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
----------------------------------------------
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)
Jill T. McGruder, 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
Date of fiscal year end: 06/30/04
Date of reporting period: 06/30/04
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
[GRAPHIC OMITTED]
June 30, 2004
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[LOGO] TOUCHSTONE
INVESTMENTS
ANNUAL REPORT
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 Money Market Fund
RESEARCH o DESIGN o SELECT o MONITOR
TABLE OF CONTENTS
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Page
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Letter from the President 3
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Management's Discussion of Fund Performance 4-5
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Statements of Assets and Liabilities 6-9
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Statements of Operations 10-12
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Statements of Changes in Net Assets 13-16
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Financial Highlights 17-22
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Notes to Financial Statements 23-33
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Portfolios of Investments:
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California Tax-Free Money Market Fund 34-36
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Florida Tax-Free Money Market Fund 37-38
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Ohio Insured Tax-Free Fund 39-41
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Ohio Tax-Free Money Market Fund 42-45
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Tax-Free Money Market Fund 46-47
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Notes to Portfolios of Investments 48
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Report of Independent Registered Public Accounting Firm 49
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Management of the Trust 50-51
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Other Items 52
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2
LETTER FROM THE PRESIDENT
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Dear Fellow Shareholders:
We are pleased to provide you with the Touchstone Tax-Free Trust Annual Report
for the twelve months ended June 30, 2004. During the period, economic reports
were favorable, including recent encouraging news regarding the job market.
However, despite this progress, financial markets have been lifeless in the last
quarter and bond returns were unchanged.
A key driver for the inconsistency between economic and financial market
performance is investor concern over the prospect of continued rising interest
rates. Although the Federal Reserve increased the federal funds rate by 0.25% in
June, interest rates have sustained record 45-year historical lows.
The Federal Reserve will continue to monitor economic data to determine what
stance to take for the remainder of the year, with one key factor being
inflation. Analysts expect inflation to rise gradually and believe the Fed is
likely to proceed with additional raises in the federal funds rate. The concern
of the bond market at this stage is how far and how quickly rates will be
raised.
We believe the tax-exempt sector continues to offer attractive investment
opportunities and may provide tax-conscious investors appealing tax-free yields.
Investing in tax-free money market funds may help provide liquidity and
stability to a portfolio. Additionally, tax-free mutual funds can potentially
provide the diversification that can help keep your financial strategy on
course.
We, at Touchstone, have an optimistic view regarding our economy and financial
markets and are focused on positioning our Funds for success. We suggest
maintaining a long-term approach and remaining diversified to gain the full
potential benefits of investing.
Thank you for your confidence in Touchstone and the opportunity to work on your
behalf. We look forward to serving your investment needs in the future.
Best Regards,
/s/ Jill T. McGruder
Jill T. McGruder
President
Touchstone Tax-Free Trust
3
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
================================================================================
MUNICIPAL BOND MARKET REVIEW AND OUTLOOK
A combination of tax cuts and mortgage refinancing fueled strong consumer demand
leading to GDP growth of 8.2% for the first quarter of the fiscal year. In the
quarters since, growth has tapered off, but on average, the economy expanded at
a rate of nearly 5.0% during the twelve-month period ending June 30, 2004. A
dormant job market finally perked up in March 2004 with 1.3 million new jobs
created in the first half of 2004. As the job market turned positive in March
2004 the Fed indicated that it would begin to raise interest rates. At the end
of the 2nd quarter 2004 the Fed raised rates for the first time in 4 years
bumping the fed funds rate 0.25% to 1.25%. These events coupled with the easing
of concerns over deflation caused a decline in bond prices and pushed interest
rates higher.
During the period, municipal supply was robust as municipalities funded a number
of infrastructure and school improvement projects. The new issue supply was met
with fairly steady demand especially from hedge funds and other nontraditional
municipal buyers that recognized the attractive pricing offered by the municipal
sector compared to other fixed income sectors. As an example, at the beginning
of the fiscal year (July 2003) 10-year AAA rated municipal bonds were trading at
92% of comparable maturity Treasury notes. This represented significant value
compared to historical standards and buyers entered the market to take advantage
of this anomaly. By the end of the fiscal year, municipal bonds had outperformed
and were trading closer to historical norms.
Recent reports have indicated that the economy may be moderating but, overall,
growth looks as though it will remain above average. The Fed has indicated that
it will continue to tighten monetary policy but at a "measured" pace so as not
to upset the markets. The likely result of this policy is that short-term
interest rates will continue to move higher and that yields on longer-term bonds
will rise as well but perhaps not as much as the market anticipates. Ultimately,
the Fed will react to the economic news and do what it believes is necessary to
sustain long-term economic growth with limited inflation.
TOUCHSTONE OHIO INSURED TAX-FREE FUND
The Touchstone 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. It invests in high-quality, long-term, Ohio
municipal obligations that are protected by insurance guaranteeing the payment
of principal and interest in the event of a default. The Fund's total return was
0.04% for the twelve months ended June 30, 2004. The total return for the Lehman
Brothers Municipal Bond Index was 0.76% for the same period. The average credit
quality of the Index was AA, while the Fund's average credit quality was higher
at AAA. In May 2004, the Touchstone Tax-Free Intermediate Term Fund was merged
into the Ohio Insured Tax-Free Fund. As a result of the merger, the Fund was
left with a larger than usual cash position. A good portion of the cash has been
invested and the remaining position will be invested as we find suitable issues
in the marketplace. The typical maturity range is in the 20- 25-year range, but
since our expectation is for rates to trend higher, we will wait for a market
pull back and buy insured Ohio municipal bonds in the 15- to 20-year maturity
range, which has historically provided the Fund with the best combination of
income and total return.
4
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
================================================================================
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
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OHIO INSURED TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS**
1 YEAR 5 YEARS 10 YEARS
CLASS A -4.73% 3.95% 4.86%
CLASS C -1.03% 4.21% 4.68%
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[The following table was depicted as a line chart in the printed material.]
OHIO INSURED TAX-FREE FUND - Class A LEHMAN BROTHERS MUNICIPAL BOND INDEX
- ------------------------------------ ----------------------------------------
QTRLY QTRLY
DATE RETURN BALANCE RETURN BALANCE
- ------------------------------------ ----------------------------------------
06/30/94 9,525 10,000
09/30/94 0.20% 9,544 0.69% 10,069
12/31/94 -0.76% 9,472 -1.43% 9,925
03/31/95 6.59% 10,096 7.07% 10,626
06/30/95 1.69% 10,266 2.41% 10,882
09/30/95 2.32% 10,505 2.87% 11,195
12/31/95 4.45% 10,972 4.13% 11,657
03/31/96 -2.17% 10,734 -1.20% 11,517
06/30/96 0.44% 10,782 0.76% 11,605
09/30/96 2.38% 11,038 2.29% 11,871
12/31/96 2.45% 11,308 2.55% 12,173
03/31/97 -0.82% 11,216 -0.24% 12,144
06/30/97 3.21% 11,575 3.44% 12,562
09/30/97 2.42% 11,856 3.02% 12,941
12/31/97 2.26% 12,124 2.71% 13,292
03/31/98 0.88% 12,230 1.15% 13,445
06/30/98 1.31% 12,390 1.52% 13,650
09/30/98 3.07% 12,771 3.07% 14,069
12/31/98 0.22% 12,799 0.60% 14,154
03/31/99 0.45% 12,857 0.89% 14,279
06/30/99 -1.89% 12,614 -1.77% 14,027
09/30/99 -0.90% 12,500 -0.40% 13,971
12/31/99 -0.79% 12,402 -0.78% 13,862
03/31/00 3.26% 12,806 2.92% 14,268
06/30/00 1.09% 12,946 1.51% 14,483
09/30/00 1.93% 13,195 2.42% 14,834
12/31/01 4.89% 13,841 4.37% 15,482
03/31/01 1.57% 14,058 2.22% 15,826
06/30/01 0.26% 14,095 0.65% 15,929
09/30/01 2.06% 14,385 2.81% 16,376
12/31/01 -0.82% 14,267 -0.61% 16,276
03/31/02 0.59% 14,351 0.94% 16,429
06/30/02 3.27% 14,820 3.66% 17,031
09/30/02 5.38% 15,618 4.75% 17,840
12/31/02 -0.37% 15,560 0.00% 17,840
03/31/03 0.90% 15,700 1.20% 18,054
06/30/03 2.35% 16,069 2.58% 18,520
09/30/03 -0.25% 16,029 0.08% 18,534
12/31/03 1.59% 16,284 1.37% 18,788
03/31/04 1.57% 16,539 1.73% 19,113
06/30/04 -2.81% 16,074 -2.37% 18,660
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 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.
** Returns shown above are adjusted for maximum applicable sales charge.
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.
5
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2004
================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost .......................... $ 59,593,130 $ 29,423,749
============================
At market value ............................ $ 59,593,130 $ 29,423,749
Interest receivable .......................... 264,955 126,290
Other assets ................................. 547 1,179
----------------------------
TOTAL ASSETS ................................. 59,858,632 29,551,218
----------------------------
LIABILITIES
Overdrafts ................................... 145,638 127,943
Dividends payable ............................ 103 7,069
Payable to Adviser ........................... 21,014 8,764
Payable to affiliates ........................ 7,836 4,344
Other accrued expenses and liabilities ....... 26,057 17,608
----------------------------
TOTAL LIABILITIES ............................ 200,648 165,728
----------------------------
NET ASSETS ................................... $ 59,657,984 $ 29,385,490
============================
NET ASSETS CONSIST OF:
Paid-in capital .............................. $ 59,661,144 $ 29,391,020
Undistributed net investment income .......... 384 --
Accumulated net realized losses from security
transactions ............................... (3,544) (5,530)
----------------------------
NET ASSETS ................................... $ 59,657,984 $ 29,385,490
============================
Shares of beneficial interest
outstanding (unlimited number
of shares authorized, no par value) ...... 59,661,153 29,391,008
============================
Net asset value, offering price and redemption
price per share ............................ $ 1.00 $ 1.00
============================
See accompanying notes to financial statements.
6
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2004
================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost ......................... $ 86,604,327 $341,376,338
============================
At market value ........................... $ 90,080,831 $341,376,338
Cash ......................................... 19,244 --
Interest receivable .......................... 603,004 952,777
Receivable for capital shares sold ........... 3,607 --
Receivable for securities sold ............... 1,012,265 --
Other assets ................................. 14,800 5,217
----------------------------
TOTAL ASSETS ................................. 91,733,751 342,334,332
----------------------------
LIABILITIES
Overdrafts ................................... -- 152,116
Dividends payable ............................ 83,974 100,828
Payable to Adviser ........................... 36,382 107,861
Payable to affiliates ........................ 14,440 23,794
Payable for capital shares redeemed .......... 294,508 --
Payable for securities purchased ............. 3,545,662 2,004,880
Other accrued expenses and liabilities ....... 60,096 60,978
----------------------------
TOTAL LIABILITIES ............................ 4,035,062 2,450,457
----------------------------
NET ASSETS ................................... $ 87,698,689 $339,883,875
----------------------------
NET ASSETS CONSIST OF:
Paid-in capital .............................. $ 84,222,185 $339,867,582
Accumulated net realized gains from security
transactions .............................. -- 16,293
Net unrealized appreciation on investments ... 3,476,504 --
----------------------------
NET ASSETS ................................... $ 87,698,689 $339,883,875
============================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares ...... $ 77,837,139 $ --
============================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................... 6,662,720 --
============================
Net asset value and redemption price per share $ 11.68 $ --
============================
Maximum offering price per share ............. $ 12.26 $ --
============================
PRICING OF CLASS C SHARES
Net assets applicable to Class C shares ...... $ 9,861,550 $ --
============================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ 843,344 --
============================
Net asset value, offering price and redemption
price per share * ......................... $ 11.69 $ --
============================
7
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
JUNE 30, 2004
================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
PRICING OF RETAIL SHARES
Net assets applicable to Retail shares ....... $ -- $165,145,176
============================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ -- 165,128,715
============================
Net asset value, offering price and redemption
price per share ............................ $ -- $ 1.00
============================
PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional shares $ -- $174,738,699
============================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ -- 174,725,256
============================
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.
8
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004
================================================================================
TAX-FREE
MONEY MARKET
FUND
- --------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost ............................................ $36,470,594
===========
At market value .............................................. $36,470,594
Cash ........................................................... 27,013
Interest receivable ............................................ 186,898
Other assets ................................................... 11,534
-----------
TOTAL ASSETS ................................................... 36,696,039
-----------
LIABILITIES
Dividends payable .............................................. 383
Payable to Adviser ............................................. 15,173
Payable to affiliates .......................................... 6,979
Other accrued expenses and liabilities ......................... 29,808
-----------
TOTAL LIABILITIES .............................................. 52,343
-----------
NET ASSETS ..................................................... $36,643,696
===========
NET ASSETS CONSIST OF:
Paid-in capital ................................................ $36,642,453
Undistributed net investment income ............................ 1,243
-----------
NET ASSETS ..................................................... $36,643,696
===========
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares ........................ $20,262,858
===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........ 20,271,779
===========
Net asset value, offering price and redemption price per share.. $ 1.00
===========
PRICING OF CLASS S SHARES
Net assets applicable to Class S shares ........................ $16,380,838
===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........ 16,380,826
===========
Net asset value, offering price and redemption price per share.. $ 1.00
===========
See accompanying notes to financial statements.
9
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2004
================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income .............................. $ 731,572 $ 344,120
----------------------------
EXPENSES
Investment advisory fees ..................... 360,815 155,971
Distribution expenses ........................ 180,802 77,981
Administration fees .......................... 39,704 17,156
Accounting services fees ..................... 30,000 24,000
Transfer agent fees .......................... 31,118 12,000
Professional fees ............................ 19,363 15,212
Custodian fees ............................... 27,573 6,520
Trustees' fees and expenses .................. 8,102 8,391
Postage and supplies ......................... 14,033 1,628
Pricing expenses ............................. 9,048 4,157
Registration fees ............................ 1,478 2,207
Other expenses ............................... 1,995 287
----------------------------
TOTAL EXPENSES ............................... 724,031 325,510
Fees waived by the Adviser ................... (183,544) (91,903)
----------------------------
NET EXPENSES ................................. 540,487 233,607
----------------------------
NET INVESTMENT INCOME ........................ 191,085 110,513
----------------------------
NET REALIZED LOSSES FROM SECURITY TRANSACTIONS (3,544) (5,422)
----------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ... $ 187,541 $ 105,091
============================
See accompanying notes to financial statements.
