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
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Date of fiscal year end: 6/30/05
----------------------
Date of reporting period: 12/31/04
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Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Tax-Free Money Market Fund Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Tax-Free Money Market Fund Touchstone Tax-Free Money Market
Tax-Free Money Market Fund Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Tax-Free Money Market Fund Touchstone Tax-Free Money Market
Tax-Free Money Market Fund Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Tax-Free Money Market Fund Touchstone Tax-Free Money Market
December 31, 2004 (Unaudited)
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[LOGO] TOUCHSTONE
INVESTMENTS
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Semi-Annual Report
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Touchstone California Tax-Free Money Market Fund
Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Insured Tax-Free Fund
Touchstone Ohio Tax-Free Money Market Fund
Touchstone Tax-Free Money Market Fund
Research o Design o Select o Monitor
TABLE OF CONTENTS
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Page
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Management's Discussion of Fund Performance 3
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Statements of Assets and Liabilities 4-7
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Statements of Operations 8-10
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Statements of Changes in Net Assets 11-14
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Financial Highlights 15-19
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Notes to Financial Statements 20-31
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Portfolios of Investments:
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California Tax-Free Money Market Fund 32-33
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Florida Tax-Free Money Market Fund 34-35
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Ohio Insured Tax-Free Fund 36-38
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Ohio Tax-Free Money Market Fund 39-42
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Tax-Free Money Market Fund 43-44
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Notes to Portfolios of Investments 45
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2
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
================================================================================
The illustrations below provide each Fund's Sector allocation. We hope it will
be useful to shareholders as it summarizes key Information about each Fund's
investments.
As of December 31, 2004
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TOUCHSTONE TAX-FREE
MONEY MARKET FUND
-----------------
CREDIT QUALITY (% OF NET ASSETS)
A-1/P-1/AAA 78.7
FW1 21.3
-----
Total 100.0
-----
PORTFOLIO ALLOCATION (% OF NET ASSETS)
Fixed Rate Revenue 14.3
Variable Rate Demand Notes 62.2
Adjustable Rate Put Bonds 12.0
General Obligations 11.5
-----
Total 100.0
-----
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TOUCHSTONE CALIFORNIA
TAX-FREE MONEY MARKET FUND
--------------------------
CREDIT QUALITY (% OF NET ASSETS)
A-1/P-1/AAA 100.0
PORTFOLIO ALLOCATION (% OF NET ASSETS)
Variable Rate Demand Notes 91.4
Fixed Rate Revenue 3.4
Commercial Paper 4.7
General Obligations 0.5
-----
Total 100.0
-----
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TOUCHSTONE FLORIDA TAX-FREE
MONEY MARKET FUND
-----------------
CREDIT QUALITY (% OF NET ASSETS)
A-1/P-1/AAA 94.5
FW1 5.5
-----
Total 100.0
-----
PORTFOLIO ALLOCATION (% OF NET ASSETS)
Fixed Rate Revenue 5.2
Variable Rate Demand Notes 81.3
Adjustable Rate Put Bonds 7.1
General Obligations 6.4
-----
Total 100.0
-----
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TOUCHSTONE OHIO TAX-FREE
MONEY MARKET FUND
-----------------
CREDIT QUALITY (% OF NET ASSETS)
A-1/P-1/AAA 78.7
FW1 21.3
-----
Total 100.0
-----
PORTFOLIO ALLOCATION (% OF NET ASSETS)
Variable Rate Demand Notes 74.2
General Obligations 14.3
Fixed Rate Revenue 7.3
Commercial Paper 1.6
Adjustable Rate Put Bonds 2.6
-----
Total 100.0
-----
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TOUCHSTONE OHIO
INSURED TAX-FREE FUND
---------------------
CREDIT QUALITY (% OF NET ASSETS)
AAA/Aaa 89.7
AA/Aa 9.1
Not Rated 1.2
-----
Total 100.0
-----
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3
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2004 (UNAUDITED)
=============================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost .......................................... $ 51,255,556 $ 31,246,098
============================
At market value ............................................ $ 51,255,556 $ 31,246,098
Cash ......................................................... 3,042 73,448
Interest receivable .......................................... 125,847 82,012
Other assets ................................................. 1,255 2,356
----------------------------
TOTAL ASSETS ................................................. 51,385,700 31,403,914
----------------------------
LIABILITIES
Dividends payable ............................................ 2 15,091
Payable to Advisor ........................................... 16,259 9,904
Payable to affiliates ........................................ 9,091 4,476
Payable to Trustees .......................................... 972 621
Other accrued expenses and liabilities ....................... 21,824 11,560
----------------------------
TOTAL LIABILITIES ............................................ 48,148 41,652
----------------------------
NET ASSETS ................................................... $ 51,337,552 $ 31,362,262
============================
NET ASSETS CONSIST OF:
Paid-in capital .............................................. $ 51,340,712 $ 31,367,990
Undistributed net investment income .......................... 384 --
Accumulated net realized losses from security transactions ... (3,544) (5,728)
============================
NET ASSETS ................................................... $ 51,337,552 $ 31,362,262
============================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ...... 51,340,722 31,367,978
============================
Net asset value, offering price and redemption price per share $ 1.00 $ 1.00
============================
See accompanying notes to financial statements.
4
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2004 (UNAUDITED)
=============================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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ASSETS
Investment securities:
At amortized cost ........................................... $ 81,186,819 $320,724,687
===========================
At market value ............................................. $ 86,648,186 $320,724,687
Cash .......................................................... 44,181 --
Interest receivable ........................................... 558,299 1,131,309
Receivable for capital shares sold ............................ 58,772 --
Other assets .................................................. 12,537 6,809
---------------------------
TOTAL ASSETS .................................................. 87,321,975 321,862,805
---------------------------
LIABILITIES
Bank overdraft ................................................ -- 134,973
Dividends payable ............................................. 98,572 231,320
Payable to Advisor ............................................ 31,852 113,972
Payable to affiliates ......................................... 17,495 25,411
Payable to Trustees ........................................... 535 889
Payable for capital shares redeemed ........................... 42,417 --
Other accrued expenses and liabilities ........................ 36,923 64,888
---------------------------
TOTAL LIABILITIES ............................................. 227,794 571,453
---------------------------
NET ASSETS .................................................... $ 87,094,181 $321,291,352
---------------------------
NET ASSETS CONSIST OF:
Paid-in capital ............................................... $ 80,979,284 $321,291,286
Accumulated net realized gains from security transactions ..... 653,530 66
Net unrealized appreciation on investments .................... 5,461,367 --
---------------------------
NET ASSETS .................................................... $ 87,094,181 $321,291,352
===========================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares ....................... $ 77,680,432 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ....... 6,454,511 --
===========================
Net asset value and redemption price per share ................ $ 12.04 $ --
===========================
Maximum offering price per share .............................. $ 12.64 $ --
===========================
PRICING OF CLASS C SHARES
Net assets applicable to Class C shares ....................... $ 9,413,749 $ --
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ....... 781,479 --
===========================
Net asset value, offering price and redemption price per share* $ 12.05 $ --
===========================
5
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 2004 (UNAUDITED)
============================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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PRICING OF RETAIL SHARES
Net assets applicable to Retail shares ....................... $ -- $127,464,006
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ...... -- 127,453,641
===========================
Net asset value, offering price and redemption price per share $ -- $ 1.00
===========================
PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional shares ................ $ -- $193,827,346
===========================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ...... -- 193,824,035
===========================
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.
6
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2004 (UNAUDITED)
================================================================================
TAX-FREE
MONEY MARKET
FUND
- --------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost ............................................. $41,209,166
===========
At market value ............................................... $41,209,166
Cash ............................................................ 19,941
Interest receivable ............................................. 170,762
Receivable for securities sold .................................. 740,000
Other assets .................................................... 11,485
-----------
TOTAL ASSETS .................................................... 42,151,354
-----------
LIABILITIES
Dividends payable ............................................... 301
Payable to Advisor .............................................. 11,961
Payable to affiliates ........................................... 7,943
Payable to Trustees ............................................. 959
Payable for securities purchased ................................ 1,125,323
Other accrued expenses and liabilities .......................... 22,909
-----------
TOTAL LIABILITIES ............................................... 1,169,396
-----------
NET ASSETS ...................................................... $40,981,958
===========
NET ASSETS CONSIST OF:
Paid-in capital ................................................. $40,980,728
Undistributed net investment income ............................. 1,230
-----------
NET ASSETS ...................................................... $40,981,958
===========
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares ......................... $28,095,444
===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 28,104,377
===========
Net asset value, offering price and redemption price per share .. $ 1.00
===========
PRICING OF CLASS S SHARES
Net assets applicable to Class S shares ......................... $12,886,514
===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ......... 12,886,502
===========
Net asset value, offering price and redemption price per share .. $ 1.00
===========
See accompanying notes to financial statements.
7
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
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INVESTMENT INCOME
Interest income .................................... $ 402,557 $ 209,370
-----------------------
EXPENSES
Investment advisory fees ........................... 139,095 72,460
Distribution expenses .............................. 71,017 36,223
Accounting services fees ........................... 15,000 12,000
Administration fees ................................ 15,312 7,966
Transfer agent fees ................................ 16,116 6,000
Professional fees .................................. 10,589 8,933
Custodian fees ..................................... 11,648 2,841
Postage and supplies ............................... 9,255 927
Trustees' fees and expenses ........................ 4,142 3,474
Pricing expenses ................................... 4,866 1,835
Reports to shareholders ............................ 3,987 1,439
Registration fees .................................. 191 1,657
Other expenses ..................................... 590 --
Compliance fees and expenses ....................... 462 222
-----------------------
TOTAL EXPENSES ..................................... 302,270 155,977
Fees waived by the Advisor ......................... (93,064) (47,010
-----------------------
NET EXPENSES ....................................... 209,206 108,967
-----------------------
NET INVESTMENT INCOME .............................. 193,351 100,403
-----------------------
NET REALIZED LOSSES FROM SECURITY TRANSACTIONS ..... -- (198)
-----------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ......... $ 193,351 $ 100,205
=======================
See accompanying notes to financial statements.
8
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
============================================================================================
OHIO OHIO
INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
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INVESTMENT INCOME
Interest income ................................................. $ 1,993,369 $ 2,499,876
--------------------------
EXPENSES
Investment advisory fees ........................................ 220,678 735,883
Distribution expenses, Class A .................................. 98,267 --
Distribution expenses, Class C .................................. 48,289 --
Distribution expenses, Retail class ............................. -- 180,924
Administration fees ............................................. 24,274 81,535
Transfer agent fees, Class A .................................... 18,944 --
Transfer agent fees, Class C .................................... 6,000 --
Transfer agent fees, Retail class ............................... -- 22,696
Transfer agent fees, Institutional class ........................ -- 6,000
Accounting services fees ........................................ 18,750 30,750
Postage and supplies ............................................ 19,783 24,343
Custodian fees .................................................. 9,982 33,273
Professional fees ............................................... 9,118 19,971
Registration fees, Class A ...................................... 6,772 --
Registration fees, Class C ...................................... 3,110 --
Registration fees, Retail class ................................. -- 5,622
Pricing expenses ................................................ 6,452 7,452
Reports to shareholders ......................................... 4,174 4,012
Trustees' fees and expenses ..................................... 3,564 3,997
Compliance fees and expenses .................................... 733 2,772
Other expenses .................................................. 110 394
--------------------------
TOTAL EXPENSES .................................................. 499,000 1,159,624
Fees waived by the Advisor ...................................... (130,756) (145,486)
--------------------------
NET EXPENSES .................................................... 368,244 1,014,138
--------------------------
NET INVESTMENT INCOME ........................................... 1,625,125 1,485,738
--------------------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ................... 755,938 66
Net change in unrealized appreciation/depreciation on investments 1,984,863 --
--------------------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ................ 2,740,801 66
--------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $ 4,365,926 $ 1,485,804
==========================
See accompanying notes to financial statements.
