03 251,004
415,000 Midview, OH, LSD COP ................................................. 1.300 11/01/03 415,000
745,000 Bucyrus, OH, GO (Waterworks Sys. Fac.) ............................... 1.990 11/13/03 745,379
250,000 Oakwood, OH, GO BANS ................................................. 2.250 11/13/03 250,182
100,000 Central Falls, RI, UT GO ............................................. 4.700 11/15/03 101,272
145,000 Centerville, OH, CSD UT GO ........................................... 2.000 12/01/03 145,450
100,000 Hempstead Town, NY, IDA Res. Recovery Rev ............................ 4.500 12/01/03 101,307
100,000 Houston, TX, Wtr. & Swr. Sys. Rev .................................... 5.000 12/01/03 101,564
1,500,000 Obetz, OH, BANS ...................................................... 1.700 12/12/03 1,502,010
140,000 Salt River, AZ, Agric. Impt. & Pwr. Dist. Elec. Sys. Rev.,
Prerefunded @ 102 .................................................... 5.000 01/01/04 145,298
130,000 Salt River, AZ, Agric. Impt. & Pwr. Dist. Elec. Sys. Rev.,
Prerefunded @ 102 .................................................... 5.000 01/01/04 136,283
738,550 American Muni. Pwr. OH, Inc. BANS (Milan Village) .................... 1.400 01/15/04 738,550
200,000 Scarsdale, NY, Un. Free Sch. Dist .................................... 5.500 01/15/04 202,327
250,000 Deerfield Twp., OH, TANS ............................................. 2.100 01/28/04 250,712
675,000 American Muni. Pwr. OH, Inc. BANS (Lakeview Village) ................. 1.400 02/05/04 675,000
300,000 Berkeley Co., WV, Pub. Svc. Dist. Wtr. Rev ........................... 2.000 03/01/04 301,288
300,000 Portsmouth, OH, Wtr. Sys. Rev ........................................ 1.600 04/01/04 300,000
200,000 Bloomville, OH, BANS ................................................. 2.160 05/06/04 201,103
735,000 Monroe, OH, BANS ..................................................... 1.800 05/06/04 737,459
120,000 Lebanon, OH, BANS (Fire Dept. Impt.) ................................. 1.650 05/20/04 120,367
100,000 Kentucky St. Higher Ed. Student Ln. Corp. Insd. Student Ln. Rev ...... 5.200 06/01/04 103,030
500,000 Spencerville, OH, BANS (Wtr. Sys. Impt.) ............................. 1.950 06/02/04 501,381
58
TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS - 37.3% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 525,000 American Muni. Pwr. OH, Inc. BANS (Grafton Village) .................. 1.250 06/17/04 $ 525,000
875,000 Blanchester, OH, Wtr. Sys. Impt. BANS ................................ 1.950 07/08/04 877,013
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS .................. $ 14,932,995
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES - 48.9% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 580,000 Arvada, CO, Water Util. Rev .......................................... 1.300 07/01/03 $ 580,000
300,000 Broward Co., FL, Health Fac. Auth. Rev. (John Knox Village) .......... 1.150 07/01/03 300,000
200,000 Collier Co., FL, Health Fac. Auth. Hosp. Rev. (Cleveland Clinic) ..... 0.980 07/01/03 200,000
200,000 Grand Forks, ND, Hosp. Fac. Rev. (United Hosp. Oblig.