10
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2004
===============================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income .................................. $ 3,148,262 $ 4,335,558
--------------------------
EXPENSES
Investment advisory fees ......................... 336,113 1,710,957
Distribution expenses, Class A ................... 149,013 --
Distribution expenses, Class B* .................. 2,731 --
Distribution expenses, Class C ................... 74,990 --
Distribution expenses, Retail class .............. -- 418,508
Administration fees .............................. 36,972 188,035
Custodian fees ................................... 6,784 102,360
Transfer agent fees, Class A ..................... 27,370 --
Transfer agent fees, Class B* .................... 9,261 --
Transfer agent fees, Class C ..................... 12,000 --
Transfer agent fees, Retail class ................ -- 46,916
Transfer agent fees, Institutional class ......... -- 12,000
Accounting services fees ......................... 44,375 61,500
Postage and supplies ............................. 19,905 40,057
Professional fees ................................ 14,291 27,120
Pricing expenses ................................. 9,050 17,057
Trustees' fees and expenses ...................... 7,274 8,118
Registration fees, Class A ....................... 4,932 --
Registration fees, Class B* ...................... 4,178 --
Registration fees, Class C ....................... 2,877 --
Registration fees, Retail class .................. -- 1,986
Other expenses ................................... 260 5,129
--------------------------
TOTAL EXPENSES ................................... 762,376 2,639,743
Fees waived by the Adviser ....................... (199,133) (243,654)
--------------------------
NET EXPENSES ..................................... 563,243 2,396,089
--------------------------
NET INVESTMENT INCOME ............................ 2,585,019 1,939,469
--------------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS
Net realized gains from security transactions .... 435,030 16,293
Net change in unrealized appreciation/depreciation
on investments ................................. (2,333,368) --
--------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS .................................... (1,898,338) 16,293
--------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ....... $ 686,681 $ 1,955,762
==========================
* Represents the period from July 1, 2003 through May 21, 2004 (see Note 6).
See accompanying notes to financial statements.
11
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2004
================================================================================
TAX-FREE
MONEY MARKET
FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income .............................................. $ 458,039
-----------
EXPENSES
Investment advisory fees ..................................... 167,794
Distribution expenses, Class A ............................... 46,754
Distribution expenses, Class S ............................... 89,145
Transfer agent fees, Class A ................................. 21,543
Transfer agent fees, Class S ................................. 12,000
Accounting services fees ..................................... 31,500
Registration fees, Class A ................................... 11,660
Registration fees, Class S ................................... 17,826
Administration fees .......................................... 18,462
Postage and supplies ......................................... 18,426
Professional fees ............................................ 15,595
Trustees' fees and expenses .................................. 8,352
Custodian fees ............................................... 5,709
Pricing expenses ............................................. 4,825
Other expenses ............................................... 257
-----------
TOTAL EXPENSES ............................................... 469,848
Fees waived by the Adviser ................................... (132,997)
-----------
NET EXPENSES ................................................. 336,851
-----------
NET INVESTMENT INCOME ........................................ 121,188
NET REALIZED GAINS FROM SECURITY TRANSACTIONS ................ 13
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................... $ 121,201
===========
See accompanying notes to financial statements.
12
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,
2004 2003 2004 2003
================================================================================================================
FROM OPERATIONS
Net investment income ....................... $ 191,085 $ 491,326 $ 110,513 $ 198,377
Net realized gains (losses)
from security transactions ................ (3,544) 251 (5,422) 7,941
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS ................................ 187,541 491,577 105,091 206,318
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .................. (190,813) (491,598) (110,513) (198,377)
From net realized gains ..................... (251) (5,641) -- --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ............. (191,064) (497,239) (110,513) (198,377)
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................... 216,103,748 231,465,121 67,059,735 60,228,779
Reinvested distributions .................... 190,472 481,616 23,524 69,053
Payments for shares redeemed ................ (226,977,960) (246,001,399) (67,348,981) (48,777,163)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........... (10,683,740) (14,054,662) (265,722) 11,520,669
----------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ................................ (10,687,263) (14,060,324) (271,144) 11,528,610
NET ASSETS
Beginning of year ........................... 70,345,247 84,405,571 29,656,634 18,128,024
----------------------------------------------------------------
End of year ................................. $ 59,657,984 $ 70,345,247 $ 29,385,490 $ 29,656,634
================================================================
UNDISTRIBUTED NET INVESTMENT INCOME.......... $ 384 $ 112 $ -- $ --
================================================================
See accompanying notes to financial statements.
13
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,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ......................... $ 2,585,019 $ 2,548,395 $ 1,939,469 $ 3,785,390
Net realized gains from
security transactions ....................... 435,030 899,591 16,293 31,700
Net change in unrealized
appreciation/depreciation on investments .... (2,333,368) 2,092,804 -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ............................. 686,681 5,540,790 1,955,762 3,817,090
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ........... (2,335,854) (2,351,509) -- --
From net investment income, Class B* .......... (10,552) (8,218) -- --
From net investment income, Class C ........... (238,613) (188,668) -- --
From net investment income, Retail ............ -- -- (582,573) (1,374,359)
From net investment income, Institutional ..... -- -- (1,356,896) (2,411,031)
From net realized gains, Class A .............. (956,379) (332,541) -- --
From net realized gains, Class B* ............. (6,660) (1,419) -- --
From net realized gains, Class C .............. (118,216) (31,146) -- --
From net realized gains, Retail ............... -- -- (5,245) --
From net realized gains, Institutional ........ -- -- (6,165) --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ............... (3,666,274) (2,913,501) (1,950,879) (3,785,390)
----------------------------------------------------------------
CAPITAL CONTRIBUTION .......................... 150,000 -- -- --
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ..................... 43,472,366 166,427,209 -- --
Proceeds from shares issued in
connection with acquisition
(Note 6) .................................. 26,699,005 -- -- --
Reinvested distributions ...................... 2,127,491 1,811,604 -- --
Payments for shares redeemed .................. (51,646,987) (165,318,707) -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS ............. 20,651,875 2,920,106 -- --
----------------------------------------------------------------
CLASS B*
Proceeds from shares sold ..................... 153,317 136,163 -- --
Reinvested distributions ...................... 11,011 7,253 -- --
Payments for shares redeemed .................. (463,312) (4,117) -- --
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS B SHARE TRANSACTIONS ............. (298,984) 139,299 -- --
----------------------------------------------------------------
14
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,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold ....................... $ 1,020,441 $ 2,962,425 $ -- $ --
Proceeds from shares issued in
connection with acquisition
(Note 6) .................................... 3,872,930 -- -- --
Reinvested distributions ........................ 254,465 172,491 -- --
Payments for shares redeemed .................... (2,351,756) (860,392) -- --
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CLASS C SHARE TRANSACTIONS .................... 2,796,080 2,274,524 -- --
----------------------------------------------------------------
RETAIL
Proceeds from shares sold ....................... -- -- 330,112,190 447,218,674
Reinvested distributions ........................ -- -- 586,040 1,369,314
Payments for shares redeemed .................... -- -- (321,365,247) (503,873,010)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM RETAIL SHARE TRANSACTIONS ................ -- -- 9,332,983 (55,285,022)
----------------------------------------------------------------
INSTITUTIONAL
Proceeds from shares sold ....................... -- -- 497,917,624 506,126,362
Reinvested distributions ........................ -- -- 61,993 159,261
Payments for shares redeemed .................... -- -- (589,363,170) (450,864,267)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM INSTITUTIONAL SHARE
TRANSACTIONS .................................. -- -- (91,383,553) 55,421,356
----------------------------------------------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ................................. 20,319,378 7,961,218 (82,045,687) 168,034
NET ASSETS
Beginning of year ............................... 67,379,311 59,418,093 421,929,562 421,761,528
----------------------------------------------------------------
End of year ..................................... $ 87,698,689 $ 67,379,311 $ 339,883,875 $ 421,929,562
================================================================
UNDISTRIBUTED NET INVESTMENT INCOME ............. $ -- $ -- $ -- $ --
================================================================
* Represents the period from July 1, 2003 through May 21, 2004 (see Note 6).
See accompanying notes to financial statements.
15
STATEMENTS OF CHANGES IN NET ASSETS
======================================================================
TAX-FREE
MONEY MARKET
FUND
----------------------------
YEAR YEAR
ENDED ENDED
JUNE 30, JUNE 30,
2004 2003
- ----------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................. $ 121,188 $ 204,839
Net realized gains from security
transactions ........................ 13 9,642
----------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ..................... 121,201 214,481
----------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ... (88,234) (181,440)
From net investment income, Class S ... (31,994) (24,361)
From net realized gains, Class A ...... (4,906) (42,682)
From net realized gains, Class S ...... (4,736) --
----------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ....... (129,870) (248,483)
----------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ............. 26,939,807 29,377,332
Reinvested distributions .............. 90,480 220,138
Payments for shares redeemed .......... (28,138,896) (31,715,452)
----------------------------
DECREASE IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS ..... (1,108,609) (2,117,982)
----------------------------
CLASS S
Proceeds from shares sold ............. 66,371,877 60,088,784
Reinvested distributions .............. 36,737 24,213
Payments for shares redeemed .......... (68,714,740) (41,426,045)
----------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS S SHARE TRANSACTIONS ..... (2,306,126) 18,686,952
----------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,423,404) 16,534,968
NET ASSETS
Beginning of year ..................... 40,067,100 23,532,132
----------------------------
End of year ........................... $ 36,643,696 $ 40,067,100
============================
UNDISTRIBUTED NET INVESTMENT INCOME ... $ 1,243 $ 270
============================
See accompanying notes to financial statements.
16
CALIFORNIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
-------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year ...... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------------------------
Net investment income ..... 0.003 0.006 0.012 0.028 0.027
-------------------------------------------------------------------------------
Net realized gains (losses)
on investments ........... (0.000)(A) 0.000(A) 0.000(A) -- --
-------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income .... (0.003) (0.006) (0.012) (0.028) (0.027)
Distributions from net
realized gains ....... (0.000)(A) -- -- -- --
-------------------------------------------------------------------------------
Total distributions ....... (0.003) (0.006) (0.012) (0.028) (0.027)
-------------------------------------------------------------------------------
Net asset value at end of
year .................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===============================================================================
Total return .............. 0.27% 0.65% 1.17% 2.84% 2.75%
===============================================================================
Net assets at end of year
(000's) ................. $ 59,658 $ 70,345 $ 84,406 $ 69,485 $ 62,900
===============================================================================
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 .................. 0.27% 0.64% 1.13% 2.84% 2.72%
(A) Amount rounds to less than $0.001.
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,
-------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year ....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------------------------
Net investment income ..... 0.004 0.008 0.017 0.033 0.030
-------------------------------------------------------------------------------
Net realized gains (losses)
on investments .......... (0.000)(A) 0.000(A) (0.000)(A) -- --
-------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income .... (0.004) (0.008) (0.017) (0.033) (0.030)
Distributions from net
realized gains ....... (0.000)(A) -- -- -- --
-------------------------------------------------------------------------------
Total distributions ....... (0.004) (0.008) (0.017) (0.033) (0.030)
-------------------------------------------------------------------------------
Net asset value at end of
year .................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===============================================================================
Total return .............. 0.36% 0.76% 1.66% 3.30% 3.05%
===============================================================================
Net assets at end of year
(000's) ................. $ 29,385 $ 29,657 $ 18,128 $ 16,690 $ 18,244
===============================================================================
Ratio of net expenses to
average net assets ...... 0.75% 0.69% 0.65% 0.65% 0.73%
Ratio of net investment
income to average
net assets ............. 0.35% 0.77% 1.64% 3.26% 2.98%
</table>
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements. 17
OHIO INSURED TAX-FREE FUND - CLASS A
FINANCIAL HIGHLIGHTS
======================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
-------------------------------------------------------------------
2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year............. $ 12.36 $ 11.94 $ 11.89 $ 11.45 $ 11.74
-------------------------------------------------------------------
Income from investment
operations:
Net investment income ....... 0.48 0.49 0.53 0.56 0.58
Net realized and unrealized
gains (losses) on investments (0.50) 0.49 0.07 0.44 (0.29)
-------------------------------------------------------------------
Total from investment
operations................... (0.02) 0.98 0.60 1.00 0.29
-------------------------------------------------------------------
Less distributions:
Dividends from net
investment income ......... (0.48) (0.49) (0.53) (0.56) (0.58)
Distributions from net
realized gains ............ (0.21) (0.07) (0.02) -- --
-------------------------------------------------------------------
Total distributions ............ (0.69) (0.56) (0.55) (0.56) (0.58)
-------------------------------------------------------------------
Capital contribution ........... 0.03 -- -- -- --
-------------------------------------------------------------------
Net asset value at end of year.. $ 11.68 $ 12.36 $ 11.94 $ 11.89 $ 11.45
===================================================================
Total return(A) ................ 0.04%(B) 8.43% 5.15% 8.88% 2.60%
===================================================================
Net assets at end of
year (000's) ................ $ 77,837 $ 59,683 $ 54,348 $ 54,791 $ 59,600
===================================================================
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 . 3.94% 4.03% 4.47% 4.77% 5.08%
Portfolio turnover rate ........ 36% 24% 28% 20% 66%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Total return would have been (0.21%) without the capital contribution made
by the Adviser (Note 4).
See accompanying notes to financial statements.
18
OHIO INSURED TAX-FREE FUND - CLASS B
FINANCIAL HIGHLIGHTS
=======================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ---------------------------------------------------------------------------------------
PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
MAY 21, JUNE 30, JUNE 30, JUNE 30,
2004(B) 2003 2002 2001(A)
- ---------------------------------------------------------------------------------------
Net asset value at beginning
of period ............................. $ 12.40 $ 11.95 $ 11.88 $ 11.76
-------------------------------------------
Income (loss) from investment operations:
Net investment income ................. 0.35 0.40 0.46 0.11
Net realized and unrealized
gains (losses) on investments ........ (0.61) 0.52 0.09 0.12
-------------------------------------------
Total from investment operations ........ (0.26) 0.92 0.55 0.23
-------------------------------------------
Less distributions:
Dividends from net investment
income ................................ (0.35) (0.40) (0.46) (0.11)
Distributions from net
realized gains ........................ (0.21) (0.07) (0.02) --
-------------------------------------------
Total distributions ..................... (0.56) (0.47) (0.48) (0.11)
-------------------------------------------
Net asset value at end
of period ............................. $ 11.58 $ 12.40 $ 11.95 $ 11.88
===========================================
Total return(C) ......................... (2.17%)(D) 7.89% 4.72% 1.98%(D)
===========================================
Net assets at end of period (000's) ..... $ 425 $ 308 $ 161 $ 40
===========================================
Ratio of net expenses to
average net assets .................... 1.50% 1.50% 1.50% 0.50%(E)
Ratio of net investment
income to average net assets .......... 3.24% 3.26% 3.69% 1.40%(E)
Portfolio turnover rate ................. 36% 24% 28% 20%(E)
(A) Represents the period from the initial public offering of shares (May 1,
2001) through June 30, 2001.
(B) On May 21, 2004, Class B shares were merged into Class A shares in
connection with an Agreement and Plan of Reorganization approved by
shareholders (see Note 6).
(C) Total returns shown exclude the effect of applicable sales loads.
(D) Not annualized.
(E) Annualized.
See accompanying notes to financial statements.
19
OHIO INSURED TAX-FREE FUND - CLASS C
FINANCIAL HIGHLIGHTS
===================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------
Net asset value at
beginning of year .............. $ 12.41 $ 11.96 $ 11.89 $ 11.44 $ 11.74
----------------------------------------------------------------
Income from investment
operations:
Net investment income ......... 0.39 0.40 0.44 0.47 0.49
Net realized and unrealized
gains (losses) on investments (0.51) 0.52 0.09 0.45 (0.30)
----------------------------------------------------------------
Total from investment
operations .................... (0.12) 0.92 0.53 0.92 0.19
----------------------------------------------------------------
Less distributions:
Dividends from net
investment income .......... (0.39) (0.40) (0.44) (0.47) (0.49)
Distributions from
net realized gains .......... (0.21) (0.07) (0.02) -- --
----------------------------------------------------------------
Total distributions ............. (0.60) (0.47) (0.46) (0.47) (0.49)
----------------------------------------------------------------
Net asset value at end of
year .......................... $ 11.69 $ 12.41 $ 11.96 $ 11.89 $ 11.44
================================================================
Total return(A) ................. (1.03%) 7.89% 4.54% 8.15% 1.75%
================================================================
Net assets at end of year
(000's) ......................... $ 9,862 $ 7,388 $ 4,910 $ 4,526 $ 3,585
================================================================
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 .. 3.19% 3.27% 3.72% 4.00% 4.42%
Portfolio turnover rate ......... 36% 24% 28% 20% 66%
</table>
(A) Total returns shown exclude the effect of applicable sales loads.