9
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
================================================================================
TAX-FREE
MONEY MARKET
FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income .......................................... $ 296,080
---------
EXPENSES
Investment advisory fees ................................. 88,984
Distribution expenses, Class A ........................... 23,992
Distribution expenses, Class S ........................... 49,200
Transfer agent fees, Class A ............................. 10,565
Transfer agent fees, Class S ............................. 6,000
Accounting services fees ................................. 15,750
Registration fees, Class A ............................... 5,799
Registration fees, Class S ............................... 7,102
Administration fees ...................................... 9,779
Professional fees ........................................ 9,583
Postage and supplies ..................................... 8,246
Custodian fees ........................................... 5,956
Trustees' fees and expenses .............................. 3,976
Reports to shareholders .................................. 3,143
Pricing expenses ......................................... 2,045
Compliance fees and expenses ............................. 284
Other expenses ........................................... 224
---------
TOTAL EXPENSES ........................................... 250,628
Fees waived by the Advisor ............................... (70,461)
---------
NET EXPENSES ............................................. 180,167
---------
NET INVESTMENT INCOME .................................... $ 115,913
=========
See accompanying notes to financial statements.
10
STATEMENTS OF CHANGES IN NET ASSETS
========================================================================================================
CALIFORNIA FLORIDA
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
----------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
DECEMBER 31, ENDED DECEMBER 31, ENDED
2004 JUNE 30, 2004 JUNE 30,
(UNAUDITED) 2004 (UNAUDITED) 2004
========================================================================================================
FROM OPERATIONS
Net investment income ............... $ 193,351 $ 191,085 $ 100,403 $ 110,513
Net realized losses from
security transactions ............. -- (3,544) (198) (5,422)
----------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS ........................ 193,351 187,541 100,205 105,091
----------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .......... (193,351) (190,813) (100,403) (110,513)
From net realized gains ............. -- (251) -- --
----------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ..... (193,351) (191,064) (100,403) (110,513)
----------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........... 79,610,605 216,103,748 31,472,864 67,059,735
Reinvested distributions ............ 197,003 190,472 28,904 23,524
Payments for shares redeemed ........ (88,128,040) (226,977,960) (29,524,798) (67,348,981)
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ... (8,320,432) (10,683,740) 1,976,970 (265,722)
----------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ........................ (8,320,432) (10,687,263) 1,976,772 (271,144)
NET ASSETS
Beginning of period ................. 59,657,984 70,345,247 29,385,490 29,656,634
----------------------------------------------------------------
End of period ....................... $ 51,337,552 $ 59,657,984 $ 31,362,262 $ 29,385,490
================================================================
UNDISTRIBUTED NET INVESTMENT INCOME . $ 384 $ 384 $ -- $ --
================================================================
See accompanying notes to financial statements.
11
STATEMENTS OF CHANGES IN NET ASSETS
=========================================================================================================
OHIO
OHIO INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
DECEMBER 31, ENDED DECEMBER 31, ENDED
2004 JUNE 30, 2004 JUNE 30,
(UNAUDITED) 2004 (UNAUDITED) 2004
- --------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 1,625,125 $ 2,585,019 $ 1,485,738 $ 1,939,469
Net realized gains from
security transactions ................. 755,938 435,030 66 16,293
Net change in unrealized appreciation/
depreciation on investments ........... 1,984,863 (2,333,368) -- --
-----------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ....................... 4,365,926 686,681 1,485,804 1,955,762
-----------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ..... (1,479,691) (2,335,854) -- --
From net investment income, Class B * ... -- (10,552) -- --
From net investment income, Class C ..... (145,434) (238,613) -- --
From net investment income, Retail ...... -- -- (530,281) (582,573)
From net investment income, Institutional -- -- (955,457) (1,356,896)
From net realized gains, Class A ........ (91,343) (956,379) -- --
From net realized gains, Class B * ...... -- (6,660) -- --
From net realized gains, Class C ........ (11,065) (118,216) -- --
From net realized gains, Retail ......... -- -- (6,125) (5,245)
From net realized gains, Institutional .. -- -- (10,168) (6,165)
-----------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ......... (1,727,533) (3,666,274) (1,502,031) (1,950,879)
-----------------------------------------------------------
CAPITAL CONTRIBUTION .................... -- 150,000 -- --
-----------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ............... 2,295,454 43,472,366 -- --
Proceeds from shares issued in
connection with acquistion (Note 6) ... -- 26,699,005 -- --
Reinvested distributions ................ 1,061,678 2,127,491 -- --
Payments for shares redeemed ............ (5,862,111) (51,646,987) -- --
-----------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS ....... (2,504,979) 20,651,875 -- --
-----------------------------------------------------------
CLASS B *
Proceeds from shares sold ............... -- 153,317 -- --
Reinvested distributions ................ -- 11,011 -- --
Payments for shares redeemed ............ -- (463,312) -- --
-----------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CLASS B SHARE TRANSACTIONS ....... -- (298,984) -- --
-----------------------------------------------------------
12
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
=========================================================================================================
OHIO
OHIO INSURED TAX-FREE
TAX-FREE MONEY MARKET
FUND FUND
----------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
DECEMBER 31, ENDED DECEMBER 31, ENDED
2004 JUNE 30, 2004 JUNE 30,
(UNAUDITED) 2004 (UNAUDITED) 2004
- ----------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold ............. $ 492,703 $ 1,020,441 $ -- $ --
Proceeds from shares issued in
connection with acquisition (Note 6) -- 3,872,930 -- --
Reinvested distributions .............. 107,413 254,465 -- --
Payments for shares redeemed .......... (1,338,038) (2,351,756) -- --
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS C SHARE TRANSACTIONS ..... (737,922) 2,796,080 -- --
----------------------------------------------------------------
RETAIL
Proceeds from shares sold ............. -- -- 130,141,967 330,112,190
Reinvested distributions .............. -- -- 543,532 586,040
Payments for shares redeemed .......... -- -- (168,360,574) (321,365,247
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM RETAIL SHARE TRANSACTIONS ...... -- -- (37,675,075) 9,332,983
----------------------------------------------------------------
INSTITUTIONAL
Proceeds from shares sold ............. -- -- 208,914,516 497,917,624
Reinvested distributions .............. -- -- 36,589 61,993
Payments for shares redeemed .......... -- -- (189,852,326) (589,363,170
----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INSTITUTIONAL SHARE TRANSACTIONS -- -- 19,098,779 (91,383,553
----------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (604,508) 20,319,378 (18,592,523) (82,045,687
NET ASSETS
Beginning of period ................... 87,698,689 67,379,311 339,883,875 421,929,562
----------------------------------------------------------------
End of period ......................... $ 87,094,181 $ 87,698,689 $ 321,291,352 $ 339,883,875
================================================================
UNDISTRIBUTED NET INVESTMENT INCOME ... $ -- $ -- $ -- $ --
================================================================
* Represents the period from July 1, 2003 through May 21, 2004 (see Note 6).
See accompanying notes to financial statements.
13
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
TAX-FREE
MONEY MARKET
FUND
----------------------------
SIX MONTHS
ENDED YEAR
DECEMBER 31, ENDED
2004 JUNE 30,
(UNAUDITED) 2004
- ----------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ....................... $ 115,913 $ 121,188
Net realized gains from security transactions -- 13
----------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .. 115,913 121,201
----------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A ......... (74,609) (88,234)
From net investment income, Class S ......... (41,317) (31,994)
From net realized gains, Class A ............ -- (4,906)
From net realized gains, Class S ............ -- (4,736)
----------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS ............. (115,926) (129,870)
----------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold ................... 21,817,608 26,939,807
Reinvested distributions .................... 75,058 90,480
Payments for shares redeemed ................ (14,060,066) (28,138,896)
----------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS A SHARE TRANSACTIONS ........... 7,832,600 (1,108,609)
----------------------------
CLASS S
Proceeds from shares sold ................... 36,079,671 66,371,877
Reinvested distributions .................... 41,983 36,737
Payments for shares redeemed ................ (39,615,979) (68,714,740)
----------------------------
NET DECREASE IN NET ASSETS FROM
CLASS S SHARE TRANSACTIONS ................ (3,494,325) (2,306,126)
----------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ..... 4,338,262 (3,423,404)
NET ASSETS
Beginning of period ......................... 36,643,696 40,067,100
----------------------------
End of period ............................... $ 40,981,958 $ 36,643,696
============================
UNDISTRIBUTED NET INVESTMENT INCOME ......... $ 1,230 $ 1,243
============================
See accompanying notes to financial statements.
14
CALIFORNIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
===========================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ---------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 --------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------------
Net investment income ..................... 0.004 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 .... (0.004) (0.003) (0.006) (0.012) (0.028) (0.027)
Distributions from net realized gains ... -- (0.000)(A) -- -- -- --
----------------------------------------------------------------------------
Total distributions ....................... (0.004) (0.003) (0.006) (0.012) (0.028) (0.027)
----------------------------------------------------------------------------
Net asset value at end of period .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============================================================================
Total return .............................. 0.73%(B) 0.27% 0.65% 1.17% 2.84% 2.75%
============================================================================
Net assets at end of period (000's) ....... $51,338 $59,658 $70,345 $84,406 $69,485 $62,900
============================================================================
Ratio of net expenses to average net assets 0.75%(B) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets ...................... 0.69%(B) 0.27% 0.64% 1.13% 2.84% 2.72%
(A) Amount rounds to less than $0.001.
(B) Annualized.
See accompanying notes to financial statements.
FLORIDA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
==========================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------------
Net investment income ..................... 0.004 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) (0.000)(A) -- --
----------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .... (0.004) (0.004) (0.008) (0.017) (0.033) (0.030)
Distributions from net realized gains ... -- (0.000)(A) -- -- -- --
----------------------------------------------------------------------------
Total distributions ....................... (0.004) (0.004) (0.008) (0.017) (0.033) (0.030)
----------------------------------------------------------------------------
Net asset value at end of period .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============================================================================
Total return .............................. 0.71%(B) 0.36% 0.76% 1.66% 3.30% 3.05%
============================================================================
Net assets at end of period (000's) ....... $31,362 $29,385 $29,657 $18,128 $16,690 $18,244
============================================================================
Ratio of net expenses to average net assets 0.75%(B) 0.75% 0.69% 0.65% 0.65% 0.73%
Ratio of net investment income to
average net assets ...................... 0.69%(B) 0.35% 0.77% 1.64% 3.26% 2.98%
(A) Amount rounds to less than $0.001.
(B) Annualized.
See accompanying notes to financial statements.
15
OHIO INSURED TAX-FREE FUND - CLASS A
FINANCIAL HIGHLIGHTS
=====================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 ----------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 11.68 $ 12.36 $ 11.94 $ 11.89 $ 11.45 $ 11.74
-------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................. 0.23 0.48 0.49 0.53 0.56 0.58
Net realized and unrealized gains
(losses) on investments ............. 0.37 (0.50) 0.49 0.07 0.44 (0.29)
-------------------------------------------------------------------------
Total from investment operations ........ 0.60 (0.02) 0.98 0.60 1.00 0.29
-------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .. (0.23) (0.48) (0.49) (0.53) (0.56) (0.58)
Distributions from net realized gains . (0.01) (0.21) (0.07) (0.02) -- --
-------------------------------------------------------------------------
Total distributions ..................... (0.24) (0.69) (0.56) (0.55) (0.56) (0.58)
-------------------------------------------------------------------------
Capital contribution .................... -- 0.03 -- -- -- --
-------------------------------------------------------------------------
Net asset value at end of period ........ $ 12.04 $ 11.68 $ 12.36 $ 11.94 $ 11.89 $ 11.45
=========================================================================
Total return(A) ......................... 5.19%(B) 0.04%(C) 8.43% 5.15% 8.88% 2.60%
=========================================================================
Net assets at end of period (000's) ..... $77,680 $77,837 $59,683 $54,348 $54,791 $59,600
=========================================================================
Ratio of net expenses to
average net assets .................... 0.75%(D) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets .................... 3.75(D) 3.94% 4.03% 4.47% 4.77% 5.08%
Portfolio turnover rate ................. 25%(D) 36% 24% 28% 20% 66%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Total return would have been (0.21%) without the capital contribution made
by the Advisor (Note 4).
