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: 6/30/09
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Date of reporting period: 6/30/09
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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, 2009
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 16-24
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Portfolios of Investments:
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Florida Tax-Free Money Market Fund 25-26
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Ohio Tax-Free Bond Fund 27-28
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Ohio Tax-Free Money Market Fund 29-32
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Tax-Free Money Market Fund 33-35
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Notes to Portfolios of Investments 36
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Portfolio Composition (Unaudited) 37
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Report of Independent Registered Public Accounting Firm 38
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Other Items (Unaudited) 39-40
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Management of the Trust (Unaudited) 41-43
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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, 2009.
The economy showed some signs of modest recovery towards the end of the fiscal
year; however the outlook remains somewhat challenged. The municipal market
improved and remains one of the better performing fixed income sectors. After
the unusual circumstances of the last year that saw municipal yields trade at
levels that exceeded Treasuries across the yield curve, recent market
performance has moved yields to a more traditional relationship with municipals
yielding less than Treasury securities in all but the 3-year maturity range.
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.
The Touchstone Ohio Tax-Free Bond Fund seeks the highest level of interest
income exempt from federal and Ohio personal income taxes consistent with the
protection of capital. It invests primarily in high-quality long-term municipal
bonds and is managed seeking the appropriate alignment of risk and return in an
attempt to provide the most favorable opportunity to maximize risk-adjusted
performance.
We continue to believe that diversification is the 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
Economic and credit conditions during the fiscal year period that ended June 30,
2009, can only be described as unprecedented. Difficulties in the housing market
and, more specifically, with subprime mortgages, spilled over into the broader
economy causing one of the worst recessions since the Great Depression. Economic
conditions deteriorated quickly at the outset of the fiscal year resulting in
rising unemployment, declining consumer demand and significantly lower home
values. The subprime crisis engulfed the credit markets, caused significant
losses, forced two giant mortgage lenders into government receivership, as well
as numerous other calamities, creating a full blown credit crisis. The
government intervened with various programs aimed at stabilizing the credit
markets, while the Federal Reserve acted aggressively to cut interest rates,
ultimately lowering the Fed funds rate 1.75% to 0.25% by the end of the fiscal
year period. Turmoil in the credit markets caused volatile bond trading, which
initially sent Treasury yields substantially lower in the first half of the
fiscal year as a flight to quality ensued. However, as investor appetite for
risk improved, Treasury yields rose and the 10-year Treasury note closed at
3.52% on June 30, 2009, down 0.45% from the previous fiscal year-end. The Fed
has indicated that rates are likely to remain low for an extended period of time
to help the markets and the economy recover. Based on this indication, we would
expect the Fed to keep the Fed funds rate at its current level of 0.25% for the
remainder of 2009 and into 2010.
The municipal market faced an extremely challenging year as well. Problems in
the subprime mortgage market spread to the municipal sector as many municipal
bond insurers had significant exposure to subprime debt. Mounting losses from
subprime exposure caused many bond insurers to lose their coveted AAA ratings.
This caused a severe sell-off in the municipal market as investors
indiscriminately sold insured municipal bonds without regard for the strong
underlying credit quality of the municipal issuer. At the midpoint of the fiscal
year, municipal bonds had underperformed dramatically, with high-quality bonds
trading at yields in excess of comparable-maturity Treasury issues, across the
yield curve. As 2009 began, investors began to show an appetite for municipal
bonds which were trading at extremely attractive levels on a relative value
basis, and thus far in 2009, the municipal sector has been one of the better
performing sectors within the bond market.
Going forward, the municipal market continues to face some challenges. State and
local budgets across the country are being stressed as declining tax receipts
have had a negative impact on revenues which is likely to cause credit quality
to deteriorate. In addition, the market does not offer the obvious relative
value currently, that it did earlier this year. Nevertheless, we believe that
the market continues to offer attractive opportunities to investors in higher
tax brackets. The difficulties relative to the overall municipal market apply to
the Ohio municipal market as well. The economy is dominated by manufacturing
and, in particular, automobile manufacturing. This will create a drag on State
finances that we believe will put additional emphasis on credit quality;
something we have always emphasized.
TOUCHSTONE OHIO TAX-FREE BOND FUND
The total return of the Touchstone Ohio Tax-Free Bond Fund was 4.84% for the
year ending June 30, 2009. The total return of the Barclays Capital Municipal
Bond Index was 3.77% for the same period. During the past year, the Fund's
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 which ultimately contributed to its
outperformance. This strategy proved to be particularly beneficial given that
municipal bond insurance has lost its luster as a credit enhancement tool.
The Fund's portfolio continues to maintain a high credit profile and, as of June
30, 2009, 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 income and total return.
This typically leads us to higher coupon issues in the 20-year maturity range; a
strategy which has served the Fund well.
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
BARCLAYS CAPITAL MUNICIPAL BOND INDEX
[LINE CHART]
OHIO BOND (FKA INSURED) - Braclay's Capital
Class A MUNICIPAL Bond INDEX:
------------------------- ---------------------
06/30/99 9,525 10,000
09/30/99 9,439 9,960
12/31/99 9,365 9,883
03/31/00 9,670 10,172
06/30/00 9,775 10,325
09/30/00 9,964 10,575
12/31/01 10,451 11,038
03/31/01 10,615 11,283
06/30/01 10,643 11,356
09/30/01 10,862 11,675
12/31/01 10,773 11,604
03/31/02 10,837 11,713
06/30/02 11,191 12,142
09/30/02 11,793 12,718
12/31/02 11,750 12,718
03/31/03 11,855 12,871
06/30/03 12,134 13,203
09/30/03 12,104 13,214
12/31/03 12,296 13,395
03/31/04 12,489 13,626
06/30/04 12,138 13,303
09/30/04 12,621 13,821
12/31/04 12,768 13,994
03/31/05 12,679 13,989
06/30/05 13,069 14,399
09/30/05 13,011 14,381
12/31/05 13,087 14,486
03/31/06 13,067 14,522
06/30/06 13,036 14,526
09/30/06 13,508 15,021
12/31/06 13,620 15,188
03/31/07 13,714 15,311
06/30/07 13,582 15,209
09/30/07 13,835 15,486
12/31/07 14,030 15,698
03/31/08 13,871 15,602
06/30/08 13,970 15,700
09/30/08 13,503 15,196
12/31/08 13,850 15,309
03/31/09 14,393 15,955
06/30/09 14,646 16,291
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 (0.18%) 2.83% 3.89%
Class C 4.08% 3.05% 3.63%
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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.
** Returns shown above are adjusted for maximum applicable sales charge.
The performance of the above Fund does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
5
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Tabular Presentation of Portfolios of Investments (Unaudited)
June 30, 2009
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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 INVESTMENT SECURITIES)
A-1 / P-1 / MIG1/SP1-+ 94.5
FW1* 5.5
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Floating & Variable Rate
Demand Notes 67.6
Fixed Rate Revenue & General
Obligation Bonds 33.6
Other Assets/Liabilities (net) (1.2)
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Total 100.0
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OHIO TAX-FREE MONEY MARKET FUND
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CREDIT QUALITY (% OF INVESTMENT SECURITIES)
A-1 / P-1 / MIG1/SP1-+ 81.8
FW1* 18.2
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Floating & Variable Rate
Demand Notes 69.7
Fixed Rate Revenue & General
Obligation Bonds 29.6
Other Assets/Liabilities (net) 0.7
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Total 100.0
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OHIO TAX-FREE BOND FUND
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CREDIT QUALITY (% OF INVESTMENT SECURITIES)
AAA / Aaa 18.0
AA / Aa 48.7
A/A 24.2
BBB/Baa 5.7
NR 3.4
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Total 100.0
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PORTFOLIO ALLOCATION (% OF NET ASSETS)
Fixed Rate Revenue & General
Obligation Bonds 98.7
Floating & Variable Rate
Demand Notes 0.9
Other Assets/Liabilities (net) 0.4
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Total 100.0
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TAX-FREE MONEY MARKET FUND
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CREDIT QUALITY (% OF INVESTMENT SECURITIES)
A-1 / P-1 / MIG1/SP1-+ 87.9
FW1* 12.1
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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 34.5
Other Assets/Liabilities (net) 0.1
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Total 100.0
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* Equivalent to Standard & 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, 2009
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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 or at original cost for Ohio
Tax-Free Bond Fund $ 22,558,739 $ 56,310,877 $ 354,396,210 $ 63,267,666
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At market value $ 22,558,739 $ 57,660,572 $ 354,396,210 $ 63,267,666
Cash 11,639 4,757 15,090 64,701
Interest receivable 122,068 366,642 1,595,880 291,939
Receivable for capital shares sold -- 57,582 -- --
Receivable for investment securities sold -- -- 2,565,000 --
Other assets 2,693 4,149 7,599 5,890
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TOTAL ASSETS 22,695,139 58,093,702 358,579,779 63,630,196
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LIABILITIES
Dividends payable 534 66,509 59,910 23
Payable for capital shares redeemed -- 16,576 -- --
Payable for securities purchased 352,334 -- 1,420,000 205,312
Payable to Advisor 10,228 23,781 133,590 26,490
Payable to other affiliates 783 7,911 19,226 20,196
Payable to Trustees 3,976 2,579 3,929 3,995
Other accrued expenses and liabilities 29,602 57,940 95,821 54,396
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TOTAL LIABILITIES 397,457 175,296 1,732,476 310,412
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NET ASSETS $ 22,297,682 $ 57,918,406 $ 356,847,303 $ 63,319,784
===================================================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $ 22,303,506 $ 56,813,383 $ 356,847,352 $ 63,320,456
Accumulated net realized losses on investments (5,824) (244,672) (49) (672)
Net unrealized appreciation on investments -- 1,349,695 -- --
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NET ASSETS $ 22,297,682 $ 57,918,406 $ 356,847,303 $ 63,319,784
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PRICING OF RETAIL SHARES
Net assets applicable to Retail shares $ -- $ -- $ 131,901,485 $ --
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Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) -- -- 131,882,630 --
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Net asset value, offering price and redemption
price per share $ -- $ -- $ 1.00 $ --
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PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional shares $ -- $ -- $ 224,945,818 $ --
===================================================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) -- -- 224,951,733 --
===================================================================================================================================
Net asset value, offering price and redemption
price per share $ -- $ -- $ 1.00 $ --
===================================================================================================================================
PRICING OF CLASS A SHARES
Net assets applicable to Class A shares $ 22,297,682 $ 51,862,468 $ -- $ 22,417,876
===================================================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 22,303,493 4,621,763 -- 22,428,318
===================================================================================================================================
Net asset value and redemption price per share $ 1.00 $ 11.22 $ -- $ 1.00
===================================================================================================================================
Maximum offering price per share $ -- $ 11.78 $ -- $ --
===================================================================================================================================
7
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Statements of Assets and Liabilities (Continued)
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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 $ -- $ 6,055,938 $ -- $ --
===================================================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) -- 539,165 -- --
===================================================================================================================================
Net asset value, offering price and redemption
price per share* $ -- $ 11.23 $ -- $ --
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PRICING OF CLASS S SHARES
Net assets applicable to Class S shares $ -- $ -- $ -- $ 40,901,908
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Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) -- -- -- 40,902,291
===================================================================================================================================
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, 2009
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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 $ 457,106 $ 2,656,368 $ 7,439,860 $ 1,166,810
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EXPENSES
Investment advisory fees 147,180 279,967 1,790,753 314,382
Administration fees 58,843 111,988 835,582 125,671
Distribution expenses, Retail class -- -- 319,812 --
Distribution expenses, Class A 73,576 126,015 -- 53,918
Distribution expenses, Class C -- 55,873 -- --
Distribution expenses, Class S -- -- -- 247,855
Money market insurance 9,598 -- 128,877 18,063
Professional fees 24,763 25,365 54,480 27,346
Transfer Agent fees, Retail class -- -- 47,423 --
Transfer Agent fees, Institutional class -- -- 276 --
Transfer Agent fees, Class A 1,045 26,271 -- 11,616
Transfer Agent fees, Class C -- 3,987 -- --
Transfer Agent fees, Class S -- -- -- 37,771
Postage and supplies 2,785 22,985 33,023 12,172
Pricing expenses 5,102 7,242 19,556 6,186
Reports to shareholders 4,913 11,934 8,474 8,478
Trustees' fees and expenses 8,569 4,670 8,508 8,597
Custodian fees 1,162 3,825 19,439 3,605
Registration fees, Retail class -- -- 2,554 --
Registration fees, Class A 2,778 3,933 -- 8,161
Registration fees, Class C -- 2,937 -- --
Registration fees, Class S -- -- -- 3,909
Compliance fees and expenses 2,027 1,945 3,899 2,027
Other expenses 374 800 4,333 1,901
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TOTAL EXPENSES 342,715 689,737 3,276,989 891,658
Administration fees waived by the Advisor (58,843) (111,988) (737,427) (125,671)
Other operating expenses reimbursed by the Advisor (55,418) (81,603) -- (90,147)
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NET EXPENSES 228,454 496,146 2,539,562 675,840
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NET INVESTMENT INCOME 228,652 2,160,222 4,900,298 490,970
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REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) from security transactions -- 27,470 (49) --
Net change in unrealized appreciation/depreciation
on investments -- 400,652 -- --
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NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS -- 428,122 (49) --
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 228,652 $ 2,588,344 $ 4,900,249 $ 490,970
===================================================================================================================================
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
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YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2009 2008 2009 2008
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FROM OPERATIONS
Net investment income $ 228,652 $ 610,218 $ 2,160,222 $ 2,295,281
Net realized gains (losses) from security transactions -- (246) 27,470 (272,142)
Net change in unrealized appreciation/depreciation
on investments -- -- 400,652 (379,461)
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NET INCREASE IN NET ASSETS FROM OPERATIONS 228,652 609,972 2,588,344 1,643,678
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A (228,652) (610,218) (1,981,807) (2,133,730)
From net investment income, Class C -- -- (178,415) (161,551)
From net realized gains, Class A -- -- -- (567,571)
From net realized gains, Class C -- -- -- (50,588)
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DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (228,652) (610,218) (2,160,222) (2,913,440)
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FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 49,210,197 44,245,136 5,013,732 1,456,249
Reinvested distributions 7,529 30,515 1,260,876 1,818,136
Payments for shares redeemed (45,836,585) (51,119,979) (6,247,579) (6,837,768)
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A
SHARE TRANSACTIONS 3,381,141 (6,844,328) 27,029 (3,563,383)
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CLASS C
Proceeds from shares sold -- -- 1,628,668 887,465
Reinvested distributions -- -- 128,173 164,399
Payments for shares redeemed -- -- (1,097,878) (746,794)
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NET INCREASE IN NET ASSETS FROM CLASS C SHARE TRANSACTIONS -- -- 658,963 305,070
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TOTAL INCREASE (DECREASE) IN NET ASSETS 3,381,141 (6,844,574) 1,114,114 (4,528,075)
NET ASSETS
Beginning of year 18,916,541 25,761,115 56,804,292 61,332,367
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End of year $ 22,297,682 $ 18,916,541 $ 57,918,406 $ 56,804,292
===================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME $ -- $ -- $ -- $ --
===================================================================================================================================
See accompanying notes to financial statements.