See accompanying notes to financial statements.
20
OHIO TAX-FREE MONEY MARKET FUND - RETAIL
FINANCIAL HIGHLIGHTS
==============================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
-----------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-----------------------------------------------------------------------------------
Net investment income .. 0.004 0.008 0.015 0.033 0.031
-----------------------------------------------------------------------------------
Net realized gains
(losses) on investments 0.000(A) 0.000(A) (0.000)(A) -- --
-----------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income .. (0.004) (0.008) (0.015) (0.033) (0.031)
Distributions from net
realized gains ...... (0.000)(A) -- -- -- --
-----------------------------------------------------------------------------------
Total distributions .... (0.004) (0.008) (0.015) (0.033) (0.031)
-----------------------------------------------------------------------------------
Net asset value at end
of year ............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===================================================================================
Total return ........... 0.35% 0.78% 1.47% 3.31% 3.09%
===================================================================================
Net assets at end of
year (000's) ......... $ 165,145 $ 155,810 $ 211,083 $ 211,564 $ 214,561
===================================================================================
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 ......... 0.35% 0.79% 1.46% 3.29% 3.04%
(A) Amount rounds to less than $0.001.
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,
-----------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-----------------------------------------------------------------------------------
Net investment income .. 0.006 0.010 0.017 0.035 0.033
-----------------------------------------------------------------------------------
Net realized gains
(losses) on investments 0.000(A) 0.000(A) (0.000)(A) -- --
-----------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income .. (0.006) (0.010) (0.017) (0.035) (0.033)
Distributions from net
realized gains .... (0.000)(A) -- -- -- --
-----------------------------------------------------------------------------------
Total distributions .... (0.006) (0.010) (0.017) (0.035) (0.033)
-----------------------------------------------------------------------------------
Net asset value at end
of year ............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===================================================================================
Total return ........... 0.60% 1.03% 1.72% 3.58% 3.35%
===================================================================================
Net assets at end of
year (000's) ......... $ 174,739 $ 266,120 $ 210,679 $ 185,381 $ 132,889
===================================================================================
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 0.59% 1.02% 1.69% 3.52% 3.25%
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements. 21
TAX-FREE MONEY MARKET FUND - CLASS A
FINANCIAL HIGHLIGHTS
=============================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
-----------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-----------------------------------------------------------------------------------
Net investment income .. 0.005 0.008 0.017 0.034 0.032
-----------------------------------------------------------------------------------
Net realized gains on
investments .......... 0.000(A) 0.000(A) 0.000(A) -- --
-----------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income . (0.005) (0.008) (0.017) (0.034) (0.032)
Distributions from net
realized gains .... (0.000)(A) -- -- -- --
-----------------------------------------------------------------------------------
Total distributions .... (0.005) (0.008) (0.017) (0.034) (0.032)
-----------------------------------------------------------------------------------
Net asset value at end of
year ................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===================================================================================
Total return ........... 0.50% 0.99% 1.73% 3.45% 3.22%
===================================================================================
Net assets at end of year
(000's) ................ $ 20,263 $ 21,375 $ 23,532 $ 22,409 $ 25,194
===================================================================================
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 ............... 0.48% 0.79% 1.71% 3.42% 3.15%
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements.
TAX-FREE MONEY MARKET FUND - CLASS S
FINANCIAL HIGHLIGHTS
=================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
JUNE 30, JUNE 30,
2004 2003(A)
- ---------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period ............. $ 1.000 $ 1.000
---------------------------------------------------------
Net investment income .............................. 0.002 0.001
---------------------------------------------------------
Net realized gains on investments .................. 0.000(B) 0.000(B)
---------------------------------------------------------
Less distributions:
Dividends from net investment income ............. (0.002) (0.001)
Distributions from net realized gains ............ (0.000)(B) --
---------------------------------------------------------
Total distributions ................................ (0.002) (0.001)
---------------------------------------------------------
Net asset value at end of period ................... $ 1.000 $ 1.000
=========================================================
Total return ....................................... 0.25% 0.32%(C)
=========================================================
Net assets at end of period (000's) ................ $ 16,381 $ 18,692
=========================================================
Ratio of net expenses to average net assets ........ 1.15% 1.15%(C)
Ratio of net investment income to average net assets 0.22% 0.31%(C)
(A) Represents the period from commencement of operations (February 3, 2003)
through June 30, 2003.
(B) Amount rounds to less than $0.001.
(C) Annualized.
See accompanying notes to financial statements.
22
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
================================================================================
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 and
the Tax-Free Money Market Fund (individually, a Fund, and collectively, the
Funds) are each a separate series 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 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 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 Ohio Insured Tax-Free Fund offers two 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), and Class C shares (sold subject to a maximum
23
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
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 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 C shares bear the expenses of higher distribution fees, which
will cause 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 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 approved by the Board of Trustees.
Share valuation -- The net asset value per share of the California Tax-Free
Money Market Fund and the Florida 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 Money Market Fund is 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 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 is equal to the net asset value per share. The
maximum offering price of Class A shares of 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 C
shares of the Ohio Insured Tax-Free 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 Insured Tax-Free Fund, Ohio Tax-Free Money Market Fund, and
the Tax-Free Money Market Fund is equal to the net asset value per share.
However, Class C shares of the Ohio Insured Tax-Free Fund are subject to a
contingent deferred sales load of 1.00% (if redeemed within a one-year period
from the date of purchase) of the original purchase price.
24
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
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.
Allocations -- Investment income earned by a 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 that 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 net assets in relation to total net assets of
all Funds in the Trust or another reasonable measure.
Estimates -- The preparation of financial statements in conformity with U.S.
generally accepted accounting principles 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.
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.
25
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
==================================================================================================
The tax character of distributions paid for the years ended June 30, 2004 and 2003 was as follows:
- ----------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FLORIDA TAX-FREE
MONEY MARKET MONEY MARKET OHIO INSURED
FUND FUND TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------
2004 2003 2004 2003 2004 2003
From tax exempt income $ 190,813 $ 491,486 $ 110,513 $ 198,377 $2,585,019 $2,548,395
From ordinary income . -- 5,753 -- -- 49,199 16,402
From long-term capital
gains ................ 251 -- -- -- 1,032,056 348,704
---------------------------------------------------------------------------
$ 191,064 $ 497,239 $ 110,513 $ 198,377 $3,666,274 $2,913,501
===========================================================================
<caption>
- ----------------------------------------------------------------------------------------------------
OHIO TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- ----------------------------------------------------------------------------------------------------
2004 2003 2004 2003
From tax exempt income ......................... $1,939,469 $3,785,390 $ 120,215 $ 205,531
From ordinary income ........................... 10,212 -- 9,655 673
From long-term capital gains.................... 1,198 -- -- 42,279
-------------------------------------------------
$1,950,879 $3,785,390 $ 129,870 $ 248,483
=================================================
- ----------------------------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of June 30, 2004:
- ----------------------------------------------------------------------------------------------------
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE OHIO-INSURED
MONEY MARKET MONEY MARKET TAX-FREE
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------
Cost of portfolio investments .................. $ 59,593,130 $ 29,423,749 $ 86,604,327
=================================================
Gross unrealized appreciation .................. $ -- $ -- $ 3,890,081
Gross unrealized depreciation .................. -- -- (413,577)
-------------------------------------------------
Net unrealized appreciation/depreciation -- -- 3,476,504
Capital loss carryforward ...................... -- (108) --
Post-October losses ............................ (3,544) (5,422) --
Undistributed tax exempt income ................ 487 7,069 83,974
Other temporary differences .................... (103) (7,069) (83,974)
=================================================
Accumulated earnings (deficit) .... $ (3,160) $ (5,530) $ 3,476,504
=================================================
- ----------------------------------------------------------------------------------------------------
26
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
====================================================================================================
OHIO
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- ----------------------------------------------------------------------------------------------------
Cost of portfolio investments ................................. $341,376,338 $ 36,470,594
==============================
Undistributed tax exempt income ............................... $ 100,828 $ 1,626
Undistributed long-term gains ................................. 16,293 --
Other temporary differences ................................... (100,828) (383)
==============================
Accumulated earnings ....................................... $ 16,293 $ 1,243
==============================
- ----------------------------------------------------------------------------------------------------
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 carryforward as of June 30, 2004 in the table above expires as follows:
- ----------------------------------------------------------------------------------------------------
AMOUNT EXPIRATION DATE
- ----------------------------------------------------------------------------------------------------
<caption>
Florida Tax-Free Money Fund ................................... $ 108 June 30, 2010
- ----------------------------------------------------------------------------------------------------
The capital loss carryforward may be utilized in future years to offset net realized capital gains,
if any, prior to distributing such gains to shareholders.
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 a tax
return of capital distribution and a reclass of distributions resulted in the following
reclassifications:
- ----------------------------------------------------------------------------------------------------
ACCUMULATED
ACCUMULATED NET REALIZED GAINS
NET INVESTMENT FROM SECURITY PAID IN
FUND NAME INCOME TRANSACTIONS CAPITAL
- ----------------------------------------------------------------------------------------------------
Ohio Insured Tax-Free Fund ..................... $ -- $ 29,341 $ (29,341)
Tax-Free Money Market Fund ..................... $ 13 $ (13) $ --
- ----------------------------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) were as follows for the year ended
June 30, 2004:
- ----------------------------------------------------------------------------------------------------
OHIO INSURED
TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------
Purchases of investment securities ............................................... $ 21,959,458
Proceeds from sales and maturities of investment securities ...................... $ 22,221,659
- ----------------------------------------------------------------------------------------------------
27
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
4. TRANSACTIONS WITH AFFILIATES
The President and certain other officers of the Trust are also officers of
Touchstone Advisers, Inc. (the Adviser), the Trust's investment adviser,
Touchstone Securities, Inc. (the Underwriter), the Trust's principal
underwriter, or Integrated Fund Services, Inc. (Integrated), the Trust's
administrator, transfer agent and accounting services agent. The Adviser, 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 Adviser under the terms of a
Management Agreement. Under the Management Agreement, each Fund pays the Adviser
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.
The Trust and the Adviser 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%; Ohio Insured Tax-Free Fund - 0.75% for Class A shares and 1.50% for
Class C shares; Ohio Tax-Free Money Market Fund - 0.75% for Retail shares and
0.50% for Institutional 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, 2005.
Pursuant to this expense limitation agreement, during the year ended June 30,
2004, the Adviser waived the following fees:
California Tax-Free Money Market Fund $ 183,544
Florida Tax-Free Money Market Fund $ 91,903
Ohio Insured Tax-Free Fund $ 199,133
Ohio Tax-Free Money Market Fund $ 243,654
Tax-Free Money Market Fund $ 132,997
During the year ended June 30, 2004, the Adviser made a capital contribution to
the Ohio Insured Tax-Free Fund Class A shares totalling $150,000.
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 based on the Fund's net assets.
TRANSFER AGENT AGREEMENT
The Trust has entered into a Transfer Agency Agreement with Integrated. 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
28
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
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 $3,202 from underwriting and broker commissions on the sale of Class A
shares of the Ohio Insured Tax-Free Fund during the year ended June 30, 2004. In
addition, the Underwriter collected $640 of contingent deferred sales loads on
the redemption of Class C shares of the Ohio Insured Tax-Free Fund.
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
and Class A shares or Retail shares of all other Funds may directly incur or
reimburse the Adviser 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
Ohio Insured Tax-Free Fund may directly incur or reimburse the Adviser 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
Adviser 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.
29
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 are the result of the following capital share
transactions:
- ------------------------------------------------------------------------------------
OHIO INSURED
TAX-FREE FUND
- ------------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
JUNE 30, JUNE 30,
2004 2003
- ------------------------------------------------------------------------------------
CLASS A
Shares sold ........................................... 3,651,817 13,664,501
Shares issued in connection with acquisition (Note 6) . 2,336,257 --
Shares reinvested ..................................... 178,114 148,905
Shares redeemed ....................................... (4,330,774) (13,536,660)
-------------------------
Net increase in shares outstanding .................... 1,835,414 276,746
Shares outstanding, beginning of year ................. 4,827,306 4,550,560
-------------------------
Shares outstanding, end of year ....................... 6,662,720 4,827,306
=========================
CLASS B
Shares sold ........................................... 12,695 11,165
Shares reinvested ..................................... 917 595
Shares redeemed ....................................... (1,763) (338)
Shares redeemed in connection with acquisition (Note 6) (36,723) --
-------------------------
Net increase (decrease) in shares outstanding ......... (24,874) 11,422
Shares outstanding, beginning of year ................. 24,874 13,452
-------------------------
Shares outstanding, end of year ....................... -- 24,874
=========================
CLASS C
Shares sold ........................................... 85,092 241,986
Shares issued in connection with acquisition (Note 6) . 336,184 --
Shares reinvested ..................................... 21,222 14,132
Shares redeemed ....................................... (194,697) (70,921)
-------------------------
Net increase in shares outstanding .................... 247,801 185,197
Shares outstanding, beginning of year ................. 595,543 410,346
-------------------------
Shares outstanding, end of year ....................... 843,344 595,543
=========================
- ------------------------------------------------------------------------------------
30
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
6. ACQUISITION
On May 21, 2004, a Special Meeting of Shareholders of the Touchstone Tax-Free
Intermediate Term Fund was held to approve or disapprove an Agreement and Plan
of Reorganization providing for the acquisition of all of the assets and
liabilities of the Touchstone Tax-Free Intermediate Term Fund Class A, Class B
and Class C Shares, a series of the Trust, in exchange for shares of the
Touchstone Ohio Insured Tax-Free Fund Class A, Class A and Class C Shares,
respectively.
The acquisition was approved as follows:
NUMBER OF VOTES
-----------------------------
FOR AGAINST ABSTAIN
--------- ------- -------
Touchstone Tax-Free Intermediate Term Fund 1,538,848 116,172 105,067
The following is a summary of shares outstanding, net assets, net asset value
per share and unrealized appreciation (depreciation) immediately before and
after the reorganization:
BEFORE REORGANIZATION AFTER REORGANIZATION
--------------------------------------------------------------------- -----------------------
TOUCHSTONE TOUCHSTONE TOUCHSTONE
TAX-FREE INTERMEDIATE OHIO INSURED OHIO INSURED
TERM FUND TAX-FREE FUND TAX-FREE FUND
--------------------------------- ---------------------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS C
Shares ................ 2,395,217 46,318 357,175 4,555,552 36,723 518,125 6,890,345 854,017
Net Assets ............ $26,081,422 $504,627 $3,890,674 $52,718,330 $425,073 $ 6,000,365 $79,729,452 $9,891,039
Net Asset Value ....... $ 10.89 $ 10.89 $ 10.89 $ 11.57 $ 11.58 $ 11.58 $ 11.57 $ 11.58
Unrealized Appreciation
(Depreciation) ........ $ 491,346 $(27,709) $ (117,535) $ 2,627,265 $(16,255) $ (358,251) $ 3,074,647 $ (475,786)
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Funds enter into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Funds' maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Funds
that have not yet occurred. However, based on experience, the Funds expect the
risk of loss to be remote.