(D) Annualized.
See accompanying notes to financial statements.
16
OHIO INSURED TAX-FREE FUND - CLASS C
FINANCIAL HIGHLIGHTS
==============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 -----------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 11.69 $ 12.41 $ 11.96 $ 11.89 $ 11.44 $ 11.74
----------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................. 0.18 0.39 0.40 0.44 0.47 0.49
Net realized and unrealized gains
(losses) on investments ............. 0.37 (0.51) 0.52 0.09 0.45 (0.30)
----------------------------------------------------------------------------------
Total from investment operations ........ 0.55 (0.12) 0.92 0.53 0.92 0.19
----------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .. (0.18) (0.39) (0.40) (0.44) (0.47) (0.49)
Distributions from net realized gains . (0.01) (0.21) (0.07) (0.02) -- --
----------------------------------------------------------------------------------
Total distributions ..................... (0.19) (0.60) (0.47) (0.46) (0.47) (0.49)
----------------------------------------------------------------------------------
Net asset value at end of period ........ $ 12.05 $ 11.69 $ 12.41 $ 11.96 $ 11.89 $ 11.44
==================================================================================
Total return(A) ......................... 4.79%(B) (1.03%) 7.89% 4.54% 8.15% 1.75%
==================================================================================
Net assets at end of period (000's) ..... $ 9,414 $ 9,862 $ 7,388 $ 4,910 $ 4,526 $ 3,585
==================================================================================
Ratio of net expenses to
average net assets .................... 1.50%(C) 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to
average net assets .................... 3.00%(C) 3.19% 3.27% 3.72% 4.00% 4.42%
Portfolio turnover rate ................. 25%(C) 36% 24% 28% 20% 66%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
17
OHIO TAX-FREE MONEY MARKET FUND - RETAIL
FINANCIAL HIGHLIGHTS
=================================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 ------------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------------------
Net investment income ..................... 0.004 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) (0.000)(A) -- --
----------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .... (0.004) (0.004) (0.008) (0.015) (0.033) (0.031)
Distributions from net realized gains ... (0.000)(A) (0.000)(A) -- -- -- --
----------------------------------------------------------------------------------
Total distributions ....................... (0.004) (0.004) (0.008) (0.015) (0.033) (0.031)
----------------------------------------------------------------------------------
Net asset value at end of period .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================
Total return .............................. 0.77%(B) 0.35% 0.78% 1.47% 3.31% 3.09%
==================================================================================
Net assets at end of period (000's) ....... $127,464 $165,145 $155,810 $211,083 $211,564 $214,561
==================================================================================
Ratio of net expenses to average net assets 0.75%(B) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets ...................... 0.73%(B) 0.35% 0.79% 1.46% 3.29% 3.04%
(A) Amount rounds to less than $0.001
(B) Annualized.
See accompanying notes to financial statements.
OHIO TAX-FREE MONEY MARKET FUND - INSTITUTIONAL
FINANCIAL HIGHLIGHTS
==============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 ----------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------------------------------------------------------------------
Net investment income ..................... 0.005 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) (0.000)(A) -- --
--------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .... (0.005) (0.006) (0.010) (0.017) (0.035) (0.033)
Distributions from net realized gains ... (0.000)(A) (0.000)(A) -- -- -- --
--------------------------------------------------------------------------------
Total distributions ....................... (0.005) (0.006) (0.010) (0.017) (0.035) (0.033)
--------------------------------------------------------------------------------
Net asset value at end of period .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
================================================================================
Total return .............................. 1.03%(B) 0.60% 1.03% 1.72% 3.58% 3.35%
================================================================================
Net assets at end of period (000's) ....... $193,827 $174,739 $266,120 $210,679 $185,381 $132,889
================================================================================
Ratio of net expenses to average net assets 0.50%(B) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ...................... 1.02%(B) 0.59% 1.02% 1.69% 3.52% 3.25%
(A) Amount rounds to less than $0.001.
(B) Annualized.
See accompanying notes to financial statements.
18
TAX-FREE MONEY MARKET FUND - CLASS A
FINANCIAL HIGHLIGHTS
=========================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
2004 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------------------------------------------------------------------------
Net investment income ..................... 0.004 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 .... (0.004) (0.005) (0.008) (0.017) (0.034) (0.032)
Distributions from net realized gains ... -- (0.000)(A) -- -- -- --
----------------------------------------------------------------------------
Total distributions ....................... (0.004) (0.005) (0.008) (0.017) (0.034) (0.032)
----------------------------------------------------------------------------
Net asset value at end of period .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============================================================================
Total return .............................. 0.79%(B) 0.50% 0.99% 1.73% 3.45% 3.22%
============================================================================
Net assets at end of period (000's) ....... $28,095 $20,263 $21,375 $23,532 $22,409 $25,194
============================================================================
Ratio of net expenses to average net assets 0.89%(B) 0.89% 0.89% 0.89% 0.89% 0.89%
Ratio of net investment income to
average net assets ...................... 0.78%(B) 0.48% 0.79% 1.71% 3.42% 3.15%
(A) Amount rounds to less than $0.001.
(B) Annualized.
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
- -----------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR PERIOD
DECEMBER 31, ENDED ENDED
2004 JUNE 30, JUNE 30,
(UNAUDITED) 2004 2003(A)
- -----------------------------------------------------------------------------------------------
Net asset value at beginning of period ............. $ 1.000 $ 1.000 $ 1.000
------------------------------------
Net investment income .............................. 0.003 0.002 0.001
------------------------------------
Net realized gains on investments .................. -- 0.000(B) 0.000(B)
------------------------------------
Less distributions:
Dividends from net investment income ............. (0.003) (0.002) (0.001)
Distributions from net realized gains ............ -- (0.000)(B) --
------------------------------------
Total distributions ................................ (0.003) (0.002) (0.001)
------------------------------------
Net asset value at end of period ................... $ 1.000 $ 1.000 $ 1.000
====================================
Total return ....................................... 0.54%(C) 0.25% 0.32%(C)
====================================
Net assets at end of period (000's) ................ $12,887 $16,381 $18,692
====================================
Ratio of net expenses to average net assets ........ 1.15%(C) 1.15% 1.15%(C)
Ratio of net investment income to average net assets 0.50%(C) 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.
19
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 (UNAUDITED)
================================================================================
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 income tax 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
20
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.
21
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.
22
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
===========================================================================
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
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
============================================
23
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
- --------------------------------------------------------------------------------
Florida Tax-Free Money Market 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.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and government
securities) were as follows for the six months ended December 31, 2004:
- --------------------------------------------------------------------------------
OHIO INSURED
TAX-FREE FUND
- --------------------------------------------------------------------------------
Purchases of investment securities .............................. $10,153,772
Proceeds from sales and maturities of investment securities ..... $14,797,936
- --------------------------------------------------------------------------------
24
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
4. TRANSACTIONS WITH AFFILIATES
The President and certain other officers of the Trust are also officers of
Touchstone Advisors, Inc. (the Advisor), the Trust's investment advisor,
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 Advisor, the
Underwriter and Integrated are each wholly-owned, indirect subsidiaries of The
Western and Southern Life Insurance Company.
MANAGEMENT AGREEMENT
Each Fund's investments are managed by the Advisor under the terms of a
Management Agreement. Under the Management Agreement, each Fund pays the Advisor
a fee, computed and accrued daily and paid monthly, at an annual rate of 0.50%
of its respective average daily net assets up to $100 million, 0.45% of such net
assets from $100 million to $200 million, 0.40% of such net assets from $200
million to $300 million and 0.375% of such net assets in excess of $300 million.
The Trust and the Advisor have entered into an agreement to contractually limit
operating expenses. The maximum operating expense limit in any year with respect
to a Fund is based on a percentage of the average daily net assets of the Fund:
California Tax-Free Money Market Fund -0.75%; Florida Tax-Free Money Market Fund
- - 0.75%; 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 six months ended
December 31, 2004, the Advisor waived the following fees:
California Tax-Free Money Market Fund $ 93,064
Florida Tax-Free Money Market Fund $ 47,010
Ohio Insured Tax-Free Fund $ 130,756
Ohio Tax-Free Money Market Fund $ 145,486
Tax-Free Money Market Fund $ 70,461
During the year ended June 30, 2004, the Advisor made a capital contribution to
the Ohio Insured Tax-Free Fund Class A shares totaling $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
25
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
functions. For these services, Integrated receives a monthly fee per shareholder
account from each Fund, subject to a minimum monthly fee for each Fund, or for
each class of shares of a Fund, as applicable. In addition, each Fund pays
Integrated out-of-pocket expenses including, but not limited to, postage and
supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement between the Trust and
Integrated, Integrated calculates the daily net asset value per share and
maintains the financial books and records of each Fund. For these services,
Integrated receives a monthly fee per Fund, based on average net assets, of each
Fund subject to an additional monthly fee for each additional class of shares.
In addition, each Fund pays certain out-of-pocket expenses incurred by
Integrated in obtaining valuations of such Fund's portfolio securities.
UNDERWRITING AGREEMENT
The Underwriter is the Funds' principal underwriter and, as such, acts as
exclusive agent for distribution of the Funds' shares. Under the terms of the
Underwriting Agreement between the Trust and the Underwriter, the Underwriter
earned $7,022 from underwriting and broker commissions on the sale of Class A
shares of the Ohio Insured Tax-Free Fund during the six months ended December
31, 2004. In addition, the Underwriter collected $973 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 Advisor or the Underwriter for expenses related to the
distribution and promotion of shares. The annual limitation for payment of such
expenses under the Class A Plan is 0.25% of average daily net assets
attributable to such shares.
The Trust also has a Plan of Distribution (Class C Plan) under which Class C
shares of the Ohio Insured Tax-Free Fund may directly incur or reimburse the
Advisor or the Underwriter for expenses related to the distribution and
promotion of shares. The annual limitation for payment of such expenses under
the Class C Plan is 1.00% of average daily net assets attributable to Class C
shares.
The Trust also has a Plan of Distribution (Class S Plan) under which Class S
shares of the Tax-Free Money Market Fund may directly incur or reimburse the
Advisor or the Underwriter for expenses related to the distribution and
promotion of shares. The annual limitation for payment of such expenses under
the Class S Plan is 1.00% of average daily net assets attributable to such
shares. The current distribution expense fee for Class S shares is limited to
0.60% of average daily net assets attributable to such shares.
COMPLIANCE SERVICES AGREEMENT
Under the terms of the Compliance Services Agreement between theTrust and
Integrated, Integrated provides certain compliance services to the Trust,
including developing and assisting in implementing a compliance program for
Integrated on behalf of the Funds and providing administrative support services
to the Funds' Compliance Program and Chief Compliance Officer.
26
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
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
DECEMBER 31, ENDED
2004 JUNE 30,
(UNAUDITED) 2004
- --------------------------------------------------------------------------------
CLASS A
Shares sold ........................................... 191,694 3,651,817
Shares issued in connection with acquisition (Note 6) . -- 2,336,257
Shares reinvested ..................................... 88,577 178,114
Shares redeemed ....................................... (488,480) (4,330,774)
-----------------------
Net increase in shares outstanding .................... (208,209) 1,835,414
Shares outstanding, beginning of year ................. 6,662,720 4,827,306
-----------------------
Shares outstanding, end of year ....................... 6,454,511 6,662,720
-----------------------
CLASS B
Shares sold ........................................... -- 12,695
Shares reinvested ..................................... -- 917
Shares redeemed ....................................... -- (1,763)
-----------------------
Shares redeemed in connection with acquisition (Note 6) -- (36,723)
Net increase (decrease) in shares outstanding ......... -- (24,874)
Shares outstanding, beginning of year ................. -- 24,874
-----------------------
Shares outstanding, end of year ....................... -- --
-----------------------
CLASS C
Shares sold ........................................... 40,983 85,092
Shares issued in connection with acquisition (Note 6) . -- 336,184
Shares reinvested ..................................... 8,954 21,222
Shares redeemed ....................................... (111,802) (194,697)
-----------------------
Net increase in shares outstanding .................... (61,865) 247,801
Shares outstanding, beginning of year ................. 843,344 595,543
-----------------------
Shares outstanding, end of year ....................... 781,479 843,344
-----------------------
- --------------------------------------------------------------------------------
27
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
6. ACQUISITION
On May 21, 2004, a Special Meeting of Shareholders of the Touchstone Tax-Free
Intermediate Term Fund, a series of the Trust 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
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, 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.
