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: 811-03162
Active Asset Tax Free Trust
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)
Kevin Klingert
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrants telephone number, including area code: 212-296-6990
Date of fiscal year end: June 30, 2012
Date of reporting period: December 31, 2011
Item 1Report to Shareholders
Welcome, Shareholder:
In this report, youll learn about how your investment in Active Assets Tax-Free Trust performed during the semiannual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Funds financial statements and a list of Fund investments.
This material must be preceded or accompanied by a prospectus for the fund being offered.
Market forecasts provided in this report may not necessarily come to pass. There is no assurance that a mutual fund will achieve its investment objective. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the Fund. Please see the prospectus for more complete information on investment risks.
Active Assets Tax-Free Trust
3 | ||||
6 | ||||
7 | ||||
19 | ||||
20 | ||||
21 | ||||
22 | ||||
28 | ||||
29 |
For the six months ended December 31, 2011
Market Conditions
The six-month review period incorporated an improving credit picture for states and a decline in negative headlines. Most states have shown both an ability and willingness to cut expenditures; states, cities and school districts continued to trim their payrolls in a cost-cutting effort that has helped to improve the financial condition of state and local governments. Much of this effort was undertaken to close $91 billion in gaps in fiscal 2012 budgets, which arose after tax revenue was slammed by the longest recession since the Great Depression, according to the National Conference of State Legislatures. California may face a $13 billion deficit, while New York, the third-largest, projects a $3.5 billion gap.
In addition to these reductions in spending, municipalities have also benefited from steady growth in tax revenues. Tax collection data for the third quarter of 2011 show growth in overall state tax collections, as well as for personal income tax and sales tax revenue, for the seventh consecutive quarter. Among 48 early reporting states, all but three showed gains during the third quarter. Some states have also made progress in dealing with pension reform.
At the national level, only $295 billion of tax-exempt bonds were issued during 2011, down almost 32 percent from 2010 issuance of $433 billion. It was the lowest amount of issuance since 2001. Issuance of Variable Rate Demand Obligations (VRDOs), which represent the majority of short-term tax exempt instruments, was down 34 percent from 2010.
Performance Analysis
As of December 31, 2011, Active Assets Tax-Free Trust had net assets of approximately $9.2 billion and an average portfolio maturity of 17 days. For the six-month period ended December 31, 2011, the Fund provided a total return of 0.01 percent. For the seven-day period ended December 31, 2011, the Fund provided an effective annualized yield of 0.01 percent (subsidized) and 0.31 percent (non-subsidized) and a current yield of 0.01 percent (subsidized) and 0.31 percent (non-subsidized), while its 30-day moving average yield for December was 0.01 percent (subsidized) and 0.31 percent (non-subsidized). Yield quotations more closely reflect the current earnings of the Fund. The non-subsidized yield reflects what the yield would have been had a fee and/or expense waiver not been in place during the period shown. Past performance is no guarantee of future results.
Despite much improved market liquidity and strong demand for bonds, in our view, it is a time for careful diligence and diversification of investment portfolios. In keeping with this view, we maintained high levels of liquidity in the portfolio, with an average of 85 percent of assets invested in daily and weekly variable rate demand obligations (VRDOs). We also kept the average maturity of the portfolio relatively short, in a range of 16 to 24 days. Throughout, safety of capital has been our main priority, with an emphasis on managing exposure to institutions under stress.
Recent economic data has been sending mixed signals and many investors are likely to continue to tread cautiously. Barring any unexpected shocks to the market, we believe rates are likely to remain low
3
through 2012. During this period of ongoing uncertainty, we continue to maintain a watchful eye on state and local economies.
There is no guarantee that any sectors mentioned will continue to perform as discussed herein or that securities in such sectors will be held by the Fund in the future.
PORTFOLIO COMPOSITION as of 12/31/11 | ||||
Weekly Variable Rate Bonds |
65.9 | % | ||
Daily Variable Rate Bonds |
15.3 | |||
Commercial Paper |
9.5 | |||
Closed-End Investment Companies |
4.6 | |||
Put Option Bonds |
2.5 | |||
Municipal Bonds & Notes |
2.1 | |||
Investment Company |
0.1 |
MATURITY SCHEDULE as of 12/31/11 | ||||
1 30 Days |
93.6 | % | ||
31 60 Days |
0.8 | |||
61 90 Days |
0.5 | |||
91 120 Days |
0.9 | |||
121 + Days |
4.2 |
Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned above. Portfolio composition and maturity schedule are as a percentage of total investments. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.