31
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
8. PORTFOLIO COMPOSITION (UNAUDITED)
As of June 30, 2004, 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 80.7% 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, 2004, 29.8% of the
portfolio securities of the Tax-Free Money Market Fund were concentrated in the
State of Ohio and 6.7% in the State of Kentucky.
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,
2004, 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.
32
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
As of June 30, 2004, 82.4% 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. Four private insurers individually insure more than 10% of the
Ohio Insured Tax-Free Fund's portfolio securities and collectively insure 80.12%
of its portfolio securities.
The concentration of investments for each Fund as of June 30, 2004, classified
by revenue source, was as follows:
- --------------------------------------------------------------------------------
CALIFORNIA FLORIDA OHIO
TAX-FREE TAX-FREE OHIO TAX-FREE TAX-FREE
MONEY MONEY INSURED MONEY MONEY
MARKET MARKET TAX-FREE MARKET MARKET
FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------
General Obligations ......... 3.3% 4.4% 56.4% 7.0% 17.5%
-------------------------------------------
Revenue Bonds:
Industrial Development/
Pollution Control ....... 17.0% 3.9% -- 9.9% 19.9%
Hospital/Health Care ...... 3.4% 10.8% 14.7% 22.2% 16.2%
Utilities ................. 12.8% 10.4% 11.1% 16.3% 12.0%
Education ................. 10.6% 14.7% 5.6% 9.4% 8.6%
Housing/Mortgage .......... 30.2% 39.7% 3.1% 8.0% 5.6%
Economic Development ...... 1.5% 2.3% -- 8.6% 6.3%
Public Facilities ......... 15.6% 4.7% -- 5.4% 0.9%
Transportation ............ 2.7% 0.7% 3.5% 4.6% 0.3%
Special Tax ............... 2.9% -- -- 6.2% 0.3%
Miscellaneous ............. -- 8.4% 5.6% 2.4% 12.4%
------------------------------------------
Total Investments ........... 100.0% 100.0% 100.0% 100.0% 100.0%
===========================================
- --------------------------------------------------------------------------------
33
CALIFORNIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 16.0% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 200,000 California Statewide CDA COP (Huntington Mem. Hosp.) ........ 5.125 07/01/04 $ 200,000
200,000 Los Angeles, CA, USD UT GO .................................. 4.000 07/01/04 200,000
370,000 Northern California Pwr. Agy. Rev. (Geothermal Proj. No.3)... 5.000 07/01/04 370,000
255,000 Placer Co., CA, Wtr. Agy. Rev. COP .......................... 2.000 07/01/04 255,000
175,000 Puerto Rico Commonwealth Prerefunded @ 101.5 ................ 6.450 07/01/04 177,625
100,000 Puerto Rico Elec. Pwr. Auth. Rev ............................ 5.000 07/01/04 100,000
110,000 Puerto Rico Elec. Pwr. Auth. Rev. Prerefunded @ 102 ......... 6.125 07/01/04 112,200
1,000,000 Sacramento, CA, Cogeneration Auth. Rev.
(Procter & Gamble Proj.) .................................... 7.000 07/01/04 1,000,001
140,000 Sacramento, CA, USD UT GO ................................... 7.000 07/01/04 140,000
300,000 San Diego, CA, USD COP (Equip. Acquisition Proj.) ........... 4.650 07/01/04 300,000
350,000 San Francisco, CA, Bay Area Rapid Trans. Dist. Sales Tax Rev. 4.000 07/01/04 350,000
200,000 San Francisco, CA, City & Co. Redev. Agy. Hotel Tax Rev ..... 6.750 07/01/04 204,000
100,000 Bakersfield, CA, CSD GO ..................................... 5.000 08/01/04 100,317
100,000 California St. UT GO ........................................ 5.400 08/01/04 100,368
165,000 Healdsburg, CA, UT GO ....................................... 2.500 08/01/04 165,209
500,000 Oakland-Alameda Co., CA, USD UT GO .......................... 5.000 08/01/04 501,662
500,000 Pleasanton, CA, USD GO ...................................... 4.500 08/01/04 501,286
100,000 Puerto Rico Muni. Fin. Agy .................................. 5.000 08/01/04 100,335
200,000 San Diego Co., CA, COP Prerefunded @ 102 .................... 6.750 08/01/04 204,953
240,000 San Jose, CA, Redev. Agy. Tax Allocation .................... 4.750 08/01/04 240,762
190,000 Santa Margarita/Dana Point, CA, Auth. Rev., Prerefunded @ 102 5.750 08/01/04 194,515
130,000 Sunnyvale, CA, Redev. Agy. Tax Allocation (Central Core
Proj.) ...................................................... 2.000 08/01/04 130,106
525,000 Orange Co., CA, Trans. Auth. Toll Rd. Rev ................... 2.000 08/15/04 525,615
260,000 San Diego Co., CA, Ed. Fac. Auth. No. 1 Lease Rev .......... 2.000 08/15/04 260,304
140,000 Dinuba, CA, Redev. Agy. Tax Allocation (Merged City Redev.
Proj.) ...................................................... 2.000 09/01/04 140,234
155,000 Los Angeles, CA, Muni. Impt. Corp.
Lease Rev. (Police Emergency) ............................... 3.750 09/01/04 155,715
200,000 Moulton-Niguel, CA, Wtr. Dist. GO ........................... 2.000 09/01/04 200,327
150,000 San Diego, CA, Redev. Agy. Tax Allocation (Centre City) ..... 2.500 09/01/04 150,339
250,000 Coalinga, CA, Pub. Fin. Auth. Loc. Oblig. Rev ............... 5.250 09/15/04 252,131
200,000 California Ed. Facs. Auth. Rev. (Univ. of San Francisco) .... 5.000 10/01/04 201,953
100,000 California St. Pub. Wrks. Brd. (UCLA Replacement Hosp.) ..... 2.200 10/01/04 100,249
250,000 California St. UT GO ........................................ 5.000 10/01/04 252,442
100,000 Contra Costa, CA, Wtr. Dist. Rev. Prerefunded @ 102 ......... 5.700 10/01/04 103,172
100,000 Inglewood, CA, USD 1998 Ser. B .............................. 2.000 10/01/04 100,240
145,000 Lodi, CA, COP (1996 Pub. Impt Fin. Proj.) ................... 5.100 10/01/04 146,460
550,000 Los Angeles Co., CA, Pub. Wrks. Fin. Auth.
Rev. Prerefunded @ 102 ...................................... 6.000 10/01/04 567,692
100,000 Los Angeles, CA, USD COP .................................... 4.000 10/01/04 100,743
150,000 Culver City, CA, Redev. Fin. Auth. Rev ...................... 4.500 11/01/04 151,005
100,000 Huntington Beach, CA, Pub. Fin. Auth. Rev. (Pub. Facs. Proj.) 5.000 12/15/04 101,519
300,000 San Jose, CA, Arpt. Rev .................................... 4.250 03/01/05 306,163
100,000 San Francisco, CA, City & Co. Arpts ......................... 4.000 05/01/05 102,065
-----------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ......... $ 9,566,707
-----------
34
CALIFORNIA TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 75.2% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,500,000 Alameda Co., CA, IDA Rev. (PJ's Lumber, Inc. Proj.) ......... 1.180 07/01/04 $ 1,500,000
1,000,000 Berkeley, CA, Rev. (Berkeley YMCA) .......................... 1.060 07/01/04 1,000,000
300,000 Califonia HFA Rev. MFH ...................................... 1.040 07/01/04 300,000
2,995,000 California HFA MFH Rev ...................................... 1.090 07/01/04 2,995,000
240,000 California Infrastructure & Econ. Dev. IDR
(Metrotile Mfg. Proj.) ...................................... 1.350 07/01/04 240,000
100,000 California Statewide CDA IDR (American Modular Sys. Proj.) .. 1.180 07/01/04 100,000
2,300,000 El Monte, CA, COP (Cmnty. Impt. Proj.) ...................... 1.040 07/01/04 2,300,000
1,500,000 Emeryville, CA, Redev. Agy. MFA Rev. (Bay Street Apts.) ..... 1.090 07/01/04 1,500,000
1,400,000 Hanford, CA, Swr. Rev ....................................... 1.380 07/01/04 1,400,000
1,000,000 Los Angeles, CA, Cmnty. Redev. Agy. MFH Rev. (Views at 270) . 1.140 07/01/04 1,000,000
400,000 Los Angeles, CA, Wtr. & Pwr. Rev ............................ 1.060 07/01/04 400,000
3,000,000 Los Angeles, CA, Wtr. & Pwr. Rev ............................ 1.080 07/01/04 3,000,000
1,160,000 Oakland, CA, Liquidity Fac. Rev. (Assoc. of Bay Area Govts.) 1.110 07/01/04 1,160,000
1,450,000 Riverside Co., CA, IDA (Advanced Business Graphics) Ser. A .. 1.130 07/01/04 1,450,000
1,300,000 Riverside Co., CA, IDA (Advanced Business Graphics) Ser. B .. 1.130 07/01/04 1,300,000
400,000 Sacramento Co., CA, MFH Rev ................................. 1.060 07/01/04 400,000
2,700,000 Sacramento, CA, USD COP ..................................... 1.060 07/01/04 2,700,000
800,000 San Bernardino Co., CA, Capt. Impt. COP ..................... 1.070 07/01/04 800,000
1,000,000 San Francisco, CA, City & Co. Redev. Agy. (Derek Silva
Cmnty.) ..................................................... 1.140 07/01/04 1,000,000
1,250,000 Sausalito, CA, MFH Rev. (Rotary Village Sr. Hsg.) ........... 1.090 07/01/04 1,250,000
1,810,000 Sweetwater, CA, USD COP ..................................... 1.060 07/01/04 1,810,000
2,000,000 ABAG Fin. Auth. Nonprofit Corps. MFH Rev. (Vintage Chateau) . 1.120 07/07/04 2,000,000
350,000 California Ed. Fac. Auth. Rev. (Mt. St. Mary's College) ..... 1.110 07/07/04 350,000
1,000,000 California Health Fac. Auth. (Catholic Health Care) ......... 1.090 07/07/04 1,000,000
325,000 California Infrastructure & Econ. Dev. (Independent Sys.
Oper.) ...................................................... 1.060 07/07/04 325,000
1,400,000 California PCR Fin. Auth. Sld. Wst. Disp.
(Mission Trail Wst. Sys.) ................................... 1.190 07/07/04 1,400,000
970,000 Huntington Park, CA, Pub. Fin. Auth. Lease Rev .............. 1.200 07/07/04 970,000
2,060,000 Long Beach, CA, Brd. Fin. Auth. (Long Beach Museum of Art) .. 1.040 07/07/04 2,060,000
1,600,000 Modesto, CA, MFH Rev. (Westdale Commons) .................... 1.000 07/07/04 1,600,000
400,000 Natomas, CA, USD COP ........................................ 2.500 07/07/04 401,002
2,000,000 San Francisco, CA, City & Co. Redev. Agy. (Bayside Village
Proj.) ...................................................... 1.080 07/07/04 2,000,000
1,600,000 Vacaville, CA, IDA IDR (Leggett & Platt, Inc.) .............. 1.100 07/07/04 1,600,000
400,000 California PCR Fin. Auth. Rev. (Southdown, Inc.) Ser. A ..... 1.100 07/15/04 400,000
3,100,000 California PCR Fin. Auth. Rev. (Southdown, Inc.) Ser. B ..... 1.100 07/15/04 3,100,001
-----------
TOTAL FLOATING & VARIABLE DEMAND NOTES ...................... $44,811,003
-----------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 4.7% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 600,000 Oakland, CA, Joint Pwr. Fin. Auth. Rev.
(Fruitvale Transit Village) ................................. 3.125 07/01/04 $ 600,000
100,000 CSUCI, CA, Auth. Rev. (Rental Hsg.) ......................... 3.375 07/07/04 100,169
615,000 California Statewide CDA MFH Rev. (Fountains Seacliff Apts.) 2.100 11/15/04 615,251
1,500,000 ABN AMRO Munitops Trust Cert. 2003-26 ...................... 1.100 05/12/05 1,500,000
-----------
TOTAL ADJUSTABLE RATE PUT BONDS ............................. $ 2,815,420
-----------
35
CALIFORNIA TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT COMMERCIAL PAPER -- 4.0% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,000,000 California Infras. Econ. Dev. Bank (Salvation Army) ......... 1.000 11/17/04 $ 1,000,000
1,400,000 California Infras. Econ. Dev. Bank (Salvation Army) ......... 1.020 11/17/04 1,400,000
-----------
TOTAL COMMERCIAL PAPER ...................................... $2,400,000
-----------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Amortized Cost $59,593,130) ................................ $59,593,130
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% ............... 64,854
-----------
NET ASSETS -- 100.0% ........................................ $59,657,984
===========
See accompanying notes to portfolio of investments and notes to financial statements.
</table>
36
FLORIDA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 23.1% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 250,000 AZ, Trans. Brd. Excise Tax Rev .............................. 6.500 07/01/04 $ 250,000
100,000 Florida St. Brd. Ed. Lottery Rev ............................ 4.100 07/01/04 100,000
150,000 Florida St. Brd. Ed. Lottery Rev ............................ 5.000 07/01/04 150,000
100,000 Florida St. Brd. Fin. Dept. General Svcs. Rev ............... 5.000 07/01/04 100,000
375,000 Florida St. Brd. Fin. Dept. General Svcs.
Rev. Escrowed to Call @ 101 ................................. 4.900 07/01/04 378,750
200,000 Florida St. Dept. of Trans. Tpk. Auth. Rev ................. 5.500 07/01/04 200,000
100,000 Florida St. UT GO (Dade Co. Rd.) Prerefunded @101 ........... 5.000 07/01/04 101,000
250,000 Maricopa Co., AZ, GO ........................................ 4.000 07/01/04 250,000
100,000 New Jersey Health Care (Monmouth Med. Ctr.)