28
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
8. PORTFOLIO COMPOSITION
As of December 31, 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 90.6% 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 December 31, 2004, 26.1% of
the portfolio securities of the Tax-Free Money Market Fund were concentrated in
the State of Ohio and 11.9% 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 December
31, 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
Advisor, under the supervision of the Board of Trustees, to be of comparable
quality.
As of December 31, 2004, 84.6% 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 83.6%
of its portfolio securities.
29
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
The concentration of investments for each Fund as of December 31, 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 ..... 0.5% 5.3% 53.5% 4.4% 8.4%
-----------------------------------------------------------------
Revenue Bonds:
Industrial Development/
Pollution Control ..... 19.6% 4.6% -- 8.8% 17.9%
Hospital/Health Care .. 5.8% 18.2% 12.5% 23.5% 20.7%
Utilities/Water & Sewer 15.7% -- 7.6% 13.9% 15.5%
Education ............. 8.5% 19.8% 7.5% 10.7% 4.6%
Housing/Mortgage ...... 29.7% 38.3% 3.2% 6.4% 4.2%
Economic Development .. 1.1% -- -- 6.2% 5.6%
Public Facilities ..... 16.4% 4.6% -- 4.7% 0.4%
Transportation ........ 0.2% -- 2.5% 1.9% 3.6%
Special Tax ........... 2.5% -- -- 11.1% 2.2%
Miscellaneous ......... -- 9.2% 13.2% 8.4% 16.9%
-----------------------------------------------------------------
Total Investments ....... 100.0% 100.0% 100.0% 100.0% 100.0%
=================================================================
- -------------------------------------------------------------------------------------------------
9. PROXY VOTING DISCLOSURE
The Advisor is responsible for exercising the voting rights associated with the
securities purchased and held by the Funds. A description of the policies and
procedures that the Advisor uses in fulfilling this responsibility and
information regarding how those proxies were voted during the twelve month
period ended June 30, 2004 are available without charge upon request by calling
toll free 1.800.543.0407. These items are also available on the Securities and
Exchange Commission's website at http://www.sec.gov.
10. QUARTERLY PORTFOLIO DISCLOSURE
The Trust will file a complete listing of portfolio holdings for each Fund as of
the end of the first and third quarters of each fiscal year on Form N-Q
beginning with the September 2004 quarter. The complete listing (i) is available
on the Commission's website; (ii) may be reviewed and copied at the Commission's
Public Reference Room in Washington, DC; and (iii) will be made available to
shareholders upon request by calling 1.800.543.0407. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
11. SCHEDULE OF SHAREHOLDER EXPENSES
As a shareholder of the Funds, you incur two types of costs: (1) transaction
costs, including reinvested dividends or other distributions; and (2) ongoing
costs, including investment advisory fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Funds and to compare these costs with the
ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 through December 31, 2004).
30
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six
Months Ended December 31, 2004" to estimate the expenses you paid on your
account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Funds' actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Funds' actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
EXPENSES PAID
NET EXPENSE TOTAL RETURN BEGINNING ENDING DURING THE
RATIO SIX MONTHS ACCOUNT ACCOUNT SIX MONTHS
ANNUALIZED ENDED VALUE VALUE ENDED
DECEMBER 31, DECEMBER 31, JULY 1, DECEMBER 31, DECEMBER 31,
2004 2004 2004 2004 2004*
- ----------------------------------------------------------------------------------------------------------------------------
California Tax-Free Money Market Fund
Actual ............................ 0.75% 0.37% $1,000.00 $1,003.70 $ 3.79
Hypothetical ...................... 0.75% 2.52% $1,000.00 $1,021.42 $ 3.82
Florida Tax-Free Money Market Fund
Actual ............................ 0.75% 0.36% $1,000.00 $1,003.60 $ 3.79
Hypothetical ...................... 0.75% 2.52% $1,000.00 $1,021.42 $ 3.82
Ohio Insured Tax-Free Fund
Class A Actual .................... 0.75% 5.19% $1,000.00 $1,051.90 $ 3.88
Class A Hypothetical .............. 0.75% 2.52% $1,000.00 $1,021.42 $ 3.82
Class C Actual .................... 1.50% 4.79% $1,000.00 $1,047.90 $ 7.74
Class C Hypothetical .............. 1.50% 2.52% $1,000.00 $1,017.64 $ 7.63
Ohio Tax-Free Money Market Fund
Retail Class Actual ............... 0.75% 0.39% $1,000.00 $1,003.90 $ 3.79
Retail Class Hypothetical ......... 0.75% 2.52% $1,000.00 $1,021.42 $ 3.82
Institutional Class Actual ........ 0.50% 0.52% $1,000.00 $1,005.20 $ 2.53
Institutional Class Hypothetical .. 0.50% 2.52% $1,000.00 $1,022.68 $ 2.55
Tax-Free Money Market Fund
Class A Actual .................... 0.89% 0.40% $1,000.00 $1,004.00 $ 4.50
Class A Hypothetical .............. 0.89% 2.52% $1,000.00 $1,020.72 $ 4.53
Class S Actual .................... 1.15% 0.27% $1,000.00 $1,002.70 $ 5.81
Class S Hypothetical .............. 1.15% 2.52% $1,000.00 $1,019.41 $ 5.85
- ----------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the
average account value over the period, multiplied by [number of days in most
recent fiscal half-year/365] (to reflect the one-half year period).
31
CALIFORNIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 3.8% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 250,000 Central CA USD COP ................................................................. 3.500 01/01/05 $ 250,000
400,000 Natomas CA USD COP Called @ 100 .................................................... 2.500 02/01/05 400,000
300,000 San Jose CA Arpt Rev ............................................................... 4.250 03/01/05 301,507
100,000 San Francisco CA City & Co Arpts ................................................... 4.000 05/01/05 100,824
410,000 Long Beach CA Habor Rev Ser A ...................................................... 2.500 05/15/05 410,595
155,000 East Bay CA Muni Util Dist Wtr Sys Rev ............................................. 5.000 06/01/05 156,976
215,000 San Francisco CA Bay Area Rapid Trans Dist Sales Tax Rev
Prerefunded @ 101 .................................................................. 5.500 07/01/05 220,847
130,000 Bell Gardens CA Wtr Rev ............................................................ 1.750 10/01/05 129,807
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ................................ $ 1,970,556
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 91.3% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 400,000 CA PCR Fin Auth Rev Ser F .......................................................... 2.200 01/01/05 $ 400,000
1,400,000 CA St Kindergarten UTGO ............................................................ 2.250 01/01/05 1,400,000
720,000 CA St Muni Secs Tr Rcpts SGA 135 ................................................... 2.190 01/01/05 720,000
600,000 CA St. Dept. Wtr. Res. Pwr. Supply Rev ............................................. 2.250 01/01/05 600,000
1,100,000 Los Angeles CA Regl Arpts Impt Corp Lease Rev ...................................... 2.220 01/01/05 1,100,000
2,000,000 ABN AMRO MuniTops Ctfs Tr 2004-12 (Chabot Cmnty College) ........................... 2.020 01/04/05 2,000,000
1,500,000 ABAG CA Fin Auth MFH (Vintage Chateau) Ser A ....................................... 2.070 01/05/05 1,500,000
350,000 CA Ed Fac Auth (Mt St Marys College) ............................................... 2.030 01/05/05 350,000
1,000,000 CA Hlth Fac Fin (Catholic Hlth West) ............................................... 1.980 01/05/05 1,000,000
325,000 CA Infra EDB (Independent Sys Oper) ................................................ 1.980 01/05/05 325,000
1,300,000 CA PCR Fin Sld Wst Disp (Mission Trail Wst Sys A) .................................. 2.120 01/05/05 1,300,000
930,000 Huntington Park CA PFA Lease Rev ................................................... 2.050 01/05/05 930,000
2,060,000 Long Beach CA Bldg Fin Lease (Long Beach Museum of Art) ............................ 1.950 01/05/05 2,060,000
950,000 Los Angeles CA Conv Ctr Auth Rev ................................................... 1.950 01/05/05 950,000
1,600,000 Modesto CA MFH Rev (Westdale Commons) A ............................................ 1.950 01/05/05 1,600,000
2,000,000 San Francisco CA Redv Agy (Bayside Village) Ser B .................................. 1.980 01/05/05 2,000,000
1,600,000 Vacaville CA IDA IDR (Leggett & Platt) Ser B ....................................... 2.050 01/05/05 1,600,000
1,500,000 Alameda Co CA IDA (PJs Lumber Inc) ................................................. 2.090 01/06/05 1,500,000
1,000,000 Berkeley CA Rev (Berkeley YMCA) .................................................... 1.960 01/06/05 1,000,000
2,675,000 CA HFA MFH Rev Ser B ............................................................... 2.030 01/06/05 2,675,000
240,000 CA Infra EDB IDR (Metrotile Mfg) ................................................... 2.280 01/06/05 240,000
1,000,000 CA St Dept of Wtr & Pwr Supply Rev Ser C-7 ......................................... 2.000 01/06/05 1,000,000
100,000 CA Statewide CDA IDR (American Modular Sys) ........................................ 2.120 01/06/05 100,000
2,300,000 El Monte CA COP Cmnty Impt Ser A ................................................... 2.000 01/06/05 2,300,000
1,400,000 Hanford CA Swr Rev ................................................................. 2.030 01/06/05 1,400,000
1,000,000 Los Angeles CA CRA MFH Rev (Views at 270) .......................................... 2.040 01/06/05 1,000,000
400,000 Los Angeles CA Wtr & Pwr Rev A-6 ................................................... 1.950 01/06/05 400,000
3,000,000 Los Angeles CA Wtr & Pwr Rev B-1 ................................................... 2.000 01/06/05 3,000,000
995,000 Oakland CA Liquidity Fac Rev (ABAG) ................................................ 2.050 01/06/05 995,000
1,450,000 Riverside Co CA IDA (Adv Business Graphics) Ser A .................................. 2.070 01/06/05 1,450,000
1,300,000 Riverside Co CA IDA (Adv Business Graphics) Ser B .................................. 2.070 01/06/05 1,300,000
2,000,000 Sacramento CA USD COP .............................................................. 1.980 01/06/05 2,000,000
400,000 Sacramento Co CA MFH Rev (Fairway II Apts) ......................................... 1.950 01/06/05 400,000
500,000 Salinas CA MFH Rev (Brentwood Garden) .............................................. 1.960 01/06/05 500,000
32
CALIFORNIA TAX-FREE MONEY MARKET FUND
(CONTINUED)
===================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 91.3% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 800,000 San Bernardino Co CA Cap Impt COP .................................................. 1.950 01/06/05 $ 800,000
240,000 San Jacinto CA USD COP ............................................................. 1.950 01/06/05 240,000
1,250,000 Sausalito CA MFH Rev (Rotary Village Sr Hsg) ....................................... 2.000 01/06/05 1,250,000
400,000 CA PCR Fin Auth Rev (Southdown Inc) Ser A .......................................... 1.750 01/15/05 400,000
3,100,000 CA PCR Fin Auth Rev (Southdown Inc) Ser B .......................................... 1.750 01/15/05 3,100,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................................. $ 46,885,000
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT COMMERCIAL PAPER -- 4.7% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,400,000 CA Infra EDB CP (Salvation Army) ................................................... 2.100 08/09/05 $ 2,400,000
------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Amortized Cost $51,255,556) ....................................................... $ 51,255,556
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2% ...................................... 81,996
------------
NET ASSETS -- 100.0% ............................................................... $ 51,337,552
============
See accompanying notes to portfolio of investments and notes to financial
statements.