Investment Strategy
The Fund will invest in high quality, short-term securities that are normally municipal obligations that pay interest exempt from federal income taxes. The Adviser seeks to maintain the Funds share price at $1.00. The Fund has a fundamental policy of investing at least 80 percent of its net assets in securities the interest on which is exempt from federal personal income tax. This policy may not be changed without shareholder approval. In addition, the Fund may invest up to 20 percent of its net assets in securities that pay interest income subject to the alternative minimum tax, and some taxpayers may have to pay tax on a Fund distribution of this income. For more information, please see the Tax Consequences section of the Funds Prospectus.
An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
For More Information
About Portfolio Holdings
Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semiannual reports and the annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders and makes these reports available on its public web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on
4
Form N-Q and monthly holdings for each money market fund on Form N-MFP. Morgan Stanley does not deliver these reports to shareholders, nor are the first and third fiscal quarter reports posted to the Morgan Stanley public web site. However, the holdings for each money market fund are posted to the Morgan Stanley public web site. You may obtain the Form N-Q filings (as well as the Form N-CSR, N-CSRS and N-MFP filings) by accessing the SEC's web site, http://www.sec.gov. You may also review and copy them at the SEC's public reference room in Washington, DC. Information on the operation of the SEC's public reference room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the public reference section of the SEC, Washington, DC 20549-1520.
Householding Notice
To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 869-NEWS, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.
5
As a shareholder of the Fund, you incur costs, including advisory fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 07/01/11 12/31/11.
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 Period 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 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 cost of investing in the Fund 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds that have transactional costs, such as sales charges (loads) or exchange fees.
Beginning Account Value |
Ending Account Value |
Expenses Paid During Period@ |
||||||||||
07/01/11 | 12/31/11 | 07/01/11 12/31/11 |
||||||||||
Actual (0.01% return) |
$ | 1,000.00 | $ | 1,000.10 | $ | 0.60 | ||||||
Hypothetical (5% annual return before expenses) |
$ | 1,000.00 | $ | 1,024.40 | $ | 0.61 |
@ | Expenses are equal to the Funds annualized expense ratio of 0.12% multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). If the fund had borne all of its expenses, the annualized expense ratio would have been 0.41%. |
6
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited)
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Weekly Variable Rate Bonds (65.6%) |
||||||||||||||||||||
$ | 12,500 | Alaska Housing Finance Corporation, Home Mortgage |