Prerefunded @ 102 ........................................... 6.250 07/01/04 102,000
150,000 Seminole Co., FL, Sch. Brd. COP Prerefunded @ 102 ........... 5.900 07/01/04 153,000
150,000 Seminole Co., FL, Sch. Brd. COP Prerefunded @ 102 ........... 6.500 07/01/04 151,500
250,000 Dade Co., FL, Sch. Dist. GO ................................. 6.000 07/15/04 250,466
170,000 Duval Co., FL, Sch. Dist .................................... 6.125 08/01/04 170,710
1,080,000 Johnson Co., KY, Justice Ctr. BANS .......................... 1.300 08/01/04 1,080,000
100,000 Illinois Health Facs. Auth. Rev ............................. 5.250 08/15/04 100,491
160,000 Dade Co., FL, GO ........................................... 5.750 10/01/04 161,851
425,000 Florida St. Hsg. Rev. (Univ. of Central Florida) ............ 2.500 10/01/04 426,414
100,000 Kissimmee, FL, Util. Auth. Elec. Sys. Rev ................... 4.450 10/01/04 100,808
300,000 Okaloosa Co., FL, Gas Dist. Rev., Prerefunded @ 102 ......... 6.875 10/01/04 310,221
150,000 Orange Co., FL, Pub. Facs. Rev .............................. 5.350 10/01/04 151,595
175,000 Palm Beach Co., FL, Wtr. & Swr. Rev ......................... 2.000 10/01/04 175,363
165,000 South Dakota St. Univ. Rev. (Black Hills) ................... 2.000 10/01/04 165,329
925,000 Tohopekaliga, FL, Wtr. Auth. Util. Sys. Rev ................. 2.000 10/01/04 927,176
100,000 Davis Co., UT, Sch. Dist. GO Prerefunded @ 100 .............. 5.500 12/01/04 101,761
300,000 Houston, TX, Wtr. & Swr. Sys. Rev ........................... 5.500 12/01/04 305,446
210,000 Lynn Haven, FL, Cap. Impt. Rev .............................. 2.000 12/01/04 210,696
100,000 Tacoma, WA, Swr. Rev ........................................ 5.600 12/01/04 101,781
100,000 Broward Co., FL, Sch. Dist. GO .............................. 5.000 02/15/05 102,391
-----------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ......... $ 6,778,749
-----------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 66.9% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 480,000 Arvada, CO, Wtr. Util. Rev .................................. 1.250 07/01/04 $ 480,000
900,000 Broward Co., FL, HFA MFH Rev. (Wtrs. Edge Proj.) ............ 1.080 07/01/04 900,000
235,000 Dade Co., FL, IDA Rev. (Spectrum Programs, Inc. Proj.) ...... 1.130 07/01/04 235,000
1,375,000 Duval Co., FL, HFA MFH Rev. (Glades Apts. Proj.) ............ 1.080 07/01/04 1,375,000
950,000 Duval Co., FL, HFA MFH Rev. (Sunbeam Rd. Proj.) ............. 1.090 07/01/04 950,000
350,000 Gulf Breeze, FL, Rev. (FL Muni Bond Fd.) .................... 1.100 07/01/04 350,000
120,000 Gulf Breeze, FL, Rev. (Loc. Govt. Loan Prog.) ............... 1.080 07/01/04 120,000
150,000 Jacksonville, FL, Health Rev. (River Garden Covers Proj.) ... 1.140 07/01/04 150,000
500,000 Lees Summit, MO, MFH Rev. Affordable Hsg. Acquisition ....... 1.420 07/01/04 500,000
300,000 Municipal Secs. Trust Ctfs. Ser. 2001-161 (Florida Brd. of Ed.) 1.120 07/01/04 300,000
1,000,000 Orange Co., FL, Sch. Brd. COP .............................. 1.060 07/01/04 1,000,000
1,400,000 Orlando & Orange Co., FL, Expwy. Auth. Rev .................. 1.060 07/01/04 1,400,000
37
FLORIDA TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 66.9% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 800,000 Palm Beach Co., FL, Rev. (Henry Morrison Flagler) ........... 1.070 07/01/04 $ 800,000
1,000,000 Palm Beach Co., FL, Rev. (Morse Oblig. Group)................ 1.110 07/01/04 1,000,000
270,000 San Jacinto, CA, USD COP..................................... 1.060 07/01/04 270,000
1,100,000 Sarasota Co., FL, Pub. Hosp. Brd. Rev. (Sarasota Mem. Hosp.) 1.140 07/01/04 1,100,000
400,000 Seminole Co., FL, IDA (Florida Living Nursing Ctr.).......... 1.280 07/01/04 400,000
500,000 Univ. Athletic Assoc. Cap. Impt. Rev. (Univ. of Florida
Stadium Proj.) .............................................. 1.140 07/01/04 500,000
200,000 Univ. of North Florida 1998 Parking Rev. Bonds .............. 1.110 07/01/04 200,000
1,205,000 Broward Co., FL, HFA MFH Rev. (Fisherman's Landing).......... 1.060 07/07/04 1,205,000
250,000 Broward Co., FL, HFA MFH Rev. (Jacaranda Village Apts.)...... 1.060 07/07/04 250,000
300,000 Broward Co., FL, HFA MFH Rev. (Margate Invts. Proj.)......... 1.060 07/07/04 300,000
1,115,000 Broward Co., FL, HFA MFH Rev. (Reflections Apts. Proj.)...... 1.060 07/07/04 1,115,000
500,000 Clay Co., FL, HFA MFH Rev. (Bluff Hsg.) Ser. A .............. 1.060 07/07/04 500,000
600,000 Clay Co., FL, HFA MFH Rev. (Bluff Hsg.) Ser. B .............. 1.060 07/07/04 600,000
765,000 Florida St. HFA MFH Rev. (Carlton Arms II Proj.) ............ 1.150 07/07/04 765,000
500,000 Jacksonville, FL, Cap. Proj. Rev ............................ 1.010 07/07/04 500,000
500,000 Lee Co., FL, IDR Ed. Fac. Rev. (Canterbury Sch. Proj.) ...... 1.080 07/07/04 500,000
605,000 Marion Co., FL, HFA Rev. (Paddock Apts.) .................... 1.060 07/07/04 605,000
500,000 Palm Beach Co., FL, Rev. (Jewish Cmnty. Campus Proj.) ....... 1.050 07/07/04 500,000
105,000 Pinellas Co., FL, Ed. Fac. Auth. Rev. (Canterbury Sch. of FL) 1.060 07/07/04 105,000
700,000 Voluisa Co., FL, HFA MFH Rev. (Anatole Apts.) ............... 1.060 07/07/04 700,000
-----------
TOTAL FLOATING & VARIABLE DEMAND NOTES ...................... $19,675,000
-----------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 10.1% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,150,000 Corpus Christi, TX, IDC EDR (Texas Air Invt. Company Proj.) . 1.300 08/01/04 $ 1,150,000
1,000,000 ABN AMRO Munitops Trust Cert. 2002-20 ....................... 1.250 08/18/04 1,000,000
820,000 Fort Thomas, KY, IDR (Carmel Manor, Inc. Proj.) ............. 1.300 10/01/04 820,000
-----------
TOTAL ADJUSTABLE RATE PUT BONDS ............................ $ 2,970,000
-----------
TOTAL INVESTMENT SECURITIES -- 100.1%
(Amortized Cost $29,423,749) ................................ $29,423,749
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ............. (38,259)
-----------
NET ASSETS -- 100.0% ....................................... $29,385,490
===========
See accompanying notes to portfolio of investments and notes to financial
statements.
38
OHIO INSURED TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30,2004
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 91.4% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 415,000 Toledo, OH, Swr. Sys. Rev., Prerefunded @ 102 ............... 6.350 11/15/04 $ 429,778
1,095,000 West Clermont, OH, LSD GO Prerefunded @ 102 ................. 6.900 12/01/05 1,193,638
530,000 Toledo, OH, GO .............................................. 6.000 12/01/06 574,875
299,624 Columbus, OH, Special Assessment GO ......................... 5.050 04/15/08 319,774
540,000 Ohio St. Revitalization Proj ............................... 5.000 10/01/08 582,347
500,000 West Clermont, OH, LSD GO .................................. 6.150 12/01/08 528,935
1,035,000 Reading, OH, Rev. (St. Mary's Ed. Institute) ................ 5.550 02/01/10 1,129,164
325,000 Columbus, OH, LT GO ........................................ 4.750 06/15/10 344,767
845,000 Cuyahoga Co., OH, Mtg. Rev. (West Tech. Apts. Proj.) ........ 5.100 09/20/10 882,636
590,000 Hubbard, OH, EVSD UT GO .................................... 5.400 12/01/10 653,006
1,000,000 Summit Co., OH, GO Prerefunded @ 101 ........................ 6.000 12/01/10 1,153,520
180,000 Cuyahoga Co., OH, Hosp. Rev. (Univ. Hosp.)
Escrowed to Maturity ....................................... 9.000 06/01/11 217,175
1,000,000 Lorain Co., OH, Hosp. Rev. (Catholic Health) ................ 5.625 10/01/11 1,093,790
275,000 Akron, OH, GO .............................................. 6.000 11/01/11 311,564
365,000 Bexley, OH, CSD GO ......................................... 7.125 12/01/11 447,151
1,000,000 Hamilton Co., OH, Swr. Sys. Rev ............................. 5.500 12/01/11 1,119,130
250,000 Westerville, OH, GO ......................................... 6.450 12/01/11 253,485
1,075,000 Franklin Co., OH, Hosp. Rev. Impt. (Childrens Hosp. Proj.) .. 5.500 05/01/12 1,182,135
275,000 Ohio St. Pub. Facs. Cmnty. Mental Health Cap. Facs .......... 5.200 06/01/12 293,222
1,000,000 Univ. of Bowling Green, OH, General Receipts Rev ............ 5.750 06/01/12 1,119,830
1,000,000 Ohio St. Bldg. Auth. (Adult Correctional Bldg.) ............. 5.500 10/01/12 1,101,460
680,000 Clermont Co., OH, GO ........................................ 4.000 12/01/12 685,658
515,000 South-Western, OH, CSD (Franklin & Pickway Co.) ............. 5.000 12/01/12 558,693
500,000 Erie Co., OH, Hosp. Rev. (Fireland Reg. Med. Ctr.) .......... 6.000 08/15/13 547,725
1,000,000 Indian Hill, OH, EVSD GO .................................... 5.250 12/01/14 1,077,330
1,000,000 Olentangy, OH, LSD UT GO .................................... 5.250 12/01/14 1,081,690
530,000 Ottawa Co., OH, GO .......................................... 5.750 12/01/14 567,874
1,000,000 Portage Co., OH, GO ......................................... 6.200 12/01/14 1,038,560
660,000 West Chester Twp., OH, GO ................................... 5.500 12/01/14 727,676
400,000 Warren, OH, Wtr. Wrks. Rev .................................. 5.500 11/01/15 443,312
1,000,000 Buckeye Valley, OH, LSD GO .................................. 6.850 12/01/15 1,198,010
415,000 Dublin, OH, Var. Purp. Impt.-Ser. A ......................... 6.000 12/01/15 467,315
680,000 Columbus-Polaris Hsg. Corp. Rev. Prerefunded @ 100 .......... 7.400 01/01/16 811,709
945,000 Chillicothe, OH, CSD ........................................ 5.000 12/01/16 1,001,681
465,000 Cincinnati, OH, Police & Fireman's Disability GO ............ 5.750 12/01/16 514,257
975,000 Hamilton Co., OH, Convention Facs. Auth. Rev. (Second Lien) . 5.000 12/01/16 1,028,801
1,340,000 Ohio St. Wtr. Dev. Auth. Rev ................................ 5.000 12/01/16 1,414,102
1,260,000 Cleveland, OH, Arpt. Sys. Rev ............................... 5.125 01/01/17 1,310,198
750,000 Butler Co., OH, Trans. Impt. Dist............................ 5.125 04/01/17 787,620
85,000 Toledo, OH, Swr. Sys. Rev ................................... 6.350 11/15/17 88,261
335,000 Akron, OH, Wtr. Wrks. Rev ................................... 5.250 12/01/17 356,956
1,000,000 Springfield, OH, CSD GO .................................... 5.000 12/01/17 1,048,180
655,000 Twinsburg, OH, Park & Land GO ............................... 5.500 12/01/17 712,142
1,000,000 Ohio St. Bldg. Auth. Rev. (Adult Correctional Bldg.) ........ 5.250 10/01/18 1,054,460
1,000,000 Univ. of Cincinnati, OH, General Receipts Rev ............... 5.750 06/01/19 1,100,340
1,000,000 Lucas Co., OH, Hsg. Dev. Corp. (Northgate Apts.) ............ 5.950 07/01/19 1,013,390
1,000,000 Lorain Co., OH, Hosp. Rev. (Catholic Health Partners) ....... 5.500 09/01/19 1,068,050
1,000,000 Lucas Co., OH, Hosp. Rev. (Promedica HealthGroup) ........... 5.625 11/15/19 1,082,110
39
OHIO INSURED TAX-FREE FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 91.4% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,145,000 Brunswick, OH, CSD GO ....................................... 5.750 12/01/19 $ 1,266,290
745,000 Crawford Co., OH, GO ........................................ 4.750 12/01/19 751,534
1,000,000 Hamilton, OH, CSD GO ........................................ 5.500 12/01/19 1,082,430
1,250,000 Kings, OH, LSD GO ........................................... 5.950 12/01/19 1,405,300
1,085,000 West Clermont, OH, LSD GO ................................... 5.000 12/01/19 1,119,557
500,000 Akron, OH, GO ............................................... 5.800 11/01/20 544,430
210,000 Butler Co., OH, GO .......................................... 5.250 12/01/20 221,810
1,000,000 Greene Co., OH, Swr. Sys. Rev ............................... 5.625 12/01/20 1,072,490
1,500,000 Nordonia Hills, OH, CSD GO .................................. 5.375 12/01/20 1,582,829
1,000,000 Pickerington, OH, LSD UT GO ................................. 5.250 12/01/20 1,047,200
850,000 West Chester Twp., OH, GO ................................... 5.000 12/01/20 872,083
1,210,000 Cincinnati, OH, Tech. College Rev ........................... 5.250 10/01/21 1,268,637
525,000 Kings, OH, LSD GO .......................................... 6.050 12/01/21 582,110
500,000 Lake, OH, LSD GO (Stark Co.) ................................ 5.750 12/01/21 544,470
1,000,000 Monroe, OH, LSD Sch. Impt. GO ............................... 5.000 12/01/21 1,020,620
1,185,000 Akron, OH, Impt. GO ......................................... 5.000 12/01/22 1,204,541
500,000 Morgan, OH, LSD GO .......................................... 5.750 12/01/22 545,410
1,200,000 Ross Twp., OH, LSD GO ....................................... 5.000 12/01/22 1,219,788
1,250,000 Scioto Valley, OH, LSD GO ................................... 5.650 12/01/22 1,351,100
1,000,000 Ohio Muni. Elec. Generation Agy ............................. 5.000 02/15/23 1,007,540
250,000 Ohio St. Higher Ed. Fac. Cmnty. Rev. (Xavier Univ.) ......... 5.000 05/01/23 252,653
1,050,000 Harrison, OH, Wst. Wtr. Sys. Rev ............................ 5.250 11/01/23 1,086,750
1,000,000 Akron, OH, Var. Purp. GO .................................... 5.000 12/01/23 1,010,230
1,480,000 Lakewood, OH, CSD ........................................... 5.250 12/01/23 1,540,205
1,000,000 Newark, OH, Var. Purp. GO .................................. 4.750 12/01/23 980,080
1,000,000 Toledo, OH, CSD ............................................. 5.000 12/01/23 1,011,190
1,000,000 Hamilton Co., OH, Hosp. Rev. (Cincinnati Childrens Hosp.) ... 5.000 05/15/24 998,690
1,000,000 Cleveland, OH, Muni. Sch. Dist .............................. 5.250 12/01/24 1,030,370
1,000,000 Hamilton, OH, CSD GO ........................................ 5.625 12/01/24 1,059,530
1,000,000 Hilliard, OH, CSD GO ........................................ 5.750 12/01/24 1,072,570
1,000,000 Kings, OH, LSD GO ........................................... 5.650 12/01/24 1,062,140
1,250,000 Ohio St. Univ. General Receipts Rev ......................... 5.750 12/01/24 1,337,438
1,250,000 Fremont, OH, Var. Purp. GO .................................. 5.000 12/15/24 1,255,963
1,750,000 Eaton, OH, CSD GO ........................................... 5.000 12/01/25 1,752,537
500,000 Galion, OH, CSD UT GO ....................................... 5.000 12/01/25 500,725
1,200,000 Jefferson, OH, LSD UT GO (Madison Co.) ...................... 5.000 12/01/25 1,204,788
1,500,000 Marysville, OH, EVSD GO .................................... 5.000 12/01/25 1,501,979
1,000,000 Plain, OH, LSD GO ........................................... 5.000 12/01/25 1,001,250
1,000,000 Hilliard, OH, CSD GO ........................................ 5.750 12/01/28 1,061,190
910,000 Licking Heights, OH, LSD GO ................................. 6.400 12/01/28 1,068,422
1,000,000 Erie Co., OH, Hosp. Fac. Rev. (Fireland Reg. Med. Ctr.) ..... 5.625 08/15/32 989,480
-----------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ......... $80,205,831
-----------
40
OHIO INSURED TAX-FREE FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 11.3% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,000,000 Cleveland, OH, Wtr. Wrks. Rev ............................... 1.080 07/01/04 $ 1,000,000
1,000,000 Hamilton, OH, Elec. Rev ..................................... 1.080 07/01/04 1,000,000
1,000,000 Puerto Rico Commonwealth Govt. Dev. Bk ...................... 1.000 07/01/04 1,000,000
1,100,000 Hamilton Co., OH, Hosp. Rev.