33
FLORIDA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 11.4% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 100,000 Tampa FL Sports Auth Rev (Tourist Dev Tax) ......................................... 4.700 01/01/05 $ 100,000
100,000 Broward Co FL SD GO ................................................................ 5.000 02/15/05 100,470
850,000 Broward Co FL SD UTGO .............................................................. 5.000 02/15/05 853,741
900,000 Center Grove IN Bldg Corp Rev BANS ................................................. 2.000 04/01/05 900,990
625,000 St Lucie Co FL Pub Impt Rev ........................................................ 2.000 04/01/05 625,301
200,000 FL St Brd of Ed UTGO ............................................................... 5.000 06/01/05 202,808
300,000 Zionsville IN Cmnty Sch Bldg GO BANS ............................................... 1.900 07/01/05 300,000
200,000 Franklin OH GO BANS ................................................................ 2.250 07/21/05 200,270
300,000 Rhodes IL SD #84.5 Ed Purp TAWS .................................................... 3.125 10/24/05 302,518
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ................................ $ 3,586,098
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 81.1% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,400,000 Broward Co FL Health Facs Rev (John Knox Village) .................................. 2.300 01/01/05 $ 1,400,000
1,175,000 Collier Co FL Health Fac Auth Hosp Rev (Cleveland Clinic) .......................... 2.190 01/01/05 1,175,000
600,000 FL St Brd Ed Muni Secs Trust Rcpts Ser SGA 102 ..................................... 2.170 01/01/05 600,000
800,000 Muni Sec Tr Ctfs 01-160 (Florida Brd of Ed) ........................................ 2.170 01/01/05 800,000
300,000 Muni Sec Tr Ctfs Ser 01-161 (Florida Brd of Ed) .................................... 2.170 01/01/05 300,000
1,300,000 Sarasota Co FL Pub Hosp Brd Rev (Sarasota Mem Hosp) ................................ 2.250 01/01/05 1,300,000
1,205,000 Broward Co FL HFA MFH Rev (Fishermans Landing) ..................................... 2.000 01/05/05 1,205,000
250,000 Broward Co FL HFA MFH Rev (Jacaranda Village Apts) ................................. 2.000 01/05/05 250,000
600,000 Broward Co FL HFA MFH Rev (Margate Investment) ..................................... 2.000 01/05/05 600,000
1,115,000 Broward Co FL HFA MFH Rev (Reflections Apts) ....................................... 2.000 01/05/05 1,115,000
500,000 Clay Co FL HFA MFH Rev (Bluff Hsg) Ser A ........................................... 2.000 01/05/05 500,000
900,000 Clay Co FL HFA MFH Rev (Bluff Hsg) Ser B ........................................... 2.000 01/05/05 900,000
575,000 Dade Co FL IDA IDR (Dolphins Stadium) Ser A ........................................ 1.980 01/05/05 575,000
650,000 Dade Co FL IDA IDR (Dolphins Stadium) Ser D ........................................ 1.980 01/05/05 650,000
765,000 FL HFA MFH Rev (Carlton Arms II) ................................................... 2.050 01/05/05 765,000
500,000 Jacksonville FL Cap Proj Rev Ser 2 ................................................. 1.950 01/05/05 500,000
500,000 Lee Co FL IDR Ed Facs (Canterbury School) .......................................... 2.000 01/05/05 500,000
605,000 Marion Co FL HFA (Paddock Apts) .................................................... 2.000 01/05/05 605,000
500,000 Palm Beach Co FL Rev (Jewish Cmnty Campus) ......................................... 2.000 01/05/05 500,000
700,000 Voluisa Co FL HFA MFH Rev (Anatole Apts) ........................................... 2.000 01/05/05 700,000
1,000,000 Brevard Co FL Ed Fac Auth Rev (FL Institute of Tech B) ............................. 2.000 01/06/05 1,000,000
900,000 Broward Co FL HFA MFH Rev (Waters Edge) ............................................ 2.000 01/06/05 900,000
135,000 Dade Co FL IDA Rev (Spectrum Programs Inc) ......................................... 2.050 01/06/05 135,000
1,375,000 Duval Co FL HFA MFH Rev (Glades Apts) .............................................. 2.000 01/06/05 1,375,000
950,000 Duval Co FL HFA MFH Rev (Sunbeam Road Apts) ........................................ 2.000 01/06/05 950,000
120,000 Gulf Breeze FL Loc Govt Loan Prog B ................................................ 1.990 01/06/05 120,000
350,000 Gulf Breeze FL Muni Bond Fund Ser A ................................................ 2.000 01/06/05 350,000
100,000 Jacksonville FL Health Fac Auth (River Garden/Coves) ............................... 1.790 01/06/05 100,000
1,400,000 Orlando & Orange Co FL Expwy Auth C-1 .............................................. 1.930 01/06/05 1,400,000
800,000 Palm Beach Co FL Rev (Henry Morrison Flagler) ...................................... 2.000 01/06/05 800,000
1,000,000 Palm Beach Co FL Rev (Morse Oblig Group) ........................................... 2.030 01/06/05 1,000,000
775,000 Pasco Co FL SB COP ................................................................. 1.990 01/06/05 775,000
400,000 Seminole Co FL IDA (Florida Living Nursing Ctr) .................................... 2.190 01/06/05 400,000
34
FLORIDA TAX-FREE MONEY MARKET FUND
(CONTINUED)
===================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 81.1% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,000,000 Seminole Co FL IDA Rev (Master Academy) ............................................ 2.030 01/06/05 $ 1,000,000
200,000 Univ of North FL 1998 Parking Rev Bonds ............................................ 2.030 01/06/05 200,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................................. $ 25,445,000
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 7.1% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 450,000 Corpus Christi TX IDC EDR (Texas Air Invt) ......................................... 1.650 02/01/05 $ 450,000
765,000 Fort Thomas KY IDR (Carmel Manor) .................................................. 1.750 04/01/05 765,000
1,000,000 Putnam Co FL Dev Auth PCR (Seminole Elec Coop) ..................................... 2.050 06/15/05 1,000,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS .................................................... $ 2,215,000
------------
TOTAL INVESTMENT SECURITIES -- 99.6%
(Amortized Cost $31,246,098) ....................................................... $ 31,246,098
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% ...................................... 116,164
------------
NET ASSETS -- 100.0% ............................................................... $ 31,362,262
============
See accompanying notes to portfolio of investments and notes to financial
statements.
35
OHIO INSURED TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 89.8% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,095,000 West Clermont OH LSD GO Prerefunded @ 102 .......................................... 6.900 12/01/05 $ 1,164,423
1,000,000 Norwood OH TIF Rev (Cornerstore) ................................................... 4.500 12/07/05 1,001,800
530,000 Toledo OH GO ....................................................................... 6.000 12/01/06 566,581
299,624 Columbus OH Special Assessment GO .................................................. 5.050 04/15/08 321,973
540,000 Ohio St Revitalization ............................................................. 5.000 10/01/08 587,817
400,000 West Clermont OH LSD GO ............................................................ 6.150 12/01/08 414,012
1,000,000 Ohio St Bldg Auth Rev (Adult Correctional Bldg)
Prerefunded @ 100 .................................................................. 5.250 10/01/09 1,121,730
1,035,000 Reading OH Rev (St Mary's Ed Institute) ............................................ 5.550 02/01/10 1,146,604
325,000 Columbus OH LTGO ................................................................... 4.750 06/15/10 347,737
790,000 Cuyahoga Co OH Mtg Rev (West Tech Apts) ............................................ 5.100 09/20/10 837,969
415,000 Dublin OH Var Purp Impt Ser A Prerefunded @ 100 .................................... 6.000 12/01/10 482,512
590,000 Hubbard OH EVSD UTGO ............................................................... 5.400 12/01/10 648,947
1,000,000 Summit Co OH GO Prerefunded @ 101 .................................................. 6.000 12/01/10 1,171,080
180,000 Cuyahoga Co OH Hosp Rev (Univ Hosp) Escrowed to Maturity ........................... 9.000 06/01/11 217,584
1,000,000 Lorain Co OH Hosp Rev (Catholic Health) ............................................ 5.625 10/01/11 1,117,470
275,000 Akron OH GO ........................................................................ 6.000 11/01/11 316,885
365,000 Bexley OH CSD GO ................................................................... 7.125 12/01/11 454,323
1,000,000 Hamilton Co OH Swr Sys Rev ......................................................... 5.500 12/01/11 1,141,530
1,075,000 Franklin Co OH Hosp Rev Impt (Childrens Hosp) ...................................... 5.500 05/01/12 1,204,559
1,000,000 Bowling Green St Univ OH General Rcpts Rev ......................................... 5.750 06/01/12 1,136,480
275,000 Ohio St Pub Facs Cmnty Mental Health Cap Facs ...................................... 5.200 06/01/12 299,024
515,000 South-Western OH CSD GO (Franklin & Pickway Co) .................................... 5.000 12/01/12 572,397
400,000 Akron OH GO ........................................................................ 6.500 11/01/14 489,116
1,000,000 Indian Hill OH EVSD GO ............................................................. 5.250 12/01/14 1,109,700
530,000 Ottawa Co OH GO .................................................................... 5.750 12/01/14 557,189
660,000 West Chester Twp OH GO ............................................................. 5.500 12/01/14 747,113
400,000 Warren OH Wtr Wrks Rev ............................................................. 5.500 11/01/15 455,996
1,000,000 Buckeye Valley OH LSD GO ........................................................... 6.850 12/01/15 1,217,360
680,000 Columbus-Polaris Hsg Corp Rev Prerefunded @ 100 .................................... 7.400 01/01/16 832,884
945,000 Chillicothe OH CSD GO .............................................................. 5.000 12/01/16 1,037,941
465,000 Cincinnati OH Police & Fireman's Disability GO ..................................... 5.750 12/01/16 525,766
975,000 Hamilton Co OH Convention Facs Auth Rev (Second Lien) .............................. 5.000 12/01/16 1,064,437
1,260,000 Cleveland OH Arpt Sys Rev .......................................................... 5.125 01/01/17 1,342,921
750,000 Butler Co OH Trans Impt Dist ....................................................... 5.125 04/01/17 810,188
415,000 Toledo OH Swr Sys Rev .............................................................. 6.350 11/15/17 424,649
335,000 Akron OH Wtr Wrks Rev .............................................................. 5.250 12/01/17 369,780
1,000,000 Springfield OH CSD GO .............................................................. 5.000 12/01/17 1,080,770
655,000 Twinsburg OH Park & Land GO ........................................................ 5.500 12/01/17 737,406
1,000,000 Univ of Cincinnati OH General Rcpts Rev ............................................ 5.750 06/01/19 1,126,100
1,000,000 Lucas Co OH Hsg Dev Corp (Northgate Apts) .......................................... 5.950 07/01/19 1,011,160
1,000,000 Lorain Co OH Hosp Rev (Catholic Health Partners) ................................... 5.500 09/01/19 1,111,050
1,000,000 Lucas Co OH Hosp Rev (Promedica Health Grp) ........................................ 5.625 11/15/19 1,118,090
745,000 Crawford Co OH GO .................................................................. 4.750 12/01/19 779,099
1,000,000 Hamilton OH CSD GO ................................................................. 5.500 12/01/19 1,116,200
1,085,000 West Clermont OH LSD GO ............................................................ 5.000 12/01/19 1,165,474
500,000 Akron OH GO ........................................................................ 5.800 11/01/20 565,960
210,000 Butler Co OH GO .................................................................... 5.250 12/01/20 230,267
1,000,000 Greene Co OH Swr Sys Rev ........................................................... 5.625 12/01/20 1,122,500