0.07 | % | 01/06/12 | 12/01/40 | $ | 12,500,000 | ||||||||||||
Arizona Health Facilities Authority, |
||||||||||||||||||||
23,980 | Banner Health Ser 2008 C |
0.07 | 01/06/12 | 01/01/35 | 23,980,000 | |||||||||||||||
12,600 | Banner Health Ser 2008 D ROCs II-R Ser 11687 |
0.12 | 01/06/12 | 07/01/25 | 12,600,000 | |||||||||||||||
38,575 | Banner Health Ser 2008 G |
0.09 | 01/06/12 | 01/01/29 | 38,575,000 | |||||||||||||||
Barclays Capital Municipal Trust Receipts, MA |
||||||||||||||||||||
6,905 | Massachusetts Health & Educational Facilities Authority MIT Ser 2008 N Floater-TRs Ser 15W |
0.08 | 01/06/12 | 07/01/38 | 6,905,000 | |||||||||||||||
20,015 | Massachusetts School Building Authority Senior Dedicated Sales Tax Ser 2011 B Floater-TRs |
0.09 | 01/06/12 | 10/15/41 | 20,015,000 | |||||||||||||||
15,590 | BB&T Municipal Trust, AZ, Salt River Project Agricultural Improvement & Power District Ser 2008 A Floater Certificates Ser 9 |
0.08 | 01/06/12 | 01/01/16 | 15,590,000 | |||||||||||||||
BB&T Municipal Trust, FL, |
||||||||||||||||||||
23,625 | Seminole County Water & Sewer Ser 2006 Floater Certificates Ser 45 |
0.09 | 01/06/12 | 10/01/14 | 23,625,000 | |||||||||||||||
9,960 | Tampa Bay Water Ser 2008 Floater Certificates |
0.09 | 01/06/12 | 04/01/16 | 9,960,000 | |||||||||||||||
10,265 | BB&T Municipal Trust, NY, New York City Fiscal 2008 Subser C-1 Floater Certificates Ser 2055 |
0.09 | 01/06/12 | 10/01/15 | 10,265,000 | |||||||||||||||
California Health Facilities Financing Authority, |
||||||||||||||||||||
71,995 | Kaiser Permanente Ser 2006 C |
0.07 | 01/06/12 | 06/01/41 | 71,995,000 | |||||||||||||||
47,100 | Stanford Hospital Ser 2008 B-1 |
0.06 | 01/06/12 | 11/15/45 | 47,100,000 | |||||||||||||||
California Statewide Communities Development Authority, |
||||||||||||||||||||
78,560 | Gas Supply Sacramento Municipal Utility District |
0.08 | 01/06/12 | 11/01/40 | 78,560,000 | |||||||||||||||
69,580 | Kaiser Permanente Ser 2002 E |
0.06 | 01/06/12 | 11/01/36 | 69,580,000 | |||||||||||||||
30,000 | Kaiser Permanente Ser 2003 D |
0.06 | 01/06/12 | 05/01/33 | 30,000,000 | |||||||||||||||
15,310 | Cape Girardeau County Industrial Development Authority, MO, St. Francis Medical Center Ser 2009 B |
0.13 | 01/06/12 | 06/01/39 | 15,310,000 | |||||||||||||||
Capital Beltway Funding Corporation of Virginia, |
||||||||||||||||||||
53,700 | Senior Lien Toll I-495 Hot Lanes Ser 2008 C |
0.03 | 01/06/12 | 12/31/47 | 53,700,000 | |||||||||||||||
40,000 | Senior Lien Toll I-495 Hot Lanes Ser 2008 D |
0.03 | 01/06/12 | 12/31/47 | 40,000,000 | |||||||||||||||
87,110 | Central Plains Energy Project, NE, Gas Project No. 2 |
0.09 | 01/06/12 | 08/01/39 | 87,110,000 | |||||||||||||||
60,685 | Charlotte, NC, Water & Sewer System Ser 2002 C |
0.06 | 01/06/12 | 07/01/27 | 60,685,000 | |||||||||||||||
5,900 | Chicago Board of Education, IL, Ser 2009 A-2 |
0.10 | 01/06/12 | 03/01/26 | 5,900,000 | |||||||||||||||
4,850 | Chicago, IL, Ser 2008 A ROCs II-R Ser 11940 |
0.13 | 01/06/12 | 07/01/28 | 4,850,000 | |||||||||||||||
22,600 | Colorado Housing & Finance Authority, Single Family Mortgage Class I 2005 Ser B-2 |
0.08 | 01/06/12 | 05/01/34 | 22,600,000 |
See Notes to Financial Statements
7
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Colorado Springs, CO, |
