UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3174
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Touchstone Tax-Free Trust
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(Exact name of registrant as specified in charter)
303 Broadway, Cincinnati, Ohio 45202
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(Address of principal executive offices) (Zip code)
Jill T. McGruder, 303 Broadway, Cincinnati, Ohio 45202
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(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 878-4066
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Date of fiscal year end: 6/30/08
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Date of reporting period: 6/30/08
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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.
JUNE 30, 2008
Annual Report
TOUCHSTONE TAX-FREE TRUST
Touchstone Florida Tax-Free Money Market Fund
Touchstone Ohio Tax-Free Bond Fund
Touchstone Ohio Tax-Free Money Market Fund
Touchstone Tax-Free Money Market Fund
[LOGO]TOUCHSTONE(R)
INVESTMENTS
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Table of Contents
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Page
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Letter from the President 3
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Management's Discussion of Fund Performance (Unaudited) 4-5
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Tabular Presentation of Portfolios of Investments (Unaudited) 6
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Statements of Assets and Liabilities 7-8
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Statements of Operations 9
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Statements of Changes in Net Assets 10-11
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Financial Highlights 12-15
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Notes to Financial Statements 16-22
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Portfolios of Investments:
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Florida Tax-Free Money Market Fund 23-24
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Ohio Tax-Free Bond Fund 25-26
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Ohio Tax-Free Money Market Fund 27-30
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Tax-Free Money Market Fund 31-33
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Notes to Portfolios of Investments 34
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Portfolio Composition (Unaudited) 35
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Report of Independent Registered Public Accounting Firm 36
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Other Items (Unaudited) 37-38
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Management of the Trust (Unaudited) 39-42
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2
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Letter from the President
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Dear Shareholder,
We are pleased to provide you with the Touchstone Tax-Free Trust Annual Report.
Inside you will find key financial information for the twelve months ended June
30, 2008.
During the past twelve months, investors were confronted with a weakening
housing market, subprime-mortgage problems, higher oil prices, the weakening
dollar, and slower economic growth. These difficulties continued to impact the
economy, credit markets and financial institutions.
In reviewing the challenges faced in the municipal market and the downgrade of
several bond insurers, adjustments were made to the investment parameters of the
Ohio Insured Tax-Free Fund. The requirement that the Fund have 80% of its assets
invested in insured bonds was removed during the first quarter of 2008. Under
the new parameters, the Fund can now buy Ohio municipal bonds with investment
grade (Baa/BBB or higher) ratings, with at least 80% invested in bonds rated "A"
or better. As a result, the Fund's name was changed to the Touchstone Ohio
Tax-Free Bond Fund.
Touchstone's tax-free money market funds continue to be appealing to those
investors seeking current tax-free income combined with liquidity and stability.
The Funds seek the highest level of interest income exempt from Federal (and in
some cases state) income tax, consistent with protection of capital by primarily
investing in high-quality, short-term municipal obligations.
Fort Washington Investment Advisors, the sub-advisor of the Funds within the
Touchstone Tax-Free Trust, has extensive experience through interest rate cycles
and market events. Fort Washington's rigorous credit standards and consistent
focus on risk management have enabled us to deliver on each Fund's respective
objective.
We continue to believe that diversification is key to balancing risk and return.
As always, we recommend that you work with your financial professional to
utilize a sound asset allocation strategy that invests in a combination of
stock, bond and money market mutual funds to help keep your financial strategy
on course. We also suggest maintaining a long-term approach to gain the full
potential benefits of investing.
We greatly appreciate your continued support. Thank you for including Touchstone
as part of your investment plan.
Sincerely,
/s/Jill T. McGruder
Jill T. McGruder
President
Touchstone Tax-Free Trust
3
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Management's Discussion of Fund Performance (Unaudited)
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MARKET REVIEW
U.S. economic growth moderated substantially over the one-year period ending
June 30, 2008. The downturn in the housing market had a negative effect on many
sectors, resulting in significant losses among financial institutions and
decreased consumer demand. Additionally, the sharp increase in the price of oil
and other commodities further crimped the budgets of many consumers.
In response to the weakening economy and problems in the credit markets, the
Federal Reserve aggressively lowered interest rates, reducing the fed funds rate
to 2.00% from 5.25% over the fiscal year period. Turmoil in the credit markets
caused bonds to trade in a volatile fashion during the fiscal year. As is
typical during an easing cycle, however, the yield curve steepened with 10-year
Treasury yields declining about 1.00% to 3.98% on June 30, 2008. The Fed has
recently expressed concerns about inflationary pressures building in the
economy, signaling that it may soon move to raise interest rates. We would not
expect this increase until early 2009 but the markets have begun to discount
higher rates in the marketplace.
The municipal market faced a challenging year. The sector overall, like other
credit sectors, underperformed relative to Treasuries for the fiscal year
period. Problems in the subprime mortgage market had a negative effect on
several municipal bond insurers with exposure to this sector. The losses
suffered in the subprime sector weakened several bond insurers, resulting in the
loss of several of those with AAA ratings. This, in turn, caused a sell off in
the municipal market as investors indiscriminately sold their insured municipal
bonds without regard for the underlying credit quality of the particular
municipal issuer. Municipal bonds underperformed dramatically during this period
and high quality bonds were trading at yields in excess of comparable maturity
to Treasury issues across the yield curve. The market showed some improvement
once investors began to look past the bond insurance and focused on the
underlying credit quality of the municipal issuers.
Looking ahead, the municipal market will continue to face challenges but we
believe there are attractive opportunities in the sector. From a relative value
standpoint, the underperformance of the market has left municipals at attractive
levels compared to other bond market sectors. Also, in light of the problems
faced by the monoline bond insurers, the use of bond insurance has declined
significantly thus far in 2008. Credit spreads have widened providing investors
the opportunity to buy municipals, which are generally sound credits, at higher
yields without bond insurance. In addition, there is a good chance that credit
spreads will narrow as investors become more accustomed to buying bonds without
insurance.
TOUCHSTONE OHIO TAX-FREE BOND FUND
The total return of the Touchstone Ohio Tax-Free Bond Fund was 2.85% for the
year ended June 30, 2008. The total return of the Lehman Brothers Municipal Bond
Index was 3.23% for the same period. Although the Fund slightly underperformed
its Index during the volatile market experienced over the past year, our
emphasis on buying bonds with good underlying credit quality along with the
Fund's higher average coupon and shorter duration, helped it to weather the
sharp downturns in the market.
Under the Fund's new investment parameters, it can buy Ohio municipal bonds with
investment grade (Baa/BBB or higher) ratings, with at least 80% invested in
bonds rated "A" or better. The Fund has continued to maintain a high credit
profile. As of June 30, 2008, the weighted average rating of the portfolio was
Aa/AA by Moody's and Standard & Poor's, respectively. Our primary strategy in
managing the Fund remains unchanged; we will continue to buy high quality, Ohio
municipal bonds that we believe offer the best combination of tax-free yield and
total return. This typically leads us to higher coupon issues in the 20-year
maturity range; a strategy which historically has served the Fund well.
Looking ahead, we expect that the volatile conditions in the market will persist
and we anticipate that the Fed will begin to raise interest rates at the
beginning of 2009 in order to combat inflationary pressures in the economy. This
is likely to result in a steepening of the yield curve with interest rates
rising most on bonds with longer maturities. In this scenario, we will
selectively look for opportunities in the market to invest in bonds that provide
good relative value opportunities.
4
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Management's Discussion of Fund Performance (Continued)
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COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE OHIO TAX-FREE BOND FUND - CLASS A* AND THE
LEHMAN BROTHERS MUNICIPAL BOND INDEX
[LINECHART]
Ohio Insured Tax- Lehman Brothers
Free Fund - Class A Municipal Bond Index
Jun-98 9525 10000
9818 10307
9839 10369
9884 10461
Jun-99 9697 10276
9610 10235
9534 10156
9845 10452
Jun-00 9952 10610
10144 10867
10640 11342
10807 11594
Jun-01 10835 11669
11058 11997
10968 11924
11033 12036
Jun-02 11393 12477
12006 13069
11962 13069
12069 13226
Jun-03 12353 13567
12322 13578
12518 13764
12715 14002
Jun-04 12357 13670
12849 14202
12998 14380
12909 14375
Jun-05 13305 14797
13246 14777
13323 14885
13303 14923
Jun-06 13271 14927
13752 15436
13866 15607
13962 15734
Jun-07 13827 15628
14085 15913
14283 16131
14122 16032
Jun-08 14224 16134
Past performance is not predictive of future performance.
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OHIO TAX-FREE BOND FUND
AVERAGE ANNUAL TOTAL RETURNS
1 Year 5 Years 10 Years
Class A (2.06%) 1.86% 3.58%
Class C 2.00% 2.02% 3.33%
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* The chart above represents performance of Class A shares only, which will
vary from the performance of Class C shares based on the difference in
loads and fees paid by shareholders in the different classes. Fund
inception was April 1, 1985, and the initial public offering of Class C
shares commenced on November 1, 1993.
The performance of the above Fund does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
5
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Tabular Presentation of Portfolios of Investments (Unaudited)
June 30, 2008
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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.
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FLORIDA TAX-FREE MONEY MARKET FUND
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CREDIT QUALITY (% OF NET ASSETS)
A-1 / P-1 / AAA 92.8
FW1* 7.2
------
Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Floating & Variable Rate
Demand Notes 65.4
Fixed Rate Revenue & General
Obligation Bonds 39.1
Other Assets/Liabilities (net) (4.5)
------
Total 100.0
------
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OHIO TAX-FREE MONEY MARKET FUND
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CREDIT QUALITY (% OF NET ASSETS)
A-1 / P-1 / AAA 81.1
FW1* 18.9
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Floating & Variable Rate
Demand Notes 71.4
Fixed Rate Revenue & General
Obligation Bonds 26.0
Adjustable Rate Put Bonds 0.7
Other Assets/Liabilities (net) 1.9
------
Total 100.0
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OHIO TAX-FREE BOND FUND
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CREDIT QUALITY (% OF NET ASSETS)
AAA / Aaa 29.8
AA / Aa 51.0
A/A 16.4
BBB/Baa 2.8
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Fixed Rate Revenue &
General Obligation Bonds 96.3
Floating & Variable Rate
Demand Notes 6.0
Other Assets/Liabilities (net) (2.3)
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Total 100.0
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TAX-FREE MONEY MARKET FUND
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CREDIT QUALITY (% OF NET ASSETS)
A-1 / P-1 / AAA 84.1
FW1* 15.9
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Floating & Variable Rate
Demand Notes 67.5
Fixed Rate Revenue & General
Obligation Bonds 30.5
Adjustable Rate Put Bonds 2.9
Other Assets/Liabilities (net) (0.9)
------
Total 100.0
------
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* Equivalent to Standart & Poor's and Moody's highest short-term ratings of
A-1 and P-1, respectively, based upon independent research conducted by
Fort Washington Investment Advisors, Inc.
6
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Statements of Assets and Liabilities
June 30, 2008
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FLORIDA OHIO OHIO TAX-FREE
TAX-FREE TAX-FREE TAX-FREE MONEY
MONEY MARKET BOND MONEY MARKET MARKET
FUND FUND FUND FUND
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ASSETS
Investment securities:
At amortized cost $ 19,773,308 $ 56,963,438 $ 388,485,431 $ 52,543,150
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At market value $ 19,773,308 $ 57,912,481 $ 388,485,431 $ 52,543,150
Cash 35,595 95,384 61,859 36,953
Interest receivable 140,215 348,325 2,265,310 424,805
Receivable for capital shares sold -- 162,641 -- --
Receivable for investment securities sold -- -- 12,780,000 --
Other assets 1,574 3,134 3,950 6,026
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TOTAL ASSETS 19,950,692 58,521,965 403,596,550 53,010,934
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LIABILITIES
Dividends payable 18,792 58,691 348,981 392
Payable for capital shares redeemed -- 38,258 -- --
Payable for securities purchased 983,395 1,550,205 7,006,820 801,952
Payable to Advisor 8,225 23,328 141,889 20,831
Payable to other affiliates 332 7,559 23,618 13,468
Payable to Trustees 6,299 6,301 6,312 6,289
Other accrued expenses and liabilities 17,108 33,331 79,521 37,901
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TOTAL LIABILITIES 1,034,151 1,717,673 7,607,141 880,833
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NET ASSETS $ 18,916,541 $ 56,804,292 $ 395,989,409 $ 52,130,101
=============================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $ 18,922,365 $ 56,127,391 $ 395,872,766 $ 52,130,534
Undistributed net investment income -- -- -- 239
Accumulated net realized gains (losses)
from security transactions (5,824) (272,142) 116,643 (672)
Net unrealized appreciation on investments -- 949,043 -- --
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NET ASSETS $ 18,916,541 $ 56,804,292 $ 395,989,409 $ 52,130,101
=============================================================================================================
PRICING OF RETAIL SHARES
Net assets applicable to Retail shares $ -- $ -- $ 133,736,524 $ --
=============================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) -- -- 133,685,353 --
=============================================================================================================
Net asset value, offering price and
redemption price per share $ -- $ -- $ 1.00 $ --
=============================================================================================================
PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional
shares $ -- $ -- $ 262,252,885 $ --
=============================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) -- -- 262,174,425 --
=============================================================================================================
Net asset value, offering price and
redemption price per share $ -- $ -- $ 1.00 $ --
=============================================================================================================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares $ 18,916,541 $ 51,440,591 $ -- $ 21,109,434
=============================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) 18,922,353 4,623,613 -- 21,119,808
=============================================================================================================
Net asset value and redemption price per
share $ 1.00 $ 11.13 $ -- $ 1.00
=============================================================================================================
Maximum offering price per share $ -- $ 11.69 $ -- $ --
=============================================================================================================
7
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Statements of Assets and Liabilities (Continued)
June 30, 2008
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FLORIDA OHIO OHIO TAX-FREE
TAX-FREE TAX-FREE TAX-FREE MONEY
MONEY MARKET BOND MONEY MARKET MARKET
FUND FUND FUND FUND
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PRICING OF CLASS C SHARES
Net assets applicable to Class C shares $ -- $ 5,363,701 $ -- $ --
=============================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) -- 481,642 -- --
=============================================================================================================
Net asset value, offering price and
redemption price per share* $ -- $ 11.14 $ -- $ --
=============================================================================================================
PRICING OF CLASS S SHARES
Net assets applicable to Class S shares $ -- $ -- $ -- $ 31,020,667
=============================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) -- -- -- 31,020,881
=============================================================================================================
Net asset value, offering price and
redemption price per share $ -- $ -- $ -- $ 1.00
=============================================================================================================
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
8
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Statements of Operations
FOR THE YEAR ENDED JUNE 30, 2008
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FLORIDA OHIO OHIO TAX-FREE
TAX-FREE TAX-FREE TAX-FREE MONEY
MONEY MARKET BOND MONEY MARKET MARKET
FUND FUND FUND FUND
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INVESTMENT INCOME
Interest income $ 803,371 $ 2,779,757 $ 10,554,908 $ 2,162,680
- -------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 128,998 298,019 1,507,509 324,631
Administration fees 51,626 119,209 684,219 130,092
Distribution expenses, Retail class -- -- 294,248 --
Distribution expenses, Class A 64,485 136,270 -- 49,591
Distribution expenses, Class C -- 50,958 -- --
Distribution expenses, Class S -- -- -- 270,538
Transfer Agent fees, Retail class -- -- 30,978 --
Transfer Agent fees, Institutional class -- -- 266 --
Transfer Agent fees, Class A 1,271 29,424 -- 12,870
Transfer Agent fees, Class C -- 4,217 -- --
Transfer Agent fees, Class S -- -- -- 63,255
Professional fees 20,726 22,581 35,464 24,217
Custodian fees 1,627 806 51,414 7,774
Trustees' fees and expenses 12,692 12,332 11,926 13,525
Pricing expenses 6,550 9,996 25,852 7,278
Postage and supplies 1,395 21,718 16,529 6,802
Registration fees, Retail class -- -- 14,349 --
Registration fees, Class A 1,333 4,984 -- 8,633
Registration fees, Class C -- 3,192 -- --
Registration fees, Class S -- -- -- 3,243
Reports to shareholders 4,269 9,302 9,912 9,174
Compliance fees and expenses 826 1,074 2,211 1,138
Other expenses 790 1,262 11,324 1,422
- -------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 296,588 725,344 2,696,201 934,183
Other operating expenses reimbursed by
the Advisor (51,809) (121,659) (7,986) (110,223)
Fees waived by the Administrator (51,626) (119,209) (684,219) (130,092)
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NET EXPENSES 193,153 484,476 2,003,996 693,868
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NET INVESTMENT INCOME 610,218 2,295,281 8,550,912 1,468,812
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REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses) from security
transactions (246) (272,142) 130,470 (672)
Net change in unrealized appreciation/
depreciation on investments -- (379,461) -- --
- -------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS (246) (651,603) 130,470 (672)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 609,972 $ 1,643,678 $ 8,681,382 $ 1,468,140
=============================================================================================================
See accompanying notes to financial statements.