(Health Alliance of Gtr. Cincinnati) ....................... 1.030 07/07/04 1,100,000
1,000,000 Puerto Rico Commonwealth Hwy. & Trans. Auth. Trans. Rev ..... 1.080 07/07/04 1,000,000
1,000,000 Puerto Rico, Elec. Pwr. Auth. SGA-43 ........................ 1.030 07/07/04 1,000,000
1,000,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. B ................ 1.030 07/07/04 1,000,000
775,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. C ................ 1.030 07/07/04 775,000
1,000,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. E ................ 1.030 07/07/04 1,000,000
1,000,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. F ................ 1.030 07/07/04 1,000,000
-----------
TOTAL FLOATING & VARIABLE DEMAND NOTES ...................... $ 9,875,000
-----------
TOTAL INVESTMENT SECURITIES -- 102.7%
(Amortized Cost $86,604,327) ................................ $90,080,831
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.7%) ............. (2,382,142)
-----------
NET ASSETS -- 100.0% ........................................ $87,698,689
===========
See accompanying notes to portfolio of investments and notes to financial
statements.
41
OHIO TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30,2004
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 24.4% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 700,000 American Muni. Pwr. OH, Inc. Rev. BANS (New Bremen Proj.) ... 1.300 07/08/04 $ 700,000
350,000 Bellefontaine, OH, GO BANS (South Main Street) .............. 1.560 07/29/04 350,082
500,000 Chillicothe, OH, GO BANS .................................... 1.630 07/29/04 500,145
2,055,000 Clermont Co., OH, Wtr. Wrks. Rev ............................ 1.200 08/01/04 2,055,000
750,000 American Muni. Pwr. OH, Inc. Rev. BANS ...................... 1.300 08/05/04 750,000
1,000,000 Liberty Twp., OH, GO BANS ................................... 1.460 08/11/04 1,000,401
500,000 Richland Co., OH, GO BANS ................................... 1.470 08/11/04 500,205
325,000 Hebron, OH, GO .............................................. 1.700 09/09/04 325,246
2,140,680 Jackson Co., OH, GO BANS .................................... 1.550 09/09/04 2,142,099
2,000,000 Orange Village, OH, GO BANS ................................. 1.500 09/16/04 2,000,831
500,000 Union Co., OH, Bldg. Renovation GO ......................... 1.420 09/16/04 500,282
600,000 Fairfield Co., OH, GO BANS .................................. 2.200 09/24/04 601,035
2,650,000 Hebron, OH, Wtr. Wrks. Rev. BANS ............................ 1.850 09/29/04 2,653,552
372,000 Richland Co., OH, GO BANS ................................... 1.750 09/29/04 372,490
500,000 Ohio St. Bldg. Auth. Rev. (Juvenile Correct. Bldg.),
Prerefunded @ 102 ........................................... 6.600 10/01/04 516,831
450,000 Wilmington, OH, GO BANS ..................................... 1.530 10/01/04 450,313
4,300,000 American Muni. Pwr. OH, Inc. Rev. BANS (Genoa Village Proj.) 1.300 10/07/04 4,300,000
800,000 American Muni. Pwr. OH, Inc. Rev. BANS (Genoa Village Proj.) 1.500 10/07/04 800,000
830,000 American Muni. Pwr. OH, Inc. Rev. BANS (St. Mary's Proj.) ... 1.200 10/07/04 830,000
1,500,000 Harrison Twp., OH GO BANS (Fire Station) .................... 1.400 10/21/04 1,500,908
1,070,000 Olmsted Falls, OH, GO BANS .................................. 1.450 10/21/04 1,070,810
610,000 Granville, OH, GO BANS ...................................... 1.460 10/27/04 610,507
2,250,000 American Muni. Pwr. OH, Inc. Rev. BANS (Pioneer Village
Proj.) ...................................................... 1.350 10/28/04 2,250,000
3,320,000 American Muni. Pwr. OH, Inc. Rev. BANS ...................... 1.200 11/04/04 3,320,000
575,000 American Muni. Pwr. OH, Inc. Rev. BANS (Yellow Springs Proj.) 1.400 11/04/04 575,000
310,000 Marysville, OH, Swr. GO ..................................... 1.680 11/10/04 310,364
5,000,000 American Muni. Pwr. OH, Inc. BANS (Galion Proj.) ............ 1.400 11/12/04 5,000,001
900,000 Stark Co., OH, GO BANS ...................................... 1.550 11/15/04 901,165
1,495,000 American Muni. Pwr. OH, Inc. BANS (Monroeville Village) ..... 1.400 11/18/04 1,495,000
3,250,000 Hillsboro, OH, CSD GO BANS .................................. 2.260 11/18/04 3,260,551
340,000 Akron, OH, Var. Purp. GO .................................... 2.000 12/01/04 341,158
475,000 Belmont Co., OH, GO ......................................... 2.000 12/01/04 476,477
175,000 Leipsic, OH, LSD GO ........................................ 2.000 12/01/04 175,615
455,000 Ohio Univ. General Receipts Athens .......................... 2.000 12/01/04 456,640
475,000 Springfield, OH, LSD GO .................................... 2.000 12/01/04 475,981
625,000 American Muni. Pwr. OH, Inc. Rev. BANS (Amherst City Proj.) . 1.250 12/02/04 625,000
1,635,000 American Muni. Pwr. OH, Inc. Rev. BANS (Bowling Green Proj.) 1.250 12/02/04 1,635,000
4,129,300 Deerfield Twp., OH, GO BANS ................................. 1.580 12/02/04 4,133,596
2,685,000 Deerfield Twp., OH, GO BANS ................................. 1.800 12/02/04 2,688,894
1,115,000 American Muni. Pwr. OH, Inc. Rev. BANS (Edgerton Proj.) ..... 1.350 12/09/04 1,115,000
570,000 American Muni. Pwr. OH, Inc. Rev. BANS (Oberlin Proj.) ...... 1.300 12/09/04 570,000
655,000 Trenton, OH, GO BANS ........................................ 1.960 12/09/04 656,739
590,000 Springboro, OH, GO BANS ..................................... 1.600 12/16/04 590,670
2,180,000 American Muni. Pwr. OH, Inc. Rev. BANS
(Brewster Village Proj.) .................................... 1.350 01/13/05 2,180,000
1,270,000 Willard, OH, GO BANS ........................................ 1.670 01/27/05 1,272,302
770,000 Olmsted Falls, OH, GO BANS .................................. 1.550 02/10/05 770,931
42
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 24.4% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 300,000 Hamilton, OH, CSD GO BANS ................................... 1.550 02/24/05 $ 300,385
660,000 Hamilton Twp., OH, GO BANS (Pub. Infrastructure) ............ 1.650 03/24/05 661,899
500,000 Crestline, OH, GO BANS ...................................... 1.730 03/30/05 501,396
3,098,000 Maple Heights, OH, CSD GO BANS .............................. 1.500 04/29/05 3,098,231
3,810,000 Willard, OH, GO BANS ........................................ 1.900 05/18/05 3,818,217
4,500,000 Loveland, OH, CSD GO TANS ................................... 2.100 06/01/05 4,514,176
783,800 London, OH, GO BANS ......................................... 2.500 06/02/05 788,046
2,800,000 Paulding Co., OH, GO BANS ................................... 2.500 06/14/05 2,813,605
1,200,000 Chillicothe, OH, GO BANS (Wtr. Tower Impt.) ................. 2.500 06/16/05 1,206,776
1,000,000 Marietta, OH, GO BANS ....................................... 3.050 06/22/05 1,009,073
2,300,000 American Muni. Pwr. OH, Inc. Rev. BANS (Newton Falls Proj.) . 2.050 06/30/05 2,300,000
2,000,000 Columbiana, OH, GO BANS ..................................... 2.500 07/07/05 2,004,880
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ......... $ 82,823,505
------------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 70.4% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 2,500,000 Akron, Bath & Copley, OH, Joint Twp. Hosp. Rev.
(Summa Health Sys.) ......................................... 1.100 07/01/04 $ 2,500,000
300,000 Akron, Bath & Copley, OH, Joint Twp. Hosp. Rev.
(Visiting Nurse Svcs. Proj.) ................................ 1.150 07/01/04 300,000
1,500,000 Ashtabula Co., OH, Hosp. Fac. Rev. (Ashtabula Co.
Med. Ctr. Proj.) ............................................ 1.110 07/01/04 1,500,000
4,000,000 Athens Co., OH, Port. Auth. Hsg. Rev. (Univ. Hsg. for
Ohio, Inc. Proj.) ........................................... 1.130 07/01/04 4,000,000
1,700,000 Butler Co., OH, Hosp. Rev. (Berkley Sq. Retirement Ctr.
Proj.) ...................................................... 1.120 07/01/04 1,700,000
2,800,000 Cambridge, OH, Hosp. Rev. (Southwestern Ohio Reg. Med.) ..... 1.150 07/01/04 2,800,000
1,530,000 Carroll Co., OH, Health Care Rev. (St. Johns Villa Proj.) ... 1.150 07/01/04 1,530,000
4,000,000 Cincinnati, OH, Port Auth. Rev. (Cincinnati Zoo Proj.) ...... 1.170 07/01/04 4,000,000
1,200,000 Cleveland, OH, Wtr. Wrks. Rev ............................... 1.080 07/01/04 1,200,000
125,000 Coshocton Co., OH, Hosp. Rev.
(Echoing Hills Village, Inc. Proj.) ........................ 1.230 07/01/04 125,000
1,600,000 Cuyahoga Co., OH, Civic Rev. (West Side Ecumenical) ......... 1.150 07/01/04 1,600,000
10,000,000 Cuyahoga Co., OH, Health Care Rev. (Gardens of McGregor) .... 1.110 07/01/04 10,000,000
2,870,000 Cuyahoga Co., OH, IDR (S&R Playhouse Realty) ................ 1.100 07/01/04 2,870,000
3,240,000 Delaware Co., OH, Health Care Rev. (Sarah Moore Home) ....... 1.230 07/01/04 3,240,000
1,670,000 Franklin Co., OH, EDR (Columbus Montessori Ed. Ctr.) ........ 1.180 07/01/04 1,670,000
2,245,000 Franklin Co., OH, EDR (Dominican Sisters) ................... 1.150 07/01/04 2,245,000
1,810,000 Franklin Co., OH, Health Care Rev. (Heinzerling Fndtn.) ..... 1.230 07/01/04 1,810,000
885,000 Franklin Co., OH, Health Care Rev.
(Lifeline Organ Procurement) ................................ 1.150 07/01/04 885,000
965,000 Franklin Co., OH, IDR (Ohio Girl Scouts) .................... 1.230 07/01/04 965,000
1,800,000 Fulton, OH, IDR (Polycraft, Inc.) ........................... 1.370 07/01/04 1,800,000
1,700,000 Geauga Co., OH, Health Care Rev. (Heather Hill Proj.) ....... 1.180 07/01/04 1,700,000
1,178,900 Hamilton Co., OH, EDR (Cincinnati Assoc. for the Performing
Arts) ....................................................... 1.120 07/01/04 1,178,900
300,000 Hamilton Co., OH, EDR (Contemporary Arts Ctr.) .............. 1.100 07/01/04 300,000
1,735,000 Hamilton Co., OH, EDR (Union Inst. Proj.) ................... 1.170 07/01/04 1,735,000
2,865,000 Hamilton Co., OH, Health Care Rev. (Episcopal Proj.) ........ 1.080 07/01/04 2,865,000
1,350,000 Hamilton Co., OH, Hosp. Rev. (Beechwood Home Proj.) ......... 1.120 07/01/04 1,350,000
1,000,000 Hamilton Co., OH, Hosp. Rev. (Childrens Hosp. Med. Ctr.) .... 1.080 07/01/04 1,000,000
43
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 70.4% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 600,000 Hamilton Co., OH, Hosp. Rev. (Childrens Hosp. Med. Ctr.) .... 1.080 07/01/04 $ 600,000
5,900,000 Hamilton Co., OH, Hosp. Rev. (Drake Ctr., Inc.) ............. 1.080 07/01/04 5,900,000
4,000,000 Hamilton Co., OH, Hosp. Rev. (Episcopal Retirement Proj.) ... 1.080 07/01/04 4,000,000
4,700,000 Hamilton Co., OH, Hosp. Rev. (Episcopal Retirement Proj.) ... 1.080 07/01/04 4,700,000
5,920,000 Hamilton Co., OH, Sales Tax Floater Ctfs. Ser. 356 .......... 1.130 07/01/04 5,920,000
13,000,000 Hamilton, OH, Elec. Rev .................................... 1.080 07/01/04 12,999,999
2,944,000 Hamilton, OH, MFH Rev. (Knollwood Village Apts.) Ser. A ..... 1.110 07/01/04 2,944,000
1,948,000 Hamilton, OH, MFH Rev. (Knollwood Village Apts.) Ser. B ..... 1.110 07/01/04 1,948,000
2,602,000 Hancock Co., OH, MFH Rev. (Crystal Glen Apts. Proj. Phase II) 1.110 07/01/04 2,602,000
4,505,000 Lima, OH, Hosp. Fac. & Impt. Rev. (Lima Mem. Hosp.) ......... 1.150 07/01/04 4,505,000
400,000 Lucas Co., OH, Health Care Rev. (Lutheran Homes Society) .... 1.080 07/01/04 400,000
2,600,000 Lucas Co., OH, Health Care Rev. (Sunset Retire) ............. 1.070 07/01/04 2,600,000
110,000 Lucas Co., OH, IDR (Assoc. Proj.) ........................... 1.330 07/01/04 110,000
125,000 Lucas Co., OH, Rev. (Sunshine Childrens Home) ............... 1.200 07/01/04 125,000
710,000 Mahoning Co., OH, Health Care Rev. (Ohio Heart Institute) ... 1.230 07/01/04 710,000
5,000,000 Mahoning Co., OH, Hosp. (Forum Health Oblig.) ............... 1.090 07/01/04 5,000,000
2,510,000 Marion Co., OH, Hosp. Impt. Rev. (Pooled Lease Proj.) ....... 1.110 07/01/04 2,510,000
1,150,000 Mason, OH, Tax Increment Fin. Rev. (Central Park Proj.) ..... 1.170 07/01/04 1,150,000
1,900,000 Middleburg Heights, OH, Hosp. Rev.