Group Proj.) ......................................................... 1.030 07/01/03 200,000
500,000 Jacksonville, FL, Elec. Auth. Rev., Var. (Sub. Elec. Sys.), Ser. B ... 1.000 07/01/03 500,000
200,000 Jacksonville, FL, Health Facs. Hosp. Rev. (Genesis Rehab Hosp.) ...... 1.000 07/01/03 200,000
400,000 Martin Co., FL, PCR (Florida Power & Light) .......................... 1.050 07/01/03 400,000
200,000 Municipal Secs. Trust Ctfs., Ser. 2001-161 (Florida Brd.
of Educ.) ............................................................ 1.030 07/01/03 200,000
500,000 Ohio State Air Quality Rev. PCR (OH Edison) .......................... 0.950 07/01/03 500,000
200,000 Reno, NV, Hosp. Rev. (St. Marys) ..................................... 1.000 07/01/03 200,000
765,000 E-470 Pub. Highway Auth. Colorado Rev. (Vehicle
Registration Fee) .................................................... 0.950 07/02/03 765,000
100,000 East Carolina Univ. Rev. (Ficklen Stadium Proj.) ..................... 1.100 07/02/03 100,000
900,000 Eddyville, IA, IDR (Heartland Lysine, Inc.) .......................... 2.700 07/02/03 900,000
200,000 Illinois Hsg. Dev. Auth. MFH Rev. (Lakeshore Plaza) .................. 0.950 07/02/03 200,000
100,000 Knox, IN, EDR (J.W. Hicks, Inc. Proj.) ............................... 1.250 07/02/03 100,000
1,415,000 New York City, NY, Transitional Fin. Auth ............................ 1.000 07/02/03 1,415,000
100,000 Northeastern PA, Hosp. & Edl. Auth. (Wyoming Vy. Healthcare) ......... 1.050 07/02/03 100,000
105,000 Pinellas Co., FL, Ed. Fac. Auth. Rev. (Canterbury Sch. of FL) ........ 0.950 07/02/03 105,000
375,000 Port Kalama, WA, Pub. Corp. Port. (Conagra, Inc. Proj.) .............. 1.150 07/02/03 375,000
710,000 Port Seattle, WA, IDC Aprt. Rev. (Alaska Airlines Inc.) .............. 1.150 07/02/03 710,000
1,100,000 Scio Twnshp., MI, EDR (ADP Network) .................................. 1.530 07/02/03 1,100,000
560,000 Boone Co., KY, Indl. Bldg. Rev. (The Hennegan Co. Proj.) ............. 1.100 07/03/03 560,000
240,000 Boulder Co., CO, Dev. Rev. (Humane Society Inc.) ..................... 1.100 07/03/03 240,000
100,000 Catawba Co., NC, Indl. Facs. (Lucky 7 Dev. Group) .................... 1.200 07/03/03 100,000
545,000 Eden Prairie, MN, MFH Rev. (Lake Place Apts.) ........................ 1.100 07/03/03 545,000
335,000 Fargo, ND, Coml. Dev. Rev., Ref. (Kelly Inns. Fargo Proj.) ........... 1.100 07/03/03 335,000
410,000 Greenwood, IN, EDR (Health Quest Realty) ............................. 1.290 07/03/03 410,000
130,000 Henderson, NV, Pub. Impt. MFH Rev. (Pueblo I), Ser. A ................ 1.150 07/03/03 130,000
595,000 Hillsborough Co., FL, HFA MFH Rev. (Brandon) ......................... 1.000 07/03/03 595,000
460,000 Illinois Dev. Auth. IDR (Hoda LLC) ................................... 1.300 07/03/03 460,000
235,000 Indiana St. EDR (Earlham College) .................................... 1.100 07/03/03 235,000
894,000 Indianapolis, IN, EDR (Pedcore Invts. Waterfront) .................... 1.340 07/03/03 894,000
390,000 Iowa HFA Health Care Rev. (Wesley Retirement Svcs. Inc.) ............. 1.100 07/03/03 390,000
470,000 Lancaster Co., NE, IDR (Garner Ind.) ................................. 1.180 07/03/03 470,000
1,085,000 Mankato, MN, IDR, Ser. 1998 (Sacco Family LP Proj.) .................. 1.300 07/03/03 1,085,000
150,000 Maricopa Co., AZ, IDR (McLane Co.) ................................... 1.500 07/03/03 150,000
110,000 Mississippi Bus. Fin. Corp. (Arch Aluminum & Glass) .................. 1.250 07/03/03 110,000
100,000 New Hampshire St. Bus. Fin. Auth. (Foundation for
Seacoast Health) ..................................................... 1.000 07/03/03 100,000
1,200,000 New Hampshire St. Bus. Fin. Auth. (Valley Regional Hosp.) ............ 1.000 07/03/03 1,200,000
59
TAX-FREE MONEY MARKET FUND
(CONTINUED)
=========================================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES - 48.9% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 125,000 Philadelphia, PA, Hosp. & Higher Ed. Fac. Auth. Rev. (The
Philadelphia Sch.) ................................................... 1.000 07/03/03 $ 125,000
1,105,000 Salina, KS, Rev. (Salina Center Mall Ltd.) ........................... 1.200 07/03/03 1,105,000
500,000 Seminole Co., FL, IDA Health Fac. (Florida Living
Nursing Center) ...................................................... 1.180 07/03/03 500,000
705,000 St. Louis, MO, Clearance Redev. Auth. (Lamment Bldg.) ................ 1.150 07/03/03 705,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES .............................. $ 19,594,000
------------
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS - 15.6% RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------
$ 530,000 Lexington-Fayette Co., KY, Urban Govt. Rev.