9
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Statements of Changes in Net Assets
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FLORIDA OHIO
TAX-FREE TAX-FREE
MONEY MARKET BOND
FUND FUND
- -------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2008 2007 2008 2007
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 610,218 $ 725,407 $ 2,295,281 $ 2,578,203
Net realized gains (losses) from security
transactions (246) 150 (272,142) 903,514
Net change in unrealized appreciation/
depreciation on investments -- -- (379,461) (519,947)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 609,972 725,557 1,643,678 2,961,770
- -------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A (610,218) (725,407) (2,133,730) (2,390,149)
From net investment income, Class C -- -- (161,551) (188,160)
From net realized gains, Class A -- -- (567,571) (605,797)
From net realized gains, Class C -- -- (50,588) (57,110)
- -------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS
TO SHAREHOLDERS (610,218) (725,407) (2,913,440) (3,241,216)
- -------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 44,245,136 38,655,640 1,456,249 1,507,559
Reinvested distributions 30,515 88,299 1,818,136 1,997,247
Payments for shares redeemed (51,119,979) 40,406,783 (6,837,768) 11,330,197
- -------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CLASS A
SHARE TRANSACTIONS (6,844,328) (1,662,844) (3,563,383) (7,825,391)
- -------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold -- -- 887,465 139,590
Reinvested distributions -- -- 164,399 180,989
Payments for shares redeemed -- -- (746,794) (1,876,997)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS C SHARE TRANSACTIONS -- -- 305,070 (1,556,418)
- -------------------------------------------------------------------------------------------------------------
TOTAL DECREASE IN NET ASSETS (6,844,574) (1,662,694) (4,528,075) (9,661,255)
NET ASSETS
Beginning of year 25,761,115 27,423,809 61,332,367 70,993,622
- -------------------------------------------------------------------------------------------------------------
End of year $ 18,916,541 $ 25,761,115 $ 56,804,292 $ 61,332,367
=============================================================================================================
ACCUMULATED NET INVESTMENT INCOME $ -- $ -- $ -- $ --
=============================================================================================================
See accompanying notes to financial statements.
10
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
OHIO
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- -------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2008 2007 2008 2007
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 8,550,912 $ 8,270,378 $ 1,468,812 $ 1,425,307
Net realized gains (losses) from security
transactions 130,470 788 (672) 239
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 8,681,382 8,271,166 1,468,140 1,425,546
- -------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Retail (2,759,518) (2,884,708) -- --
From net investment income, Institutional (5,791,394) (5,385,670) -- --
From net investment income, Class A -- -- (465,507) (479,524)
From net investment income, Class S -- -- (1,003,305) (945,783)
From net realized gains, Retail (4,892) (6,368) -- --
From net realized gains, Institutional (9,723) (11,170) -- --
- -------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS
TO SHAREHOLDERS (8,565,527) (8,287,916) (1,468,812) (1,425,307)
- -------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
RETAIL
Proceeds from shares sold 251,754,217 154,993,833 -- --
Reinvested distributions 2,749,113 2,872,822 -- --
Payments for shares redeemed (225,955,439) (144,795,154) -- --
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM RETAIL
SHARE TRANSACTIONS 28,547,891 13,071,501 -- --
- -------------------------------------------------------------------------------------------------------------
INSTITUTIONAL
Proceeds from shares sold 453,352,308 371,911,836 -- --
Reinvested distributions 260,223 129,858 -- --
Payments for shares redeemed (361,142,637) (385,429,495) -- --
- -------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INSTITUTIONAL SHARE TRANSACTIONS 92,469,894 (13,387,801) -- --
- -------------------------------------------------------------------------------------------------------------
CLASS A
Proceeds from shares sold -- -- 14,328,428 14,546,505
Reinvested distributions -- -- 456,924 469,892
Payments for shares redeemed -- -- (10,266,105) (14,704,961)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS A
SHARE TRANSACTIONS -- -- 4,519,247 311,436
- -------------------------------------------------------------------------------------------------------------
CLASS S
Proceeds from shares sold -- -- 149,100,506 226,477,167
Reinvested distributions -- -- 997,151 946,943
Payments for shares redeemed -- -- (202,001,440) (177,156,980)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CLASS S SHARE TRANSACTIONS -- -- (51,903,783) 50,267,130
- -------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 121,133,640 (333,050) (47,385,208) 50,578,805
NET ASSETS
Beginning of year 274,855,769 275,188,819 99,515,309 48,936,504
- -------------------------------------------------------------------------------------------------------------
End of year $ 395,989,409 $ 274,855,769 $ 52,130,101 $ 99,515,309
=============================================================================================================
ACCUMULATED NET INVESTMENT INCOME $ -- $ -- $ 239 $ --
=============================================================================================================
See accompanying notes to financial statements.
11
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FLORIDA TAX-FREE MONEY MARKET FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
--------------------------------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.023 0.029 0.023 0.011 0.004
Net realized gains (losses) on
investments (0.000)(A) 0.000(A) -- (0.000)(A) (0.000)(A)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 0.023 0.029 0.023 0.011 0.004
- -----------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.023) (0.029) (0.023) (0.011) (0.004)
Distributions from net realized gains -- -- -- -- (0.000)(A)
- -----------------------------------------------------------------------------------------------------------
Total distributions (0.023) (0.029) (0.023) (0.011) (0.004)
- -----------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============================================================================================================
Total return 2.29% 2.92% 2.28% 1.09% 0.36%
============================================================================================================
Net assets at end of year (000's) $ 18,917 $ 25,761 $ 27,424 $ 28,144 $ 29,385
============================================================================================================
Ratio of net expenses to average net assets 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets 2.37% 2.88% 2.23% 1.08% 0.35%
(A) Amount rounds to less than $0.001.
OHIO TAX-FREE BOND FUND - CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
--------------------------------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 11.37 $ 11.45 $ 12.10 $ 11.68 $ 12.36
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.44 0.45 0.46 0.45 0.48
Net realized and unrealized gains (losses)
on investments (0.12) 0.03 (0.49) 0.43 (0.50)
===========================================================================================================
Total from investment operations 0.32 0.48 (0.03) 0.88 (0.02)
===========================================================================================================
Less distributions:
Dividends from net investment income (0.44) (0.45) (0.46) (0.45) (0.48)
Distributions from net realized gains (0.12) (0.11) (0.16) (0.01) (0.21)
- -----------------------------------------------------------------------------------------------------------
Total distributions (0.56) (0.56) (0.62) (0.46) (0.69)
- -----------------------------------------------------------------------------------------------------------
Capital contributions -- -- -- -- 0.03
- -----------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 11.13 $ 11.37 $ 11.45 $ 12.10 $ 11.68
===========================================================================================================
Total return (A) 2.85% 4.19% (0.25%) 7.66% 0.04%(B)
===========================================================================================================
Net assets at end of year (000's) $ 51,440 $ 56,163 $ 64,266 $ 74,604 $ 77,837
===========================================================================================================
Ratio of net expenses to average net assets 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets 3.92% 3.87% 3.87% 3.74% 3.94%
Portfolio turnover rate 17% 28% 24% 30% 36%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Total return would have been (0.21%) without the capital contribution made
by the Advisor. See accompanying notes to financial statements.
12
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
OHIO TAX-FREE BOND FUND - CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 11.39 $ 11.46 $ 12.11 $ 11.69 $ 12.41
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.36 0.36 0.37 0.36 0.39
Net realized and unrealized gains (losses)
on investments (0.13) 0.04 (0.49) 0.43 (0.51)
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.23 0.40 (0.12) 0.79 (0.12)
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.36) (0.36) (0.37) (0.36) (0.39)
Distributions from net realized gains (0.12) (0.11) (0.16) (0.01) (0.21)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (0.48) (0.47) (0.53) (0.37) (0.60)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 11.14 $ 11.39 $ 11.46 $ 12.11 $ 11.69
==================================================================================================================
Total return (A) 2.00% 3.50% (1.00%) 6.86% (1.03%)
==================================================================================================================
Net assets at end of year (000's) $ 5,364 $ 5,169 $ 6,728 $ 9,400 $ 9,862
==================================================================================================================
Ratio of net expenses to average net assets 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to average net
assets 3.17% 3.12% 3.12% 2.99% 3.19%
Portfolio turnover rate 17% 28% 24% 30% 36%
(A) Total returns shown exclude the effect of applicable sales loads.
OHIO TAX-FREE MONEY MARKET FUND - RETAIL
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.024 0.029 0.023 0.011 0.004
Net realized gains on investments 0.000(A) 0.000(A) -- -- 0.000(A)
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.024 0.029 0.023 0.011 0.004
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.024) (0.029) (0.023) (0.011) (0.004)
Distributions from net realized gains 0.000(A) (0.000)(A) -- (0.000)(A) (0.000)(A)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (0.024) (0.029) (0.023) (0.011) (0.004)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================
Total return 2.43% 2.96% 2.31% 1.13% 0.35%
==================================================================================================================
Net assets at end of year (000's) $133,736 $105,148 $ 92,082 $ 99,127 $165,145
==================================================================================================================
Ratio of net expenses to average net assets 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets 2.35% 2.92% 2.26% 1.05% 0.35%
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements.
13
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
OHIO TAX-FREE MONEY MARKET FUND - INSTITUTIONAL
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.027 0.032 0.025 0.014 0.006
Net realized gains on investments 0.000(A) 0.000(A) -- -- 0.000(A)
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.027 0.032 0.025 0.014 0.006
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.027) (0.032) (0.025) (0.014) (0.006)
Distributions from net realized gains 0.000(A) (0.000)(A) -- 0.000(A) 0.000(A)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (0.027) (0.032) (0.025) (0.014) (0.006)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================
Total return 2.68% 3.21% 2.57% 1.39% 0.60%
==================================================================================================================
Net assets at end of year (000's) $ 262,253 $169,708 $183,107 $192,346 $174,739
==================================================================================================================
Ratio of net expenses to average net assets 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net
assets 2.58% 3.17% 2.50% 1.41% 0.59%
(A) Amount rounds to less than $0.001.
TAX-FREE MONEY MARKET FUND - CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.024 0.028 0.023 0.011 0.005
Net realized gains (losses) on investments (0.000)(A) 0.000(A) -- -- 0.000(A)
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.024 0.028 0.023 0.011 0.005
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.024) (0.028) (0.023) (0.011) (0.005)
Distributions from net realized gains -- -- -- -- (0.000)(A)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (0.024) (0.028) (0.023) (0.011) (0.005)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================
Total return 2.39% 2.88% 2.28% 1.14% 0.50%
==================================================================================================================
Net assets at end of year (000's) $ 21,109 $ 16,590 $ 16,279 $ 19,250 $ 20,263
==================================================================================================================
Ratio of net expenses to average net assets 0.89% 0.89% 0.89% 0.89% 0.89%
Ratio of net investment income to average net
assets 2.35% 2.85% 2.23% 1.13% 0.48%
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements.
14
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND - CLASS S
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.021 0.026 0.020 0.009 0.002
Net realized gains (losses) on investments (0.000)(A) 0.000(A) -- -- 0.000(A)
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.021 0.026 0.020 0.009 0.002
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.021) (0.026) (0.020) (0.009) (0.002)
Distributions from net realized gains -- -- -- -- (0.000)(A)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (0.021) (0.026) (0.020) (0.009) (0.002)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================
Total return 2.12% 2.61% 2.01% 0.87% 0.25%
==================================================================================================================
Net assets at end of year (000's) $ 31,021 $ 82,925 $ 32,658 $ 13,075 $ 16,381
==================================================================================================================
Ratio of net expenses to average net assets 1.15% 1.15% 1.15% 1.15% 1.15%
Ratio of net investment income to average net
assets 2.23% 2.58% 2.10% 0.86% 0.22%
(A) Amount rounds to less than $0.001.