36
OHIO INSURED TAX-FREE FUND
(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 89.8% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,500,000 Nordonia Hills OH CSD GO ........................................................... 5.375 12/01/20 $ 1,659,614
1,000,000 Pickerington OH LSD UTGO ........................................................... 5.250 12/01/20 1,094,110
850,000 West Chester Twp OH GO ............................................................. 5.000 12/01/20 909,917
1,210,000 Cincinnati OH Tech College Rev ..................................................... 5.250 10/01/21 1,320,364
525,000 Kings OH LSD GO .................................................................... 6.050 12/01/21 603,587
500,000 Lake OH LSD GO (Stark Co) .......................................................... 5.750 12/01/21 561,910
1,000,000 Monroe OH LSD Sch Impt GO .......................................................... 5.000 12/01/21 1,064,860
1,185,000 Akron OH Impt GO ................................................................... 5.000 12/01/22 1,259,394
765,000 Fairfield Co OH GO ................................................................. 5.000 12/01/22 810,770
1,200,000 Ross Twp OH LSD GO ................................................................. 5.000 12/01/22 1,275,336
250,000 Ohio St Higher Ed Fac (Xavier Univ) ................................................ 5.000 05/01/23 263,748
1,510,000 Wright St Univ OH General Rcpts .................................................... 5.000 05/01/23 1,601,203
1,050,000 Harrison OH Wst Wtr Sys Rev ........................................................ 5.250 11/01/23 1,142,243
1,000,000 Akron OH Var Purp GO ............................................................... 5.000 12/01/23 1,054,030
450,000 Columbus OH TIF Rev (Polaris) ...................................................... 4.750 12/01/23 464,121
1,350,000 Greater Cleveland OH Regl Trans Auth ............................................... 5.000 12/01/23 1,434,564
1,480,000 Lakewood OH CSD .................................................................... 5.250 12/01/23 1,621,280
1,000,000 Newark OH Var Purp GO .............................................................. 4.750 12/01/23 1,032,250
1,000,000 OH St Higher Ed Fac Rev ............................................................ 5.000 12/01/23 1,058,480
1,000,000 Toledo OH CSD GO ................................................................... 5.000 12/01/23 1,058,190
1,000,000 Hamilton Co OH Hosp Rev (Cincinnati Childrens Hosp) ................................ 5.000 05/15/24 1,048,760
400,000 Springboro OH Swr Sys Rev .......................................................... 5.000 06/01/24 422,432
1,000,000 Cleveland OH Muni Sch Dist GO ...................................................... 5.250 12/01/24 1,085,800
1,050,000 Delaware Co OH GO .................................................................. 5.000 12/01/24 1,100,211
1,000,000 Hamilton OH CSD GO ................................................................. 5.625 12/01/24 1,114,340
1,000,000 Hilliard OH CSD GO ................................................................. 5.750 12/01/24 1,132,000
1,000,000 Kings OH LSD GO .................................................................... 5.650 12/01/24 1,116,240
1,250,000 Fremont OH Var Purp GO ............................................................. 5.000 12/15/24 1,309,788
810,000 Big Walnut OH LSD GO ............................................................... 5.000 12/01/25 853,351
1,750,000 Eaton OH CSD GO .................................................................... 5.000 12/01/25 1,835,907
300,000 Galion OH CSD UTGO ................................................................. 5.000 12/01/25 314,727
1,200,000 Jefferson OH LSD UTGO (Madison Co) ................................................. 5.000 12/01/25 1,267,200
1,500,000 Marysville OH EVSD GO .............................................................. 5.000 12/01/25 1,566,705
1,000,000 Plain OH LSD GO .................................................................... 5.000 12/01/25 1,042,080
1,000,000 Hudson OH CSD COP .................................................................. 5.000 06/01/26 1,042,680
1,000,000 Hilliard OH CSD GO ................................................................. 5.750 12/01/28 1,124,680
905,000 Licking Heights OH LSD GO .......................................................... 6.400 12/01/28 1,128,761
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ................................ $ 78,218,186
------------
37
OHIO INSURED TAX-FREE FUND
(CONTINUED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 9.7% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 400,000 Hamilton Co OH Hosp Fac Rev Adj (Health Alliance) .................................. 1.940 01/05/05 $ 400,000
1,100,000 Hamilton Co OH Hosp Rev (Health Alliance of Gtr Cincinnati) ........................ 2.010 01/05/05 1,100,000
3,030,000 Puerto Rico Commonwealth Govt Dev Bk ............................................... 1.920 01/05/05 3,030,000
1,500,000 Puerto Rico Elec Pwr Auth Rev ...................................................... 1.950 01/05/05 1,500,000
1,000,000 Scioto Co OH Hosp Rev (VHA Ctr) Ser B .............................................. 1.980 01/05/05 1,000,000
400,000 Scioto Co OH Hosp Rev (VHA Ctr) Ser C .............................................. 1.980 01/05/05 400,000
1,000,000 Scioto Co OH Hosp Rev (VHA Ctr) Ser E .............................................. 1.980 01/05/05 1,000,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................................. $ 8,430,000
------------
TOTAL INVESTMENT SECURITIES -- 99.5%
(Amortized Cost $81,186,819) ....................................................... $ 86,648,186
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5% ...................................... 445,995
------------
NET ASSETS -- 100.0% ............................................................... $ 87,094,181
============
See accompanying notes to portfolio of investments and notes to financial
statements.
38
OHIO TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 21.5% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,180,000 AMP-OH Elec Rev BANS (Brewster Vlg) ................................................ 1.350 01/13/05 $ 2,180,000
1,270,000 Willard OH GO BANS ................................................................. 1.670 01/27/05 1,270,286
770,000 Olmsted Falls OH BANS .............................................................. 1.550 02/10/05 770,167
300,000 Hamilton OH CSD LTGO BANS 2004 ..................................................... 1.550 02/24/05 300,088
660,000 Hamilton Twp OH Pub Infra Impt LTGO ................................................ 1.650 03/24/05 660,587
500,000 Crestline OH UTGO Swr Impt BANS .................................................... 1.730 03/30/05 500,453
200,000 OH St Bldg Auth St Facs (Adult Corr Bldg A) ........................................ 5.000 04/01/05 201,476
3,098,000 Maple Heights OH CSD LTGO BANS ..................................................... 1.500 04/29/05 3,098,091
135,000 OH St Hwy Cap Impts UTGO ........................................................... 4.750 05/01/05 136,462
175,000 Wilmington OH Park Land Acq LTGO BANS .............................................. 2.200 05/02/05 175,289
3,810,000 Willard City OH Var Purp Impt LTGO BANS ............................................ 1.900 05/18/05 3,813,522
4,500,000 Loveland OH CSD UTGO TANS .......................................................... 2.100 06/01/05 4,506,417
250,000 OH St Wtr Dev Auth Rev ............................................................. 5.000 06/01/05 252,977
783,800 London City OH LTGO BANS Ser 2004 .................................................. 2.500 06/02/05 785,730
2,800,000 Paulding Co OH Facs LTGO BANS ...................................................... 2.500 06/14/05 2,806,443
1,200,000 Chillicothe OH Wtr Tower Impt UTGO BANS ............................................ 2.500 06/16/05 1,203,229
1,000,000 Marietta OH UTGO BANS .............................................................. 3.050 06/22/05 1,004,407
2,300,000 AMP-OH Elec Rev BANS (Newton Falls) ................................................ 2.050 06/30/05 2,300,000
2,650,000 AMP-OH Elec Rev BANS (Montpelier) .................................................. 2.150 07/07/05 2,650,000
2,000,000 Columbiana OH GO BANS .............................................................. 2.500 07/07/05 2,002,514
1,975,000 Warrensville Heights OH LTGO BANS .................................................. 2.100 07/14/05 1,977,067
1,000,000 Liberty Twp OH Parkland Acq LTGO BANS .............................................. 2.260 08/11/05 1,002,155
3,250,000 Hillsboro OH CSD Sch Impt UTGO BANS ................................................ 2.850 08/17/05 3,261,021
800,000 Sugarcreek OH BANS ................................................................. 3.300 08/18/05 804,447
6,740,000 AMP-OH Elec Rev BANS (Bryan) ....................................................... 1.700 08/19/05 6,739,999
325,000 Hebron OH Swr Impt LTGO BANS ....................................................... 2.600 09/08/05 326,312
3,648,500 Jackson Co OH Var Purp LTGO BANS ................................................... 2.300 09/08/05 3,657,096
318,000 Richland Co OH Energy LTGO BANS .................................................... 2.500 09/28/05 319,271
360,000 Wilmington OH Lowes Rd Const LTGO BANS ............................................. 2.100 09/30/05 360,790
1,550,000 Harrison Twp OH Fire Station LTGO BANS ............................................. 2.100 10/20/05 1,551,819
630,000 Licking Co OH (Jardin Manor Swr) LTGO BANS ......................................... 2.450 10/20/05 632,227
2,000,000 Olmsted Falls OH Bldg Impt LTGO BANS ............................................... 2.500 10/20/05 2,007,856
2,075,000 AMP-OH Elec Rev BANS (Pioneer Vlg) ................................................. 2.500 10/27/05 2,079,987
475,000 AMP-OH Elec Rev BANS (Yellow Spring) ............................................... 2.500 11/03/05 475,972
4,360,000 Springboro OH Real Estate Acq Rev .................................................. 3.000 11/03/05 4,377,847
6,864,600 Deerfield Twp OH Var Pur LTGO BANS ................................................. 2.750 12/01/05 6,886,036
2,060,000 AMP-OH Elec Rev BANS (Edgerton) .................................................... 2.750 12/08/05 2,063,747
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ................................ $ 69,141,787
------------
39
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 74.1% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,600,000 Cuyahoga Co OH IDR (S&R Playhouse Rlty) ............................................ 1.850 01/01/05 $ 2,600,000
2,000,000 OH St Higher Ed Fac (Case Western) ................................................. 2.150 01/01/05 2,000,000
4,000,000 Trumbull Co OH Healthcare (Shepard of Valley Lutheran Home) ........................ 2.250 01/01/05 4,000,000
3,000,000 ABN AMRO MuniTOPS Ctfs Tr 1998-18 Cleveland OH Wtrwk ............................... 2.020 01/05/05 3,000,000
2,400,000 ABN AMRO MuniTOPS Ctfs Tr 1998-18 Cleveland OH Wtrwk ............................... 2.030 01/05/05 2,400,000
845,000 Centerville OH Healthcare (Bethany Luth Vlg) ....................................... 2.030 01/05/05 845,000
3,000,000 Cleveland OH Arpt Sys Rev Tr Rcpts SGA 126 ......................................... 2.000 01/05/05 3,000,000
1,780,000 Cuyahoga Co OH Ed Fac (Utd Cerebral Paisy Assn) .................................... 2.070 01/05/05 1,780,000
1,025,000 Erie Co OH IDR (Toft Dairy Inc) .................................................... 2.070 01/05/05 1,025,000
390,000 Greene Co OH Hlth Fac (Greene Oaks) ................................................ 2.070 01/05/05 390,000
460,000 Hamilton Co OH EDR (General Prostestant) ........................................... 2.110 01/05/05 460,000
780,000 Hamilton Co OH Hlth Fac (St Aloysius Orphanage) .................................... 2.070 01/05/05 780,000
1,000,000 Hamilton Co OH Hosp (Health Alliance) Ser A ........................................ 1.940 01/05/05 1,000,000
900,000 Hamilton Co OH Hosp (Health Alliance) Ser F ........................................ 2.010 01/05/05 900,000