(Providence Montessori) .............................................. 2.250 07/01/03 $ 530,000
1,000,000 Pulaski Co., KY, Solid Wst. Disp. Rev. (East KY Pwr.) ................ 1.300 08/15/03 1,000,000
500,000 Sabine River, TX, IDA (Northeast TX Elec. Coop.) ..................... 1.250 08/15/03 500,000
705,000 Summit Co., OH, IDR (S.D. Myers Inc. Proj.) .......................... 2.000 08/15/03 705,000
1,200,000 Owensboro, KY, IDR, Ser. 1985 (Dart Container) ....................... 1.900 09/01/03 1,200,000
145,000 Portage Co., OH, IDR (Neidlinger Proj.) .............................. 2.150 09/01/03 145,000
140,000 Summit Co., OH, IDR (Keltec Inc. Proj.) .............................. 2.150 09/01/03 140,000
510,000 Summit Co., OH, IDR (Struktol Co. America Proj.) ..................... 2.150 09/01/03 510,000
75,000 Summit Co., OH, IDR (Triscari Proj.) ................................. 2.150 09/01/03 75,000
120,000 Cuyahoga Co.,OH, IDR (Halle Office Bldg.) ............................ 1.210 10/01/03 120,000
325,000 Summit Co., OH, IDR (L & W Mfg. Proj.) ............................... 2.150 10/01/03 325,000
1,000,000 Westmoreland Co., PA, IDR (White Consolidated Industries) ............ 1.265 12/01/03 1,000,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS ...................................... $ 6,250,000
------------
TOTAL INVESTMENT SECURITIES- 101.8%
(Amortized Cost $40,776,995) ......................................... $ 40,776,995
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.8%) ....................... (709,895)
------------
NET ASSETS - 100.0% .................................................. $ 40,067,100
============
See accompanying notes to portfolio of investments and notes to financial
statements.
60
NOTES TO PORTFOLIOS OF INVESTMENTS
JUNE 30, 2003
================================================================================
Variable and adjustable rate put bonds earn interest at a coupon rate which
fluctuates at specified intervals, usually daily, monthly or semi-annually. The
rates shown in the Portfolios of Investments are the coupon rates in effect at
June 30, 2003.
Put bonds may be redeemed at the discretion of the holder on specified dates
prior to maturity. Mandatory put bonds are automatically redeemed at a specified
put date unless action is taken by the holder to prevent redemption.
Bonds denoted as prerefunded are anticipated to be redeemed prior to their
scheduled maturity. The dates indicated in the Portfolios of Investments are the
stipulated prerefunded dates.