See accompanying notes to financial statements.
15
- --------------------------------------------------------------------------------
Notes to Financial Statements
June 30, 2008
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Florida Tax-Free Money Market Fund, the Ohio Tax-Free Bond Fund (formerly
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 Funds are registered to offer different classes of shares: Retail class
shares, Institutional class shares, Class A shares, Class C shares, and Class S
shares. The assets of each Fund are segregated, and a shareholder's interest is
limited to the Fund in which shares are held. The Funds' prospectus provides a
description of each Fund's investment objectives, policies, and strategies along
with information on the classes of shares currently being offered.
The Florida Tax-Free Money Market Fund offers one class 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).
The Ohio Tax-Free Bond 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 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 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 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 - 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
Tax-Free Bond 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.
16
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles (GAAP) from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. As of June 30, 2008, the Trust does not believe the adoption
of SFAS No. 157 will impact the amounts reported in the financial statements,
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements reported on the
statement of changes in net assets for a fiscal period.
SHARE VALUATION - The net asset value per share of the Florida Tax-Free Money
Market Fund is calculated daily by dividing the total value of the 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 Tax-Free Bond Fund, the Ohio
Tax-Free Money Market Fund, and the Tax-Free Money Market Fund is calculated
daily by dividing the total value of each 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 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 Tax-Free Bond 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 Tax-Free Bond 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 Florida Tax-Free Money Market Fund, the Ohio Tax-Free Bond Fund,
the 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 Tax-Free
Bond 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.
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.
17
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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.
GAAP 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 continue 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.
The tax character of distributions paid for the years ended June 30, 2008 and
2007 was as follows:
FLORIDA
TAX-FREE MONEY OHIO TAX-FREE
MARKET FUND BOND FUND
- --------------------------------------------------------------------------------
2008 2007 2008 2007
- --------------------------------------------------------------------------------
From tax exempt income $ 610,218 $ 725,407 $2,295,281 $2,578,309
From ordinary income -- -- 22,120 --
From long-term capital gains -- -- 596,039 662,907
- --------------------------------------------------------------------------------
$ 610,218 $ 725,407 $2,913,440 $3,241,216
- --------------------------------------------------------------------------------
OHIO TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
2008 2007 2008 2007
- --------------------------------------------------------------------------------
From tax exempt income $8,550,912 $8,286,395 $1,468,812 $1,425,307
From ordinary income 3,188 -- -- --
From long-term capital gains 11,427 1,521 -- --
- --------------------------------------------------------------------------------
$8,565,527 $8,287,916 $1,468,812 $1,425,307
- --------------------------------------------------------------------------------
18
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of June
30, 2008:
FLORIDA
TAX-FREE MONEY OHIO TAX-FREE
MARKET FUND BOND FUND
- ----------------------------------------------------------------------------
Tax cost of portfolio investments $ 19,773,308 $ 56,963,438
============================================================================
Gross unrealized appreciation -- 1,517,571
Gross unrealized depreciation -- (568,528)
- ----------------------------------------------------------------------------
Net unrealized appreciation -- 949,043
Capital loss carryforward (5,573) (192,709)
Post-October loss (251) (79,433)
Undistributed tax exempt income 18,792 29,350
Other temporary differences (18,792) (29,350)
- ----------------------------------------------------------------------------
Accumulated earnings (deficit) $ (5,824) $ 676,901
============================================================================
OHIO TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- ----------------------------------------------------------------------------
Tax cost of portfolio investments $388,485,431 $ 52,543,150
============================================================================
Post-October loss -- (672)
Undistributed tax exempt income 348,981 631
Undistributed ordinary income 23,216 --
Undistributed long-term gains 93,427 --
Other temporary differences (348,981) (392)
- ----------------------------------------------------------------------------
Accumulated earnings (deficit) $ 116,643 $ (433)
============================================================================
The capital loss carryforward as of June 30, 2008 in the table above expires as
follows:
FUND AMOUNT EXPIRATION DATE
- ----------------------------------------------------------------------------
Florida Tax-Free Money Market Fund $ 5,375 June 30, 2013
$ 198 June 30, 2014
- ----------------------------------------------------------------------------
Ohio Tax-Free Bond Fund $ 192,709 June 30, 2016
- ----------------------------------------------------------------------------
The capital loss carryforwards and Post-October losses may be utilized in future
years to offset net realized capital gains, if any, prior to distributing such
gains to shareholders.
During the year ended June 30, 2008, the Florida Tax-Free Money Market Fund
utilized $5 of capital loss carryforwards.
RECLASSIFICATION OF CAPITAL ACCOUNTS - Reclassifications result primarily from
the difference in the tax treatment of paydown securities. These
reclassifications have no impact on the net assets or net asset value per share
of the Funds and are designed to present the Funds' capital accounts on a tax
basis. For the year ended June 30, 2008, the Tax-Free Money Market Fund
increased undistributed net investment income by $239 and increased accumulated
net realized losses on the Statement of Assets and Liabilities.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet a more-likely-than-not threshold would be recorded
as a tax benefit in the current year. Adoption of FIN 48 is required for fiscal
years beginning after December 15, 2006 and is to be applied to all open tax
years as of the effective date. The Funds have analyzed their tax positions
taken on Federal income tax returns for all open tax years (tax years ended June
30, 2005 through 2008) for purposes of implementing FIN 48 and have concluded
that no provision for income tax is required in their financial statements.
19
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and government
securities) were as follows for the year ended June 30, 2008:
OHIO TAX- FREE
BOND FUND
- --------------------------------------------------------------------------------
Purchases of investment securities $ 9,584,328
Proceeds from sales and maturities of investment securities $15,241,379
- --------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of the Advisor (Touchstone
Advisors, Inc.), the Underwriter (Touchstone Securities, Inc.) and/or JPMorgan
Chase Bank, N.A. ("JPMorgan" and the Sub-Administrator and Transfer Agent to the
Funds). The Advisor and Underwriter are each wholly-owned, indirect subsidiaries
of The Western and Southern Life Insurance Company (Western-Southern).
MANAGEMENT AGREEMENT
The Advisor provides general investment supervisory services for the Funds,
under the terms of an Advisory Agreement. Under the Advisory Agreement, each
Fund pays the Advisor a fee, which is computed and accrued daily and paid
monthly, at an annual rate based on average daily net assets of each Fund as
follows:
- --------------------------------------------------------------------------------
0.50% on the first $100 million
0.45% on the next $100 million
0.40% on the next $100 million
0.375% of such assets in excess of $300 million
- --------------------------------------------------------------------------------
Fort Washington Investment Advisors, Inc. (Sub-Advisor) has been retained by the
Advisor to manage the investments of the Funds under the terms of a Sub-Advisory
Agreement. The Sub-Advisor is a wholly-owned, indirect subsidiary of
Western-Southern. The Advisor (not the Funds) pays the Sub-Advisor a fee for
these services.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
The Advisor entered into an Administration and Accounting Services Agreement
with the Trust, whereby the Advisor is responsible for supplying executive and
regulatory compliance services, supervises the preparation of tax returns, and
coordinates the preparation of reports to shareholders and reports to, and
filings with, the Securities and Exchange Commission and state securities
authorities, materials for meetings of the Board of Trustees, calculating the
daily net asset value per share and maintaining the financial books and records
of each Fund. For its services, the Advisor receives an annual fee of 0.20% of
the aggregate average daily net assets of the Trust, Touchstone Funds Group
Trust, Touchstone Investment Trust (excluding Institutional Money Market Fund),
and Touchstone Strategic Trust up to and including $6 billion; 0.16% of the next
$4 billion of aggregate average daily net assets; and 0.12% of the aggregate
average daily net assets of all such assets in excess of $10 billion. The fee is
allocated among the Funds on the basis of relative daily net assets.
The Advisor has engaged JPMorgan as the Sub-Administrator to the Trust. JPMorgan
provides administrative and accounting services to the Trust and is compensated
directly by the Advisor, not the Trust.
EXPENSE LIMITATION AGREEMENT
The Trust and the Advisor have entered into an Expense Limitation Agreement to
contractually limit operating expenses of the Florida Tax-Free Money Market
Fund, Ohio Tax-Free Bond Fund, Ohio Tax-Free Money Market Fund, and Tax-Free
Money Market Fund. The maximum operating expense limit in any year with respect
to the Funds is based on a percentage of the average daily net assets of the
Funds. The Advisor has agreed to waive advisory fees and reimburse expenses in
order to maintain expense limitations for the Funds as follows through June 30,
2009:
20
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued
- --------------------------------------------------------------------------------
CLASS R CLASS I CLASS A CLASS C CLASS S
- ------------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund -- -- 0.75% -- --
Ohio Tax-Free Bond Fund -- -- 0.75% 1.50% --
Ohio Tax-Free Money Market Fund 0.75% 0.50% -- -- --
Tax-Free Money Market Fund -- -- 0.89% -- 1.15%
For the year ended June 30, 2008, the Advisor waived administration fees and/or
reimbursed expenses as follows:
OTHER OPERATING
ADMINISTRATION EXPENSES
FEES WAIVED REIMBURSED
- --------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund $ 51,626 $ 51,809
Ohio Tax-Free Bond Fund $119,209 $121,659
Ohio Tax-Free Money Market Fund $684,219 $ 7,986
Tax-Free Money Market Fund $130,092 $110,223
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent Agreement between the Trust and JPMorgan,
JPMorgan maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. For these services,
JPMorgan receives a monthly fee per shareholder account from each Fund. In
addition, each Fund pays JPMorgan out-of-pocket expenses including, but not
limited to, postage and supplies.
For the year ended June 30, 2008, the following Funds reimbursed the Advisor for
amounts paid to third parties that provide sub-transfer agency and other
administrative services to the Funds. These amounts are included in transfer
agent fees on the Statements of Operations:
AMOUNT
- -------------------------------------------------------------------------------
Ohio Tax-Free Bond Fund $ 914
Ohio Tax-Free Money Market Fund $ 17
Tax-Free Money Market Fund $63,269
UNDERWRITING AGREEMENT
The Underwriter is the Funds' principal underwriter and, as such, acts as the
exclusive agent for distribution of the Funds' shares. Under the terms of the
Underwriting Agreement between the Trust and the Underwriter, the Underwriter
earned $5,607 from underwriting and broker commissions on the sale of Class A
shares of the Ohio Tax-Free Bond Fund during the year ended June 30, 2008. In
addition, the Underwriter collected $63 of contingent deferred sales loads on
the redemption of Class C shares of the Ohio Tax-Free Bond Fund.
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution (Class A Plan) under which shares of 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 Tax-Free Bond 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.
21
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 the Trust and
JPMorgan, JPMorgan provides certain compliance services to the Trust and
provides administrative support services to the Funds' Compliance Program and
Chief Compliance Officer. For these services, JPMorgan receives a quarterly fee
from each Fund.
5. CAPITAL SHARE TRANSACTIONS
Capital share transactions for the Florida Tax-Free Money Market Fund, the Ohio
Tax-Free Money Market Fund and the Tax-Free Money Market Fund are the same as
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 Tax-Free Bond Fund are the result of the
following capital share transactions:
OHIO TAX-FREE
BOND FUND
- --------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
JUNE 30, JUNE 30,
2008 2007
- --------------------------------------------------------------------------------
CLASS A
Shares sold 128,208 129,809
Shares reinvested 160,419 171,567
Shares redeemed (602,647) (977,738)
- --------------------------------------------------------------------------------
Net decrease in shares outstanding (314,020) (676,362)
Shares outstanding, beginning of year 4,937,633 5,613,995
- --------------------------------------------------------------------------------
Shares outstanding, end of year 4,623,613 4,937,633
================================================================================
CLASS C
Shares sold 78,817 12,057
Shares reinvested 14,496 15,528
Shares redeemed (65,703) (160,738)
- --------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 27,610 (133,153)
Shares outstanding, beginning of year 454,032 587,185
- --------------------------------------------------------------------------------
Shares outstanding, end of year 481,642 454,032
================================================================================
6. 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.