10
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Statements of Changes in Net Assets (Continued)
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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,
2009 2008 2009 2008
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FROM OPERATIONS
Net investment income $ 4,900,298 $ 8,550,912 $ 490,970 $ 1,468,812
Net realized gains (losses) from security transactions (49) 130,470 -- (672)
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NET INCREASE IN NET ASSETS FROM OPERATIONS 4,900,249 8,681,382 490,970 1,468,140
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Retail (1,274,560) (2,759,518) -- --
From net investment income, Institutional (3,625,738) (5,791,394) -- --
From net investment income, Class A -- -- (203,998) (465,507)
From net investment income, Class S -- -- (287,211) (1,003,305)
From net realized gains, Retail (32,302) (4,892) -- --
From net realized gains, Institutional (84,341) (9,723) -- --
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DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (5,016,941) (8,565,527) (491,209) (1,468,812)
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
RETAIL
Proceeds from shares sold 201,151,386 251,754,217 -- --
Reinvested distributions 1,305,039 2,749,113 -- --
Payments for shares redeemed (204,259,148) (225,955,439) -- --
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NET INCREASE (DECREASE) IN NET ASSETS FROM RETAIL
SHARE TRANSACTIONS (1,802,723) 28,547,891 -- --
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INSTITUTIONAL
Proceeds from shares sold 486,100,048 453,352,308 -- --
Reinvested distributions 101,563 260,223 -- --
Payments for shares redeemed (523,424,302) (361,142,637) -- --
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NET INCREASE (DECREASE) IN NET ASSETS FROM
INSTITUTIONAL SHARE TRANSACTIONS (37,222,691) 92,469,894 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
Proceeds from shares sold -- -- 9,684,704 14,328,428
Reinvested distributions -- -- 201,122 456,924
Payments for shares redeemed -- -- (8,577,315) (10,266,105)
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NET INCREASE IN NET ASSETS FROM CLASS A SHARE TRANSACTIONS -- -- 1,308,511 4,519,247
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS S
Proceeds from shares sold -- -- 104,762,447 149,100,506
Reinvested distributions -- -- 287,212 997,151
Payments for shares redeemed -- -- (95,168,248) (202,001,440)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS S
SHARE TRANSACTIONS -- -- 9,881,411 (51,903,783)
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TOTAL INCREASE (DECREASE) IN NET ASSETS (39,142,106) 121,133,640 11,189,683 (47,385,208)
NET ASSETS
Beginning of year 395,989,409 274,855,769 52,130,101 99,515,309
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $ 356,847,303 $ 395,989,409 $ 63,319,784 $ 52,130,101
===================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME $ -- $ -- $ -- $ 239
===================================================================================================================================
See accompanying notes to financial statements.
11
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Financial Highlights
- --------------------------------------------------------------------------------
FLORIDA TAX-FREE MONEY MARKET FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------------
2009 2008 2007 2006 2005
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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 0.008 0.023 0.029 0.023 0.011
Net realized gains (losses) on investments 0.000(A) (0.000)(A) 0.000(A) -- (0.000)(A)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.008 0.023 0.029 0.023 0.011
- --------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.008) (0.023) (0.029) (0.023) (0.011)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
================================================================================================================================
Total return 0.81% 2.29% 2.92% 2.28% 1.09%
================================================================================================================================
Net assets at end of year (000's) $ 22,298 $ 18,917 $ 25,761 $ 27,424 $ 28,144
================================================================================================================================
Ratio of net expenses to average net assets 0.78%(B) 0.75% 0.75% 0.75% 0.75%
Ratio of gross expenses to average net assets 1.17% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets 0.78% 2.37% 2.88% 2.23% 1.08%
(A) Amount rounds to less than $0.001.
(B) Absent money market insurance, the ratio of net expenses to average net
assets would have been 0.74%. See Footnote 8 in notes to financial
statements.
OHIO TAX-FREE BOND FUND - CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
----------------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at beginning of year $ 11.13 $ 11.37 $ 11.45 $ 12.10 $ 11.68
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.43 0.44 0.45 0.46 0.45
Net realized and unrealized gains (losses) on investments 0.09 (0.12) 0.03 (0.49) 0.43
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.52 0.32 0.48 (0.03) 0.88
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.43) (0.44) (0.45) (0.46) (0.45)
Distributions from net realized gains -- (0.12) (0.11) (0.16) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.43) (0.56) (0.56) (0.62) (0.46)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 11.22 $ 11.13 $ 11.37 $ 11.45 $ 12.10
===================================================================================================================================
Total return (A) 4.84% 2.85% 4.19% (0.25%) 7.66%
===================================================================================================================================
Net assets at end of year (000's) $ 51,862 $ 51,440 $ 56,163 $ 64,266 $ 74,604
===================================================================================================================================
Ratio of net expenses to average net assets 0.81% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets 3.93% 3.92% 3.87% 3.87% 3.74%
Portfolio turnover rate 2% 17% 28% 24% 30%
(A) Total returns shown exclude the effect of applicable sales loads.
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,
----------------------------------------------------------------------
2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 11.14 $ 11.39 $ 11.46 $ 12.11 $ 11.69
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.35 0.36 0.36 0.37 0.36
Net realized and unrealized gains (losses) on investments 0.09 (0.13) 0.04 (0.49) 0.43
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.44 0.23 0.40 (0.12) 0.79
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.35) (0.36) (0.36) (0.37) (0.36)
Distributions from net realized gains -- (0.12) (0.11) (0.16) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.35) (0.48) (0.47) (0.53) (0.37)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 11.23 $ 11.14 $ 11.39 $ 11.46 $ 12.11
===================================================================================================================================
Total return (A) 4.08% 2.00% 3.50% (1.00%) 6.86%
===================================================================================================================================
Net assets at end of year (000's) $ 6,056 $ 5,364 $ 5,169 $ 6,728 $ 9,400
===================================================================================================================================
Ratio of net expenses to average net assets 1.55% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to average net assets 3.19% 3.17% 3.12% 3.12% 2.99%
Portfolio turnover rate 2% 17% 28% 24% 30%
(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,
------------------------------------------------------------------------
2009 2008 2007 2006 2005
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.010 0.024 0.029 0.023 0.011
Net realized gains on investments 0.000(A) 0.000(A) 0.000(A) -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.010 0.024 0.029 0.023 0.011
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.010) (0.024) (0.029) (0.023) (0.011)
Distributions from net realized gains (0.000)(A) (0.000)(A) (0.000)(A) -- (0.000)(A)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.010) (0.024) (0.029) (0.023) (0.011)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
================================================================================================================================
Total return 1.01% 2.43% 2.96% 2.31% 1.13%
================================================================================================================================
Net assets at end of year (000's) $ 131,901 $ 133,736 $ 105,148 $ 92,082 $ 99,127
================================================================================================================================
Ratio of net expenses to average net assets 0.78%(B) 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets 0.99% 2.35% 2.92% 2.26% 1.05%
(A) Amount rounds to less than $0.001.
(B) Absent money market insurance, the ratio of net expenses to average net
assets would have been 0.75%. See Footnote 8 in notes to financial
statements.
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,
------------------------------------------------------------------------
2009 2008 2007 2006 2005
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.012 0.027 0.032 0.025 0.014
Net realized gains on investments 0.000(A) 0.000(A) 0.000(A) -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.012 0.027 0.032 0.025 0.014
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.012) (0.027) (0.032) (0.025) (0.014)
Distributions from net realized gains (0.000)(A) (0.000)(A) (0.000)(A) -- (0.000)(A)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.012) (0.027) (0.032) (0.025) (0.014)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
================================================================================================================================
Total return 1.26% 2.68% 3.21% 2.57% 1.39%
================================================================================================================================
Net assets at end of year (000's) $ 224,946 $ 262,253 $ 169,708 $ 183,107 $ 192,346
================================================================================================================================
Ratio of net expenses to average net assets 0.53%(B) 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets 1.25% 2.58% 3.17% 2.50% 1.41%
(A) Amount rounds to less than $0.001.
(B) Absent money market insurance, the ratio of net expenses to average
net assets would have been 0.50%.See Footnote 8 in notes to
financial statements.
TAX-FREE MONEY MARKET FUND - CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------
2009 2008 2007 2006 2005
- ----------------------------------------------------------------------------------------------------------------------------------
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 0.010 0.024 0.028 0.023 0.011
Net realized gains (losses) on investments 0.000(A) (0.000)(A) 0.000(A) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.010 0.024 0.028 0.023 0.011
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.010) (0.024) (0.028) (0.023) (0.011)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================================
Total return 0.96% 2.39% 2.88% 2.28% 1.14%
==================================================================================================================================
Net assets at end of year (000's) $ 22,418 $ 21,109 $ 16,590 $ 16,279 $ 19,250
==================================================================================================================================
Ratio of net expenses to average net assets 0.92%(B) 0.89% 0.89% 0.89% 0.89%
Ratio of net investment income to average net assets 0.94% 2.35% 2.85% 2.23% 1.13%
(A) Amount rounds to less than $0.001.