PORTFOLIO ABBREVIATIONS:
ARPB - Adjustable Rate Put Bond
BANS - Bond Anticipation Notes
COP - Certificates of Participation
CSD - City School District
EDR - Economic Development Revenue
EVSD - Exempted Village School District
GO - General Obligation
HFA - Housing Finance Authority/Agency
HFC - Housing Finance Corporation
IDA - Industrial Development Authority/Agency
IDC - Industrial Development Corporation
IDR - Industrial Development Revenue
ISD - Independent School District
LSD - Local School District
LT - Limited Tax
MFA - Multi-Family Authority
MFH - Multi-Family Housing
MFM - Multi-Family Mortgage
PCR - Pollution Control Revenue
TANS - Tax Anticipation Notes
USD - Unified School District
UT - Unlimited Tax
61
REPORT OF INDEPENDENT AUDITORS
================================================================================
To the Shareholders and
Board of Trustees of the Touchstone Tax-Free Trust
We have audited the accompanying statements of assets and liabilities of
Touchstone Tax-Free Trust comprising the Tax-Free Money Market Fund, California
Tax-Free Money Market Fund, Ohio Tax-Free Money Market Fund, Florida Tax-Free
Money Market Fund, Tax-Free Intermediate Term Fund, and Ohio Insured Tax-Free
Fund (the "Funds"), including the portfolios of investments, as of June 30,
2003, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years then ended, and
the financial highlights for each of the four years then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights presented herein for each of the respective years or periods ended
June 30, 1999 were audited by other auditors who have ceased operations. Those
auditors expressed an unqualified opinion on the financial highlights in their
report dated August 6, 1999.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit 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, 2003, by correspondence with the custodian and brokers or
by other appropriate auditing procedures where replies from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting the Touchstone Tax-Free Trust as of June 30,
2003, the results of their operations for the year then ended, the changes in
their net assets for each of the two years then ended, and the financial
highlights for each of the four years then ended in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Cincinnati, Ohio
August 7, 2003
62
THIS PAGE INTENTIONALLY LEFT BLANK.
TOUCHSTONE INVESTMENTS
DISTRIBUTOR
Touchstone Securities, Inc.
221 East Fourth Street
Cincinnati, Ohio 45202-4094
800.638.8194
www.touchstoneinvestments.com
INVESTMENT ADVISOR
Touchstone Advisors, Inc.
221 East Fourth Street
Cincinnati, Ohio 45202-4094
TRANSFER AGENT
Integrated Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
SHAREHOLDER SERVICE
800.543.0407
A Member of Western & Southern Financial Group
-----------------
PRESORTED
STANDARD
U.S. POSTAGE PAID
CHICAGO, IL
PERMIT #6325
-----------------
Address Service Requested
[LOGO]TOUCHSTONE
INVESTMENTS
------------
TSF-336-0308
ITEM 2. CODE OF ETHICS. Not applicable to Annual Reports for the period ended
June 30, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to Annual Reports
for the period ended June 30, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to Annual
Reports for the period ended June 30, 2003.
ITEMS 5-6. RESERVED
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END
MANAGEMENT INVESTMENT COMPANIES. Not Applicable.
Item 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of June 30, 2003, the disclosure controls and procedures
are reasonably designed to ensure that the information required in
filings on Form N-CSR is recorded, processed, summarized, and reported
on a timely basis.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last
fiscal half-year that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
(a)(1) Not applicable [See Item 2].
(a)(2) Certifications required by Item 10(a)(2) of Form N-CSR are filed
herewith.
(b) Certification required by Item 10(b) of Form N-CSR is filed herewith.
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.
(Registrant) Touchstone Tax-Free Trust
-------------------------------------------------------------------
By (Signature and Title)
/s/ Patrick T. Bannigan
- --------------------------------------------------------------------------------
Patrick T. Bannigan
President
Date: September 5, 2003
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 (Signature and Title)
/s/ Patrick T. Bannigan
- --------------------------------------------------------------------------------
Patrick T. Bannigan
President
Date: September 5, 2003
/s/ Terrie A. Wiedenheft
- --------------------------------------------------------------------------------
Terrie A. Wiedenheft
Controller
Date: September 9, 2003