||||||||||||||||||||
$ | 70,900 | Utilities System Sub Lien Ser 2004 A |
0.10 | % | 01/06/12 | 11/01/23 | $ | 70,900,000 | ||||||||||||
45,125 | Utilities System Sub Lien Ser 2006 A |
0.10 | 01/06/12 | 11/01/25 | 45,125,000 | |||||||||||||||
25,000 | Utilities System Sub Lien Ser 2007 B |
0.10 | 01/06/12 | 11/01/26 | 25,000,000 | |||||||||||||||
29,035 | Utilities System Sub Lien Ser 2009 C |
0.08 | 01/06/12 | 11/01/28 | 29,035,000 | |||||||||||||||
Columbus, OH, |
||||||||||||||||||||
23,580 | Sewer Ser 2008 B |
0.04 | 01/06/12 | 06/01/32 | 23,580,000 | |||||||||||||||
1,400 | Sewer Ser 2008 PUTTERs Ser 2456 |
0.10 | 01/06/12 | 12/01/15 | 1,400,000 | |||||||||||||||
5,200 | Dallas Area Rapid Transit, TX, Sales Tax Ser 2008 |
0.10 | 01/06/12 | 06/01/16 | 5,200,000 | |||||||||||||||
39,530 | Delaware River Port Authority, PA, Ser 2008 B |
0.08 | 01/06/12 | 01/01/26 | 39,530,000 | |||||||||||||||
14,845 | Derry Township Industrial & Commercial Development Authority, PA, Hotel Tax Arena Ser 2000 A |
0.09 | 01/06/12 | 11/01/30 | 14,845,000 | |||||||||||||||
5,935 | District of Columbia Water & Sewer Authority, Public Utility Ser 1998 PUTTERs Ser 2964 (AGM) |
0.12 | 01/06/12 | 04/01/20 | 5,935,000 | |||||||||||||||
9,615 | Eclipse Funding Trust, WA, Seattle Water System |
0.09 | 01/06/12 | 09/01/29 | 9,615,000 | |||||||||||||||
Fairfax County Industrial Development Authority, VA, |
||||||||||||||||||||
8,900 | Inova Health System Foundation Ser 1988 A |
0.11 | 01/06/12 | 10/01/25 | 8,900,000 | |||||||||||||||
8,900 | Inova Health System Foundation Ser 1988 B |
0.11 | 01/06/12 | 10/01/25 | 8,900,000 | |||||||||||||||
44,960 | Inova Health System Foundation Ser 2000 |
0.09 | 01/06/12 | 01/01/30 | 44,960,000 | |||||||||||||||
16,000 | Florida State Board of Education, FL, Capital Outlay |
0.09 | 01/06/12 | 10/15/16 | 16,000,000 | |||||||||||||||
9,035 | Florida Turnpike Authority, Ser 2008 A PUTTERs |
0.10 | 01/06/12 | 07/01/15 | 9,035,000 | |||||||||||||||
20,000 | Franklin County, OH, OhioHealth Corp. Ser 2009 A |
0.08 | 01/06/12 | 11/15/41 | 20,000,000 | |||||||||||||||
Gainesville, FL, |
||||||||||||||||||||
80,690 | Utilities System 2007 Ser A |
0.06 | 01/06/12 | 10/01/36 | 80,690,000 | |||||||||||||||
53,600 | Utilities System 2008 Ser B |
0.06 | 01/06/12 | 10/01/38 | 53,600,000 | |||||||||||||||
15,300 | Guilford County, NC, Ser 2005 B |
0.07 | 01/06/12 | 03/01/25 | 15,300,000 | |||||||||||||||
Highlands County Health Facilities Authority, FL, |
||||||||||||||||||||
38,200 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/21 | 38,200,000 | |||||||||||||||
49,650 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/35 | 49,650,000 | |||||||||||||||
44,425 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/35 | 44,425,000 | |||||||||||||||
42,500 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/27 | 42,500,000 | |||||||||||||||
44,000 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/29 | 44,000,000 | |||||||||||||||
18,665 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/30 | 18,665,000 |
See Notes to Financial Statements
8
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
$ | 4,175 | Adventist Health System/Sunbelt Obligated Group |