3,660,000 Kent St Univ Gen Rcpts Rev ......................................................... 2.000 01/05/05 3,660,000
3,900,000 Lake Co OH Hosp Facs (Lake Hosp) ................................................... 2.070 01/05/05 3,900,000
1,710,000 Lorain Co OH IDR (EMH Regl Med Ctr) ................................................ 2.070 01/05/05 1,710,000
4,000,000 Middletown OH Dev (Bishop-Fenwick HS) .............................................. 2.000 01/05/05 4,000,000
1,070,000 Monroe OH IDR (CR/PL Inc) .......................................................... 2.100 01/05/05 1,070,000
2,000,000 Montgomery Co OH EDR (Dayton Art Inst) ............................................. 2.050 01/05/05 2,000,000
3,800,000 OH St GO Infrastructure Impt ....................................................... 1.980 01/05/05 3,800,000
7,505,000 OH St Infra Impt UTGO .............................................................. 1.950 01/05/05 7,505,000
1,000,000 OH Wtr Dev Auth PCR (Cleveland Elec) Ser B ......................................... 2.000 01/05/05 1,000,000
7,110,000 OH Wtr Dev Auth Pure Wtr Ser B ..................................................... 1.950 01/05/05 7,110,000
2,050,000 OH Wtr Dev Auth Rev (Timken Company) ............................................... 2.000 01/05/05 2,050,000
350,000 Orrville OH Hosp Fac (Orrville Hosp Fdtn) .......................................... 2.080 01/05/05 350,000
2,200,000 Puerto Rico Commonwealth Govt Dev Bk ............................................... 1.920 01/05/05 2,200,000
3,410,000 Puerto Rico Elec Pwr Auth Rev ...................................................... 1.950 01/05/05 3,410,000
1,375,000 Scioto Co OH Hosp Rev (VHA Ctr) Ser C .............................................. 1.980 01/05/05 1,375,000
2,400,000 Summit Co OH Civic Fac (YMCA) ...................................................... 2.070 01/05/05 2,400,000
2,500,000 Akron Bath Copley OH Hosp (Summa Hlth) B ........................................... 2.010 01/06/05 2,500,000
275,000 Akron Bath Copley OH Hosp (Visiting Nurse Svc) ..................................... 2.060 01/06/05 275,000
1,300,000 Ashtabula Co OH Hosp (Ashtabula Co Med Ctr) ........................................ 2.020 01/06/05 1,300,000
4,000,000 Athens Co OH Port Auth (Hsg OH Univ) ............................................... 2.020 01/06/05 4,000,000
1,700,000 Butler Co OH Hosp Facs (Berkeley Sq Ret) ........................................... 2.040 01/06/05 1,700,000
2,705,000 Cambridge OH Hosp Facs Rev (SE OH Regl Med) ........................................ 2.060 01/06/05 2,705,000
1,510,000 Carroll Co OH Healthcare Fac (St Johns Villa) ...................................... 2.060 01/06/05 1,510,000
120,000 Cochocton Co OH Hosp (Echoing Hills Vlg) ........................................... 2.100 01/06/05 120,000
200,000 Columbus OH GO Ser 1 ............................................................... 1.960 01/06/05 200,000
4,000,000 Coshocton Co OH Hosp Facs Rev (Mem Hosp) ........................................... 2.000 01/06/05 4,000,000
1,560,000 Cuyahoga Co OH Civic Facs (West Side Ecumenical) ................................... 2.070 01/06/05 1,560,000
4,900,000 Cuyahoga Co OH Hlth (Grdns Mcgregor Amasa Stone) ................................... 2.030 01/06/05 4,900,000
3,145,000 Delaware Co OH Hlth Fac (Sarah Moore Home) ......................................... 2.140 01/06/05 3,145,000
1,620,000 Franklin Co OH EDR (Columbus Montessori) ........................................... 2.090 01/06/05 1,620,000
2,120,000 Franklin Co OH EDR (Dominican Sisters) ............................................. 2.070 01/06/05 2,120,000
3,000,000 Franklin Co OH Hlth Fac (Friendship Vlg Dublin) .................................... 2.000 01/06/05 3,000,000
1,605,000 Franklin Co OH Hlth Fac (Heinzerling Fndtn) ........................................ 2.100 01/06/05 1,605,000
885,000 Franklin Co OH Hlth Fac (Lifeline Organ Procurement) ............................... 2.070 01/06/05 885,000
920,000 Franklin Co OH IDR (OH Girl Scout Council) ......................................... 2.100 01/06/05 920,000
1,800,000 Fulton Co OH IDR (Polycraft Inc) ................................................... 2.280 01/06/05 1,800,000
40
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 74.1% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,600,000 Geauga Co OH Hlth Fac (Heather Hill) ............................................... 1.980 01/06/05 $ 1,600,000
1,278,900 Hamilton Co OH EDR (Cinti Performing Arts) ......................................... 2.040 01/06/05 1,278,900
300,000 Hamilton Co OH EDR (Contemporary Arts Ctr) ......................................... 2.030 01/06/05 300,000
1,570,000 Hamilton Co OH EDR (Union Institute) ............................................... 2.090 01/06/05 1,570,000
1,350,000 Hamilton Co OH Hosp (Beechwood Home) ............................................... 2.040 01/06/05 1,350,000
600,000 Hamilton Co OH Hosp (Childrens Hosp Med Ctr) Ser 1997 .............................. 2.010 01/06/05 600,000
3,100,000 Hamilton Co OH Hosp (Childrens Hosp Med Ctr) Ser 2000 .............................. 2.010 01/06/05 3,100,000
5,900,000 Hamilton Co OH Hosp (Drake Ctr Inc) ................................................ 2.010 01/06/05 5,900,000
4,700,000 Hamilton Co OH Hosp (Episcopal Retire Homes) Ser A ................................. 2.010 01/06/05 4,700,000
5,920,000 Hamilton Co OH Sales Tax Fltr Ctfs Ser 356 ......................................... 2.020 01/06/05 5,920,000
15,520,000 Hamilton OH Elec Sys Rev Ser A ..................................................... 1.990 01/06/05 15,520,000
265,000 Hamilton OH Elec Sys Rev Ser B ..................................................... 1.990 01/06/05 265,000
2,944,000 Hamilton OH MFH Afford Hsg (Knollwood Vlg) A ....................................... 2.020 01/06/05 2,944,000
1,948,000 Hamilton OH MFH Afford Hsg (Knollwood Vlg) B ....................................... 2.020 01/06/05 1,948,000
2,602,000 Hancock Co OH MFH (Crystal Glen Apts) A ............................................ 2.020 01/06/05 2,602,000
4,220,000 Lima OH Hosp Fac (Lima Mem Hosp) ................................................... 2.070 01/06/05 4,220,000
400,000 Lucas Co OH Hlth Fac (Lutheran Homes) .............................................. 1.970 01/06/05 400,000
100,000 Lucas Co OH Hosp Rev (Sunshine Childrens Home) ..................................... 2.160 01/06/05 100,000
110,000 Lucas Co OH IDR (SA Associates) .................................................... 2.110 01/06/05 110,000
645,000 Mahoning Co OH IDR (OH Heart Inst) ................................................. 2.100 01/06/05 645,000
2,075,000 Marion Co OH Hosp Pooled Lease Rev ................................................. 2.020 01/06/05 2,075,000
1,140,000 Mason OH TIF Rev (Central Parke of Mason) .......................................... 2.090 01/06/05 1,140,000
1,800,000 Middleburg Hgts OH Hosp Rev (SW Gen Hlth) .......................................... 2.030 01/06/05 1,800,000
1,160,000 Montgomery Co OH Hlth Facs (Cmnty Blood Ctr) ....................................... 2.100 01/06/05 1,160,000
2,500,000 Montgomery Co OH Rev (St Vincent de Paul) .......................................... 2.030 01/06/05 2,500,000
800,000 OH St Higher Ed Fac (John Carroll) ................................................. 2.010 01/06/05 800,000
3,000,000 OH St Higher Ed Fac (Mt St Joseph) ................................................. 2.020 01/06/05 3,000,000
3,000,000 OH St Higher Ed Fac Pooled Fin (1997) .............................................. 2.050 01/06/05 3,000,000
500,000 OH St Higher Ed Fac Pooled Fin (1998) .............................................. 2.050 01/06/05 500,000
3,200,000 OH St Higher Ed Fac Pooled Fin (1999) .............................................. 2.050 01/06/05 3,200,000
200,000 OH St Higher Ed Rev (Malone College) ............................................... 2.060 01/06/05 200,000
400,000 OH St Univ Gen Rcpts Rev Ser 1997 A ................................................ 2.000 01/06/05 400,000
2,100,000 OH St Univ Gen Rcpts Rev Ser 1997 B ................................................ 2.000 01/06/05 2,100,000
1,275,000 OH St Univ Gen Rcpts Rev Ser 1997 C ................................................ 2.000 01/06/05 1,275,000
1,475,000 Ottawa Co OH Hosp Rev (Lutheran Home of Mercy) Ser 99 .............................. 2.110 01/06/05 1,475,000
3,850,000 Port Gtr Cincinnati Dev Auth (Cincinnati Zoo) ...................................... 2.030 01/06/05 3,850,000
3,450,000 Puerto Rico Childrens Trust Fund Putter Ser 149 .................................... 2.030 01/06/05 3,450,000
950,000 Puerto Rico Cmnwlth Hwy & Trans Auth Rev ........................................... 1.990 01/06/05 950,000
900,000 Puerto Rico Cmnwlth Putter Ser 441 ................................................. 2.000 01/06/05 900,000
1,700,000 Puerto Rico Pub Fin Corp Putters 363 ............................................... 2.000 01/06/05 1,700,000
300,000 Rickenbacker Port Auth OH (Rickenbacker Hldgs) ..................................... 2.100 01/06/05 300,000
1,000,000 Seneca Co OH Hosp Fac (St Francis Home) ............................................ 2.030 01/06/05 1,000,000
4,425,000 Sharonville OH IDR (Duke Rlty LP) .................................................. 2.080 01/06/05 4,425,000
1,470,000 Summit Co OH Hlth Fac (Evant Inc) .................................................. 2.110 01/06/05 1,470,000
140,000 Summit Co OH IDR (Go-Jo Ind) ....................................................... 2.100 01/06/05 140,000
3,300,000 Toledo OH City Svcs Special Assmnt ................................................. 2.000 01/06/05 3,300,000
5,000,000 Toledo-Lucas Co OH Port Auth Rev ................................................... 2.000 01/06/05 5,000,000
3,995,000 Univ of Akron Gen Rcpts Fltr Ctfs Ser 165 .......................................... 2.020 01/06/05 3,995,000
1,000,000 Univ of Akron Gen Rcpts Ser 2004 ................................................... 1.990 01/06/05 1,000,000
1,600,000 Warren Co OH IDR (Liquid Container) ................................................ 2.010 01/06/05 1,600,000
41
OHIO TAX-FREE MONEY MARKET FUND
(CONTINUED)
===================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 74.1% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,455,000 Westlake OH EDR (Oaks Dev Co) ...................................................... 2.110 01/06/05 $ 1,455,000
4,720,000 Woodlawn OH EDR (Goodwill Inds) .................................................... 2.040 01/06/05 4,720,000
1,870,000 Miami Co OH Hosp Fac (Upper Vly Med Ctr) ........................................... 2.010 01/07/05 1,870,000
5,700,000 Hamilton Co OH IDR (ADP) ........................................................... 1.800 01/15/05 5,700,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................................. $238,107,900
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 2.6% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,395,000 Cuyahoga Co OH IDR (Halle Office Bldg) ............................................. 1.760 04/01/05 $ 3,395,000
1,000,000 Clermont Co OH EDR (John Q Hammons/Clermont Hills) ................................. 1.850 05/01/05 1,000,000
2,570,000 Richland Co OH IDR (Mansfield Sq Ltd) .............................................. 2.350 05/15/05 2,570,000
575,000 Gallia Co OH IDR (Jackson Pike Assoc) .............................................. 2.200 06/15/05 575,000
935,000 Clermont Co OH EDR (Eastgate Partnership) .......................................... 2.000 09/01/05 935,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS .................................................... $ 8,475,000
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT COMMERCIAL PAPER -- 1.6% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 5,000,000 Cuyahoga Co OH (Cleveland Clinic) Series 2004 B .................................... 1.870 01/19/05 $ 5,000,000
------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Amortized Cost $320,724,687) ...................................................... $320,724,687
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2% ...................................... 566,665
------------
NET ASSETS -- 100.0% ............................................................... $321,291,352
============
See accompanying notes to portfolio of investments and notes to financial
statements.