(Southwest General Health) .................................. 1.120 07/01/04 1,900,000
1,100,000 Montgomery Co., OH, (Miami Valley Hosp.) .................... 1.100 07/01/04 1,100,000
1,235,000 Montgomery Co., OH, Health Care Rev.
(Cmnty. Blood Ctr. Proj.) .................................. 1.230 07/01/04 1,235,000
2,700,000 Montgomery Co., OH, Ltd. Oblig. Rev. (St.Vincent de Paul
Proj.) ...................................................... 1.120 07/01/04 2,700,000
3,000,000 Ohio St. Higher Ed. Rev. (College of Mt. St. Joseph's) ...... 1.110 07/01/04 3,000,000
200,000 Ohio St. Higher Ed. Rev. (Malone College) ................... 1.150 07/01/04 200,000
500,000 Ohio St. Higher Ed. Rev. (Pooled Fin.) ...................... 1.180 07/01/04 500,000
3,100,000 Ohio St. Higher Ed. Rev. (Pooled Fin.) ...................... 1.180 07/01/04 3,100,000
3,400,000 Ohio St. Higher Ed. Rev. (Pooled Fin.) ...................... 1.180 07/01/04 3,400,000
4,620,000 Ohio St. Tpk. Rev. Fltr. Ctfs. Ser. 71 ...................... 1.130 07/01/04 4,620,000
1,510,000 Ottawa Co., OH, Hosp. Rev. (Lutheran Home of Mercy Proj.) ... 1.200 07/01/04 1,510,000
3,450,000 Puerto Rico Childrens Trust Fund ............................ 1.120 07/01/04 3,450,000
2,000,000 Puerto Rico Commonwealth Govt. Dev .......................... 1.000 07/01/04 2,000,000
9,000,000 Puerto Rico Commonwealth Hwy. & Trans. Auth ................. 1.080 07/01/04 9,000,000
400,000 Rickenbacker, OH, Port. Auth. Rev.
(Rickenbacker Holdings, Inc.) ............................... 1.230 07/01/04 400,000
1,100,000 Seneca Co., OH, Hosp. Rev. (St. Francis Home, Inc. Proj.) ... 1.120 07/01/04 1,100,000
4,690,000 Sharonville, OH, IDR (Duke Realty Proj.) .................... 1.180 07/01/04 4,690,000
1,510,000 Summit Co., OH, Health Care Rev. (Evant, Inc. Proj.) ........ 1.200 07/01/04 1,510,000
200,000 Summit Co., OH, IDR (Go-Jo Industries, Inc. Proj.) .......... 1.230 07/01/04 200,000
5,000,000 Summit Co., OH, Port. Auth. Rev. (Summa Health Sys. Hosp.
Proj.) ...................................................... 1.120 07/01/04 5,000,000
3,300,000 Toledo, OH, City Svcs. Special Assessment Nts ............... 1.100 07/01/04 3,300,000
1,600,000 Warren Co., OH, IDR (Liquid Container Proj.) ................ 1.090 07/01/04 1,600,000
1,500,000 Westlake, OH, EDR (Oaks Dev. Company Proj.) ................. 1.200 07/01/04 1,500,000
4,800,000 Woodlawn, OH, EDR (Goodwill Industries Proj.) ............... 1.120 07/01/04 4,800,000
265,000 Hamilton, OH, Elec. Rev ..................................... 1.080 07/02/04 265,000
2,155,000 Miami Co., OH, Hosp. Rev. (Upper Valley Med. Ctr.) .......... 1.110 07/02/04 2,155,000
2,400,000 ABN AMRO Munitops Trust Ctfs. (Westerville, OH CSD GO) ...... 1.100 07/07/04 2,400,000
860,000 Centerville, OH, Health Care Rev. (Bethany Lutheran Village
Proj.) ...................................................... 1.090 07/07/04 860,000
3,000,000 Cleveland, OH, Arpt. Sys. Rev ............................... 1.080 07/07/04 3,000,000
44
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 70.4% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 10,000,000 Cleveland-Cuyahoga Co., OH, Port Auth. Rev ................. 1.050 07/07/04 $ 10,000,000
1,830,000 Cuyahoga Co., OH, Ed. Rev. (United Cerebral Palsy Assoc.) ... 1.120 07/07/04 1,830,000
1,150,000 Erie Co., OH, IDR (Toft Dairy, Inc.) ........................ 1.120 07/07/04 1,150,000
500,000 Greene Co., OH, Health Care Rev. (Green Oaks Proj.) ......... 1.120 07/07/04 500,000
480,000 Hamilton Co., OH, EDR (General Protestant Orphan Home) ...... 1.150 07/07/04 480,000
810,000 Hamilton Co., OH, Health Care Rev. (Aloysius Orphanage Proj.) 1.120 07/07/04 810,000
400,000 Hamilton Co., OH, Hosp. Rev. (Health Alliance) Ser. F ....... 1.030 07/07/04 400,000
4,000,000 Lake Co., OH, Hosp. Rev. (Lake Hosp. Sys., Inc.) ............ 1.140 07/07/04 4,000,000
1,725,000 Lorain Co., OH, IDR (EMH Med. Ctr. Proj.) .................. 1.120 07/07/04 1,725,000
2,450,000 Middletown, OH, Dev. Rev. (Bishop Fenwick High Sch. Proj.) .. 1.080 07/07/04 2,450,000
1,070,000 Monroe, OH, IDR (Magnode Corp.) ............................. 1.600 07/07/04 1,070,000
2,000,000 Montgomery Co., OH, EDR (Dayton Art Institute) .............. 1.100 07/07/04 2,000,000
3,310,000 Ohio St. Univ. General Receipts ............................. 0.990 07/07/04 3,310,000
1,000,000 Ohio St. Wtr. Dev. Auth. PCR (Cleveland Elec.) .............. 1.050 07/07/04 1,000,000
200,000 Ohio St. Wtr. Dev. Auth. Rev ............................... 1.040 07/07/04 200,000
2,050,000 Ohio St. Wtr. Dev. Auth. Rev. (Timken Company) .............. 1.050 07/07/04 2,050,000
400,000 Orrville, OH, Hosp. Rev. (Orrville Hosp.) ................... 1.140 07/07/04 400,000
3,910,000 Puerto Rico Elec. Pwr. Auth. Rev. Muni. Secs.
Trust Rec. Ser. 43 .......................................... 1.030 07/07/04 3,910,000
3,800,000 Puerto Rico Elec. Pwr. Auth. Rev. Muni. Secs.
Trust Rec. Ser. 44 .......................................... 1.030 07/07/04 3,800,000
2,525,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. F ................ 1.030 07/07/04 2,525,000
4,775,000 Scioto Co., OH, Hosp. Rev. (VHA Ctr.) Ser. G ................ 1.030 07/07/04 4,775,000
2,500,000 Summit, OH, Civic Fac. Rev. (YMCA Proj.) Ser. 1997 .......... 1.120 07/07/04 2,500,000
2,500,000 Hamilton Co., OH, IDR (ADP Sys.) ............................ 1.200 07/15/04 2,500,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ...................... $239,472,899
------------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 5.6% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 3,995,000 Univ. of Akron, OH, General Receipts ........................ 1.050 07/08/04 $3,995,000
845,000 Clermont Co., OH, EDR (Eastgate Partnership) ................ 1.850 09/01/04 845,000
3,740,000 Cuyahoga Co., OH, IDR (Halle Office Bldg.) .................. 1.155 10/01/04 3,740,000
1,045,000 Clermont Co., OH, EDR (John Q. Hammons Proj.) ............... 1.400 11/01/04 1,045,000
2,435,000 Ohio St. HFA MFH (Lincoln Park) ............................. 1.400 11/01/04 2,435,000
3,000,000 ABN AMRO Munitops Trust Ctfs. 1998-I8 (Cleveland Wtr. Wrks.) 1.250 11/03/04 3,000,000
2,570,000 Richland Co., OH, IDR (Mansfield Sq. Proj.) ................. 1.400 11/15/04 2,570,000
810,000 Scioto Co., OH, Health Care Rev. (Hillview Retirement) ...... 1.550 12/01/04 809,934
640,000 Gallia Co., OH, IDR (Jackson Pike Assoc.) ................... 1.550 12/15/04 640,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS ............................. $ 19,079,934
------------
TOTAL INVESTMENT SECURITIES -- 100.4%
(Amortized Cost $341,376,338) ............................... $341,376,338
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%) ............. (1,492,463)
------------
NET ASSETS -- 100.0% ........................................ $339,883,875
============
See accompanying notes to portfolio of investments and notes to financial
statements.
45
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30,2004
===============================================================================================================
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 31.9% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 225,000 Arizona St. COP Called @ 100 ................................ 5.000 07/01/04 $ 229,500
100,000 Clark Co., NV, Hwy. Impt. Rev. (Motor Vehicle Fuel Tax) ..... 5.000 07/01/04 100,000
500,000 Louisiana St. Univ. & Agri. & Mech. College Rev.,
Prerefunded @ 102 ........................................... 5.750 07/01/04 510,000
200,000 Maricopa Co., AZ, USD No. 097 Deer Valley
(Proj. of 1996-Ser. H) ...................................... 5.850 07/01/04 200,000
115,000 Maricopa Co., AZ, USD No. 11 Peoria Prerefunded @ 101 ....... 6.100 07/01/04 116,150
100,000 New Jersey Health Care Facs. Fin. Auth. Rev., Prerefunded @
102 ......................................................... 6.200 07/01/04 102,000
250,000 Orange, NC, Wtr. & Swr. Auth. Sys. Rev ...................... 3.500 07/01/04 250,000
250,000 San Antonio, TX, River Auth ................................ 3.000 07/01/04 250,000
875,000 Blanchester, OH, Wtr. Sys. Impt. BANS ....................... 1.950 07/08/04 875,000
1,388,000 Georgetown, OH, EVSD, GO BANS .............................. 1.950 07/28/04 1,388,666
1,000,000 Perkins Twp., OH, GO BANS ................................... 2.000 07/28/04 1,000,000
150,000 El Paso, TX, GO ............................................. 5.500 08/15/04 150,803
100,000 Agawam, MA, GO .............................................. 4.500 09/01/04 100,553
100,000 Denver, CO, City & Co. Excise Tax Rev ....................... 5.000 09/01/04 100,626
240,000 Pataskala, OH, Bridge Impt. GO BANS ......................... 1.830 09/23/04 240,180
400,000 Bell Cmnty., CA, Tax Allocation Redev. Agy .................. 2.000 10/01/04 400,498
480,000 Lake Co., IL, Sch. Dist. No. 079 Fremont .................... 8.250 10/01/04 488,239
100,000 Mississippi St. Brd. of Trustees of Instns. of Higher
Learning .................................................... 2.125 10/01/04 100,219
300,000 North Randall, OH, Temp. GO Bonds ........................... 1.700 10/15/04 300,258
500,000 American Muni. Pwr. OH, Inc. Rev. BANS (Galion Proj.) ....... 1.400 11/12/04 500,000
250,000 Tampa, FL, Rev. (Catholic Health East) ...................... 5.250 11/15/04 253,318
100,000 El Paso Co., CO, Sch. Dist. No. 038 ......................... 5.000 12/01/04 101,551
100,000 Northglenn, CO, Wtr. & Swr ................................. 5.250 12/01/04 101,655
450,000 Portsmouth, OH, GO BANS ..................................... 2.125 12/15/04 450,759
560,000 Goshen, IN, Cmnty. Schs. Land Acquisition ................... 2.300 01/01/05 561,521
100,000 Harrison Co., MS, Wst. Wtr. Mgmt. Dist. Rev.,
Prerefunded @ 102 ........................................... 5.875 02/01/05 104,612
250,000 Winnebago & Boone Co., IL, Cmnty. High Sch. Dist. No. 207 GO 4.500 02/01/05 253,605
600,000 Portsmouth, OH, Swr. Sys. Rev ............................... 2.150 02/15/05 601,106
735,000 Monroe, OH, GO BANS ......................................... 2.450 05/05/05 738,656
265,000 Munfordville, KY, IDR (Louisville Bedding Company Proj.) .... 1.800 06/01/05 265,000
500,000 Spencerville, OH, BANS, Wtr. Sys. Impt ...................... 2.450 06/01/05 501,119
350,000 American Muni. Pwr. OH, Inc. Rev. BANS (Grafton Village
Proj.) ...................................................... 2.250 06/16/05 350,000
-----------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ......... $11,685,594
-----------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 54.2% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 1,500,000 Broward Co., FL, Health Fac. Auth. Rev. (John Knox Village) . 1.190 07/01/04 $1,500,000
600,000 California Statewide Cmntys. Dev. Auth ...................... 1.100 07/01/04 600,000
1,000,000 Jacksonville, FL, Health Facs. Hosp. Rev. (Genesis Rehab.
Hosp.) ..................................................... 1.100 07/01/04 1,000,000
600,000 Municipal Secs. Trust Ctfs. Ser. 2001-160 (Florida Brd. of
Ed.) ........................................................ 1.120 07/01/04 600,000
1,600,000 Ohio St. Air Quality Rev. PCR (Ohio Edison) ................. 1.080 07/01/04 1,600,000
100,000 Univ. Athletic Assoc. Cap. Impt. Rev. (Univ. of Florida
Stadium Proj.) .............................................. 1.140 07/01/04 100,000
555,000 Arvada, CO, Wtr. Util. Rev .................................. 1.250 07/07/04 555,000
500,000 Bloomington, IL, Normal Arpt. Auth ......................... 1.130 07/07/04 500,000
46
TAX-FREE MONEY MARKET FUND
(CONTINUED)
===============================================================================================================
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 54.2% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$ 320,000 Boone Co., KY, Indl. Bldg. Rev. (The Hennegan Company Proj.) 1.170 07/07/04 $ 320,000
180,000 Boulder Co., CO, Dev. Rev. (Humane Society, Inc.) ........... 1.200 07/07/04 180,000
100,000 Catawba Co., NC, Indl. Facs. (Lucky 7 Dev. Group) ........... 1.270 07/07/04 100,000
545,000 Eden Prairie, MN, MFH Rev. (Lake Place Apts.) ............... 1.200 07/07/04 545,000
430,000 Eupora, MS, IDR (Plymouth Tube Company Proj.) ............... 1.350 07/07/04 430,000
315,000 Fargo, ND, Dev. Rev. (Kelly Inns. Fargo Proj.) .............. 1.250 07/07/04 315,000
235,000 Greenwood, IN, EDR (Health Quest Realty) .................... 1.360 07/07/04 235,000
1,000,000 Hamilton Co., OH, Hosp. Fac. Rev. (Health Alliance), Ser. A 1.010 07/07/04 1,000,000
130,000 Henderson, NV, Pub. Impt. MFH Rev. (Pueblo I), Ser. A ....... 1.180 07/07/04 130,000
355,000 Illinois Dev. Auth. IDR (Hoda LLC) .......................... 1.380 07/07/04 355,000
235,000 Indiana St. EDR (Earlham College) ........................... 1.230 07/07/04 235,000
888,000 Indianapolis, IN, EDR (Pedcore Invts. Waterfront) ........... 1.400 07/07/04 888,000
220,000 Jefferson Co., MO, IDA IDR (GHF Holdings LLC Proj.) ......... 1.280 07/07/04 220,000
100,000 Knox, IN, EDR (J.W. Hicks, Inc. Proj.) ...................... 1.250 07/07/04 100,000
280,000 Lake Co., IL, Cmnty. Cons. Sch. Dist. No. 073 Hawthorn ...... 1.160 07/07/04 280,000
450,000 Lancaster Co., NE, IDR (Garner Industries) .................. 1.230 07/07/04 450,000
1,000,000 Lees Summit, MO, MFH Rev .................................... 1.420 07/07/04 1,000,000
1,035,000 Mankato, MN, IDR, Ser. 1998 (Sacco Family LP Proj.) ......... 1.350 07/07/04 1,035,000
110,000 Mississippi Bus. Fin. Corp. (Arch Aluminum & Glass) ......... 1.320 07/07/04 110,000
117,000 Portage, IN, EDR ............................................ 1.280 07/07/04 117,000
1,500,000 Rev. Bond Cert. Ser. Trust .................................. 1.380 07/07/04 1,500,000
1,105,000 Salina, KS, Rev. (Salina Ctr. Mall Ltd.) .................... 1.280 07/07/04 1,105,000
1,100,000 Scio Twp., MI, EDR (ADP Network) ............................ 1.580 07/07/04 1,100,000
660,000 St. Louis, MO, Clearance Redev. Auth. (Lamment Bldg.) ....... 1.230 07/07/04 660,000
1,000,000 Vermont Ed. & Health Bldgs. Fin. Agy. Rev. (Rutland Med.