(B) Absent money market insurance, the ratio of net expenses to average net
assets would have been 0.89%. See Footnote 8 in notes to financial
statements.
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,
--------------------------------------------------------------------------
2009 2008 2007 2006 2005
- ----------------------------------------------------------------------------------------------------------------------------------
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 0.007 0.021 0.026 0.020 0.009
Net realized gains (losses) on investments 0.000(A) (0.000)(A) 0.000(A) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.007 0.021 0.026 0.020 0.009
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.007) (0.021) (0.026) (0.020) (0.009)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
==================================================================================================================================
Total return 0.73% 2.12% 2.61% 2.01% 0.87%
==================================================================================================================================
Net assets at end of year (000's) $ 40,902 $ 31,021 $ 82,925 $ 32,658 $ 13,075
==================================================================================================================================
Ratio of net expenses to average net assets 1.16%(B) 1.15% 1.15% 1.15% 1.15%
Ratio of gross expenses to average net assets 1.54% 1.15% 1.15% 1.15% 1.15%
Ratio of net investment income to average net assets 0.69% 2.23% 2.58% 2.10% 0.86%
(A) Amount rounds to less than $0.001.
(B) Absent money market insurance, the ratio of net expenses to average net
assets would have been 1.13%. See Footnote 8 in notes to financial
statements.
See accompanying notes to financial statements.
15
- --------------------------------------------------------------------------------
Notes to Financial Statements
June 30, 2009
- --------------------------------------------------------------------------------
1. ORGANIZATION
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 (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 value. 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 by the Advisor consistent with
procedures approved by the Board of Trustees.
16
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The Funds have adopted the Financial Accounting Standards Board's (FASB)
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. 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.
Various inputs are used in determining the value of the Funds investments. These
inputs are summarized in the three broad levels listed below:
o Level 1 - quoted prices in active markets for identical securities
o Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For
example, money market securities are valued using amortized cost, in accordance
with rules under the Investment Company Act of 1940. Generally, amortized cost
approximates the current fair value of a security, but since the value is not
obtained from a quoted price in an active market, such securities are reflected
as Level 2.
On April 9, 2009 the FASB issued Staff Position SFAS 157-4, "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Indentifying Transactions That Are Not Orderly" (FSP
157-4). FSP 157-4 provides additional guidance in estimating fair value under
Statement No. 157, "Fair Value Measurements" (SFAS 157), when the volume and
level of transaction activity for an asset or liability have significantly
decreased in relation to normal market activity for the asset or liability. FSP
157-4 also provides additional guidance on circumstances that may indicate a
transaction is not orderly. FSP 157-4 is effective for interim and annual
periods ending after June 15, 2009, and the Funds have adopted its provisions
for the period ending June 30, 2009. FSP 157-4 did not have a significant impact
on the Funds' financial position, results of operations, or disclosures for the
year ending June 30, 2009.
The aggregate value by input level, as of June 30, 2009, for each Fund's
investments, as well as a reconciliation of assets for which significant
unobservable inputs (Level 3) were used in determining value, is included in
each Fund's Portfolio of Investments, which also includes a breakdown of the
Fund's investments by geographic/industry concentration.
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.
17
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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.
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.
18
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
RECENT ACCOUNTING PRONOUNCEMENTS -- In June 2009, the FASB issued Statement of
Financial Accounting Standards No. 168, "The FASB Accounting Standards
CodificationTM and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No 162" ("SFAS 168"). SFAS 168 replaces SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles" and establishes
the "FASB Accounting Standards CodificationTM" ("Codification") as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. All guidance contained in the Codification carries an
equal level of authority. On the effective date of SFAS 168, the Codification
will supersede all then-existing non-SEC accounting and reporting standards. All
other nongrandfathered non-SEC accounting literature not included in the
Codification will become nonauthoritative. SFAS 168 is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. The Funds evaluated this new statement, and have determined that it will
not have a significant impact on the determination or reporting of the Funds'
financial statements.
3. FEDERAL TAX INFORMATION
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, 2009 and
2008 was as follows:
FLORIDA
TAX-FREE MONEY OHIO TAX-FREE
MARKET FUND BOND FUND
- --------------------------------------------------------------------------------
2009 2008 2009 2008
- --------------------------------------------------------------------------------
From tax exempt income $ 228,652 $ 610,218 $2,160,222 $2,295,281
From ordinary income -- -- -- 22,120
From long-term capital gains -- -- -- 596,039
- --------------------------------------------------------------------------------
$ 228,652 $ 610,218 $2,160,222 $2,913,440
- --------------------------------------------------------------------------------
OHIO TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
2009 2008 2009 2008
- --------------------------------------------------------------------------------
From tax exempt income $4,900,298 $8,550,912 $ 491,209 $1,468,812
From ordinary income 23,216 3,188 -- --
From long-term capital gains 93,427 11,427 -- --
- --------------------------------------------------------------------------------
$5,016,941 $8,565,527 $ 491,209 $1,468,812
- --------------------------------------------------------------------------------
19
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of June
30, 2009:
FLORIDA
TAX-FREE MONEY OHIO TAX-FREE
MARKET FUND BOND FUND
- --------------------------------------------------------------------------------
Tax cost of portfolio investments $ 22,558,739 $ 56,310,877
================================================================================
Gross unrealized appreciation $ -- $ 2,159,175
Gross unrealized depreciation -- (809,480)
- --------------------------------------------------------------------------------
Net unrealized appreciation -- 1,349,695
Capital loss carryforward (5,824) (244,672)
Undistributed tax exempt income 534 37,168
Other temporary differences (534) (37,168)
- --------------------------------------------------------------------------------
Accumulated earnings (deficit) $ (5,824) $ 1,105,023
================================================================================
OHIO TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
- --------------------------------------------------------------------------------
Tax cost of portfolio investments $ 354,396,210 $ 63,267,666
================================================================================
Capital loss carryforward $ -- $ (672)
Post-October loss (49) --
Undistributed tax exempt income 59,910 23
Other temporary differences (59,910) (23)
- --------------------------------------------------------------------------------
Accumulated deficit $ (49) $ (672)
================================================================================
The capital loss carryforward as of June 30, 2009 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
251 June 30, 2017
- --------------------------------------------------------------------------------
$ 5,824
- --------------------------------------------------------------------------------
Ohio Tax-Free Bond Fund $ 192,709 June 30, 2016
51,963 June 30, 2017
- --------------------------------------------------------------------------------
$ 244,672
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund $ 672 June 30, 2017
- --------------------------------------------------------------------------------
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.
The Funds have adopted 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 in the current year. The Funds
have analyzed their tax positions taken on Federal income tax returns for all
open tax years (tax years ended June 30, 2006 through 2009) for purposes of
implementing FIN 48 and have concluded that no provision for income tax is
required in their financial statements.
20
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and government
securities) were as follows for the year ended June 30, 2009:
OHIO TAX-FREE
BOND FUND
- --------------------------------------------------------------------------------
Purchases of investment securities $ 3,624,289
Proceeds from sales and maturities of investment securities $ 1,274,386
- --------------------------------------------------------------------------------
5. 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) 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.
21
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 October
31, 2009:
CLASS R CLASS I CLASS A CLASS C CLASS S
- -------------------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund -- -- 0.75% -- --
Ohio Tax-Free Bond Fund (A) -- -- 0.85% 1.60% --
Ohio Tax-Free Money Market Fund 0.75% 0.50% -- -- --
Tax-Free Money Market Fund -- -- 0.89% -- 1.15%
(A) Effective November 1, 2008, the Fund increased its expense limits from
0.75% and 1.50% for Class A and Class C, respectively.
For the year ended June 30, 2009, the Advisor waived administration fees and/or
reimbursed expenses as follows:
OTHER OPERATING
ADMINISTRATION EXPENSES
FEES WAIVED REIMBURSED
- --------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund $ 58,843 $ 55,418
Ohio Tax-Free Bond Fund $ 111,988 $ 81,603
Ohio Tax-Free Money Market Fund $ 737,427 $ --
Tax-Free Money Market Fund $ 125,671 $ 90,147
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, 2009, 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 $ 1,256
Ohio Tax-Free Money Market Fund $ 19,276
Tax-Free Money Market Fund $ 37,722
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 $6,820 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, 2009. In
addition, the Underwriter collected $3,868 of contingent deferred sales loads on
the redemption of Class C shares of the Ohio Tax-Free Bond Fund.
22
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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.
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.
6. 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,
2009 2008
- --------------------------------------------------------------------------------
CLASS A
Shares sold 448,987 128,208
Shares reinvested 114,347 160,419
Shares redeemed (565,184) (602,647)
- --------------------------------------------------------------------------------
Net decrease in shares outstanding (1,850) (314,020)
Shares outstanding, beginning of year 4,623,613 4,937,633
- --------------------------------------------------------------------------------
Shares outstanding, end of year 4,621,763 4,623,613
================================================================================
CLASS C
Shares sold 145,439 78,817
Shares reinvested 11,628 14,496
Shares redeemed (99,544) (65,703)
- --------------------------------------------------------------------------------
Net increase in shares outstanding 57,523 27,610
Shares outstanding, beginning of year 481,642 454,032
- --------------------------------------------------------------------------------
Shares outstanding, end of year 539,165 481,642
================================================================================
23
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
7. COMMITMENTS AND CONTINGENCIES
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business, the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
8. TREASURY DEPARTMENT TEMPORARY GUARANTEE PROGRAM
During a meeting held October 7, 2008 of the Board of Trustees, the Trustees
unanimously approved the Touchstone Florida Tax-Free Money Market Fund,
Touchstone Ohio Tax-Free Money Market Fund and Touchstone Tax-Free Money Market
Fund's participation in the Treasury Department Temporary Guarantee Program
(Program), the initial term of which extended through December 18, 2008. The
Funds will continue to participate in the Program through the Program's
extension date of September 18, 2009 (Extension Period). In the event that a
Fund's NAV should drop below $0.995 (the "Guarantee Event") and the Fund elects
to liquidate, the Program provides coverage to shareholders of the Fund for
amounts held in that Fund as of the close of business on September 19, 2008,
subject to certain conditions and limitations. Participation in the Program does
not guarantee a $1.00 net asset value upon redemption or liquidation of shares.
Any increase in the number of Fund shares held in an account after the close of
business on September 19, 2008 are not guaranteed. If the number of Fund shares
held in the account fluctuates during the period covered by the Program,
shareholders are covered for the lesser of the number of Fund shares held as of
the close of business on September 19, 2008, or the number of shares held in the
Fund on the date of the Guarantee Event.
The cost of the Program is $1.00 multiplied by the sum of all covered shares in
the Fund multiplied by 0.00015 (1.5 basis points) for the Extension Period. The
cost to participate in the Program is borne by the Fund without regard to any
expense limitation currently in effect, as these costs constitute "extraordinary
expenses not incurred in the ordinary course of the Fund's business," although
only shareholder balances as of September 19, 2008 are covered by the Program.
9. SUBSEQUENT EVENTS
The Funds evaluated subsequent events from June 30, 2009, the date of these
financial statements, through August 26, 2009, the date these financial
statements were issued and available. There were no subsequent events to report
that would have a material impact on the Funds' financial statements.