0.11 | % | 01/06/12 | 11/15/14 | $ | 4,175,000 | ||||||||||||
26,870 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/37 | 26,870,000 | |||||||||||||||
20,000 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/26 | 20,000,000 | |||||||||||||||
26,500 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/26 | 26,500,000 | |||||||||||||||
20,000 | Adventist Health System/Sunbelt Obligated Group |
0.06 | 01/06/12 | 11/15/26 | 20,000,000 | |||||||||||||||
55,300 | Houston, TX, Combined Utility System First Lien |
0.04 | 01/06/12 | 05/15/34 | 55,300,000 | |||||||||||||||
Illinois Toll Highway Authority, |
||||||||||||||||||||
45,900 | Toll Highway Senior Priority Ser 2007 A-1B |
0.08 | 01/06/12 | 07/01/30 | 45,900,000 | |||||||||||||||
60,000 | Toll Highway Senior Priority Ser 2007 A-2B |
0.08 | 01/06/12 | 07/01/30 | 60,000,000 | |||||||||||||||
Indiana Finance Authority, |
||||||||||||||||||||
20,075 | Ascension Health Senior Credit Group Ser 2008 E-7 |
0.07 | 01/06/12 | 11/15/33 | 20,075,000 | |||||||||||||||
25,000 | Sisters of St. Francis Health Services, Inc. |
0.06 | 01/06/12 | 09/01/48 | 25,000,000 | |||||||||||||||
112,005 | Trinity Health Ser 2008 D-1 |
0.04 | 01/06/12 | 12/01/34 | 112,005,000 | |||||||||||||||
106,505 | Trinity Health Ser 2008 D-2 |
0.04 | 01/06/12 | 12/01/34 | 106,505,000 | |||||||||||||||
11,000 | Indiana Health Facility Financing Authority, Ascension Health Ser 2003 E-6 |
0.10 | 01/06/12 | 11/15/39 | 11,000,000 | |||||||||||||||
19,170 | Iowa Finance Authority, CHF-Des Moines LLC |
0.11 | 01/06/12 | 06/01/39 | 19,170,000 | |||||||||||||||
10,000 | Iowa Higher Education Loan Authority, Grinnell College |
0.09 | 01/06/12 | 06/01/23 | 10,000,000 | |||||||||||||||
8,000 | J P Morgan Chase & Co., NH, New Hampshire Health & Higher Education Facilities Authority LRG Healthcare Ser 2009 PUTTERs Ser 3648 |
0.10 | 01/06/12 | 10/01/17 | 8,000,000 | |||||||||||||||
Kansas Department of Transportation, |
||||||||||||||||||||
3,840 | Highway Ser 2004 A PUTTERs Ser 2969 (AGM) |
0.10 | 01/06/12 | 09/01/12 | 3,840,000 | |||||||||||||||
40,275 | Highway Ser 2008 A-4 |
0.06 | 01/06/12 | 09/01/14 | 40,275,000 | |||||||||||||||
23,000 | Kent Hospital Finance Authority, MI, Spectrum Health |
0.08 | 01/06/12 | 01/15/47 | 23,000,000 | |||||||||||||||
King County, WA, |
||||||||||||||||||||
11,650 | Limited Tax Sewer Ser 2010 A |
0.05 | 01/06/12 | 01/01/40 | 11,650,000 | |||||||||||||||
26,365 | Limited Tax Sewer Ser 2010 A |
0.05 | 01/06/12 | 01/01/40 | 26,365,000 | |||||||||||||||
43,000 | Sewer Ser 2007 Eagle #20070084 Class A (AGM) |
0.10 | 01/06/12 | 01/01/47 | 43,000,000 | |||||||||||||||
52,265 | Loudoun County Industrial Development Authority, VA, Howard Hughes Medical Institute Ser 2003 D |
0.08 | 01/06/12 | 02/15/38 | 52,265,000 | |||||||||||||||
94,940 | Main Street Natural Gas, Inc., GA, Gas Ser 2010 A |
0.09 | 01/06/12 | 08/01/40 | 94,940,000 |
See Notes to Financial Statements
9
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Maryland Economic Development Corporation, |
||||||||||||||||||||
$ | 58,400 | Howard Hughes Medical Institute Ser 2008 A |
0.05 | % | 01/06/12 | 02/15/43 | $ | 58,400,000 | ||||||||||||
71,700 | Howard Hughes Medical Institute Ser 2008 B |
0.07 | 01/06/12 | 05/15/43 | 71,700,000 | |||||||||||||||