22
- --------------------------------------------------------------------------------
Portfolio of Investments
Florida Tax-Free Money Market Fund - June 30, 2008
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 39.1%
$100,000 Broward Co FL Sch Brd COP Ser B 5.000 07/01/08 $ 100,000
200,000 FL Hurricane Catastrophe Fd Fin Corp Rev Ser A 5.000 07/01/08 200,000
100,000 FL St Brd Ed Lottery Rev Ser C 4.625 07/01/08 100,000
125,000 FL St Dept Environmental Protection Preservation Rev Ser A 5.250 07/01/08 125,000
130,000 FL St Sr Lien Jacksonville Trans UTGO 6.000 07/01/08 130,000
125,000 FL St Tpk Auth Rev (Dept of Trans) Ser A 5.250 07/01/08 125,000
200,000 Glendale AZ Str & Hwy User Rev 3.000 07/01/08 200,000
100,000 Hillsborough Co FL Sch Brd COP (Master Lease) Ser B Prerefunded @ 101 5.000 07/01/08 101,000
250,000 Lake Co FL Sch Brd COP Prerefunded @ 101 5.000 07/01/08 252,500
500,000 Sarasota Co FL Sch Brd COP 3.000 07/01/08 500,000
300,000 Columbiana OH Elec Sys Impt BANS 4.250 07/10/08 300,014
100,000 CA Statewide Cmntys Dev Auth Rev (Sherman Oaks A) Prerefunded @ 102 5.000 08/01/08 102,200
190,000 Hillsborough Co FL Util Rev Jr Lien 5.500 08/01/08 190,505
100,000 NV St Nat Res Ser B 3.000 08/01/08 100,001
125,000 Palm Beach Co FL Sch Brd COP Ser E 5.000 08/01/08 125,253
150,000 TX St Pub Fin Auth Bldg Rev (St Preservation) Ser B 4.900 08/01/08 150,313
100,000 Plantation FL Rev (Pub Impt) 4.250 08/15/08 100,214
400,000 Union Twp OH TIF Rev BANS 4.250 09/17/08 400,542
455,000 Stark Co OH Swr Dist 2007-2 LTGO BANS 3.900 09/24/08 455,258
400,000 Gainesville FL Utils Sys Rev Ser C 5.000 10/01/08 402,978
100,000 JEA FL St Johns Riv Pwr Pk Sys Rev (Issue 2) Ser 19 4.000 10/01/08 100,297
100,000 Orlando FL Utils Commn Wtr & Elec Rev 5.900 10/01/08 100,908
100,000 Sarasota Co FL Sales Tax Rev 4.600 10/01/08 100,579
150,000 South FL Wtr Mgmt Dist COP 3.500 10/01/08 150,357
685,000 Tampa Bay FL Wtr Util Sys Rev Ser B Prerefunded @ 101 4.750 10/01/08 695,630
100,000 Tampa Bay FL Wtr Util Sys Rev Ser B Prerefunded @ 101 5.125 10/01/08 101,701
125,000 Volusia Co FL Sch Brd Sales Tax Rev 3.625 10/01/08 125,444
100,000 Volusia Co FL Sch Brd Sales Tax Rev 5.000 10/01/08 100,649
100,000 Winter Haven FL Util Sys Rev Impt Prerefunded @ 101 5.000 10/01/08 101,588
380,000 Cincinnati OH EDR BANS 3.600 11/07/08 380,000
100,000 MI St Hosp Fin Auth Rev (Ascension Hlth Credit) Ser A 5.200 11/15/08 100,996
100,000 Collier Co FL Sch Brd COP 4.750 02/15/09 101,547
300,000 Lebanon OH Rd Impt UTGO BANS 3.000 06/23/09 301,719
400,000 FL Hurricane Catastrophe Fd Fin Corp Rev Ser A 5.000 07/01/09 410,212
370,000 Columbiana OH Elec Sys Impt BANS 2.650 07/09/09 370,903
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $ 7,403,308
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 65.4%
$400,000 Collier Co FL Hlth Fac Auth Hosp Rev (Cleveland Clinic)
(LOC: JPMorgan Chase Bank) 1.700 07/01/08 $ 400,000
800,000 FL St Brd Ed Muni Secs Tr Rcpts Ser SGA 102 (SPA: Societe Generale) 1.850 07/01/08 800,000
250,000 Grand Forks ND Hosp Facs Rev (United Hosp Oblig Grp)
(LOC: LaSalle National Bank) 2.660 07/01/08 250,000
200,000 Jacksonville FL Hlth Facs Auth Hosp Rev (Baptist Med)
(LOC: Bank of America NA) 2.500 07/01/08 200,000
500,000 Manatee Co FL PCR (FL Pwr & Light Co) 1.750 07/01/08 500,000
390,000 Broward Co FL HFA MFH Rev (Jacaranda Village Apts) (LOC: HSBC Bank) 1.560 07/02/08 390,000
900,000 Broward Co FL HFA MFH Rev (Reflections Apts) (LOC: FHLMC) 1.550 07/02/08 900,000
100,000 Lee Co FL HFA MFH Rev (Forestwood Apts) (LOC: FNMA) 1.570 07/02/08 100,000
605,000 Marion Co FL HFA (Paddock Apts) (LOC: FNMA) 1.550 07/02/08 605,000
300,000 Palm Beach Co FL Rev (Norton Gallery) (LOC: Bank of America NA) 1.630 07/02/08 300,000
400,000 Pinellas Co FL Edl Facs Auth Rev (LOC: Suntrust Bank) 1.560 07/02/08 400,000
450,000 Volusia Co FL HFA Rev (Fisherman's Landing) (LOC: FNMA) 1.550 07/02/08 450,000
675,000 Duval Co FL HFA MFH Rev (Glades Apts) (SPA: FHLMC) 1.550 07/03/08 675,000
350,000 Gulf Breeze FL Muni Bond Fund Ser A (LOC: Bank of America NA) 1.600 07/03/08 350,000
23
- --------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 65.4% (CONTINUED)
$ 70,000 Highlands Co FL Hlth Facs Auth Rev (Adventist Hlth) (LOC: Suntrust Bank) 1.550 07/03/08 $ 70,000
500,000 Hillsborough Co FL IDR (Mosi-Charter Sch A) (LOC: Bank of America) 1.600 07/03/08 500,000
250,000 Hillsborough Co FL Rev (Carrollwood Day) (LOC: Wells Fargo Bank) 1.550 07/03/08 250,000
500,000 Orange Co FL IDA Rev (Trinity Prep Sch Inc) (LOC: Wachovia Bank NA) 1.520 07/03/08 500,000
100,000 Palm Beach Co FL Edl Facs Auth Rev (Atlantic College)
(LOC: Bank of America NA) 1.550 07/03/08 100,000
900,000 Palm Beach Co FL Rev (Henry Morrison Flagler) (LOC: Northern Trust Bank) 1.570 07/03/08 900,000
200,000 Seminole Co FL IDA Rev (FL Living Nursing Ctr) (LOC: Bank of America NA) 1.750 07/03/08 200,000
900,000 Seminole Co FL IDA Rev (Master Academy) (LOC: Allied Irish Bank) 1.530 07/03/08 900,000
900,000 Tampa FL Rev (Tampa LLC-Univ Tampa) (LOC: Royal Bank of Canada) 1.560 07/03/08 900,000
800,000 Wauchula FL IDR (Hardee Co Ctr) (LOC: JPMorgan Chase Bank) 1.560 07/03/08 800,000
930,000 Lee Co FL IDA Hlthcare Facs Rev (Bonita Cmnty Hlth) (LOC: Fifth Third Bank) 1.610 07/04/08 930,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 12,370,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 104.5%
(Amortized Cost $19,773,308) $ 19,773,308
LIABILITIES IN EXCESS OF OTHER ASSETS -- (4.5%) (856,767)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 18,916,541
============================================================================================================================
See accompanying notes to portfolios of investments and notes to financial
statements.
24
- --------------------------------------------------------------------------------
Portfolio of Investments
Ohio Tax-Free Bond Fund -June 30, 2008
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 96.3%
$1,035,000 Reading OH Rev (St Mary's Ed Institute) 5.550 02/01/10 $ 1,060,823
525,000 Kings OH LSD GO Prerefunded @ 101 6.050 12/01/10 569,667
1,000,000 Summit Co OH GO Prerefunded @ 101 6.000 12/01/10 1,083,920
105,000 Cuyahoga Co OH Hosp Rev (Univ Hosp) ETM 9.000 06/01/11 116,126
1,000,000 Lorain Co OH Hosp Rev (Catholic Hlth) 5.625 10/01/11 1,060,940
1,000,000 Hamilton Co OH Swr Sys Rev 5.500 12/01/11 1,068,990
1,000,000 Pickerington OH LSD UTGO Prerefunded @ 100 5.250 12/01/11 1,067,080
1,750,000 Eaton OH CSD GO Prerefunded @ 101 5.000 12/01/12 1,886,728
1,000,000 Monroe OH LSD UTGO Prerefunded @ 100 5.000 12/01/12 1,069,480
500,000 Ross Twp OH LSD UTGO Prerefunded @ 100 5.000 12/01/13 538,330
1,480,000 Lakewood OH CSD GO Prerefunded @ 100 5.250 12/01/14 1,620,141
660,000 West Chester Twp OH GO 5.500 12/01/14 702,187
400,000 Warren OH Wtr Wrks Rev 5.500 11/01/15 425,456
845,000 Buckeye Valley OH LSD GO 6.850 12/01/15 945,589
595,000 Columbus-Polaris Hsg Corp Rev Prerefunded @ 100 7.400 01/01/16 678,859
2,750,000 Little Miami OH LSD GO Prerefunded @ 100 5.000 12/01/16 2,990,542
1,000,000 Lorain Co OH Hosp Rev (Catholic Hlth Partners) 5.500 09/01/19 1,040,930
1,000,000 Lucas Co OH Hosp Rev (Promedica Hlth Grp) 5.625 11/15/19 1,019,500
1,085,000 West Clermont OH LSD GO 5.000 12/01/19 1,122,291
850,000 West Chester Twp OH GO 5.000 12/01/20 872,245
1,210,000 Cincinnati OH Tech College Rev 5.250 10/01/21 1,220,225
1,185,000 Akron OH Impt GO 5.000 12/01/22 1,217,753
765,000 Fairfield Co OH GO 5.000 12/01/22 784,400
250,000 OH St Higher Ed Fac (Xavier Univ) 5.000 05/01/23 265,020
1,050,000 Harrison OH Wst Wtr Sys Rev 5.250 11/01/23 1,101,975
1,000,000 Akron OH Var Purp GO 5.000 12/01/23 1,021,410
450,000 Columbus OH TIF Rev (Polaris) 4.750 12/01/23 447,066
865,000 Fairfield Co OH GO 5.000 12/01/23 881,677
1,000,000 OH St Higher Ed Fac Rev (Univ Dayton) 5.000 12/01/23 1,013,650
1,000,000 Toledo OH CSD GO 5.000 12/01/23 1,018,000
1,000,000 Hamilton Co OH Hosp Rev (Children's Hosp Med Ctr) 5.000 05/15/24 957,650
400,000 Springboro OH Swr Sys Rev 5.000 06/01/24 409,024
2,000,000 Canal Winchester OH LSD UTGO 4.750 12/01/24 2,027,520
825,000 Parma OH GO 4.750 12/01/24 827,244
1,000,000 Columbus OH Arpt Rev 5.000 01/01/25 1,004,120
1,040,000 Franklin Co OH Hosp Rev (Children's Hosp) 5.000 05/01/25 1,029,434
810,000 Big Walnut OH LSD GO 5.000 12/01/25 834,608
580,000 New Albany Plain OH LSD GO 5.000 12/01/25 585,933
1,000,000 Univ of Cincinnati OH General Rcpts 4.750 06/01/26 1,005,870
1,500,000 Richland Co OH Hosp Facs Rev (MedCentral Hlth Sys) 5.125 11/15/26 1,425,390
1,090,000 Fairborn OH CSD GO 5.000 12/01/26 1,126,668
1,000,000 Kings OH LSD Impt UTGO 5.000 12/01/26 1,024,880
1,000,000 Lakewood OH CSD Facs Impt UTGO 5.000 12/01/26 1,016,490
1,500,000 OH St Higher Ed Fac Rev (Univ Dayton) 5.000 12/01/26 1,442,310
2,100,000 Oregon OH CSD GO 5.000 12/01/27 2,144,226
1,830,000 Columbus OH CSD Impt UTGO 5.000 12/01/28 1,879,739
1,185,000 Delaware OH GO 5.000 12/01/28 1,211,094
895,000 Licking Heights OH LSD GO 6.400 12/01/28 1,069,051
1,000,000 Mason OH Swr Sys Rev 5.000 12/01/28 984,870
1,500,000 Reynoldsburg OH CSD Facs Constr & Impt UTGO 5.250 12/01/28 1,562,340
1,000,000 Cleveland OH Income Tax Rev (Sub Lien Brdgs & Roadways B) 5.000 10/01/29 1,013,020
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $ 54,492,481
- ----------------------------------------------------------------------------------------------------------------------------
25
- --------------------------------------------------------------------------------
Ohio Tax-Free Bond Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 6.0%
$ 400,000 OH St Higher Edl Fac Rev (Case Western)
(SPA: Landesbank Hessen-Thuringen) 2.200 07/01/08 $ 400,000
1,200,000 OH St Wtr Dev Auth (Purewater) (SPA: State Street B&T Co) 7.650 07/02/08 1,200,000
95,000 OH St Higher Ed Fac Pooled Fin (1998)
(LOC: Fifth Third Bank) 1.510 07/03/08 95,000
1,725,000 Univ of Cincinnati OH General Rcpts Ser B
(SPA: Bayerische Landesbank) 9.000 07/03/08 1,725,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 3,420,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 102.3%
(Amortized Cost $56,963,438) $ 57,912,481
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.3%) (1,108,189)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 56,804,292
============================================================================================================================
See accompanying notes to portfolios of investments and notes to financial
statements.