24
- --------------------------------------------------------------------------------
Portfolio of Investments
Florida Tax-Free Money Market Fund - June 30, 2009
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 33.6%
$ 500,000 FL Hurricane Catastrophe Fd Fin Corp Rev 5.000 07/01/09 $ 500,000
350,000 FL St Dept Environmental Protection Preservation Rev (FL Forever) 5.000 07/01/09 350,000
300,000 Gilbert AZ LTGO 4.000 07/01/09 300,000
100,000 Hillsborough Co FL Sch Brd COP Prerefunded @ 101 5.800 07/01/09 101,000
100,000 Orange Co FL Hlth Facs Auth Rev Mtg (South Cent Nursing)
Ser A Prerefunded @ 101 5.400 07/01/09 101,000
620,000 Orlando FL Util Commn Sys Rev 5.250 07/01/09 620,001
400,000 Orlando FL Utils Commn Sys Rev 4.000 07/01/09 400,000
370,000 Columbiana OH Elec Sys Impt GO BANS 2.650 07/09/09 370,020
100,000 CA Edl Facs Auth Rev (Pepperdine Univ) Ser A
Prerefunded @ 100 5.500 08/01/09 100,377
175,000 Palm Beach Co FL Sch Brd COP Ser A 3.750 08/01/09 175,252
300,000 Columbiana OH Var Purp UTGO BANS 2.850 09/15/09 300,184
495,000 Dade Co FL UTGO Ser DD 7.700 10/01/09 501,969
200,000 JEA FL St Johns Riv Pwr Pk Sys Rev (Issue 2) Ser 18 5.000 10/01/09 201,957
100,000 JEA FL St Johns Riv Pwr Pk Sys Rev (Issue 2) Ser 18 5.000 10/01/09 101,000
200,000 Orlando FL Utils Commn Wtr & Elec Rev 6.000 10/01/09 202,122
100,000 Orlando FL Wst Wtr Sys Rev Ser A 3.125 10/01/09 100,500
515,000 St Petersburg FL Excise Tax Rev 5.000 10/01/09 517,881
100,000 Tallahassee FL Cons Util Sys Rev 3.000 10/01/09 100,174
100,000 Tampa FL Wtr & Swr Rev 5.500 10/01/09 101,072
100,000 WA St Hlthcare Facs Auth Rev (Sisters of Providence) ETM 6.375 10/01/09 101,338
200,000 Chappaqua NY Cent SD UTGO 2.750 10/15/09 200,976
200,000 Escambia Co FL Hlth Facs Rev (Ascension Hlth Credit)
Ser A-1 Prerefunded @ 101 5.750 11/15/09 205,183
300,000 Switzerland OH LSD Sch Impt UTGO BANS 2.900 11/17/09 301,125
300,000 Niles OH UTGO BANS 3.500 11/19/09 300,682
100,000 FT Collins CO Wtr UTGO 2.750 12/01/09 100,725
100,000 NV St Hwy Impt Rev Motor Vehicle Fuel Tax 5.000 12/01/09 101,662
300,000 Carmel Clay IN Schs UTGO TAWS 2.750 12/31/09 302,617
250,000 Columbus IN Multi-High Sch Bldg Corp BANS 2.500 12/31/09 250,000
135,000 Broward Co FL Parks & Land Preservation UTGO 3.000 01/01/10 136,217
100,000 Cleveland OH Wtr Rev Ser T 3.000 01/01/10 101,025
100,000 Pinellas Co FL Cap Impt Rev 4.750 01/01/10 101,871
145,000 OK Dev Fin Auth Rev (Continuing Care Retirement B)
Prerefunded @ 101 6.250 02/01/10 150,809
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $ 7,498,739
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 67.6%
$ 385,000 Broward Co FL HFA MFH Rev (Jacaranda Village Apts)
(LOC: HSBC Bank USA NA) 0.300 07/01/09 $ 385,000
900,000 Broward Co FL HFA MFH Rev (Reflections Apts) (LOC: FHLMC) 0.300 07/01/09 900,000
100,000 Lee Co FL HFA MFH Rev (Forestwood Apts) (LOC: FNMA) 0.380 07/01/09 100,000
410,000 Manatee Co FL PCR (FL Pwr & Light Co) 0.280 07/01/09 410,000
605,000 Marion Co FL HFA (Paddock Apts) (LOC: FNMA) 0.300 07/01/09 605,000
300,000 Orange Co FL HFA Multifamily Rev (Post Fountains) (LOC: FNMA) 0.340 07/01/09 300,000
850,000 Orange Co FL HFA Rev (LOC: FHLMC) 0.300 07/01/09 850,000
1,000,000 Orange Co FL Hlth Facs Auth (Orlando Regl Hlthcare)
Ser A-1 (SPA: Dexia Credit Local) 0.750 07/01/09 1,000,000
300,000 Palm Beach Co FL Rev (Norton Gallery) (LOC: Bank of America NA) 0.490 07/01/09 300,000
100,000 Sarasota Co FL Pub Hosp Dist Rev (Sarasota Mem Hosp A)
(LOC: Northern Trust Co) 0.270 07/01/09 100,000
1,000,000 Duval Co FL HFA MFH Rev (Sunbeam Rd Apts) (LOC: US Bank NA) 0.290 07/02/09 1,000,000
400,000 FL Hsg Fin Corp MFH Rev (Victoria Park) (LOC: FNMA) 0.290 07/02/09 400,000
385,000 Hillsborough Co FL IDR (Mosi-Charter Sch A) (LOC: Bank of America NA) 0.370 07/02/09 385,000
550,000 JEA FL Dist Energy Sys Rev (LOC: State Street B&T Co) 0.200 07/02/09 550,000
25
- --------------------------------------------------------------------------------
Florida Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 67.6% (CONTINUED)
$ 1,000,000 Leesburg FL Hosp Rev (Villages Regl Hosp B) (LOC: ScotiaBank) 0.290 07/02/09 $ 1,000,000
1,000,000 Marion Co FL IDA IDR (Hospice of Marion Co Inc) (LOC: Wachovia Bank NA) 0.320 07/02/09 1,000,000
875,000 Orange Co FL IDA Rev (Trinity Prep Sch Inc) (LOC: Wachovia Bank NA) 0.470 07/02/09 875,000
900,000 Palm Beach Co FL Rev (Henry Morrison Flagler) (LOC: Northern Trust Co) 0.520 07/02/09 900,000
500,000 Palm Beach Co FL Rev (Raymond F Kravis Ctr) (LOC: Northern Trust Co) 0.270 07/02/09 500,000
1,000,000 Port Orange FL Rev (Palmer College) (LOC: LaSalle Bank NA) 0.400 07/02/09 1,000,000
800,000 Seminole Co FL IDA Rev (Master Academy) (LOC: Allied Irish Bank PLC) 0.550 07/02/09 800,000
900,000 Volusia Co FL IDA Rev (Retirement Hsg Fndtn) (LOC: KBC Bank NV) 0.300 07/02/09 900,000
800,000 Wauchula FL IDR (Hardee Co Ctr) (LOC: JPMorgan Chase Bank) 0.290 07/02/09 800,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 15,060,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 101.2%
(Amortized Cost $22,558,739) $ 22,558,739
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.2%) (261,057)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 22,297,682
============================================================================================================================
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. Fore more information
on valuation inputs, and their aggregation in the levels used in the table
below, please refer to the Security Valuation section in the accompanying Notes
to Financial Statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Municipal Bonds $ -- $22,558,739 $ -- $22,558,739
See accompanying notes to portfolios of investments and notes to financial
statements.
26
- --------------------------------------------------------------------------------
Portfolio of Investments
Ohio Tax-Free Bond Fund - June 30, 2009
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 98.7%
$ 1,035,000 Reading OH Rev (St Mary's Ed Institute) 5.550 02/01/10 $ 1,045,940
1,000,000 Summit Co OH LTGO Prerefunded @ 101 6.000 12/01/10 1,085,570
75,000 Cuyahoga Co OH Hosp Rev (Univ Hosp) ETM 9.000 06/01/11 82,460
1,000,000 Lorain Co OH Hosp Rev (Catholic Hlth) 5.625 10/01/11 1,048,020
500,000 Montgomery Co OH Wtr Rev Sys (Greater Moraine Beaver) 5.000 11/15/11 508,350
1,000,000 Hamilton Co OH Swr Sys Rev 5.500 12/01/11 1,095,430
1,000,000 Pickerington OH LSD UTGO Prerefunded @ 100 5.250 12/01/11 1,099,390
1,750,000 Eaton OH CSD UTGO Prerefunded @ 101 5.000 12/01/12 1,981,333
1,000,000 Monroe OH LSD UTGO Prerefunded @ 100 5.000 12/01/12 1,122,630
250,000 OH St Higher Edl Fac Commn Rev (Xavier Univ) Prerefunded @ 100 5.000 05/01/13 277,948
500,000 Ross Twp OH LSD Sch Impt UTGO Prerefunded @ 100 5.000 12/01/13 567,355
1,480,000 Lakewood OH CSD Sch Impt UTGO Prerefunded @ 100 5.250 12/01/14 1,711,117
660,000 West Chester Twp OH GO 5.500 12/01/14 723,017
400,000 Warren OH Wtr Wrks Rev 5.500 11/01/15 426,412
760,000 Buckeye Valley OH LSD GO 6.850 12/01/15 869,562
570,000 Columbus-Polaris Hsg Corp Rev Prerefunded @ 100 7.400 01/01/16 662,956
2,750,000 Little Miami OH LSD Sch Impt UTGO Prerefunded @ 100 5.000 12/01/16 3,173,224
1,000,000 Lorain Co OH Hosp Rev (Catholic Hlth Partners) 5.500 09/01/19 1,015,220
1,000,000 Lucas Co OH Hosp Rev (Promedica Hlth Grp) 5.625 11/15/19 1,003,290
1,085,000 West Clermont OH LSD GO 5.000 12/01/19 1,146,335
850,000 West Chester Twp OH GO 5.000 12/01/20 881,051
1,210,000 Cincinnati OH Tech College Rev 5.250 10/01/21 1,181,081
1,185,000 Akron OH Impt GO 5.000 12/01/22 1,218,263
765,000 Fairfield Co OH GO 5.000 12/01/22 782,434
1,050,000 Harrison OH Wst Wtr Sys Rev 5.250 11/01/23 1,067,409
1,000,000 Akron OH Var Purp GO 5.000 12/01/23 1,020,790
450,000 Columbus OH TIF Rev (Polaris) 4.750 12/01/23 434,529
865,000 Fairfield Co OH GO 5.000 12/01/23 887,317
1,000,000 OH St Higher Ed Fac Rev (Univ Dayton) 5.000 12/01/23 991,850
1,000,000 Toledo OH CSD GO 5.000 12/01/23 1,019,480
1,000,000 Hamilton Co OH Hosp Rev (Children's Hosp Med Ctr) 5.000 05/15/24 953,490
400,000 Springboro OH Swr Sys Rev 5.000 06/01/24 386,116
2,000,000 Canal Winchester OH LSD UTGO 4.750 12/01/24 2,022,559
825,000 Parma OH GO 4.750 12/01/24 823,185
1,000,000 Columbus OH Arpt Rev 5.000 01/01/25 995,730
1,040,000 Franklin Co OH Hosp Rev (Children's Hosp) 5.000 05/01/25 1,025,388
810,000 Big Walnut OH LSD GO 5.000 12/01/25 840,731
1,000,000 Univ of Cincinnati OH General Rcpts 4.750 06/01/26 1,009,360
1,500,000 Richland Co OH Hosp Facs Rev (MedCentral Hlth Sys) 5.125 11/15/26 1,335,690
1,090,000 Fairborn OH CSD GO 5.000 12/01/26 1,141,186
1,000,000 Kings OH LSD Impt UTGO 5.000 12/01/26 1,036,100
1,000,000 Lakewood OH CSD Facs Impt UTGO 5.000 12/01/26 1,031,150
1,500,000 OH St Higher Ed Fac Rev (Univ Dayton) 5.000 12/01/26 1,482,765
2,100,000 Oregon OH CSD GO 5.000 12/01/27 2,168,270
1,000,000 OH St Higher Edl Fac Commn Rev (Xavier Univ C) 5.750 05/01/28 1,040,190
1,830,000 Columbus OH CSD Impt UTGO 5.000 12/01/28 1,879,264
1,185,000 Delaware OH GO 5.000 12/01/28 1,225,006
890,000 Licking Heights OH LSD GO 6.400 12/01/28 1,053,502
1,000,000 Mason OH Swr Sys Rev 5.000 12/01/28 862,500
1,500,000 Reynoldsburg OH CSD Facs Constr & Impt UTGO 5.250 12/01/28 1,560,600
1,000,000 Cleveland OH Income Tax Rev (Sub Lien Brdgs & Roadways B) 5.000 10/01/29 1,006,970
1,000,000 Columbus OH CSD Sch Facs Constr & Impt UTGO 4.500 12/01/29 951,060
895,000 Milton Union OH Exmp Village SD Spl Ltd Oblig Sch Impt 4.875 12/01/29 861,903
320,000 Brookfield LSD OH Sch Facs Impt UTGO 5.000 01/15/30 323,094
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $ 57,145,572
- ----------------------------------------------------------------------------------------------------------------------------
27
- --------------------------------------------------------------------------------
Ohio Tax-Free Bond Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 0.9%
$ 115,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser C
(LOC: Wachovia Bank NA) 0.180 10/01/31 $ 115,000
400,000 Kent St Univ OH Univ Revs General Rcpts (LOC: Bank of America NA) 0.300 05/01/32 400,000
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 515,000
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 99.6%
(Amortized Cost $56,310,877) $ 57,660,572
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% 257,834
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 57,918,406
=============================================================================================================================
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. Fore more information
on valuation inputs, and their aggregation in the levels used in the table
below, please refer to the Security Valuation section in the accompanying Notes
to Financial Statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Municipal Bonds $ -- $57,660,572 $ -- $57,660,572
See accompanying notes to portfolios of investments and notes to financial
statements.