42
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 25.9% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 560,000 Goshen IN Cmnty Schools Land Acq ................................................... 2.300 01/01/05 $ 560,000
100,000 Grant Co WA Pub Util Dist No 2 Rev ................................................. 5.000 01/01/05 100,000
100,000 Harrison Co MS Wst Wtr Mgmt Dist Prerefunded @ 102 ................................. 5.875 02/01/05 102,377
250,000 Winnebago & Boone Co IL LSD #207 ................................................... 4.500 02/01/05 250,522
150,000 Mansfield TX LTGO Prerefunded @ 100 ................................................ 4.800 02/15/05 150,509
130,000 NY St Med Care Fac (Mental Hlth Svcs) Prerefunded @ 102 ............................ 6.000 02/15/05 133,214
600,000 Portsmouth OH Swr Sys Rev .......................................................... 2.150 02/15/05 600,218
500,000 Jackson Co MO SD #7 Lees Summit .................................................... 4.150 03/01/05 501,738
1,100,000 Center Grove IN Bldg Corp Rev BANS ................................................. 2.000 04/01/05 1,101,209
125,000 Chicago IL MFH Rev (Hilliard Homes) ................................................ 3.150 04/20/05 125,323
735,000 Monroe OH Var Purp GO BANS ......................................................... 2.450 05/05/05 736,479
265,000 Mundfordville KY IDR (Louisville Bedding Co) ....................................... 1.800 06/01/05 265,000
500,000 Spencerville OH Wtr Sys Impt BANS .................................................. 2.450 06/01/05 500,507
350,000 AMP-OH Elect Rev BANS (Grafton Vlg) ................................................ 2.250 06/16/05 350,000
1,000,000 KY Area Dev Dist Fin Trust ......................................................... 2.750 06/30/05 1,000,000
200,000 Brazoria Co TX Hlth Fac (Brazosport Hosp) .......................................... 4.000 07/01/05 202,276
850,000 Zionsville IN Cmnty Sch Bldg GO BANS ............................................... 1.900 07/01/05 850,000
635,000 AMP-OH Elect Sys Rev (Carey) ....................................................... 2.000 08/04/05 635,000
225,000 Pataskala OH Bridge Impt LTGO BANS ................................................. 2.750 09/22/05 226,118
750,000 Clinton Prairie IN Cmnty Sch Bldg Corp BANS ........................................ 2.550 10/01/05 750,000
700,000 Rhodes IL SD #84.5 Edl Purp TAWS ................................................... 3.125 10/24/05 705,874
750,000 Norwood OH TIF Rev (Cornerstone) ................................................... 4.500 12/07/05 750,000
------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS ................................ $ 10,596,364
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT FLOATING & VARIABLE DEMAND NOTES -- 62.6% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,035,000 Arvada CO Wtr Enter Rev ............................................................ 1.950 01/03/05 $ 1,035,000
1,300,000 Broward Co FL Hlth Facs Rev (John Knox Vlg) ........................................ 2.300 01/03/05 1,300,000
700,000 CA PCR Fin Auth Rev Ser F .......................................................... 2.200 01/03/05 700,000
300,000 CA St Dept Wtr Res Rev ............................................................. 2.200 01/03/05 300,000
1,750,000 CA St Kindergarten UTGO ............................................................ 2.250 01/03/05 1,750,000
400,000 Collier Co FL Health Fac Auth Hosp Rev (Cleveland Clinic) .......................... 2.190 01/03/05 400,000
1,200,000 Montgomery Co OH (Miami Valley Hosp) ............................................... 2.200 01/03/05 1,200,000
1,900,000 OH St Air Quality Rev PCR (Ohio Edison) ............................................ 2.150 01/03/05 1,900,000
625,000 Sarasota Co FL Pub Hosp ............................................................ 2.250 01/03/05 625,000
1,400,000 Trumbull Co OH Healthcare (Shepard of Valley Lutheran Home) ........................ 2.250 01/03/05 1,400,000
500,000 Bloomington IL Normal Arpt Auth .................................................... 2.050 01/05/05 500,000
260,000 CO Hlth Facs (Jefferson Hills Pr-Ser B) ............................................ 2.100 01/05/05 260,000
100,000 Knox IN EDR (JW Hicks Inc) ......................................................... 2.130 01/05/05 100,000
1,100,000 Scio Twp MI EDR (ADP Inc) .......................................................... 2.470 01/05/05 1,100,000
220,000 Boone Co KY IBR (Hennegan Co) ...................................................... 2.090 01/06/05 220,000
180,000 Boulder CO Dev Rev (Humane Society) ................................................ 2.090 01/06/05 180,000
100,000 Catawba Co NC Ind Fac (Lucky 7 Dev Grp) ............................................ 2.140 01/06/05 100,000
545,000 Eden Prairie MN MFH Rev (Lake Pl Apts) ............................................. 2.090 01/06/05 545,000
375,000 Eupora MS IDR (Plymouth Tube Co) ................................................... 2.200 01/06/05 375,000
315,000 Fargo ND CDR Ref (Kelly Inns Fargo) ................................................ 2.150 01/06/05 315,000
140,000 Greenwood IN EDR (Health Quest Rlty) ............................................... 2.270 01/06/05 140,000
43
TAX-FREE MONEY MARKET FUND
(CONTINUED)
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL FLOATING & VARIABLE DEMAND NOTES -- 62.6% COUPON MATURITY MARKET
AMOUNT (CONTINUED) RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 130,000 Henderson NV Pub Impt Hsg (Pueblo Verde I) ......................................... 2.080 01/06/05 $ 130,000
500,000 IN St Ed Facs Auth (Univ Evansville) B ............................................. 2.100 01/06/05 500,000
888,000 Indianapolis IN EDR (Pedcor Invts Waterfront-B) .................................... 2.300 01/06/05 888,000
120,000 Jefferson Co MO IDA (GHF Holding LLC) .............................................. 2.150 01/06/05 120,000
280,000 Lake Co IL Cmnty SD #73 Putter Ser 329 ............................................. 2.060 01/06/05 280,000
430,000 Lancaster NE IDR (Garner Inds) Ser B ............................................... 2.140 01/06/05 430,000
1,010,000 Mankato MN IDR (Sacco Family Ltd) .................................................. 2.240 01/06/05 1,010,000
240,000 Maricopa Co AZ IDA Hsg Rev (San Angelin Apts) ...................................... 2.280 01/06/05 240,000
1,390,000 New Hampshire Hlth & Ed (S NH Med Ctr) ............................................. 2.090 01/06/05 1,390,000
1,440,000 Ottawa Co OH Hosp Facs Rev (Luther Home of Mercy) .................................. 2.110 01/06/05 1,440,000
1,000,000 Puerto Rico Cmnwlth Hwy & Trans Auth Rev ........................................... 1.990 01/06/05 1,000,000
1,500,000 Rev Bd Ctfs Ser 04-13 (Centennial East Apts) ....................................... 2.290 01/06/05 1,500,000
1,105,000 Salina KS Rev (Salina Cent Mall LP-Dillards) ....................................... 2.200 01/06/05 1,105,000
1,180,000 St Louis MO Ld Clear Redev (Lammert Bldg) .......................................... 2.150 01/06/05 1,180,000
------------
TOTAL FLOATING & VARIABLE DEMAND NOTES ............................................. $ 25,658,000
------------
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT ADJUSTABLE RATE PUT BONDS -- 12.1% RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 445,000 Lex-Fayette Co KY IBR (Providence Montessori) ...................................... 2.250 01/01/05 $ 445,000
1,280,000 Corpus Cristi TX IDC EDR (Texas Air Invt) .......................................... 1.650 02/01/05 1,279,802
435,000 Summit Co OH IDR (SD Myers Inc) .................................................... 2.200 02/15/05 435,000
50,000 Portgage Co OH IDR (Neidlinger) .................................................... 2.250 03/01/05 50,000
50,000 Summit Co OH IDR (Keltec Inc) ...................................................... 2.250 03/01/05 50,000
360,000 Summit Co OH IDR (Struktol Co America) ............................................. 2.250 03/01/05 360,000
105,000 Cuyahoga Co OH IDR (Halle Office Bldg) ............................................. 1.760 04/01/05 105,000
935,000 Ft Thomas KY Ind Bldg (Carmel Manor) ............................................... 1.750 04/01/05 935,000
295,000 Newport KY IBR (Sumerel Tire) ...................................................... 3.350 06/01/05 295,000
1,000,000 Westmoreland Co PA IDA (White Cons Inds) ........................................... 2.200 06/01/05 1,000,000
------------
TOTAL ADJUSTABLE RATE PUT BONDS .................................................... $ 4,954,802
------------
TOTAL INVESTMENT SECURITIES -- 100.6%
(Amortized Cost $41,209,166) ....................................................... $ 41,209,166
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.6%) .................................... (227,208)
------------
NET ASSETS -- 100.0% ............................................................... $ 40,981,958
============
See accompanying notes to portfolio of investments and notes to financial
statements.
44
NOTES TO PORTFOLIOS OF INVESTMENTS
DECEMBER 31, 2004 (UNAUDITED)
================================================================================
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
December 31, 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
CDR - Community Development Revenue
COP - Certificates of Participation
CDA - Community Developement Authority
CRA - Community Redevelopment Authority
CSD - City School District
EDB - Economic Development Bank
EDR - Economic Development Revenue
EVSD - Exempted Village School District
GO - General Obligation
HFA - Housing Finance Authority/Agency
IBR - Industrial Building Revenue
IDA - Industrial Development Authority/Agency
IDC - Industrial Development Corporation
IDR - Industrial Development Revenue
LSD - Local School District
LT - Limited Tax
MFH - Multi-Family Housing
PCR - Pollution Control Revenue
PFA - Public Financing Authority
SD - School District
TANS - Tax Anticipation Notes
TAWS - Tax Anticipation Warrants
TIF - Tax Increment Financing
USD - Unified School District
UT - Unlimited Tax
45
<page>
Touchstone Investments
DISTRIBUTOR
Touchstone Securities, Inc.
221 East Fourth Street
Cincinnati, Ohio 45202-4094
800.638.8194
www.touchstoneinvestments.com
INVESTMENT ADVISOR
Touchstone Advisors, Inc.
221 East Fourth Street
Cincinnati, Ohio 45202-4094
TRANSFER AGENT
Integrated Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
SHAREHOLDER SERVICE
800.543.0407
A Member of Western & Southern Financial Group(R)
- --------------------------------------------------------------------------------
Touchstone Securities, Inc.
221 East Fourth Street
Cincinnati, Ohio 45202-4133
[LOGO] TOUCHSTONE
INVESTMENTS
------------
TSF-101-0501
------------
ITEM 2. CODE OF ETHICS.
Not required for Semiannual Reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required for Semiannual Reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required for Semiannual Reports
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 Semiannual Report filed under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant does not have procedures by which shareholders may recommend
nominees to its Board of Trustees.
ITEM 11. 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 last fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(2) Certifications required by Item 12 (a)(2) of Form N-CSR are filed
herewith.
(b) Certification required by Item 12 (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: March 8, 2005
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: March 8, 2005
/s/ Terrie A. Wiedenheft
- --------------------------------------------------------------------------------
Terrie A. Wiedenheft
Controller & Treasurer
Date: March 8, 2005