26
- --------------------------------------------------------------------------------
Portfolio of Investments
Ohio Tax-Free Money Market Fund - June 30, 2008
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 26.0%
$4,000,000 Cincinnati OH EDR LTGO BANS (Baldwin 300) 3.050 07/10/08 $ 4,000,000
500,000 Columbiana OH Elec Sys Impt BANS 4.250 07/10/08 500,024
1,850,000 OH Univ General Rcpts BANS (Athens) 3.625 07/16/08 1,850,579
1,000,000 AMP OH Elect Rev BANS (Woodville) 4.350 07/17/08 1,000,107
1,005,000 Greenhills OH Var Purp LTGO BANS 4.050 07/17/08 1,005,000
890,000 Columbiana OH Wtr Main Impt BANS 4.250 08/07/08 890,132
3,700,000 Arcanum-Butler OH LSD (Classroom Facs) UTGO BANS 3.850 08/12/08 3,702,305
672,000 Greene Co OH Ctfs Indbt Var Purp UTGO Ser C 5.300 08/12/08 674,516
850,000 Olmsted Falls OH Impt BANS (Fire Station) 3.950 08/20/08 850,341
1,080,000 Olmsted Falls OH Var Purp Impt BANS 3.950 08/20/08 1,080,433
3,000,000 Geauga Co OH Safety Ctr Impt BANS 4.000 08/27/08 3,001,139
2,560,000 Jackson Co OH LTGO BANS 4.300 09/04/08 2,561,551
290,000 Jackson Co OH LTGO BANS (Courthouse Impt) 4.050 09/04/08 290,531
125,000 OH St UTGO Ser D 5.000 09/15/08 125,720
3,600,000 Union Twp OH TIF Rev BANS 4.250 09/17/08 3,604,876
4,000,000 Milford OH Exempt Village SD LTGO BANS 2.750 09/18/08 4,005,142
710,000 Warrensville Heights OH Var Purp Impt BANS 3.950 09/18/08 710,374
1,000,000 Stark Co OH Swr Dist 2007-2 LTGO BANS 3.900 09/24/08 1,000,568
3,500,000 Cuyahoga Heights OH Var Purp LTGO BANS 4.500 09/25/08 3,506,430
100,000 OH St Bldg Auth (St Facs Admin Bldg Fd A) Prerefunded @ 101 5.250 10/01/08 101,680
100,000 OH St Bldg Auth (St Facs Adult Correction A) 5.500 10/01/08 100,802
150,000 OH St Bldg Auth (St Facs Amin Bldg Fd A) Prerefunded @ 101 4.750 10/01/08 152,331
140,000 OH St Bldg Auth (St Facs Arts Facs Bldg Fd A) 5.000 10/01/08 140,693
1,000,000 Harrison Twp OH BANS (Fire Dept) 3.850 10/09/08 1,000,666
1,000,000 South Lebanon Village OH Tax Increment Rev BANS
(LOC: National City Bank) 3.750 10/27/08 1,000,000
2,000,000 Canal Winchester OH LTGO BANS (Diley Rd) 4.250 10/30/08 2,003,882
300,000 OH St Pub Facs Commn Higher Ed Cap Facs Ser II-A Prerefunded @ 100 5.000 11/01/08 302,655
100,000 Parma OH Hosp Impt Rev (Parma Cmnty Gen Hosp Assn) Prerefunded @ 101 5.375 11/01/08 101,994
2,166,109 Barberton OH CSD UTGO BANS (Sch Facs Constr) 2.600 11/04/08 2,170,513
4,000,000 Northmor OH LSD UTGO BANS (Sch Facs Constr) 2.500 11/06/08 4,006,892
1,000,000 Cincinnati OH EDR BANS (LOC: National City Bank) 3.600 11/07/08 1,000,000
1,605,000 Hancock Co OH LTGO BANS 4.250 11/08/08 1,609,455
1,055,000 AMP OH Elect Rev BANS (Monroeville Village) 3.800 11/13/08 1,055,949
3,000,000 Deerfield Twp OH UTGO BANS 3.450 11/18/08 3,000,000
3,600,000 Niles OH LTGO BANS 2.500 11/21/08 3,606,237
1,500,000 Niles OH Wtr Sys Impt LTGO BANS 4.000 11/21/08 1,502,287
2,200,000 Avon OH LTGO BANS (Miller Rd Extn) 2.500 11/26/08 2,204,384
3,210,000 Mahoning Co OH LTGO BANS Ser A 4.200 11/26/08 3,217,589
200,000 Akron OH Impt LTGO 4.000 12/01/08 201,411
100,000 Akron OH LTGO 4.250 12/01/08 100,828
200,000 Columbus OH CSD Facs Constr & Impt UTGO 3.000 12/01/08 200,664
200,000 Cuyahoga Co OH EDR (Univ Sch Proj) Ser B (LOC: Keybank NA) 5.200 12/01/08 202,142
150,000 Franklin Co OH LTGO 2.300 12/01/08 150,000
150,000 Hilliard OH LTGO 3.000 12/01/08 150,438
300,000 Indian Lake OH LSD Constr & Impt UTGO Prerefunded @ 101 5.125 12/01/08 306,600
150,000 Lakewood OH CSD Impt UTGO 3.375 12/01/08 150,542
325,000 OH St Wtr Dev Auth Ln Fd Rev 5.000 12/01/08 328,678
200,000 OH St Wtr Dev Auth Rev (Fresh Wtr Ser) ETM 5.700 12/01/08 200,000
150,000 Reynoldsburg OH CSD Sch Facs Constr & Impt UTGO 3.000 12/01/08 150,275
575,000 Westlake OH Impt LTGO 6.400 12/01/08 585,039
250,000 Wyoming OH CSD UTGO Ser B Prerefunded @ 101 5.150 12/01/08 254,931
820,000 AMP OH Elect Rev BANS (Edgerton Village) 3.550 12/04/08 820,000
805,000 Oakwood OH Str Impt BANS Ser 2 3.750 12/04/08 805,834
1,980,000 North Baltimore OH LSD Impt UTGO BANS 4.100 12/11/08 1,984,723
1,655,000 Forest Park OH LTGO BANS 3.750 12/23/08 1,659,250
690,000 AMP OH Elect Rev BANS (Brewster Village) 3.500 01/09/09 691,437
840,000 Defiance OH CSD UTGO BANS (Sch Facs Constr) 4.200 01/15/09 845,553
27
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 26.0% (CONTINUED)
$ 952,000 AMP OH Elect Rev BANS (Seville Village) 3.500 01/16/09 $ 954,826
780,000 AMP OH Elect Rev BANS (Woodsfield Village) 3.250 01/30/09 782,938
550,000 Lorain Co OH Hosp Rev Facs (Catholic-A-Rmkt) 4.000 02/01/09 554,568
550,000 Lorain Co OH Hosp Rev Facs (Catholic-B-Rmkt) 4.000 02/01/09 554,567
1,120,000 Mason OH LTGO BANS 3.000 03/12/09 1,125,732
2,970,000 Willowick OH Var Purp Impt LTGO BANS 3.000 03/12/09 2,975,043
2,361,975 Hamilton Twp OH Var Purp LTGO BANS 3.100 03/18/09 2,367,716
400,000 Deer Park - Silverton OH Jt Fire Dist LTGO BANS (Vehicle Acquisition) 3.500 04/07/09 402,244
1,250,000 Brookville OH UTGO BANS 2.750 04/23/09 1,254,961
1,900,000 Fayette Co OH Courthouse LTGO BANS 2.400 05/14/09 1,900,000
1,145,000 Greene Co OH Var Purp UTGO BANS Ser D 2.750 05/19/09 1,152,433
1,265,000 Gates Mills OH Var Purp Impt LTGO BANS 3.250 05/21/09 1,277,097
3,000,000 Ironton OH CSD LTGO BANS 4.750 05/27/09 3,067,737
2,445,000 Ashtabula Co OH LTGO BANS 2.150 05/28/09 2,445,000
2,795,000 Cincinnati OH CSD LTGO BANS 2.500 05/28/09 2,804,922
3,690,000 Middletown OH CSD Sch Impt UTGO BANS 2.500 06/03/09 3,703,334
1,000,000 Tiffin OH Cap Impt LTGO BANS 2.500 06/04/09 1,003,624
2,000,000 Niles OH Swr Sys Impt LTGO BANS 2.750 07/01/09 2,006,820
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $102,759,684
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 71.4%
$ 980,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser C
(LOC: Wachovia Bank NA) 1.700 07/01/08 $ 980,000
8,800,000 Cuyahoga Co OH Rev (Cleveland Clinic) (SPA: Bank of Nova Scotia) 1.700 07/01/08 8,800,000
250,000 Geauga Co OH Rev (South Franklin Circle A) (LOC: Keybank NA) 2.940 07/01/08 250,000
600,000 Geauga Co OH Rev (South Franklin Circle B) (LOC: Keybank NA) 2.940 07/01/08 600,000
3,500,000 Montgomery Co OH Rev (Miami Valley Hosp) (LOC: National City Bank) 3.500 07/01/08 3,500,000
3,000,000 OH St Air Quality Dev Auth Rev (Pollution-FirstEnergy B)
(LOC: Bank of America NA) 1.800 07/01/08 3,000,000
900,000 OH St Air Quality Rev PCR (OH Edison) (LOC: Wachovia Bank) 2.200 07/01/08 900,000
1,450,000 OH St Higher Edl Fac Rev (Case Western Rsrv B-1)
(LOC: Bank of America NA) 2.050 07/01/08 1,450,000
1,000,000 OH St PCR (Sohio Water) 1.750 07/01/08 1,000,000
3,000,000 Cleveland OH Arpt Sys Rev Tr Rcpts SGA 126 (SPA: Societe Generale) 1.600 07/02/08 3,000,000
1,400,000 Cleveland-Cuyahoga Co OH Port Auth Rev (Carnegie/96th Resh Bldg)
(LOC: Fifth Third Bank) 1.510 07/02/08 1,400,000
5,960,000 Cleveland-Cuyahoga Co OH Port Auth Rev (Euclid/93rd Garage Office)
(LOC: Fifth Third Bank) 1.510 07/02/08 5,960,000
1,395,000 Cuyahoga Co OH Ed Fac (Utd Cerebral Palsy Assn) (LOC: Key Bank NA) 1.640 07/02/08 1,395,000
1,835,000 Hamilton Co OH EDR (General Prostestant) (LOC: National City Bank) 1.990 07/02/08 1,835,000
500,000 Hamilton Co OH Hlth Facs (St Aloysius Orphanage) (LOC: Key Bank NA) 1.640 07/02/08 500,000
1,720,000 Hamilton Co OH Hlthcare Facs Rev (Deaconess Lg Term Care A)
(LOC: JPMorgan Chase Bank) 1.500 07/02/08 1,720,000
2,400,000 Hamilton Co OH Hosp Facs Rev (Eliz Gamble) Ser A
(LOC: JPMorgan Chase Bank) 1.540 07/02/08 2,400,000
2,270,000 Lorain Co OH IDR (EMH Regl Med Ctr) (LOC: Key Bank NA) 1.640 07/02/08 2,270,000
4,000,000 Middletown OH Dev Rev (Bishop-Fenwick HS)
(LOC: JPMorgan Chase Bank) 1.500 07/02/08 4,000,000
2,300,000 Montgomery Co OH EDR (Dayton Art Inst) (LOC: National City Bank) 1.840 07/02/08 2,300,000
4,700,000 Montgomery Co OH Rev (Catholic Hlth) Ser B (SPA: Bayerische Landesbank) 1.550 07/02/08 4,700,000
1,500,000 OH St Air Quality Dev Auth PCR (FirstEnergy A) (LOC: Key Bank NA) 1.550 07/02/08 1,500,000
2,550,000 OH St Air Quality Dev Auth PCR (FirstEnergy B) (LOC: Barclays Bank PLC) 1.500 07/02/08 2,550,000
2,800,000 OH St Air Quality Dev Auth Rev (Timken) (LOC: Key Bank NA) 1.500 07/02/08 2,800,000
1,800,000 OH St Higher Edl Fac Commn Rev (Univ Hosps Hlth Sys)
(LOC: JPMorgan Chase Bank) 1.400 07/02/08 1,800,000
28
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 71.4% (CONTINUED)
$5,000,000 OH St Higher Edl Fac Commn Rev (Univ Hosps Hlth Sys) Ser C
(LOC: Wells Fargo Bank NA) 1.430 07/02/08 $ 5,000,000
6,500,000 OH St Infra Impt UTGO 1.450 07/02/08 6,500,000
2,500,000 OH St Univ General Rcpts 1.150 07/02/08 2,500,000
6,800,000 OH St Wtr Dev Auth PCR (FirstEnergy Nuclear B) (LOC: Wachovia Bank NA) 1.470 07/02/08 6,800,000
6,200,000 OH St Wtr Dev Auth PCR Facs Rev (FirstEnergy) (LOC: Barclays Bank PLC) 1.500 07/02/08 6,200,000
8,645,000 OH Wtr Dev Auth Rev (Purewater) (SPA: State Street B&T Co) 7.650 07/02/08 8,645,000
1,300,000 Port Gtr Cincinnati OH Dev Auth Rev (Natl Underground RR A)
(LOC: JPMorgan Chase Bank) 1.500 07/02/08 1,300,000
5,000,000 ABN AMRO MuniTOPS Ctfs Tr 2006-4 (SPA: Bank of America) 1.600 07/03/08 5,000,000
4,040,000 Akron Bath Copley OH Hosp (Summa Hlth Sys B) (LOC: Bank One NA) 1.560 07/03/08 4,040,000
4,000,000 Akron Bath Copley OH Jt Twp Hosp Dist Rev (Hlthcare Fac-Summner)
(LOC: KBC Bank NV) 1.630 07/03/08 4,000,000
3,700,000 Athens Co OH Port Auth (Hsg for OH Univ) (LOC: Wachovia Bank) 1.650 07/03/08 3,700,000
6,075,000 Butler Co OH Hlthcare Facs Rev (Lifesphere) (LOC: US Bank NA) 1.480 07/03/08 6,075,000
850,000 Butler Co OH Hosp Facs (Berkeley Sq Ret) (LOC: Fifth Third Bank) 1.590 07/03/08 850,000
1,390,000 Cambridge OH Hosp Facs Rev (SE OH Regl Med) (LOC: National City Bank) 1.990 07/03/08 1,390,000
1,000,000 Carroll Co OH Hlthcare Facs (St Johns Village) (LOC: National City Bank) 1.990 07/03/08 1,000,000
3,000,000 Centerville OH Hlthcare Rev (Bethany Lutheran Vlg B)
(LOC: National City Bank) 1.480 07/03/08 3,000,000
9,420,000 Cleveland OH Wtrworks Rev Ser B (SPA: Dexia Credit Local) 1.500 07/03/08 9,420,000
1,500,000 Columbus OH GO (SPA: JPMorgan Chase Bank) 1.400 07/03/08 1,500,000
2,605,000 Columbus OH GO Ser 1 (SPA: JPMorgan Chase Bank) 1.400 07/03/08 2,605,000
2,700,000 Columbus OH Regl Arpt Auth Cap Fdg Rev (Oasbo Expaned Asset Sr Ser)
(LOC: US Bank NA) 1.570 07/03/08 2,700,000
2,435,000 Columbus OH Regl Arpt Auth Rev (LOC: US Bank NA) 1.570 07/03/08 2,435,000
80,000 Coshocton Co OH Hosp (Echoing Hills Village) (LOC: JPMorgan Chase Bank) 2.250 07/03/08 80,000
1,330,000 Cuyahoga Co OH Civic Facs (West Side Ecumenical) (LOC: Key Bank NA) 1.640 07/03/08 1,330,000
1,315,000 Cuyahoga Co OH EDR (Cleveland Botanical) (LOC: Allied Irish Bank PLC) 1.560 07/03/08 1,315,000
5,135,000 Cuyahoga Co OH Hlthcare Facs Rev (A M McGregor Home)
(LOC: Keybank NA) 1.540 07/03/08 5,135,000
415,000 Cuyahoga Co OH Hlthcare Facs Rev (Judson Retirement Cmnty)
(LOC: National City Bank) 2.050 07/03/08 415,000
8,905,000 Delaware Co OH Hlthcare Facs Rev Impt (Sarah Moore)
(LOC: Fifth Third Bank) 1.610 07/03/08 8,905,000
1,935,000 Franklin Co OH EDR (Dominican Sisters) (LOC: Fifth Third Bank) 1.640 07/03/08 1,935,000
1,000,000 Franklin Co OH Hlth Facs (Friendship Village Dublin)
(LOC: LaSalle Bank) 1.500 07/03/08 1,000,000
1,050,000 Franklin Co OH Hlth Facs (Heinzerling Fndtn)
(LOC: JPMorgan Chase Bank) 2.250 07/03/08 1,050,000
5,000,000 Franklin Co OH Hosp Rev Impt (US Hlth Corp) (LOC: US Bank) 1.520 07/03/08 5,000,000