28
- --------------------------------------------------------------------------------
Portfolio of Investments
Ohio Tax-Free Money Market Fund - June 30, 2009
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 29.6%
$ 2,000,000 Niles OH Swr Sys Impt LTGO BANS 2.750 07/01/09 $ 2,000,000
1,250,000 AMP OH Elec Rev BANS (Woodville) 2.750 07/17/09 1,250,137
1,810,000 Kirtland OH Var Purp LTGO BANS 2.350 07/23/09 1,810,269
400,000 OH St Higher Ed Cap Facs Ser II-A 5.000 08/01/09 400,989
5,000,000 Columbus OH CSD UTGO BANS 1.850 08/13/09 5,003,512
1,995,000 AMP OH Elec Rev BANS (Cleveland Pub Pwr) 2.250 08/14/09 1,995,240
2,685,000 Jackson Co OH Var Purp Impt LTGO BANS 2.550 09/03/09 2,687,090
4,500,000 Union Twp OH TIF Rev BANS 3.000 09/15/09 4,509,255
1,722,000 Warrensville Heights OH Var Purp Impt LTGO BANS 2.850 09/17/09 1,725,089
3,500,000 Cuyahoga Heights OH Var Purp UTGO BANS 3.500 09/23/09 3,503,954
140,000 OH St Bldg Auth Facs (Adult Correctl) Ser A Prerefunded @ 101 5.500 10/01/09 142,547
1,800,000 Portage Co OH UTGO BANS 3.250 10/02/09 1,801,122
4,000,000 Ashland OH Var Purp Impt B LTGO BANS 3.500 10/15/09 4,005,697
1,000,000 Kent OH Var Purp UTGO BANS 3.750 10/15/09 1,001,278
4,000,000 AMP OH UTGO BANS 2.250 10/29/09 4,003,283
3,000,000 AMP OH Var Purp UTGO BANS 2.000 10/29/09 3,004,956
2,050,000 AMP OH Var Purp UTGO BANS 3.750 10/29/09 2,051,668
2,300,000 Springboro OH BANS (Real Estate Acq) 4.500 10/29/09 2,305,527
1,410,000 Celina OH Var Purp LTGO BANS 3.125 11/05/09 1,415,420
1,680,000 Celina OH Var Purp LTGO BANS 3.800 11/05/09 1,683,145
2,320,000 Hillsboro OH BANS (Emergency Dept) 3.300 11/05/09 2,324,384
2,150,000 Cincinnati OH EDR BANS (Columbia Sq) Ser D 3.000 11/06/09 2,151,846
1,711,500 AMP OH Elec Rev BANS (Hubbard) 3.750 11/11/09 1,712,423
1,450,000 Trotwood OH Cap Facs Impt A UTGO BANS 3.625 11/12/09 1,451,952
4,050,000 Switzerland OH LSD Sch Impt UTGO BANS 2.900 11/17/09 4,065,190
3,900,000 Niles OH UTGO BANS 3.500 11/19/09 3,908,860
1,633,000 AMP OH Elec Rev BANS (Bowling Green) 3.000 11/24/09 1,635,580
3,300,000 Mahoning Co OH Var Purp LTGO BANS 4.450 11/24/09 3,310,942
250,000 OH St Higher Ed Cap Facs Ser II-A 5.500 12/01/09 254,572
150,000 OH St Univ General Rcpts Ser A 5.000 12/01/09 152,442
275,000 OH St Wtr Dev Auth PCR (Wtr Quality Ln Fd) 5.000 12/01/09 279,564
2,500,000 Harrison OH Wst Wtr Sys Impt LTGO BANS 2.700 12/10/09 2,504,903
1,180,000 AMP OH Elec Rev BANS (Brewster) 3.000 01/08/10 1,181,527
785,000 Defiance OH CSD UTGO BANS 4.350 01/13/10 794,331
652,000 AMP OH Elec Rev BANS (Seville Village) 3.000 01/15/10 652,875
3,100,000 Westlake OH Var Purp LTGO BANS 1.250 01/28/10 3,104,430
1,500,000 Lyndhurst OH LTGO BANS 2.000 03/03/10 1,502,976
1,800,000 Franklin OH LTGO BANS 2.500 03/09/10 1,806,076
2,300,000 Southwest OH Regl Wtr Dist Wtr Rev UTGO BANS 2.500 03/10/10 2,311,735
2,545,000 Willowick OH Var Purp Impt LTGO BANS 2.500 03/10/10 2,549,296
1,745,000 Hamilton Twp OH Infra LTGO BANS 2.850 03/17/10 1,752,287
1,085,000 Brookville OH Var Purp LTGO BANS 2.875 04/21/10 1,091,638
2,000,000 Univ Cincinnati OH General Rcpts BANS Ser A 1.500 05/12/10 2,006,606
1,600,000 Fayette Co OH LTGO BANS 3.125 05/13/10 1,608,459
3,584,500 Greene Co OH Var Purp LTGO BANS Ser B 1.625 05/14/10 3,602,201
1,145,000 Gates Mills OH Var Purp Impt LTGO BANS 2.000 05/20/10 1,152,503
4,810,000 Cincinnati OH CSD Sch Impt LTGO BANS 1.750 05/26/10 4,829,271
3,135,000 Middletown OH CSD Sch Impt UTGO BANS 2.750 06/01/10 3,156,165
2,445,000 AMP OH Elec Rev BANS (Newton Falls) 3.000 06/30/10 2,450,998
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $105,606,210
- ----------------------------------------------------------------------------------------------------------------------------
29
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 69.7%
$ 2,300,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser A
(LOC: Bank of America NA) 0.250 07/01/09 $ 2,300,000
1,035,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser C
(LOC: Wachovia Bank NA) 0.180 07/01/09 1,035,000
3,000,000 Cleveland OH Arpt Sys Rev Tr Rcpts SGA 126 (SPA: Societe Generale) 0.560 07/01/09 3,000,000
1,330,000 Hamilton Co OH EDR (The General Prostestant) (LOC: National City Bank) 0.500 07/01/09 1,330,000
1,715,000 Hamilton Co OH Hlthcare Facs Rev (Deaconess)
(LOC: JPMorgan Chase Bank) 0.320 07/01/09 1,715,000
2,300,000 Hamilton Co OH Hosp Facs Rev (Eliz Gamble) Ser A
(LOC: JPMorgan Chase Bank) 0.340 07/01/09 2,300,000
3,900,000 Middletown OH Dev Rev (Bishop-Fenwick HS)
(LOC: JPMorgan Chase Bank) 0.300 07/01/09 3,900,000
3,550,000 OH St Air Quality Dev Auth PCR (FirstEnergy B) (LOC: Barclays Bank PLC) 0.200 07/01/09 3,550,000
11,100,000 OH St Air Quality Dev Auth PCR (FirstEnergy B) (LOC: Wachovia Bank NA) 0.330 07/01/09 11,100,000
3,600,000 OH St Higher Edl Fac Commn Rev (Kenyon College)
(LOC: Northern Trust Co) 0.180 07/01/09 3,600,000
1,500,000 OH St Higher Edl Fac Rev (Case Western A)
(SPA: Landesbank Hessen-Thuringen) 0.300 07/01/09 1,500,000
2,000,000 OH St Higher Edl Fac Rev (Case Western Rsrv A)
(LOC: Allied Irish Bank PLC) 0.500 07/01/09 2,000,000
3,100,000 OH St Higher Edl Fac Rev (Case Western Rsrv A)
(SPA: Landesbank Hessen-Thuringen) 0.300 07/01/09 3,100,000
2,560,000 OH St Infra Impt GO 0.220 07/01/09 2,560,000
10,400,000 OH St Infra Impt UTGO Ser B 0.170 07/01/09 10,400,000
1,000,000 OH St PCR (Sohio Air) 0.180 07/01/09 1,000,000
6,360,000 OH St Univ General Rcpts 0.170 07/01/09 6,360,000
4,770,000 OH St Univ General Rcpts Ser B 0.130 07/01/09 4,770,000
1,600,000 OH St Univ General Rcpts Ser B 0.170 07/01/09 1,600,000
885,000 OH St Univ General Rcpts Ser B 0.170 07/01/09 885,000
8,000,000 OH St UTGO (Common Schs) Ser A 0.170 07/01/09 8,000,000
3,220,000 OH St UTGO (Common Schs) Ser B 0.170 07/01/09 3,220,000
4,300,000 OH St Wtr Dev Auth PCR (FirstEnergy Nuclear B)
(LOC: Wachovia Bank NA) 0.320 07/01/09 4,300,000
200,000 OH St Wtr Dev Auth PCR Facs Rev (FirstEnergy Gen Corp A)
(LOC: Barclays Bank PLC) 0.300 07/01/09 200,000
7,925,000 OH St Wtr Dev Auth PCR Facs Rev (FirstEnergy) (LOC: Barclays Bank PLC) 0.300 07/01/09 7,925,000
11,185,000 OH Wtr Dev Auth Rev (Purewater) (SPA: State Street B&T Co) 0.550 07/01/09 11,185,000
2,400,000 Wooster OH IDR (Allen Group Inc) (LOC: Wachovia Bank NA) 0.470 07/01/09 2,400,000
3,940,000 Akron Bath Copley OH Jt Twp Hosp Dist Rev (Summa Hlth Sys B)
(LOC: Bank One NA) 0.320 07/02/09 3,940,000
10,000,000 Akron Bath Copley OH Jt Twp Hosp Dist Rev (Summner)
(LOC: KBC Bank NV) 0.500 07/02/09 10,000,000
500,000 Allen Co OH Hlthcare Facs Rev (Mennonite Mem Home)
(LOC: Wells Fargo Bank) 0.270 07/02/09 500,000
6,955,000 Butler Co OH Hlthcare Facs Rev (Lifesphere) (LOC: US Bank NA) 0.300 07/02/09 6,955,000
920,000 Cambridge OH Hosp Facs Rev (Southeastern Regl Med Ctr)
(LOC: National City Bank) 0.450 07/02/09 920,000
2,275,000 Cambridge OH Hosp Facs Rev (Southeastern Regl Med Ctr)
(LOC: National City Bank) 0.450 07/02/09 2,275,000
1,920,000 Carroll Co OH Hlthcare Facs Rev (St Johns Village)
(LOC: National City Bank) 0.450 07/02/09 1,920,000
500,000 Centerville OH Hlthcare Rev (Bethany Lutheran Village B)
(LOC: National City Bank) 0.300 07/02/09 500,000
2,600,000 Cleveland OH Arpt Sys Rev Ser D (LOC: US Bank NA) 0.290 07/02/09 2,600,000
2,980,000 Columbiana Co OH Rev (East Liverpool Area Y) (LOC: National City Bank) 0.350 07/02/09 2,980,000
3,720,000 Columbus OH Regl Arpt Auth Cap Fdg Rev (OASBO Pooled Fin)
(LOC: US Bank NA) 0.320 07/02/09 3,720,000
3,840,000 Columbus OH Regl Arpt Auth Rev (LOC: US Bank NA) 0.320 07/02/09 3,840,000
30
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 69.7% (CONTINUED)
$ 80,000 Coshocton Co OH Hosp (Echoing Hills Village)
(LOC: JPMorgan Chase Bank) 1.550 07/02/09 $ 80,000
1,945,000 Coshocton Co OH Hosp Facs Rev (Mem Hosp)
(LOC: Bank One Chicago NA) 0.300 07/02/09 1,945,000
1,315,000 Cuyahoga Co OH EDR (Cleveland Botanical) (LOC: Allied Irish Bank PLC) 1.150 07/02/09 1,315,000
500,000 Cuyahoga Co OH EDR (North Coast Cmnty Homes)
(LOC: National City Bank) 0.850 07/02/09 500,000
905,000 Franklin Co OH Hlth Facs (Heinzerling Fndtn) (LOC: JPMorgan Chase Bank) 0.800 07/02/09 905,000
300,000 Franklin Co OH Hosp Rev Impt (US Hlth Corp) (LOC: US Bank NA) 0.180 07/02/09 300,000
4,630,000 Franklin Co OH Hosp Rev Sub (Doctors OH Hlth B)