Ctr.) ....................................................... 1.140 07/07/04 1,000,000
-----------
TOTAL FLOATING & VARIABLE DEMAND NOTES ...................... $19,865,000
-----------
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 13.4% RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------
$490,000 Lexington-Fayette Co., KY, Urban Govt. Rev.
(Providence Montessori) ..................................... 2.25 07/01/04 $490,000
750,000 Corpus Christi, TX, IDC EDR (Texas Air Invt. Company Proj.) . 1.300 08/01/04 750,000
570,000 Summit Co., OH, IDR (S.D. Myers, Inc. Proj.) ................ 1.900 08/15/04 570,000
100,000 Portage Co., OH, IDR (Neidlinger Proj.) ..................... 2.000 09/01/04 100,000
95,000 Summit Co., OH, IDR (Keltec, Inc. Proj.) .................... 2.000 09/01/04 95,000
440,000 Summit Co., OH, IDR (Struktol Company America Proj.) ........ 2.000 09/01/04 440,000
115,000 Cuyahoga Co., OH, IDR (Halle Office Bldg.) .................. 1.155 10/01/04 115,000
1,000,000 Fort Thomas, KY, IDR (Carmel Manor, Inc. Proj.) ............. 1.300 10/01/04 1,000,000
360,000 Newport, KY, Indl. Bldg. Rev. (Sumerel Tire Svc., Inc. Proj.) 3.250 12/01/04 360,000
1,000,000 Westmoreland Co., PA, IDR (White Consolidated Industries) ... 1.650 12/01/04 1,000,000
-----------
TOTAL ADJUSTABLE RATE PUT BONDS ............................. $4,920,000
-----------
TOTAL INVESTMENT SECURITIES -- 99.5%
(Amortized Cost $36,470,594) ................................ $36,470,594
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5% ............... 173,102
-----------
NET ASSETS -- 100.0% ........................................ $36,643,696
===========
See accompanying notes to portfolio of investments and notes to financial
statements.
47
NOTES TO PORTFOLIOS OF INVESTMENTS
JUNE 30, 2004
================================================================================
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, 2004.
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:
BANS - Bond Anticipation Notes
COP - Certificates of Participation
CDA - Community Developement Authority
CSD - City School District
EDR - Economic Development Revenue
EVSD - Exempted Village School District
GO - General Obligation
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
IDC - Industrial Development Corporation
IDR - Industrial Development Revenue
LSD - Local School District
LT - Limited Tax
MFA - Multi-Family Authority
MFH - Multi-Family Housing
PCR - Pollution Control Revenue
TANS - Tax Anticipation Notes
USD - Unified School District
UT - Unlimited Tax
48
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
The Board of Trustees and Shareholders
Touchstone Tax-Free Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Touchstone Tax-Free Trust (consisting of
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, and Touchstone Tax-Free Money Market Fund) (the
Funds) as of June 30, 2004, and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years or periods in the period 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.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the 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, 2004, by correspondence with the
custodian and brokers. 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 respective portfolios comprising Touchstone Tax-Free Trust as of June 30,
2004, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended and their
financial highlights for each of the five years or periods in the period then
ended, in conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
August 10, 2004
49
MANAGEMENT OF THE TRUST (UNAUDITED)
=================================================================================================================
Listed below is basic information regarding the Trustees and pricipal officers of the Trust. The Trust's Statement
of Additional Information includes additional information about the Trustees and is available, without charge,
upon request by calling 1-800-543-0407.
INTERESTED TRUSTEES(1)
- -------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF FUNDS
NAME POSITION(S) OFFICE(2) OVERSEEN IN THE OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) TOUCHSTONE DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS FAMILY(3) HELD(4)
- -------------------------------------------------------------------------------------------------------------------
Jill T. McGruder President Until Senior Vice President of 32 Director of
Touchstone Advisors, and Trustee retirement The Western and Southern LaRosa's (a
Inc at age 75 or Life Insurance Company. restaurant chain).
221 East Fourth until she President and a director
Street resigns or of IFS Financial
Cincinnati, OH is removed Services, Inc. (a
Age: 49 Trustee holding company). She is
since 1999 a director of Capital
Analysts Incorporated
(an investment advisor
and broker-dealer),
Integrated Fund
Services, Inc. (the
Trust's administrator
and transfer agent) and
IFS Fund Distributors,
Inc. (a broker-dealer),
Touchstone Advisors,
Inc. (the Trust's
investment advisor) and
Touchstone Securities,
Inc. (the Trust's
distributor). She is
also President and a
director of IFS Agency
Services, Inc. (an
insurance agency), W&S
Financial Group
Distributors, Inc. and
IFS Systems, Inc. She is
Senior Vice President
and a director of Fort
Washington Brokerage
Services, Inc. (a
broker-dealer). She is
President of Touchstone
Tax-Free Trust,
Touchstone Investment
Trust, Touchstone
Variable Series Trust
and Touchstone Strategic
Trust. She was
President of Touchstone
Advisors, Inc and
Touchstone Securities,
Inc. until 2004.
- -------------------------------------------------------------------------------------------------------------------
John F. Barrett Trustee Until Chairman of the Board, 32 Director of The
The Western and retirement President and Chief Andersons (an
Southern at age 75 or Executive Officer of The agribusiness and
Life Insurance until he Western and Southern retailing
Company resigns or Life Insurance Company, company);
400 Broadway is removed Western- Southern Life Convergys
Cincinnati, OH Trustee Assurance Company and Corporation (a
Age: 55 since 2002 Western & Southern provider of
Financial Group, Inc.; integrated
Director and Chairman of billing solutions
Columbus Life Insurance and
Company; Fort Washington customer/employee
Investment Advisors, care services)
Inc., Integrity Life and Fifth Third
Insurance Company and Bancorp.
National Integrity Life
Insurance Company;
Director of Eagle Realty
Group, Inc., Eagle
Realty Investments,
Inc.; Integrated Fund
Services, Inc. and IFS
Holdings, Inc.;
Director, Chairman and
CEO of WestAd, Inc.;
President and Trustee of
Western & Southern
Foundation.
- -------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES:
- -------------------------------------------------------------------------------------------------------------------
J. Leland Brewster II Trustee Until Retired Senior Partner 32 Director of
5155 Ivyfarm Road retirement of Frost Brown Todd LLC Consolidated
Cincinnati, OH in 2005 or (a law firm). Health Services,
Age: 75 until he Inc.
resigns or
is removed
Trustee
since 2000
- -------------------------------------------------------------------------------------------------------------------
William O. Coleman Trustee Until Retired Vice President 32 Director of
c/o Touchstone retirement of The Procter & Gamble LCA-Vision (a
Advisors, Inc. at age 75 or Company. A Trustee of laser vision
221 East Fourth until he The Procter & Gamble correction
Street resigns or Profit Sharing Plan and company) and
Cincinnati, OH is removed The Procter & Gamble Millennium
Age: 75 Trustee Employee Stock Ownership Bancorp.
since 1999 Plan until 2000.
- -------------------------------------------------------------------------------------------------------------------
50
MANAGEMENT OF THE TRUST (UNAUDITED)
(CONTINUED)
===================================================================================================================
INDEPENDENT TRUSTEES(1) (CONTINUED):
- -------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF FUNDS
NAME POSITION(S) OFFICE(2) OVERSEEN IN THE OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) TOUCHSTONE DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS FAMILY(3) HELD(4)
- -------------------------------------------------------------------------------------------------------------------
Phillip R. Cox Trustee Until President and Chief 32 Director of the
105 East Fourth retirement Executive Officer of Federal Reserve
Street at age 75 or Cox Financial Corp. (a Bank of
Cincinnati, OH until he financial services Cleveland;
Age: 56 resigns or company). Broadwing, Inc.
is removed (a communications
Trustee company); and
since 1999 Cinergy Corporation
(a utility company).
- -------------------------------------------------------------------------------------------------------------------
H. Jerome Lerner Trustee Until Principal of HJL 32 None
2828 Highland retirement Enterprises (a
Avenue at age 75 or privately held
Cincinnati, OH until he investment company);
Age: 65 resigns or Chairman of Crane
is removed Connectors (a
Trustee manufacturer of
since 1989 electronic connectors).
- -------------------------------------------------------------------------------------------------------------------
Robert E. Stautberg Trustee Until Retired Partner of KPMG 32 Trustee of Good
4815 Drake Road retirement LLP (a certified public Samaritan
Cincinnati, OH at age 75 or accounting firm). He is Hospital,
Age: 69 until he Vice President of St. Bethesda
resigns or Xavier High School. Hospital and
is removed Tri-Health, Inc.
Trustee
since 1999
- -------------------------------------------------------------------------------------------------------------------
John P. Zanotti Trustee Until CEO and Chairman of 32 None
c/o Touchstone retirement Avaton, Inc. (a
Advisors, Inc. at age 75 or wireless entertainment
221 East Fourth until he company). President of
Street resigns or Cincinnati Biomedical
Cincinnati, OH is removed (a consulting company)
Age: 56 Trustee and a Director of QMed
since 2002 (a health care
management company).
CEO and Chairman of
Astrum Digital
Information (an
information monitoring
company) from 2000
until 2001; President
of Great American Life
Insurance Company from
1999 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 a director of Touchstone Advisors, Inc., the Trust's
investment advisor, and Touchstone Securities, Inc., the Trust's
distributor and an officer of affiliates of the advisor and 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., Chairman of Fort Washington Investment
Advisors, Inc., a Trust sub-advisor and an officer of other affiliates of
the advisor and distributor 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 or she sooner resigns or is
removed.
(3) The Touchstone Family of Funds consists of five series of the Trust, seven
series of Touchstone Strategic Trust, five series of Touchstone Investment
Trust and fifteen variable annuity series of Touchstone Variable Series
Trust.
(4) Each Trustee is also a Trustee of Touchstone Strategic Trust, Touchstone
Investment Trust and Touchstone Variable Series Trust.
51
OTHER ITEMS
(UNAUDITED)
================================================================================
PROXY VOTING
A description of the policies and procedures that each Fund uses to determine
how to vote proxies relating to its portfolio Securities is available without
charge upon request by calling toll-free 1-800-543-0407.
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to its principal executive officer and principal
financial officer. During the period covered by this report, no amendments were
made to the provisions of the code of ethics, nor did the registrant grant any
waivers, including any implicit waivers, from the provisions of the code of
ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. Mr.
Robert Stautberg is the registrant's "audit committee financial expert" and is
"independent" (as each term is defined in Item 3 of Form N-CSR).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. Audit fees totaled $68,000 for the June 30, 2004 fiscal year and
$76,400 for the June 30, 2003 fiscal year.
(b) AUDIT-RELATED FEES. Audit-Related fees totaled $135,800 for the June 30,
2004 fiscal year, of which $36,000 consisted of due diligence/merger services
for fund mergers, $4,800 consisted of accounting consultations and $95,000
consisted of SAS 70 internal control reviews of the registrant's fund accountant
and transfer agent. Audit-Related fees totaled $90,000 for the June 30, 2003
fiscal year and consisted of SAS 70 internal control reviews of the registrant's
fund accountant and transfer agent.
(c) TAX FEES. Tax fees totaled $16,000 for the June 30, 2004 fiscal year and
$21,000 for the June 30, 2003 fiscal year and consisted of fees for tax
compliance services during both years.
(d) ALL OTHER FEES. There were no other fees for the June 30, 2004 or June 30,
2003 fiscal years.
(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICIES. The Audit Committee's
pre-approval policies describe the types of audit, audit-related, tax and other
services that may receive the general pre-approval of the Audit Committee. The
pre-approval policies provide that annual audit service fees, tax services not
specifically granted pre-approval, services exceeding pre-approved cost levels
and other services that have not received general pre-approval will be subject
to specific pre-approval by the Audit Committee. The pre-approval policies
further provide that the Committee may grant general pre-approval to other audit
services (statutory audits and services associated with SEC registration
statements, periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings), audit-related
services (accounting consultations related to accounting, financial reporting or
disclosure matters not classified as "audit services," assistance with
understanding and implementing new accounting and financial reporting guidance
from rulemaking authorities, agreed-upon or expanded audit procedures related to
accounting and/or billing records required to respond to or comply with
financial, accounting or regulatory reporting matters and assistance with
internal control reporting requirements under Form N-SAR and Form N-CSR), tax
services that have historically been provided by the auditor that the Committee
believes would not impair the independence of the auditor and are consistent
with the SEC's rules on auditor independence and permissible non-audit services
classified as "all other services" that are routine and recurring services.
(e)(2) All services described in paragraphs (b) through (d) of Item 4 were
approved by the Audit Committee.
(f) Not applicable
(g) The aggregate non-audit fees for services to the registrant, its investment
adviser and any entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant were $231,008 for
the fiscal year ended June 30, 2004 and $243,600 for the fiscal year ended June
30, 2003, including services provided prior to May 6, 2003, the effective date
of the pre-approval process.
(h) Not applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments in securities of unaffiliated issuers is included in
the Annual Report.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant does not have procedures by which shareholders may recommend
nominees to its Board of Trustees.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the 1940 Act) the
registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures
are effective as of a date within 90 days of the filing date of this
report.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred
during the registrant's second fiscal half-year that have materially
affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) The Code of Ethics for Senior Financial Officers is filed herewith.
(a)(2) Certifications required by Item 11(a)(2) of Form N-CSR are filed
herewith.
(b) Certification required by Item 11(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/ Jill T. McGruder
- --------------------------------------------------------------------------------
Jill T. McGruder
President
Date: September 6, 2004
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/ Jill T. McGruder
- --------------------------------------------------------------------------------
Jill T. McGruder
President
Date: September 6, 2004
/s/ Terrie A. Wiedenheft
- --------------------------------------------------------------------------------
Terrie A. Wiedenheft
Controller & Treasurer
Date: September 6, 2004