2,590,000 Geauga Co OH Hlth Fac (Heather Hill) (LOC: Bank One NA) 1.520 07/03/08 2,590,000
2,500,000 Hamilton Co OH Hlthcare (Life Enriching Cmntys B) (LOC: PNC Bank NA) 1.570 07/03/08 2,500,000
3,600,000 Hamilton Co OH Hlthcare Facs Rev (Children's Home Cincinnati)
(LOC: US Bank NA) 1.610 07/03/08 3,600,000
1,785,000 Hamilton Co OH Hlthcare Facs Rev (Episcopal) (LOC: Key Bank NA) 1.560 07/03/08 1,785,000
1,150,000 Hamilton Co OH Hosp (Beechwood Home) (LOC: US Bank NA) 1.590 07/03/08 1,150,000
2,980,000 Hamilton Co OH Hosp (Children's Hosp Med Ctr) Ser 1997
(LOC: PNC Bank NA) 1.550 07/03/08 2,980,000
600,000 Hamilton Co OH Hosp (Children's Hosp Med Ctr) Ser 2000
(LOC: JPMorgan Chase Bank) 1.550 07/03/08 600,000
505,000 Hamilton Co OH Hosp (Drake Ctr Inc) (LOC: US Bank NA) 1.550 07/03/08 505,000
1,545,000 Hamilton Co OH Hosp Facs Rev (Children's Hosp Med Ctr)
(LOC: US Bank NA) 1.550 07/03/08 1,545,000
3,820,000 Henry Co OH Fac Impt Rev (Co Hosp) (LOC: Key Bank NA) 1.640 07/03/08 3,820,000
4,600,000 Highland Co OH Jt Twp Hosp Facs Rev (LOC: Key Bank NA) 1.630 07/03/08 4,600,000
3,420,000 Kent St Univ OH Rev General Rcpts (LOC: Keybank NA) 1.600 07/03/08 3,420,000
5,000,000 Lancaster OH Port Auth Gas Rev (SPA: Royal Bank of Canada) 1.570 07/03/08 5,000,000
29
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 71.4% (CONTINUED)
$2,010,000 Lima OH Hosp Facs (Lima Mem Hosp) (LOC: Bank One NA) 1.640 07/03/08 $ 2,010,000
400,000 Lucas Co OH Hlth Facs (Lutheran Homes) (LOC: Fifth Third Bank) 1.580 07/03/08 400,000
700,000 Lucas Co OH Hlthcare Rev (Sunset Retire) (LOC: Fifth Third Bank) 1.500 07/03/08 700,000
715,000 Lucas Co OH Hosp Rev (Sunshine Inc NW OH Proj) (LOC: National City Bank) 2.040 07/03/08 715,000
75,000 Mahoning Co OH IDR (OH Heart Inst) (LOC: JPMorgan Chase Bank) 3.000 07/03/08 75,000
995,000 Mason OH TIF Rev (Central Parke of Mason) (LOC: US Bank) 1.640 07/03/08 995,000
910,000 Montgomery Co OH Hlth Facs (Cmnty Blood Ctr) (LOC: Bank One NA) 2.250 07/03/08 910,000
1,325,000 Montgomery Co OH Hlthcare Facs Rev (South Cmnty Inc)
(LOC: National CIty Bank) 2.040 07/03/08 1,325,000
1,700,000 OH St Higher Ed Fac Pooled Fin Rev (1997) (LOC: Fifth Third Bank) 1.760 07/03/08 1,700,000
1,430,000 OH St Higher Ed Fac Pooled Fin Rev (1998) (LOC: Fifth Third Bank) 1.510 07/03/08 1,430,000
1,275,000 OH St Higher Ed Fac Pooled Fin Rev (1999) (LOC: Fifth Third Bank) 1.510 07/03/08 1,275,000
1,700,000 OH St Higher Ed Fac Pooled Fin Rev Ser B (LOC: Fifth Third Bank) 1.570 07/03/08 1,700,000
2,200,000 OH St Higher Ed Fac Rev (Marietta College) (LOC: JPMorgan Chase Bank) 1.580 07/03/08 2,200,000
1,450,000 OH St Higher Ed Fac Rev (Mt Union College) (LOC: JPMorgan Chase Bank) 1.590 07/03/08 1,450,000
3,030,000 OH St Higher Edl Fac (Xavier Univ) Ser B (LOC: US Bank NA) 1.750 07/03/08 3,030,000
440,000 OH St Higher Edl Fac Rev (Xavier Univ) (LOC: US Bank NA) 1.750 07/03/08 440,000
300,000 OH Univ General Rcpts Rev (SPA: Dexia Credit Local) 1.700 07/03/08 300,000
1,165,000 Ottawa Co OH Hosp Facs Rev (Luther Home of Mercy) Ser 97
(LOC: National City Bank) 2.040 07/03/08 1,165,000
4,555,000 Parma OH Hosp Impt Rev (Parma Cmnty Gen Hosp) Ser A
(LOC: JPMorgan Chase Bank) 1.560 07/03/08 4,555,000
3,375,000 Port Gtr Cincinnati Dev Auth Rev (Cincinnati Zoo) (LOC: US Bank NA) 1.760 07/03/08 3,375,000
670,000 Port Gtr Cincinnati Dev Auth Rev (Cincinnati Zoo) (LOC: US Bank NA) 1.840 07/03/08 670,000
3,000,000 Port of Gtr Cincinnati Dev Auth OH Spl Oblig Dev Rev
(Sycamore Twp Kenwood) Ser A (LOC: LaSalle Bank NA) 1.580 07/03/08 3,000,000
4,000,000 Richland Co OH Hlthcare Facs Rev (Wesleyan) Ser B
(LOC: JPMorgan Chase Bank) 1.530 07/03/08 4,000,000
900,000 Salem OH Hosp Rev Impt (Salem Cmnty) (LOC: JPMorgan Chase Bank) 1.500 07/03/08 900,000
3,470,000 Sharonville OH IDR (Duke Rlty LP) (LOC: Fifth Third Bank) 1.700 07/03/08 3,470,000
2,240,000 Summit Co OH Civic Facs Rev (YMCA) (LOC: Key Bank NA) 1.640 07/03/08 2,240,000
4,300,000 Toledo OH City Svcs Spl Assessment Nts Spl Oblig (LOC: State Street B&T Co) 1.540 07/03/08 4,300,000
6,915,000 Univ of Cincinnati OH General Rcpts Ser B (LOC: Bayerische Landesbank) 1.590 07/03/08 6,915,000
3,535,000 Univ of Cincinnati OH General Rcpts Ser B (SPA: Bayerische Landesbank) 9.000 07/03/08 3,535,000
500,000 Warren Co OH Hlthcare Facs Rev (Otterbien) (LOC: Fifth Third Bank) 1.300 07/03/08 500,000
1,600,000 Warren Co OH IDR (Liquid Container) (LOC: Bank of America) 1.540 07/03/08 1,600,000
5,000,000 Wood Co OH Hosp Facs Rev Impt (Hosp Assn) (LOC: JPMorgan Chase Bank) 1.600 07/03/08 5,000,000
4,720,000 Woodlawn OH EDR (Goodwill Inds) (LOC: US Bank NA) 1.590 07/03/08 4,720,000
1,040,000 Miami Co OH Hosp Facs (Upper Valley Med Ctr) (LOC: Fifth Third Bank) 1.610 07/04/08 1,040,000
5,700,000 Hamilton Co OH IDR (ADP) 1.650 07/15/08 5,700,000
100,000 OH St PCR (Sohio Wtr) 5.250 10/01/08 100,747
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 282,970,747
- ----------------------------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE PUT BONDS -- 0.7%
$ 730,000 Clermont Co OH EDR (John Q Hammons/Clermont Hills)
(LOC: Fifth Third Bank) 2.750 11/01/08 $ 730,000
1,700,000 Richland Co OH IDR (Mansfield Sq Ltd) (LOC: National City Bank) 2.750 11/15/08 1,700,000
325,000 Gallia Co OH IDR (Jackson Pike Assoc) (LOC: Fifth Third Bank) 2.250 12/15/08 325,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ADJUSTABLE RATE PUT BONDS $ 2,755,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 98.1%
(Amortized Cost $388,485,431) $ 388,485,431
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.9% 7,503,978
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 395,989,409
============================================================================================================================
See accompanying notes to portfolios of investments and notes to financial
statements.
30
- --------------------------------------------------------------------------------
Portfolio of Investments
Tax-Free Money Market Fund - June 30, 2008
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 30.5%
$ 300,000 Columbus GA Sales Tax UTGO 5.000 07/01/08 $ 300,000
100,000 IL Edl Facs Auth Revs (Univ of Chicago) Ser A 5.000 07/01/08 100,000
300,000 IL Edl Facs Auth Revs (Univ of Chicago) Ser B-1 3.450 07/01/08 300,000
160,000 New York NY City Hsg Dev Corp Rev Cap Fd Pg (NYC Hsg Auth PG A) 5.000 07/01/08 160,000
100,000 Pima Co AZ UTGO 4.500 07/01/08 100,000
100,000 Pima Co AZ UTGO (Cmnty College) Ser C 4.000 07/01/08 100,000
100,000 Puerto Rico Cmnwlth UTGO ETM 5.750 07/01/08 100,000
100,000 Scottsdale AZ Wtr & Swr Rev (Proj of 1989) Ser E Prerefunded @ 101 4.500 07/01/08 101,000
1,000,000 Cincinnati OH EDR LTGO BANS (Baldwin 300) 3.050 07/10/08 999,999
420,000 Columbiana OH Elec Sys Impt BANS 4.250 07/10/08 420,020
235,000 East Chicago IN Multi Sch Bldg Corp (First Mtg) Prerefunded @ 101 4.900 07/15/08 237,586
340,000 East Porter Co IN Sch Bld Corp Prerefunded @ 101 4.600 07/15/08 343,547
400,000 AMP OH Elect Rev BANS (Woodville) 4.350 07/17/08 400,043
100,000 IL St First Ser UTGO 5.000 08/01/08 100,227
180,000 Lockhart TX ISD UTGO Prerefunded @100 5.000 08/01/08 180,232
120,000 MA St Cons Ln UTGO Ser B 5.000 08/01/08 120,280
645,000 Arcanum-Butler OH LSD UTGO Classroom Facs BANS 3.850 08/12/08 645,402
425,000 Harris Co TX Sub Lien LTGO Prerefunded @ 100 5.800 08/15/08 426,592
150,000 Lake Co OH Hosp Facs Rev (Lake Hosp Sys Inc) Prerefunded @101 5.000 08/15/08 151,746
586,500 Bratenahl OH BANS UTGO (Greenspace) 4.500 08/28/08 587,000
95,000 KY St Ppty & Bldgs Commn Revs (No 55) 6.000 09/01/08 95,472
100,000 TX Muni Pwr Agy Rev 5.250 09/01/08 100,432
100,000 RI St Hlth & Edl Bldg Corp Rev (Hosp Financing) Ser A Prerefunded @ 100 5.875 09/15/08 100,730
1,000,000 Union Twp OH TIF Rev BANS 4.250 09/17/08 1,001,354
707,750 AMP OH Elect Rev BANS (Hubbard) 3.700 09/25/08 707,750
200,000 Hamilton Co OH Hlthcare Facs Rev Impt (Twin Towers A) 5.750 10/01/08 201,364
250,000 IL St First Ser UTGO 5.000 10/01/08 251,680
250,000 Miami-Dade Co FL Sch Brd COP Ser C 3.750 10/01/08 250,872
255,000 Tampa Bay FL Wtr Util Sys Rev Ser B Prerefunded @ 101 4.750 10/01/08 258,993
100,000 TX St Pub Fin Auth UTGO 5.500 10/01/08 100,792
530,000 AMP OH Elect Rev BANS (St Marys) 3.700 10/02/08 530,000
700,000 Ontario OH Wtr Sys Impt LTGO BANS 4.125 10/02/08 700,476
1,000,000 Kent OH LTGO BANS 4.000 10/16/08 1,001,142
450,000 South Lebanon Village OH Tax BANS (LOC: National City Bank) 3.750 10/27/08 450,000
500,000 Canal Winchester OH LTGO BANS (Diley Road) 4.250 10/30/08 500,970
150,000 Bell Co TX Hlth Facs Dev Corp Rev Retirement Fac
(Buckner) Prerefunded @ 101 5.250 11/15/08 152,968
100,000 Chicago IL Pk Dist UTGO 5.000 11/15/08 100,957
100,000 Northeast OH Regl Swr Dist Wst Wtr Rev Impt 4.000 11/15/08 100,370
100,000 Cook Co IL SD No 125 Atwood Heights Ltd Sch LTGO Ser B 2.750 12/01/08 100,230
150,000 DE River & Bay Auth Rev 5.000 01/01/09 151,437
125,000 IL Hlth Facs Auth Rev (Alexian Bros Hlth Sys) Prerefunded @ 101 5.000 01/01/09 127,872
200,000 Norfolk VA UTGO Cap Impt 5.000 01/01/09 201,965
250,000 Darien CT UTGO 3.000 01/15/09 250,115
690,000 Columbiana OH UTGO BANS (Wtr Treatment Sys) 3.450 01/22/09 690,940
275,000 Lake Co IL Fst Presv Dist UTGO 5.500 02/01/09 279,926
105,000 Addison TX LTGO 3.500 02/15/09 105,707
700,000 Lebanon OH Rd Impt UTGO BANS 3.000 06/23/09 704,010
800,000 Columbiana OH Elec Sys Impt BANS 2.650 07/09/09 801,952
- ----------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $15,894,150
- ----------------------------------------------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 67.5%
$1,700,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser B
(LOC: JPMorgan Chase Bank) 1.700 07/01/08 $ 1,700,000
935,000 Arvada CO Wtr Sys Rev (SPA: Dexia Credit Local) 2.850 07/01/08 935,000
500,000 CA Fing Auth Res Recovery PCR (Burney Forest Prods A)
(LOC: Union Bank of California) 3.000 07/01/08 500,000
2,000,000 Cincinnati & Hamilton Co OH Port Auth EDR (Kenwood Office Assoc)
(LOC: Fifth Third Bank) 2.500 07/01/08 2,000,000
1,400,000 Cuyahoga Co OH Hosp Rev Impt (Univ Hosp Cleveland)
(LOC: JPMorgan Chase Bank) 2.840 07/01/08 1,400,000
200,000 Forsyth MT PCR (Pacificorp) (LOC: BNP Paribas) 3.000 07/01/08 200,000
450,000 Geauga Co OH Rev (South Franklin Circle B) (LOC: Keybank NA) 2.940 07/01/08 450,000
250,000 Grand Forks ND Hlthcare Facs Rev (United Hosp) (LOC: LaSalle Bank) 2.660 07/01/08 250,000
350,000 Grand Forks ND Hosp Fac Rev (United Hosp) (LOC: LaSalle Bank) 2.660 07/01/08 350,000
1,300,000 OH St Higher Ed Fac Rev (Case Western) (SPA: Landesbank
Hessen-Thuringen) 2.200 07/01/08 1,300,000
1,400,000 WA St Hsg Fin Cmnty Rev (Panorama City) (LOC: Key Bank NA) 2.700 07/01/08 1,400,000
100,000 Broward Co FL HFA MFH Rev (Reflections Apts) (LOC: FHLMC) 1.550 07/02/08 100,000
705,000 Hillsborough Co FL IDR (Vigo Importing Co) (LOC: Bank of America) 2.050 07/02/08 705,000
1,100,000 Scio Twp MI EDR (ADP Inc) 2.150 07/02/08 1,100,000
545,000 Ulster Co NY IDA IDR (Viking Industries Inc) Ser A (LOC: Key Bank NA) 1.760 07/02/08 545,000
1,000,000 ABN AMRO MuniTOPS Ctfs Tr 2006-56 (Frisco TX)
(SPA: Bank of America) 1.590 07/03/08 1,000,000
240,000 CA Infra EDB IDR (Metrotile Mfg) Ser A (LOC: Comerica Bank) 1.820 07/03/08 240,000
100,000 CA Statewide Cmntys IDR (American Modular Sys) (LOC: Bank of the West) 1.700 07/03/08 100,000
100,000 Catawba Co NC Ind Fac (Lucky 7 Dev Grp) (LOC: Wachovia Bank) 1.670 07/03/08 100,000