7,125 | Maryland Health & Higher Educational Facilities Authority, LifeBridge Health Ser 2008 ROCs II-R Ser 11594 (AGC) |
0.25 | 01/06/12 | 07/01/39 | 7,125,000 | |||||||||||||||
77,605 | Massachusetts, Refg 1998 Ser A |
0.07 | 01/06/12 | 09/01/16 | 77,605,000 | |||||||||||||||
Massachusetts Department of Transportation, |
||||||||||||||||||||
21,650 | Metropolitan Highway System 2010 Ser A5 |
0.04 | 01/06/12 | 01/01/39 | 21,650,000 | |||||||||||||||
28,900 | Metropolitan Highway System Contract Assistance |
0.06 | 01/06/12 | 01/01/29 | 28,900,000 | |||||||||||||||
47,010 | Metropolitan Highway System Contract Assistance |
0.06 | 01/06/12 | 01/01/37 | 47,010,000 | |||||||||||||||
62,495 | Metropolitan Highway System Contract Assistance |
0.04 | 01/06/12 | 01/01/39 | 62,495,000 | |||||||||||||||
Massachusetts Development Finance Agency, |
||||||||||||||||||||
35,025 | Boston University Ser U-6E |
0.07 | 01/06/12 | 10/01/42 | 35,025,000 | |||||||||||||||
30,710 | Phillips Academy Ser 2003 |
0.06 | 01/06/12 | 09/01/33 | 30,710,000 | |||||||||||||||
45,250 | Massachusetts Health & Educational Facilities Authority, Partners HealthCare System 2005 Ser F-3 |
0.06 | 01/06/12 | 07/01/40 | 45,250,000 | |||||||||||||||
Massachusetts Water Resources Authority, |
||||||||||||||||||||
20,000 | Gen Ser 2008 A-1 |
0.08 | 01/06/12 | 08/01/37 | 20,000,000 | |||||||||||||||
25,000 | Gen Ser 2008 A-2 |
0.06 | 01/06/12 | 08/01/37 | 25,000,000 | |||||||||||||||
44,300 | Gen Ser 2008 A-3 |
0.07 | 01/06/12 | 08/01/37 | 44,300,000 | |||||||||||||||
56,920 | Gen Ser 2008 C-2 |
0.08 | 01/06/12 | 11/01/26 | 56,920,000 | |||||||||||||||
55,755 | Gen Ser 2008 F |
0.05 | 01/06/12 | 08/01/29 | 55,755,000 | |||||||||||||||
20,550 | Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, TN, Vanderbilt University Ser 2005 A-2 |
0.03 | 01/06/12 | 10/01/44 | 20,550,000 | |||||||||||||||
Metropolitan Transportation Authority, NY, |
||||||||||||||||||||
13,000 | Dedicated Tax Ser 2008 B-1 |
0.07 | 01/06/12 | 11/01/34 | 13,000,000 | |||||||||||||||
24,445 | Ser 2005 B Eagle #20060114 Class A (BHAC) |
0.11 | 01/06/12 | 11/15/35 | 24,445,000 | |||||||||||||||
39,000 | Miami-Dade County Expressway Authority, FL, Toll System Ser 2006 Eagle #20060121 Class A (BHAC) |
0.11 | 01/06/12 | 07/01/37 | 39,000,000 | |||||||||||||||
109,500 | Michigan Finance Authority, Unemployment Obligation Assessment Ser 2011 |
0.24 | 01/06/12 | 07/01/14 | 109,500,000 | |||||||||||||||
4,795 | Michigan Hospital Finance Authority, Trinity Health Credit Group Ser 2006 A |
0.10 | 01/06/12 | 12/01/14 | 4,795,000 | |||||||||||||||
3,290 | Milwaukee Redevelopment Authority, WI, |
0.10 | 01/06/12 | 09/01/40 | 3,290,000 |
See Notes to Financial Statements
10
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Missouri Health & Educational Facilities Authority, |
||||||||||||||||||||
$ | 26,500 | Ascension Health Ser 2003 C-2 |
0.07 | % | 01/06/12 | 11/15/39 | $ | 26,500,000 | ||||||||||||
13,000 | Ascension Health Ser 2003 C-3 |
0.07 | 01/06/12 | 11/15/39 | 13,000,000 | |||||||||||||||
65,845 | BJC Health System Ser 2008 A |
0.04 | 01/06/12 | 05/15/38 | 65,845,000 | |||||||||||||||
37,960 | BJC Health System Ser 2008 B |
0.02 | 01/06/12 | 05/15/38 | 37,960,000 | |||||||||||||||