(LOC: National City Bank) 0.290 07/02/09 4,630,000
120,000 Geauga Co OH Hlth Fac (Heather Hill) (LOC: Bank One NA) 0.230 07/02/09 120,000
400,000 Hamilton Co OH EDR (Contemporary Arts) (LOC: National City Bank) 0.350 07/02/09 400,000
2,500,000 Hamilton Co OH Hlthcare (Life Enriching Cmntys B) (LOC: PNC Bank NA) 0.330 07/02/09 2,500,000
3,515,000 Hamilton Co OH Hlthcare Facs Rev (Children's Home Cincinnati)
(LOC: US Bank NA) 0.320 07/02/09 3,515,000
1,050,000 Hamilton Co OH Hosp (Beechwood Home) (LOC: US Bank NA) 0.340 07/02/09 1,050,000
2,980,000 Hamilton Co OH Hosp (Children's Hosp Med Ctr) Ser 1997
(LOC: PNC Bank NA) 0.320 07/02/09 2,980,000
600,000 Hamilton Co OH Hosp (Children's Hosp Med Ctr) Ser 2000
(LOC: JPMorgan Chase Bank) 0.320 07/02/09 600,000
505,000 Hamilton Co OH Hosp (Drake Ctr Inc) (LOC: US Bank NA) 0.320 07/02/09 505,000
1,450,000 Hamilton Co OH Hosp Facs Rev (Children's Hosp Med Ctr)
(LOC: US Bank NA) 0.320 07/02/09 1,450,000
12,900,000 Kent St Univ OH Univ Revs General Rcpts Ser B
(LOC: Bank of America NA) 0.300 07/02/09 12,900,000
4,910,000 Lancaster OH Port Auth Gas Rev (SPA: Royal Bank of Canada) 0.270 07/02/09 4,910,000
1,300,000 Lima OH Hosp Facs (Lima Mem Hosp) (LOC: JPMorgan Chase Bank) 0.700 07/02/09 1,300,000
5,000,000 Mahoning Co OH Hsg Rev (Youngstown St Univ)
(LOC: National City Bank) 0.350 07/02/09 5,000,000
820,000 Montgomery Co OH Hlth Facs (Cmnty Blood Ctr) (LOC: Bank One NA) 0.800 07/02/09 820,000
1,225,000 Montgomery Co OH Hlthcare Facs Rev (South Cmnty Inc)
(LOC: National City Bank) 0.500 07/02/09 1,225,000
1,980,000 Montgomery Co OH Ltd Oblig Rev (Society St Vincent de Paul)
(LOC: National City Bank) 0.400 07/02/09 1,980,000
1,000,000 OH St Higher Edl Fac Rev (Cleveland Inst Music) (LOC: National City Bank) 0.300 07/02/09 1,000,000
1,400,000 OH St Higher Edl Fac Rev (Marietta College) (LOC: JPMorgan Chase Bank) 0.280 07/02/09 1,400,000
1,365,000 OH St Higher Edl Fac Rev (Mt Union College) (LOC: JPMorgan Chase Bank) 0.400 07/02/09 1,365,000
2,000,000 OH St Higher Edl Fac Rev (Otterbein College) (LOC: JPMorgan Chase Bank) 2.100 07/02/09 2,000,000
440,000 OH St Higher Edl Fac Rev (Xavier Univ) (LOC: US Bank NA) 0.220 07/02/09 440,000
1,600,000 OH St Higher Edl Fac Rev (Xavier Univ) Ser A (LOC: US Bank NA) 0.220 07/02/09 1,600,000
835,000 OH St Higher Edl Fac Rev (Xavier Univ) Ser B (LOC: US Bank NA) 0.220 07/02/09 835,000
700,000 OH St Univ General Rcpts Rev 0.250 07/02/09 700,000
4,445,000 Parma OH Hosp Impt Rev (Parma Cmnty Gen Hosp) Ser A
(LOC: JPMorgan Chase Bank) 0.320 07/02/09 4,445,000
3,210,000 Port Gtr Cincinnati OH Dev Auth Rev (Cincinnati Zoo) (LOC: US Bank NA) 1.450 07/02/09 3,210,000
630,000 Port Gtr Cincinnati OH Dev Auth Rev (Cincinnati Zoo) (LOC: US Bank NA) 1.450 07/02/09 630,000
3,000,000 Port of Gtr Cincinnati OH Dev Auth OH Spl Oblig Dev Rev
(Sycamore Twp Kenwood) Ser A (LOC: LaSalle Bank NA) 0.280 07/02/09 3,000,000
4,850,000 Puerto Rico Cmnwlth UTGO A-8 (LOC: Wachovia Bank NA) 0.070 07/02/09 4,850,000
3,750,000 Puerto Rico Cmnwlth UTGO A-9 (LOC: Wachovia Bank NA) 0.070 07/02/09 3,750,000
5,610,000 Richland Co OH Hlthcare Facs Rev (Wesleyan) Ser B
(LOC: JPMorgan Chase Bank) 0.330 07/02/09 5,610,000
900,000 Salem OH Hosp Rev Impt (Salem Cmnty) (LOC: JPMorgan Chase Bank) 0.300 07/02/09 900,000
1,120,000 Summit Co OH Rev (Neighborhood Dev Corp) (LOC: National City Bank) 0.500 07/02/09 1,120,000
4,300,000 Toledo OH Spl Assess Nts (LOC: State Street B&T Co) 0.300 07/02/09 4,300,000
1,600,000 Warren Co OH IDR (Liquid Container) (LOC: Bank of America NA) 0.400 07/02/09 1,600,000
31
- --------------------------------------------------------------------------------
Ohio Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 69.7% (CONTINUED)
$ 5,000,000 Wood Co OH Hosp Facs (Hosp Assn) (LOC: JPMorgan Chase Bank) 0.380 07/02/09 $ 5,000,000
4,720,000 Woodlawn OH EDR (Goodwill Inds) (LOC: US Bank NA) 0.340 07/02/09 4,720,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $248,790,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 99.3%
(Amortized Cost $354,396,210) $354,396,210
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7% 2,451,093
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $356,847,303
============================================================================================================================
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. Fore more information
on valuation inputs, and their aggregation in the levels used in the table
below, please refer to the Security Valuation section in the accompanying Notes
to Financial Statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Municipal Bonds $ -- $354,396,210 $ -- $354,396,210
See accompanying notes to portfolios of investments and notes to financial
statements.
32
- --------------------------------------------------------------------------------
Portfolio of Investments
Tax-Free Money Market Fund - June 30, 2009
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 34.5%
$ 100,000 IN St Office Bldg Commn Facs Rev (IN St Museum) 3.125 07/01/09 $ 100,000
335,000 IN St Office Bldg Commn Facs Rev (Southeast Regl Treatment Ctr E) 4.000 07/01/09 335,000
100,000 Indianapolis IN Loc Pub Impt Bd Bk (Wtr Wrks) 5.000 07/01/09 100,000
315,000 KY Hsg Corp Rev Ser C 3.850 07/01/09 315,000
100,000 NM St Severance Tax Ser A 5.000 07/01/09 100,000
100,000 Tempe AZ UTGO Ser A 4.500 07/01/09 100,000
800,000 Columbiana OH Elec Sys Impt BANS 2.650 07/09/09 800,044
250,000 AK St UTGO Ser A 5.250 08/01/09 250,777
300,000 IL St First Ser UTGO 5.500 08/01/09 300,953
110,000 IN Univ Revs Student Fee Ser O 5.000 08/01/09 110,319
225,000 IN Univ Revs Student Fees Ser S 4.000 08/01/09 225,557
310,000 New York NY UTGO Ser G 2.875 08/01/09 310,085
100,000 OH St Infra A Impt UTGO 5.000 08/01/09 100,337
100,000 OR St Brd Higher Ed UTGO Ser A Prerefunded @ 101 5.300 08/01/09 101,361
100,000 South Cent CT Regl Wtr Auth Wtr Sys Rev Fifteenth Ser A
Prerefunded @ 101 5.125 08/01/09 101,306
260,000 Goose Creek TX CISD Unrefunded Balance 2006 UTGO 7.000 08/15/09 261,949
160,000 IA Fin Auth Hosp Fac Rev (Mercy Med Ctr) Prerefunded @ 101 6.000 08/15/09 162,590
200,000 Univ of TX Univ Revs Fing Sys Ser B Prerefunded @ 100 5.700 08/15/09 201,015
560,000 Bratenahl OH UTGO BANS (Greenspace Acq) 2.750 08/27/09 560,431
100,000 OH St Bldg Auth St Facs (Trans Bldg A) 3.250 09/01/09 100,280
590,000 Columbiana OH Var Purp UTGO BANS 2.850 09/15/09 590,363
100,000 OH St UTGO (Common Schs) Ser A 5.000 09/15/09 100,824
500,000 Union Twp OH TIF Rev BANS 3.000 09/15/09 501,028
200,000 Bernalillo Co NM Gross Rcpts Tax Rev Prerefunded @ 100 5.250 10/01/09 202,119
125,000 Cumberland Co NC Hosp Facs Rev (Cumberland Co Hosp Sys Inc)
Prerefunded @ 101 5.250 10/01/09 127,573
100,000 IL St UTGO 5.500 10/01/09 101,110
100,000 New Castle Co DE UTGO 5.000 10/01/09 100,798
100,000 OH St Higher Edl Fac Commn Rev (Oberlin College) 4.000 10/01/09 100,589
100,000 Springfield MA Mun Purp Ln LTGO Prerefunded @ 101 6.000 10/01/09 102,263
663,000 Ashland OH Var Purp Impt B LTGO BANS 3.500 10/15/09 663,944
400,000 Chappaqua NY Cent SD UTGO 2.750 10/15/09 401,952
250,000 Londonderry NH UTGO 2.750 10/15/09 251,258
400,000 Springboro OH BANS (Real Estate Acq) 4.500 10/29/09 400,961
300,000 Findlay OH (Wtr Wrks Sys) LTGO 3.375 11/01/09 302,320
270,000 ME Mun Bd Bk Ser E Prerefunded @ 101 5.875 11/01/09 276,383
100,000 New York NY City Transitional Fin Auth Rev (Future Tax Secd) Ser B ETM 4.000 11/01/09 100,996
250,000 Seattle WA Mun Light & Pwr Rev 5.000 11/01/09 253,314
100,000 Walnut Grove MS Correctional Auth COP ETM 6.000 11/01/09 101,666
400,000 Hillsboro OH BANS (Emergency Dept) 3.300 11/05/09 400,756
400,000 Cincinnati OH EDR BANS (Columbia Sq) Ser D 3.000 11/06/09 400,343
300,000 AMP OH Elec Rev BANS (Hubbard) 3.750 11/11/09 300,162
300,000 Trotwood OH Cap Facs Impt A UTGO BANS 3.625 11/12/09 300,404
150,000 MI St Hosp Fin Auth Rev (Ascension Hlth Credit) Ser A Prerefunded @ 101 5.750 11/15/09 153,562
650,000 Switzerland OH LSD Sch Impt UTGO BANS 2.900 11/17/09 652,438
600,000 Niles OH UTGO BANS 3.500 11/19/09 601,363
565,000 AMP OH Elec Rev BANS (Amherst) 3.000 11/24/09 565,674
250,000 Cuyahoga Co OH Cap Impt LTGO 4.750 12/01/09 253,795
200,000 Delaware Co OH Swr Dist Impt LTGO Prerefunded @ 101 4.750 12/01/09 205,103