1,000,000 Cl B Rev Ctfs Ser 2006-1 (SPA: AIG) 2.250 07/03/08 1,000,000
490,000 CO HFA EDR (Casarosa & Denver Gasket Inc) (LOC: Key Bank NA) 1.800 07/03/08 490,000
2,000,000 Cobb Co GA Hsg Auth Rev MFH (Six Flags Assoc) (LOC: FHLMC) 1.590 07/03/08 2,000,000
1,150,000 Dayton KY TIF & Spl Assmt Rev Pub Impts (Belmont Lake)
(LOC: LaSalle Bank NA) 1.650 07/03/08 1,150,000
175,000 Franklin Co VA IDA IDR (Mod-U-Kraf) (LOC: Lasalle Bank NA) 1.750 07/03/08 175,000
500,000 Hailey ID IDC Rev (Rocky Mountain Hardware) (LOC: Wells Fargo Bank) 1.750 07/03/08 500,000
320,000 Hillsborough Co FL IDR (Mosi Charter Sch A) (LOC: Bank of America NA) 1.600 07/03/08 320,000
1,500,000 IN St Fin Auth Rev (LOC: Allied Irish Bank PLC) 1.620 07/03/08 1,500,000
859,000 Indianapolis IN EDR (Pedcor Invts Wtrfront B) (LOC: FHLB) 1.930 07/03/08 859,000
735,000 Indianapolis IN MFH Rev (Nora Commons) (LOC: FHLB) 1.700 07/03/08 735,000
1,000,000 Kalamazoo Co MI EDR (WBC Properties) (LOC: Fifth Third Bank) 1.710 07/03/08 1,000,000
370,000 Lancaster NE IDR (Garner Inds) Ser B (LOC: Wells Fargo Bank) 1.650 07/03/08 370,000
100,000 Lemoore CA COP (Muni Golf Course) (LOC: Union Bank of California) 1.650 07/03/08 100,000
900,000 Lexington-Fayette Urban Co KY Govt IBR (Liberty Ridge) (LOC: US Bank NA) 1.650 07/03/08 900,000
2,050,000 Lexington-Fayette Urban Co KY Rev IBR (Eastland Pkwy) (LOC: US Bank NA) 1.650 07/03/08 2,050,000
245,000 MA St Ind Fin Agy Rev (Lower Mills Assoc LP) (LOC: Fleet Bank NA) 1.720 07/03/08 245,000
240,000 Maricopa Co AZ IDA Hsg Rev (San Angelin Apts) (LOC: FNMA) 1.830 07/03/08 240,000
470,000 Oakland CA Liq Fac Rev (Assoc Bay Area Govt) (LOC: Bank of the West) 1.650 07/03/08 470,000
350,000 Palm Beach Co FL Rev (Henry Morrison Flagler) (LOC: Northern Trust Bank) 1.570 07/03/08 350,000
1,405,000 Rev Bd Ctfs Ser 04-13 (Centennial East Apts) (SPA: AIG) 2.250 07/03/08 1,405,000
1,000,000 Southglenn Met Dist CO Rev (LOC: BNP Paribas) 1.600 07/03/08 1,000,000
640,000 St Charles Co MO IDA Rev (National Cart) Ser A (LOC: US Bank NA) 1.730 07/03/08 640,000
1,000,000 Storm Lake IA High Ed Facs Rev (Buena Vista) (SPA: Wells Fargo Bank) 2.000 07/03/08 1,000,000
100,000 Tampa FL Rev (Univ Tampa) (LOC: Royal Bank of Canada) 1.560 07/03/08 100,000
2,170,000 Univ of Cincinnati OH General Rcpts Ser B (SPA: Bayerische Landesbank) 9.000 07/03/08 2,170,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 35,144,000
- ----------------------------------------------------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE PUT BONDS -- 2.9%
$ 310,000 Dayton KY IBR (Patriot Signage Inc) (LOC: Fifth Third Bank) 3.250 09/01/08 $ 310,000
115,000 Summit Co OH IDR (Struktol Co America) (LOC: National City Bank) 3.000 09/01/08 115,000
80,000 Newport KY IBR (Sumerel Tire) (LOC: US Bank NA) 2.900 12/01/08 80,000
1,000,000 Westmoreland Co PA IDA (White Cons Inds) (LOC: Bank of Nova Scotia) 2.090 12/01/08 1,000,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ADJUSTABLE RATE PUT BONDS $ 1,505,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 100.9%
(Amortized Cost $52,543,150) $ 52,543,150
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.9%) (413,049)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 52,130,101
============================================================================================================================
See accompanying notes to portfolios of investments and notes to financial
statements.
33
- --------------------------------------------------------------------------------
Notes to Portfolios of Investments
June 30, 2008
- --------------------------------------------------------------------------------
Variable and adjustable rate put bonds earn interest at a coupon rate which
fluctuates at specified intervals, usually daily, monthly or semi-annually. The
rates shown in the Portfolios of Investments are the coupon rates in effect at
June 30, 2008.
Put bonds may be redeemed at the discretion of the holder on specified dates
prior to maturity. Mandatory put bonds are automatically redeemed at a specified
put date unless action is taken by the holder to prevent redemption.
Bonds denoted as prerefunded are anticipated to be redeemed prior to their
scheduled maturity. The dates indicated in the Portfolios of Investments are the
stipulated prerefunded dates.
PORTFOLIO ABBREVIATIONS:
BANS - Bond Anticipation Notes
COP - Certificates of Participation
CSD - City School District
EDB -Economic Development Bank
EDR - Economic Development Revenue
ETM - Escrowed to Maturity
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
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
ISD - Independent School District
LOC - Letter of Credit
LSD - Local School District
LTGO - Limited Tax General Obligation
MFH - Multi-Family Housing
PCR - Pollution Control Revenue
SD - School District
SPA - Stand-by Purchase Agreement
TIF - Tax Increment Financing
UTGO - Unlimited Tax General Obligation
34
- --------------------------------------------------------------------------------
Portfolios Composition (Unaudited)
June 30, 2008
- --------------------------------------------------------------------------------
As of June 30, 2008, the Ohio Tax-Free Bond 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 Florida Tax-Free Money Market Fund was 88.1% 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 federal income tax. As of June 30, 2008, 37.9% of the
portfolio securities of the Tax-Free Money Market Fund were concentrated in the
State of Ohio, 8.8% in the State of Kentucky and 7.1% in the State of Indiana.
The Florida Tax-Free Money Market Fund, the Ohio Tax-Free Bond Fund, and the
Ohio Tax-Free Money Market Fund are each non-diversified Funds under the 1940
Act. Thus, investments may be concentrated in fewer issuers than those of a
diversified fund. As of June 30, 2008, there were no concentrations of
investments (10% or greater) in any one issuer.
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.
The concentration of investments for each Fund as of June 30, 2008, classified
by revenue source, was as follows:
FLORIDA TAX-FREE OHIO TAX-FREE OHIO TAX-FREE TAX-FREE
MONEY MARKET BOND MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------
General Obligations 24.0% 43.9% 5.4% 8.9%
- ---------------------------------------------------------------------------------------------------
Revenue Bonds:
Industrial Development/
Pollution Control 2.5% -- 4.1% 8.7%
Hospital/Health Care 11.6% 13.2% 26.5% 10.8%
Utilities/Water & Sewer 4.4% 9.0% 4.8% 5.9%
Education 16.6% 12.4% 25.0% 19.5%
Housing/Mortgage 27.7% -- 4.0% 9.2%
Economic Development 1.3% -- 7.2% 12.7%
Public Facilities -- -- 3.2% 1.0%
Transportation -- 3.5% 4.7% --
Special Tax 1.5% -- 5.2% 16.8%
Miscellaneous 10.4% 18.0% 9.9% 6.5%
- ---------------------------------------------------------------------------------------------------
Total Investments 100.0% 100.0% 100.0% 100.0%
===================================================================================================
35
- --------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Touchstone Tax-Free Trust:
We have audited the accompanying statement of assets and liabilities, including
portfolios of investments, of Touchstone Tax-Free Trust, comprised of the
Florida Tax-Free Money Market Fund, the Ohio Tax-Free Bond Fund, the Ohio
Tax-Free Money Market Fund, and the Tax-Free Money Market Fund (the "Funds") as
of June 30, 2008, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of June 30, 2008, by correspondence with the custodian and
brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds comprising Touchstone Tax-Free Trust at June 30, 2008,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, in conformity
with U.S. generally accepted accounting principles.
/s/ Ernst and Young LLP
Cincinnati, Ohio
August 19, 2008
36
- --------------------------------------------------------------------------------
Other Items (Unaudited)
- --------------------------------------------------------------------------------
PROXY VOTING DISCLOSURE
The Sub-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 Sub-Advisor uses in fulfilling this responsibility and
information regarding how those proxies were voted during the twelve month
period ended June 30 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.
QUARTERLY PORTFOLIO DISCLOSURE
The Trust files 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. 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.
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 (January 1, 2008 through June 30, 2008).
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 June 30, 2008" 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.
37
- --------------------------------------------------------------------------------
Other Items (Continued)
- --------------------------------------------------------------------------------
EXPENSES
NET EXPENSE BEGINNING ENDING PAID DURING
RATIO ACCOUNT ACCOUNT THE SIX MONTHS
ANNUALIZED VALUE VALUE ENDED
JUNE 30, JANUARY 1, JUNE 30, JUNE 30,
2008 2008 2008 2008*
- ----------------------------------------------------------------------------------------------------------
FLORIDA TAX-FREE MONEY MARKET FUND
Actual 0.75% $1,000.00 $1,008.30 $ 3.74
Hypothetical 0.75% $1,000.00 $1,021.13 $ 3.77
OHIO TAX-FREE BOND FUND
Class A Actual 0.75% $1,000.00 $ 995.70 $ 3.72
Class A Hypothetical 0.75% $1,000.00 $1,021.13 $ 3.77
Class C Actual 1.50% $1,000.00 $ 992.00 $ 7.43
Class C Hypothetical 1.50% $1,000.00 $1,017.40 $ 7.52
OHIO TAX-FREE MONEY MARKET FUND
Retail Class Actual 0.75% $1,000.00 $1,009.50 $ 3.75
Retail Class Hypothetical 0.75% $1,000.00 $1,021.13 $ 3.77
Institutional Class Actual 0.50% $1,000.00 $1,010.70 $ 2.50
Institutional Class Hypothetical 0.50% $1,000.00 $1,022.38 $ 2.51
TAX-FREE MONEY MARKET FUND
Class A Actual 0.89% $1,000.00 $1,009.60 $ 4.45
Class A Hypothetical 0.89% $1,000.00 $1,020.44 $ 4.47
Class S Actual 1.15% $1,000.00 $1,008.30 $ 5.74
Class S Hypothetical 1.15% $1,000.00 $1,019.14 $ 5.77
* 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 [or 366]] (to reflect the one-half
year period).
38
- --------------------------------------------------------------------------------
Management of the Trust (Unaudited)
- --------------------------------------------------------------------------------
Listed below is basic information regarding the Trustees and principal officers
of the Trust. The Trust's Statement of Additional Information includes
additional information about the Trustees and is available, without charge, upon
request by calling 1.800.543.0407.
INTERESTED TRUSTEES(1):
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
TERM OF IN THE
NAME POSITION(S) OFFICE(2) AND TOUCHSTONE OTHER
ADDRESS HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) FUND DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS COMPLEX(3) HELD(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Jill T. McGruder Trustee and Until Senior Vice President of The Western 41 Director of LaRosa's
Touchstone President retirement at and Southern Life Insurance Company; (a restaurant chain).
Advisors, Inc age 75 or President and a director of IFS
303 Broadway until Financial Services, Inc. (a holding
Cincinnati, OH she resigns company); Director of Capital
Year of Birth: 1955 or Analysts Incorporated (an investment
is removed advisor and broker-dealer),
Trustee since Integrated Investment Services, Inc.