36,375 | BJC Health System Ser 2008 C |
0.04 | 01/06/12 | 05/15/38 | 36,375,000 | |||||||||||||||
66,700 | BJC Health System Ser 2008 D |
0.03 | 01/06/12 | 05/15/38 | 66,700,000 | |||||||||||||||
12,500 | BJC Health System Ser 2008 E |
0.07 | 01/06/12 | 05/15/38 | 12,500,000 | |||||||||||||||
Mobile Downtown Redevelopment Authority, AL, |
||||||||||||||||||||
40,600 | Gulf Opportunity Zone Austal USA LLC Ser 2011 A |
0.08 | 01/06/12 | 05/01/41 | 40,600,000 | |||||||||||||||
39,000 | Gulf Opportunity Zone Austal USA LLC Ser 2011 B |
0.08 | 01/06/12 | 05/01/41 | 39,000,000 | |||||||||||||||
Murray City, UT, |
||||||||||||||||||||
43,500 | IHC Health Services, Inc. Ser 2003 A |
0.06 | 01/06/12 | 05/15/36 | 43,500,000 | |||||||||||||||
70,900 | IHC Health Services, Inc. Ser 2003 B |
0.06 | 01/06/12 | 05/15/36 | 70,900,000 | |||||||||||||||
16,140 | New Castle County, DE, University Courtyard Apartments Ser 2005 |
0.11 | 01/06/12 | 08/01/31 | 16,140,000 | |||||||||||||||
39,450 | New Hampshire Higher Educational & Health Facilities Authority, St. Pauls School Ser 1998 |
0.08 | 01/06/12 | 01/01/28 | 39,450,000 | |||||||||||||||
32,750 | New Mexico Finance Authority, Sub Lien Ser 2008 |
0.05 | 01/06/12 | 12/15/26 | 32,750,000 | |||||||||||||||
25,075 | New Mexico Hospital Equipment Loan Council, Presbyterian Healthcare Services Ser 2008 |
0.09 | 01/06/12 | 08/01/34 | 25,075,000 | |||||||||||||||
39,890 | New Mexico Municipal Energy Acquisition Authority, Gas Supply Ser 2009 |
0.09 | 01/06/12 | 11/01/39 | 39,890,000 | |||||||||||||||
New York City, NY, |
||||||||||||||||||||
36,235 | Fiscal 2004 Subser H-2 |
0.06 | 01/06/12 | 03/01/34 | 36,235,000 | |||||||||||||||
9,580 | Fiscal 2005 Ser O ROCs II-R Ser 11685 |
0.10 | 01/06/12 | 06/01/20 | 9,580,000 | |||||||||||||||
69,000 | Fiscal 2008 Subser J-9 |
0.06 | 01/06/12 | 08/01/27 | 69,000,000 | |||||||||||||||
New York City Municipal Water Finance Authority, NY, |
||||||||||||||||||||
50,000 | Second General Fiscal 2003 F1B |
0.04 | 01/06/12 | 06/15/35 | 50,000,000 | |||||||||||||||
93,025 | Second General Fiscal 2010 Ser CC |
0.03 | 01/06/12 | 06/15/41 | 93,025,000 | |||||||||||||||
29,500 | Water & Sewer System Fiscal 2008 Ser B-2 |
0.05 | 01/06/12 | 06/15/24 | 29,500,000 | |||||||||||||||
78,025 | Water & Sewer System Fiscal 2008 Ser B-4 |
0.05 | 01/06/12 | 06/15/23 | 78,025,000 | |||||||||||||||
2,045 | Water & Sewer System Fiscal 2010 ROCs II-R |
0.10 | 01/06/12 | 06/15/18 | 2,045,000 | |||||||||||||||
30,000 | New York State Dormitory Authority, City University System Cons 5th Ser 2008 D |
0.08 | 01/06/12 | 07/01/31 | 30,000,000 | |||||||||||||||
12,000 | New York State Mortgage Agency, Homeowner Mortgage |
0.10 | 01/06/12 | 10/01/35 | 12,000,000 | |||||||||||||||
17,025 | North Broward Hospital District, FL, Ser 2008 A |
0.07 | 01/06/12 | 01/15/31 | 17,025,000 | |||||||||||||||
North Carolina Medical Care Commission, |
||||||||||||||||||||
77,520 | Duke University Health System Ser 2005 B |
0.06 | 01/06/12 | 06/01/28 | 77,520,000 | |||||||||||||||
19,605 | FirstHealth of the Carolinas Ser 2008 A |
0.09 | 01/06/12 | 10/01/28 | 19,605,000 |
See Notes to Financial Statements
11
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