380,000 Fairfield OH Wtr Wrks Sys Impt LTGO 2.500 12/01/09 382,371
200,000 Mount Prospect IL UTGO 3.000 12/01/09 201,239
250,000 OH St Pks & Rec Cap Facs Ser II-A 4.100 12/01/09 253,121
150,000 OH St Wtr Dev Auth PCR (Wtr Quality Ln Fd) 5.000 12/01/09 152,489
155,000 Olentangy LSD OH UTGO Prerefunded @ 101 5.250 12/01/09 158,906
200,000 Pepper Pike OH LTGO 3.800 12/01/09 201,615
100,000 Rocky River OH UTGO 3.000 12/01/09 100,771
33
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FIXED RATE REVENUE & GENERAL OBLIGATION BONDS -- 34.5% (CONTINUED)
$ 100,000 Snohomish Co WA SD No 016 Arlington UTGO 4.150 12/01/09 $ 101,101
100,000 South-Western OH CSD Franklin & Pickway Co UTGO Prerefunded @ 100 4.750 12/01/09 101,556
250,000 Springfield OH CSD Sch Energy Consv Impt LTGO 3.500 12/01/09 250,773
130,000 Springfield OH LTGO Prerefunded @ 101 5.500 12/01/09 133,665
310,000 West Chester Twp OH Var Pup LTGO 2.500 12/01/09 311,927
450,000 Harrison OH TANS 3.250 12/10/09 451,470
100,000 Douglas Co NE SD No 001 UTGO Ser B 3.125 12/15/09 100,962
200,000 MA St Fed Hwy GANS Ser A 5.500 12/15/09 204,088
200,000 MA St Spl Oblig Rev Fed Hwy GANS Ser A 5.000 12/15/09 203,497
700,000 Carmel Clay IN Schs UTGO TANS 2.750 12/31/09 706,105
650,000 Columbus IN Multi-High Sch Bldg Corp BANS 2.500 12/31/09 650,000
200,000 AMP OH Elec Rev BANS (Seville Village) 3.000 01/15/10 200,269
385,000 Calcasieu Parish LA SD No 034 UTGO 2.000 01/15/10 386,025
120,000 San Antonio TX Elec & Gas Ser A Prerefunded @ 100 5.750 02/01/10 123,117
200,000 Spring-Ford PA Area SD UTGO 3.500 02/01/10 202,597
150,000 Tuscaloosa AL UTGO Wts 4.150 02/15/10 152,538
100,000 Fort Worth TX General Purp LTGO 5.000 03/01/10 102,589
200,000 HI St UTGO Ser DI 5.000 03/01/10 205,312
317,000 Southwest OH Regl Wtr Dist Wtr Rev UTGO BANS 2.500 03/10/10 318,617
500,000 Willowick OH Var Purp Impt LTGO BANS 2.500 03/10/10 500,844
300,000 Hamilton Twp OH Infra LTGO BANS 2.850 03/17/10 301,253
150,000 NY St Hwy Auth Second Gen Hwy & Brdg Tr Fd Ser A 5.000 04/01/10 154,473
300,000 Fayette Co OH LTGO BANS 3.125 05/13/10 301,586
500,000 Middletown OH CSD Sch Impt UTGO BANS 2.750 06/01/10 503,376
550,000 AMP OH Elec Rev BANS (Newton Falls) 3.000 06/30/10 551,349
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE REVENUE & GENERAL OBLIGATION BONDS $ 21,819,666
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 65.4%
$ 400,000 Allen Co OH Hosp Facs Rev (Catholic Hlthcare) Ser B
(LOC: JPMorgan Chase Bank) 0.180 07/01/09 $ 400,000
100,000 Broward Co FL HFA MFH Rev (Reflections Apts) (LOC: FHLMC) 0.300 07/01/09 100,000
1,500,000 CO Edl & Cultural Facs Auth Rev (Parker & Denver HS)
(LOC: Bank of America NA) 0.400 07/01/09 1,500,000
605,000 Hillsborough Co FL IDR (Vigo Importing Co) (LOC: Bank of America NA) 1.000 07/01/09 605,000
1,000,000 IL Fin Auth Rev (Lake Forest College) (LOC: Northern Trust Co) 0.420 07/01/09 1,000,000
400,000 Manatee Co FL PCR (FL Pwr & Light Co) 0.280 07/01/09 400,000
600,000 Martin Co FL PCR (FL Pwr & Light Co) 0.350 07/01/09 600,000
900,000 OH St Higher Edl Fac Commn Rev (Kenyon College)
(LOC: Northern Trust Co) 0.180 07/01/09 900,000
1,000,000 OH St PCR (Sohio Wtr) 0.280 07/01/09 1,000,000
1,400,000 OH St Wtr Dev Auth PCR Facs Rev (FirstEnergy Gen Corp A)
(LOC: Barclays Bank PLC) 0.300 07/01/09 1,400,000
600,000 Putnam Co FL PCR Dev Auth (FL Pwr & Light Co) 0.280 07/01/09 600,000
1,100,000 Sarasota Co FL Pub Hosp Dist Rev (Sarasota Mem Hosp A)
(LOC: Northern Trust Co) 0.270 07/01/09 1,100,000
1,100,000 Scio Twp MI EDR (ADP) 1.700 07/01/09 1,100,000
300,000 Volusia Co FL HFA MFH Rev (Fisherman's Landing Apt) (LOC: FNMA) 0.300 07/01/09 300,000
1,215,000 VT Edl & Hlth Bldgs (Brattleboro Mem Hosp) (LOC: TD Banknorth NA) 0.320 07/01/09 1,215,000
500,000 West Valley UT IDR (Johnson Matthey Inc) (LOC: HSBC Bank USA NA) 0.280 07/01/09 500,000
630,000 Winston-Salem NC Urban Redev Mtg Rev (Summit Sq Garden Apts) 0.710 07/01/09 630,000
700,000 Ames TX Higher Ed Facs Corp Rev (St Gabriels)
(LOC: Allied Irish Bank PLC) 0.770 07/02/09 700,000
240,000 CA Infra EDB IDR (Metrotile Mfg) Ser A (LOC: Comerica Bank) 1.000 07/02/09 240,000
100,000 CA Statewide Cmntys IDR (American Modular Sys)
(LOC: Bank of the West) 0.550 07/02/09 100,000
245,000 Columbus OH Regl Arpt Auth Rev Cap Fdg (Pooled Fing Prog A)
(LOC: US Bank NA) 0.320 07/02/09 245,000
34
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL COUPON MATURITY MARKET
AMOUNT RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
FLOATING & VARIABLE RATE DEMAND NOTES -- 65.4% (CONTINUED)
$ 830,000 Dade Co FL IDR (Spectrum Programs Inc) (LOC: Bank of America NA) 0.370 07/02/09 $ 830,000
1,150,000 Dayton KY TIF & Spl Assmt (Belmont Lake) (LOC: LaSalle Bank NA) 0.420 07/02/09 1,150,000
300,000 Duval Co FL HFA MFH Rev (Sunbeam Rd Apts) (LOC: US Bank NA) 0.290 07/02/09 300,000
175,000 Franklin Co VA IDA IDR (Mod-U-Kraf) (LOC: Lasalle Bank NA) 0.700 07/02/09 175,000
500,000 Hailey ID IDC Rev (Rocky Mountain Hardware) (LOC: Wells Fargo Bank) 0.520 07/02/09 500,000
245,000 Hillsborough Co FL IDR (Mosi-Charter Sch A) (LOC: Bank of America NA) 0.370 07/02/09 245,000
700,000 IL Fin Auth IDR (E Kinast) Ser A (LOC: JPMorgan Chase Bank) 1.250 07/02/09 700,000
1,800,000 IN Hlth Fac Fing Auth Rev (Clark Mem Hosp) (LOC: JPMorgan Chase Bank) 0.350 07/02/09 1,800,000
1,500,000 IN St Fin Auth Rev (LOC: Allied Irish Bank PLC) 0.770 07/02/09 1,500,000
850,000 Indianapolis IN EDR (Pedcor Invts Wtrfront B) (LOC: FHLB) 0.700 07/02/09 850,000
725,000 Indianapolis IN MFH Rev (Nora Commons) (LOC: FHLB) 0.700 07/02/09 725,000
1,900,000 Jacksonville FL Edl Facs Rev (Edward Waters College)
(LOC: Wachovia Bank NA) 0.470 07/02/09 1,900,000
345,000 Lancaster NE IDR (Garner Inds) Ser B (LOC: Wells Fargo Bank) 0.450 07/02/09 345,000
800,000 Lexington-Fayette Co KY Govt IBR (Liberty Ridge) (LOC: US Bank NA) 0.600 07/02/09 800,000
1,985,000 Lexington-Fayette Co KY Rev IBR (Eastland Pkwy) (LOC: US Bank NA) 0.500 07/02/09 1,985,000
600,000 Lucas Co OH Hosp Rev (Sunshine Inc Northwest OH)
(LOC: National City Bank) 0.850 07/02/09 600,000
1,000,000 MA St Dev Fin Agy Rev (Seven Hills Fndtn) (LOC: TD Banknorth NA) 0.500 07/02/09 1,000,000
240,000 Maricopa Co AZ IDA Hsg Rev (San Angelin Apts) (LOC: FNMA) 0.500 07/02/09 240,000
1,000,000 Marion Co FL IDA Rev MFH (Chambrel) (LOC: FNMA) 0.320 07/02/09 1,000,000
245,000 Oakland CA Liq Fac Rev (Assoc Bay Area Govt) (LOC: Bank of the West) 0.450 07/02/09 245,000
1,000,000 OH St Higher Edl Fac Rev (Otterbein College)
(LOC: JPMorgan Chase Bank) 2.100 07/02/09 1,000,000
2,038,000 Orange Co FL IDA Rev (Trinity Prep Sch Inc) (LOC: Wachovia Bank NA) 0.470 07/02/09 2,038,000
350,000 Palm Beach Co FL Rev (Henry Morrison Flagler)
(LOC: Northern Trust Co) 0.520 07/02/09 350,000
800,000 Richland Co OH Hlthcare Facs Rev (Wesleyan) Ser B
(LOC: JPMorgan Chase Bank) 0.330 07/02/09 800,000
1,370,000 Seneca Gardens KY Edl Facs Rev (Louisville Presbyterian)
(LOC: National City Bank) 0.550 07/02/09 1,370,000
1,000,000 Southglenn Met Dist CO Rev (LOC: BNP Paribas) 0.350 07/02/09 1,000,000
1,500,000 St Charles Co MO IDA Rev (National Cart) Ser A (LOC: US Bank NA) 1.050 07/02/09 1,500,000
700,000 Volusia Co FL IDA Rev (Retirement Hsg Fndtn) (LOC: KBC Bank NV) 0.300 07/02/09 700,000
715,000 Weber Co UT Indl Rev (Enable Inds Inc) (LOC: Wells Fargo Bank NA) 0.370 07/02/09 715,000
450,000 Monroe Co NY IDA Rev (Natl Dev Council Multi A)
(LOC: HSBC Bank USA NA) 4.000 06/15/10 450,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING & VARIABLE RATE DEMAND NOTES $ 41,448,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Amortized Cost $63,267,666) $ 63,267,666
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% 52,118
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 63,319,784
============================================================================================================================
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. Fore more information
on valuation inputs, and their aggregation in the levels used in the table
below, please refer to the Security Valuation section in the accompanying Notes
to Financial Statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Municipal Bonds $ -- $63,267,666 $ -- $63,267,666
See accompanying notes to portfolios of investments and notes to financial
statements.