1999 until April 2007 (the Trust's former
administrator, accounting and
transfer agent), IFS Fund
Distributors, Inc. (a broker-dealer),
Touchstone Advisors, Inc. (the
Trust's investment advisor) and
Touchstone Securities, Inc. (the
Trust's distributor); President and a
director of IFS Agency Services, Inc.
(an insurance agency), W&S Financial
Group Distributors, Inc. (an annuity
distributor) and IFS Systems, Inc.;
Senior Vice President and a director
of W&S Brokerage Services, Inc. (a
broker-dealer); Director, President
and Chief Executive Officer of
Integrity Life Insurance Company and
National Integrity Life Insurance
Company; President of Touchstone
Tax-Free Trust, Touchstone Investment
Trust, Touchstone Variable Series
Trust, Touchstone Strategic Trust,
Touchstone Funds Group Trust and
Touchstone Institutional Funds Trust;
President of Touchstone Advisors,
Inc., and Touchstone Securities, Inc.
until 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
John F. Barrett Trustee Until Chairman of the Board, President and 41 Director of The
The Western and retirement at Chief Executive Officer of The Andersons (an
Southern Life age 75 or Western and Southern Life Insurance agribusiness and
Insurance Company until he Company, Western- Southern Life retailing company);
400 Broadway resigns or is Assurance Company and Western & Convergys Corporation
Cincinnati, OH removed Southern Financial Group, Inc.; (a provider of
Year of Birth: 1949 Trustee since Director and Chairman of Columbus business support
2002 Life Insurance Company; Fort systems and customer
Washington Investment Advisors, Inc., care operations) and
Integrity Life Insurance Company and Fifth Third Bancorp.
National Integrity Life Insurance
Company; Director of Eagle Realty
Group, Inc., Eagle Realty
Investments, Inc. and Integrated
Investment Services, Inc. (until
April 2007); Director, Chairman and
CEO of WestAd, Inc.; President and
Trustee of Western & Southern
Financial Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
39
- --------------------------------------------------------------------------------
Management of the Trust (Continued)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
TERM OF IN THE
NAME POSITION(S) OFFICE(2) AND TOUCHSTONE OTHER
ADDRESS HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) FUND DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS COMPLEX(3) HELD(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Phillip R. Cox Trustee Until retirement at President and Chief Executive Officer of 41 Director of the
303 Broadway age 75 or until he Cox Financial Corp. (a financial Federal Reserve Bank
Cincinnati, OH resigns or is services company). of Cleveland and Duke
Year of Birth: removed Energy (a utility
1947 Trustee company); Chairman
since 1994 of The Cincinnati Bell
Telephone Company LLC;
Director of The Timken
Company (a
manufacturer of
bearings, alloy steels
and related products
and services);
Director of Diebold,
Incorporated (a
provider of integrated
self-service delivery
and security systems).
- ------------------------------------------------------------------------------------------------------------------------------------
H. Jerome Trustee Until retirement at Principal of HJL Enterprises (a 41 None
Lerner age 75 or until he privately held investment company).
303 Broadway resigns or is
Cincinnati, OH removed
Year of Birth: Trustee since
1938 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Trustee Until retirement at Executive for Duro Bag Manufacturing Co. 41 Trustee of Jewish
Siekmann age 75 or until he (a bag manufacturer); President of Shor Hospital, Greater
303 Broadway resigns or is Foundation for Epilepsy Research (a Cincinnati Arts &
Cincinnati, OH removed charitable foundation); Trustee of Greater
Year of Birth: Trustee since Riverfront Funds (mutual funds) from Education Center and
1938 2005 1999 - 2004. Cincinnati Arts
Association
- ------------------------------------------------------------------------------------------------------------------------------------
40
- --------------------------------------------------------------------------------
Management of the Trust (Continued)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES (CONTINUED):
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
TERM OF OF FUNDS
OFFICE(2) OVERSEEN
AND IN THE
NAME POSITION(S) LENGTH OF TOUCHSTONE OTHER
ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) FUND DIRECTORSHIPS
AGE TRUST SERVED DURING PAST 5 YEARS COMPLEX(3) HELD(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Trustee Until Retired Partner of KPMG LLP (a certified public 41 Trustee of
Stautberg retirement accounting firm). Vice President of St. Xavier Tri-Health
303 at age High School. Physician
Broadway 75 or Enterprise
Cincinnati, until he Corporation.
OH resigns
Year of or is
Birth: removed
1934 Trustee
since
1994
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Trustee Until CEO, Chairman and Director of Avaton, Inc. (a 41 None
Zanotti retirement wireless entertainment company). President of
303 at age Cincinnati Biomedical (a life science and economic
Broadway 75 or development company) from July 2003 until 2005.
Cincinnati, until he CEO, Chairman and Director of Astrum Digital
OH resigns Information (an information monitoring company)
Year of or is from 2000 until 2001; President of Great American
Birth: removed Life Insurance Company from 1999 until 2000.
1948 Trustee
since
2002
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Ms. McGruder, as a director of Touchstone Advisors, Inc., the Trust's
investment advisor, and Touchstone Securities, Inc., the Trust's
distributor and an officer of affiliates of the advisor and distributor,
is an "interested person" of the Trust within the meaning of Section
2(a)(19) of the 1940 Act. Mr. Barrett, as President and Chairman of The
Western and Southern Life Insurance Company and Western-Southern Life
Assurance Company, parent companies of Touchstone Advisors, Inc. and
Touchstone Securities, Inc., Chairman of Fort Washington Investment
Advisors, Inc., a Trust sub-advisor and an officer of other affiliates of
the advisor and distributor is an "interested person" of the Trust within
the meaning of Section 2(a)(19) of the 1940 Act.
(2) Each Trustee is elected to serve until the age of 75 or until he or she
sooner resigns or is removed.
(3) The Touchstone Fund Complex consists of 4 series of the Trust, 10 series
of Touchstone Funds Group Trust, 4 series of Touchstone Institutional
Funds Trust, 5 series of Touchstone Investment Trust, 7 series of
Touchstone Strategic Trust, and 11 variable annuity series of Touchstone
Variable Series Trust.
(4) Each Trustee is also a Trustee of Touchstone Funds Group Trust, Touchstone
Institutional Funds Trust, Touchstone Investment Trust, Touchstone
Strategic Trust, and Touchstone Variable Series Trust.
41
- --------------------------------------------------------------------------------
Management of the Trust (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL OFFICERS(1):
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF FUNDS
OVERSEEN
TERM OF IN THE
NAME POSITION(S) OFFICE AND TOUCHSTONE OTHER
ADDRESS HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) FUND DIRECTORSHIPS
AGE TRUST TIME SERVED DURING PAST 5 YEARS COMPLEX(2) HELD
- ------------------------------------------------------------------------------------------------------------------------------------
Jill T. President Until See biography above. 41 See biography
McGruder and Trustee resignation, above.
Touchstone removal or
Advisors, Inc. disqualification
303 Broadway President since
Cincinnati, OH 2004; President
Year of from 2000-2002
Birth: 1955
- ------------------------------------------------------------------------------------------------------------------------------------
Brian E. Vice Until Senior Vice President-Compliance of IFS 41 None
Hirsch President resignation, Financial Services, Inc., Director of
Touchstone and Chief removal or Compliance of W&S Brokerage Services,
Advisors, Inc. Compliance disqualification Inc.; Chief Compliance Officer of
303 Broadway Officer Vice President Puglisi & Co. from 2001 until 2002.
Cincinnati, OH since 2003
Year of
Birth: 1956
- ------------------------------------------------------------------------------------------------------------------------------------
William A. Vice Until Senior Vice President of Touchstone 41 None
Dent President resignation, Advisors, Inc.; Marketing Director of
Touchstone removal or Promontory Interfinancial Network from
Advisors, Inc. disqualification 2002-2003; Senior Vice President of
303 Broadway Vice President McDonald Investments from 1998 - 2001.
Cincinnati, OH since 2004
Year of
Birth: 1963
- ------------------------------------------------------------------------------------------------------------------------------------
Terrie A. Controller Until Senior Vice President, Chief Financial 41 None
Wiedenheft and resignation, Officer and Treasurer of Integrated
Touchstone Treasurer removal or Investment Services, Inc. (until April
Advisors, Inc. disqualification 2007), IFS Fund Distributors, Inc. and
303 Broadway Controller since W&S Brokerage Services, Inc.; Chief
Cincinnati, OH 2000 Treasurer Financial Officer of IFS Financial
Year of Treasurer since Services, Inc., Touchstone Advisors,
Birth: 1962 2003 Inc. and Touchstone Securities, Inc.
and Assistant Treasurer of Fort
Washington Investment Advisors, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Jay S. Fitton Secretary Until Assistant Vice President and Senior 41 None
JPMorgan resignation, Counsel of JPMorgan; Director and
303 Broadway removal or Senior Counsel of Integrated Investment
Cincinnati, OH disqualification Services, Inc. and IFS Fund
Year of Secretary since Distributors, Inc. until April 2007.
Birth: 1970 2006
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Each Trustee is also a Trustee of Touchstone Funds Group Trust, Touchstone
Institutional Funds Trust, Touchstone Investment Trust, Touchstone
Strategic Trust, and Touchstone Variable Series Trust.
(2) The Touchstone Fund Complex consists of 4 series of the Trust, 10 series
of Touchstone Funds Group Trust, 4 series of Touchstone Institutional
Funds Trust, 5 series of Touchstone Investment Trust, 7 series of
Touchstone Strategic Trust, and 11 variable annuity series of Touchstone
Variable Series Trust.
42
This page intentionally left blank
TOUCHSTONE INVESTMENTS
DISTRIBUTOR
Touchstone Securities, Inc.*
303 Broadway
Cincinnati, Ohio 45202-4203
800.638.8194
www.touchstoneinvestments.com
INVESTMENT ADVISOR
Touchstone Advisors, Inc.*
303 Broadway
Cincinnati, Ohio 45202-4203
TRANSFER AGENT
JPMorgan Chase Bank, N.A.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
SHAREHOLDER SERVICE
800.543.0407
A Member of Western & Southern Financial Group(R)
- --------------------------------------------------------------------------------
[LOGO]TOUCHSTONE(R)
INVESTMENTS
303 Broadway, Suite 1100
Cincinnati, OH 45202-4203
TSF-58-TTFT-AR-0806
ITEM 2. CODE OF ETHICS.
At the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to its principal executive officer and principal
financial officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. Mr.
Donald C. Siekmann is the registrant's audit committee financial expert and is
an independent trustee within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act").
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees. Audit fees totaled approximately $63,400 for the June 30, 2008
fiscal year and approximately $60,900 for the June 30, 2007 fiscal year,
including fees associated with the annual audit and filings of Form N-1A and
N-SAR.
(b) Audit-Related Fees. Audit-Related fees totaled approximately $6,000 for the
June 30, 2008 fiscal year and approximately $116,000 for the June 30, 2007
fiscal year and consisted of limited internal control testing in fiscal year
2008 and SAS 70 internal control reviews in fiscal year 2007 of the registrant's
fund accountant and transfer agent.
(c) Tax Fees. Tax fees totaled approximately $17,200 for the June 30, 2008
fiscal year and $16,600 for the June 30, 2007 fiscal year and consisted of fees
for tax compliance services and tax consultation services.
(d) All Other Fees. There were no fees for all other services during the June
30, 2008 or June 30, 2007 fiscal years.
(e) (1) Audit Committee Pre-Approval Policies. The Audit Committee's
pre-approval policies describe the types of audit, audit-related, tax and other
services that have the general pre-approval of the Audit Committee. The
pre-approval policies provide that annual audit service fees, tax services not
specifically granted pre-approval, services exceeding pre-approved cost levels
and other services that have not received general pre-approval will be subject
to specific pre-approval by the Audit Committee. The pre-approval policies
further provide that the Committee may grant general pre-approval to other audit
services (statutory audits and services associated with SEC registration
statements, periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings), audit-related
services (accounting consultations related to accounting, financial reporting or
disclosure matters not classified as "audit services," assistance with
understanding and implementing new accounting and financial reporting guidance
from rulemaking authorities, agreed-upon or expanded audit procedures related to
accounting and/or billing records required to respond to or comply with
financial, accounting or regulatory reporting matters and assistance with
internal control reporting
requirements under Form N-SAR and Form N-CSR), tax services that have
historically been provided by the auditor that the Committee believes would not
impair the independence of the auditor and are consistent with the SEC's rules
on auditor independence and permissible non-audit services classified as "all
other services" that are routine and recurring services.
(e)(2) All services described in paragraphs (b) through (d) of Item 4 were
approved by the Audit Committee.
(f) Not applicable
(g) The aggregate non-audit fees for services to the registrant, its investment
adviser (excluding its sub-advisor) and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services to the
registrant were approximately $52,200 for the fiscal year ended June 30, 2008
and $215,325 for the fiscal year ended June 30, 2007.
(h) Not applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments in securities of unaffiliated issuers is included in
the Annual Report.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. 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 Governance Committee will consider shareholder recommendations for
nomination to the Board only in the event that there is a vacancy on the Board.
Shareholders who wish to submit recommendations for nominations to the Board to
fill the vacancy must submit their recommendations in writing to John P.
Zanotti, Chairman of the Governance Committee, c/o Touchstone, 303 Broadway,
Suite 1100, Cincinnati, OH 45202. Shareholders should include appropriate
information on the background and qualifications of any person recommended to
the Governance Committee (e.g., a resume), as well as the candidate's contact
information and a written consent from the candidate to serve if nominated and
elected. Shareholder recommendations for nominations to the Board will be
accepted on an ongoing basis and such recommendations will be kept on file for
consideration in the event of a future vacancy on the Board.
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 second fiscal quarter of the period covered by this report that
have materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) The Code of Ethics for Senior Financial Officers was filed with
registrant's June 30, 2004 N-CSR and is hereby incorporated by
reference.
(a)(2) Certifications required by Item 12(a)(2) of Form N-CSR are filed
herewith.
(b) Certification required by Item 11(b) of Form N-CSR is
filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Touchstone Tax-Free Trust
By (Signature and Title)
/s/ Jill T. McGruder
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Jill T. McGruder
President
Date: August 25, 2008
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
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Jill T. McGruder
President
Date: August 25, 2008
/s/ Terrie A. Wiedenheft
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Terrie A. Wiedenheft
Controller & Treasurer
Date: August 27, 2008