35
- --------------------------------------------------------------------------------
Notes to Portfolios of Investments
June 30, 2009
- --------------------------------------------------------------------------------
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, 2009.
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
CISD - Consolidated Independent School District
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
GANS - Grant Anticipation Notes
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
LOC - Letter of Credit
LSD - Local School District
LTGO - Limited Tax General Obligation
MBIA - Municipal Bond Insurance Association
MFH - Multi-Family Housing
PCR - Pollution Control Revenue
PLC - Public Limited Company
SD - School District
SPA - Stand-by Purchase Agreement
TANS - Tax Anticipation Notes
TAWS - Tax Anticipation Warrants
TIF - Tax Increment Financing
UTGO - Unlimited Tax General Obligation
36
- --------------------------------------------------------------------------------
Portfolio Composition (Unaudited)
June 30, 2009
- --------------------------------------------------------------------------------
As of June 30, 2009, 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 87.8% 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, 2009, 30.7% of the
portfolio securities of the Tax-Free Money Market Fund were concentrated in the
State of Ohio, 11.2% in the State of Indiana and 8.9% in the State of Kentucky.
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, 2009, 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, 2009, 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 7.5% 44.1% 4.1% 8.9%
- ------------------------------------------------------------------------------------------------------
Revenue Bonds:
Industrial Development/
Pollution Control 1.7% -- 4.1% 9.9%
Hospital/Health Care 11.1% 13.2% 35.5% 14.2%
Utilities/Water & Sewer 11.1% 7.5% 8.4% 4.6%
Education 10.6% 10.6% 24.6% 23.0%
Housing/Mortgage 37.4% -- 0.9% 11.0%
Economic Development -- -- 2.5% 11.8%
Public Facilities 4.4% -- 3.3% --
Transportation -- 3.5% 0.9% --
Special Tax -- -- 4.7% 8.9%
Miscellaneous 16.2% 21.1% 11.0% 7.7%
- ------------------------------------------------------------------------------------------------------
Total Investments 100.0% 100.0% 100.0% 100.0%
======================================================================================================
37
- --------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Touchstone Tax-Free Trust:
We have audited the accompanying statements of assets and liabilities, including
the 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 (collectively,
"the Funds") as of June 30, 2009, 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, 2009, 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 portfolios constituting the Touchstone Tax-Free Trust at June
30, 2009, 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 26, 2009
38
- --------------------------------------------------------------------------------
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, 2009 through June 30, 2009).
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, 2009" 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.
39
- --------------------------------------------------------------------------------
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,
2009 2009 2009 2009*
- ---------------------------------------------------------------------------------------------------------------
FLORIDA TAX-FREE MONEY MARKET FUND
Actual 0.78% $ 1,000.00 $ 1,000.50 $ 3.85
Hypothetical 0.78% $ 1,000.00 $ 1,020.95 $ 3.89
OHIO TAX-FREE BOND FUND
Class A Actual 0.84% $ 1,000.00 $ 1,057.50 $ 4.29
Class A Hypothetical 0.84% $ 1,000.00 $ 1,020.63 $ 4.21
Class C Actual 1.58% $ 1,000.00 $ 1,053.60 $ 8.05
Class C Hypothetical 1.58% $ 1,000.00 $ 1,016.95 $ 7.91
OHIO TAX-FREE MONEY MARKET FUND
Retail Class Actual 0.79% $ 1,000.00 $ 1,001.30 $ 3.92
Retail Class Hypothetical 0.79% $ 1,000.00 $ 1,020.87 $ 3.96
Institutional Class Actual 0.54% $ 1,000.00 $ 1,002.50 $ 2.68
Institutional Class Hypothetical 0.54% $ 1,000.00 $ 1,022.11 $ 2.71
TAX-FREE MONEY MARKET FUND
Class A Actual 0.92% $ 1,000.00 $ 1,001.60 $ 4.59
Class A Hypothetical 0.92% $ 1,000.00 $ 1,020.21 $ 4.63
Class S Actual 1.14% $ 1,000.00 $ 1,000.50 $ 5.65
Class S Hypothetical 1.14% $ 1,000.00 $ 1,019.14 $ 5.71
* 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).
40
- --------------------------------------------------------------------------------
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 President and CEO of IFS 40 Director of LaRosa's (a
Touchstone Advisors, Inc President retirement at Financial Services, Inc. restaurant chain), Capital
303 Broadway age 75 or until (a holding company). Analysts Incorporated (an
Cincinnati, OH she resigns or investment advisor and broker-
Year of Birth: 1955 is removed dealer), IFS Financial Services,
Trustee since Inc. (a holding company), IFS
1999 Fund Distributors (a broker-
dealer), Integrity and National
Integrity Life Insurance
Co., Touchstone Securities
(the Trust's distributor),
Touchstone Advisors (the
Trust's investment advisor
and administrator), W&S
Brokerage Services (a broker-
dealer) and W&S Financial
Group Distributors (a
distribution company).
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------------------
Phillip R. Cox Trustee Until President and Chief 40 Director of Cincinnati Bell (a
105 East Fourth Street retirement at Executive Officer of Cox communications company),
Cincinnati, OH age 75 or until Financial Corp. Bethesda Inc. (a hospital),
Year of Birth: 1947 he resigns or is (a financial services Timken Co. (a manufacturing
removed company). company), Diebold (a
Trustee since technology solutions
1999 company), and Ohio Business
Alliance for Higher Education.
- ------------------------------------------------------------------------------------------------------------------------------------
H. Jerome Lerner Trustee Until Principal of HJL 40 None
c/o Touchstone retirement at Enterprises (a privately
Advisors, Inc. age 75 or until held investment company).
303 Broadway he resigns or is
Cincinnati, OH removed
Year of Birth: 1938 Trustee since
1989
- ------------------------------------------------------------------------------------------------------------------------------------
41
- --------------------------------------------------------------------------------
Management of the Trust (Continued)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES (CONTINUED):
- ------------------------------------------------------------------------------------------------------------------------------------
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)
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Siekmann Trustee Until Executive for Duro Bag 40 None
c/o Touchstone retirement at Manufacturing Co. (a bag
Advisors, Inc. age 75 or until manufacturer) from
303 Broadway he resigns or is 2002-2008. President of Shor
Cincinnati, OH removed Foundation for Epilepsy
Year of Birth: 1938 Trustee since Research (a charitable
2005 foundation).
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Stautberg Trustee Until Retired Partner of KPMG LLP 40 Trustee of Tri-Health
c/o Touchstone retirement at (a certified public Physician Enterprise
Advisors, Inc. age 75 or until accounting firm). Corporation.
303 Broadway he resigns or is Vice President of St. Xavier
Cincinnati, OH removed High School.
Year of Birth: 1934 Trustee since
1999
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Zanotti Trustee Until CEO, Chairman and Director 40 None
c/o Touchstone retirement at of Avaton, Inc. (a wireless
Advisors, Inc. age 75 or until entertainment company)
303 Broadway he resigns or is until 2006. President
Cincinnati, OH removed of Cincinnati Biomedical
Year of Birth: 1948 Trustee since (a life science and economic
2002 development company) from
2003-2007. Chairman of
Integrated Media Technologies
(a media company).
- ------------------------------------------------------------------------------------------------------------------------------------
Susan J. Hickenlooper Trustee Until President and Trustee of 40 Trustee of Gateway
c/o Touchstone retirement at Episcopal Retirement Homes Trust (a charitable
Advisors, Inc. age 75 or until Foundation organization), Trustee
303 Broadway she resigns or of Cincinnati Parks
Cincinnati, OH is removed Foundation.
Year of Birth: 1946 Trustee since
2009
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Ms. McGruder, as a director of the Advisor and the Distributor, and an
officer of affiliates of the Advisor and the 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, 11 series
of Touchstone Funds Group Trust, 4 series of Touchstone Institutional
Funds Trust, 4 series of Touchstone Investment Trust, 6 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.
42
- --------------------------------------------------------------------------------
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. McGruder President Until resignation, See biography above. 40 See biography
Touchstone Advisors, Inc. removal or above.
303 Broadway disqualification
Cincinnati, OH President since
Year of Birth: 1955 2004; President
from 2000-2002
- ------------------------------------------------------------------------------------------------------------------------------------
Brian E. Hirsch Vice Until resignation, Senior Vice President and Chief 40 None
Touchstone Advisors, Inc. President removal or Compliance Officer of IFS
303 Broadway and Chief disqualification Financial Services, Inc.
Cincinnati, OH Compliance Vice President
Year of Birth: 1956 Officer since 2003
- ------------------------------------------------------------------------------------------------------------------------------------
William A. Dent Vice Until resignation, Senior Vice President of Touchstone 40 None
Touchstone Advisors, Inc. President removal or Advisors, Inc.
303 Broadway disqualification
Cincinnati, OH Vice President
Year of Birth: 1963 since 2004
- ------------------------------------------------------------------------------------------------------------------------------------
Gregory A. Harris Vice Until resignation, Vice President-Fund Administration of 40 None
Touchstone Advisors, Inc. President removal or Touchstone Investments;
303 Broadway disqualification Managing Director, Fund Project Services,
Cincinnati, OH Vice President Inc. 1998 - 2007
Year of Birth: 1968 since 2007
- ------------------------------------------------------------------------------------------------------------------------------------
Terrie A. Wiedenheft Controller Until resignation, Chief Financial Officer of IFS Financial 40 None
Touchstone Advisors, Inc. and Treasurer removal or Services Inc.
303 Broadway disqualification
Cincinnati, OH Controller since
Year of Birth: 1962 2000; Treasurer
since 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Jay S. Fitton Secretary Until resignation, Assistant Vice President and Senior 40 None
JPMorgan removal or Counsel at JPMorgan Chase
303 Broadway disqualification Bank, N.A.
Cincinnati, OH Secretary since
Year of Birth: 1970 2006; Assistant
Secretary from
2002-2006
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Each officer also holds the same office with 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, 11 series
of Touchstone Funds Group Trust, 4 series of Touchstone Institutional
Funds Trust, 4 series of Touchstone Investment Trust, 6 series of
Touchstone Strategic Trust, and 11 variable annuity series of Touchstone
Variable Series Trust.
43
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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
[LOGO] TOUCHSTONE(R)
INVESTMENTS
303 Broadway, Suite 1100
Cincinnati, OH 45202-4203
- --------------------------------------------------------------------------------
[LOGO] eDelivery
Go paperless, sign up today at:
www.touchstoneinvestments.com/home
TSF-58-TTFT-AR-0906
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 $61,080 for the June 30, 2009
fiscal year and approximately $63,400 for the June 30, 2008 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, 2009 fiscal year and approximately $6,000 for the June 30, 2008 fiscal
year and consisted of limited internal control testing of the registrant's fund
accountant and transfer agent.
(c) Tax Fees. Tax fees totaled approximately $17,200 for the June 30, 2009
fiscal year and $17,200 for the June 30, 2008 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, 2009 or June 30, 2008 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 $23,200 for the fiscal year ended June 30, 2009
and $52,200 for the fiscal year ended June 30, 2008.
(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
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By (Signature and Title)
/s/ Jill T. McGruder
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Jill T. McGruder
President
Date: August 18, 2009
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 18, 2009
/s/ Terrie A. Wiedenheft
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Terrie A. Wiedenheft
Controller & Treasurer
Date: August 18, 2009