$ | 56,950 | Novant Health Obligated Group Ser 2004 A |
0.09 | % | 01/06/12 | 11/01/34 | $ | 56,950,000 | ||||||||||||
21,105 | Novant Health Obligated Group Ser 2004 B |
0.09 | 01/06/12 | 11/01/34 | 21,105,000 | |||||||||||||||
26,965 | North Central Texas Health Facilities Development Corporation, Baylor Health Care System Ser 2006 A |
0.08 | 01/06/12 | 08/15/13 | 26,965,000 | |||||||||||||||
Ohio, |
||||||||||||||||||||
24,725 | Common Schools Ser 2005 B |
0.06 | 01/06/12 | 03/15/25 | 24,725,000 | |||||||||||||||
18,110 | Common Schools Ser 2006 B |
0.06 | 01/06/12 | 06/15/26 | 18,110,000 | |||||||||||||||
37,960 | Oregon Facilities Authority, PeaceHealth Ser 2008 A |
0.05 | 01/06/12 | 08/01/34 | 37,960,000 | |||||||||||||||
80,000 | Orlando Utilities Commission, FL, Utility System |
0.09 | 01/06/12 | 10/01/33 | 80,000,000 | |||||||||||||||
Orlando-Orange County Expressway Authority, FL, |
||||||||||||||||||||
20,000 | Ser 2003 C-4 |
0.08 | 01/06/12 | 07/01/25 | 20,000,000 | |||||||||||||||
30,090 | Ser 2007 A Eagle #20070107 Class A (BHAC) |
0.11 | 01/06/12 | 07/01/42 | 30,090,000 | |||||||||||||||
59,900 | Pennsylvania Housing Finance Agency, Single Family Mortgage Ser 2003 77B (AMT) |
0.08 | 01/06/12 | 10/01/33 | 59,900,000 | |||||||||||||||
15,000 | Pinellas County Health Facilities Authority, FL, Baycare Health System Ser 2009 A-2 |
0.08 | 01/06/12 | 11/01/38 | 15,000,000 | |||||||||||||||
Private Colleges & Universities Authority, GA, |
||||||||||||||||||||
49,150 | Emory University Ser 2005 C-1 |
0.09 | 01/06/12 | 09/01/36 | 49,150,000 | |||||||||||||||
54,525 | Emory University Ser 2005 C-5 |
0.09 | 01/06/12 | 09/01/36 | 54,525,000 | |||||||||||||||
86,865 | Raleigh, NC, Combined Enterprise System Ser 2008 A |
0.06 | 01/06/12 | 03/01/35 | 86,865,000 | |||||||||||||||
57,400 | RBC Municipal Products Trust, Inc., CA, Contra Costa Transportation Authority Sales Tax Ser 2010 Floater Certificates Ser E-17 |
0.10 | 01/06/12 | 03/01/34 | 57,400,000 | |||||||||||||||
20,000 | RBC Municipal Products Trust, Inc., CO, Denver City & County Airport System Ser 2008-C2 & C3 Floater Certificates Ser E-25 |
0.13 | 01/06/12 | 11/15/25 | 20,000,000 | |||||||||||||||
RBC Municipal Products Trust, Inc., PA, |
||||||||||||||||||||
12,320 | Allegheny County Hospital Development Authority University of Pittsburgh Medical Center Ser 2007 B-2 Floater Certificates Ser E-16 |
0.10 | 01/06/12 | 04/15/39 | 12,320,000 | |||||||||||||||
15,800 | Berks County Municipal Authority Reading Hospital & Medical Center Ser 2008 Floater Certificates |
0.10 | 01/06/12 | 11/01/12 | 15,800,000 | |||||||||||||||
22,480 | Berks County Municipal Authority Reading Hospital & Medical Center Ser 2009 A-1 & A-2 Floater Certificates Ser E-15 |
0.11 | 01/06/12 | 02/01/12 | 22,480,000 | |||||||||||||||
29,000 | RBC Municipal Products Trust, Inc., TX, Houston Combined Utility System First Lien Ser 2010 B Floater Certificates Ser E-14 |
0.10 | 01/06/12 | 05/15/34 | 29,000,000 | |||||||||||||||
21,725 | Richmond, KY, Kentucky League of Cities Funding Trust |
0.08 | 01/06/12 | 03/01/36 | 21,725,000 |
See Notes to Financial Statements
12
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
$ | 60,000 | Rochester, MN, Health Care Facilities Mayo Clinic |
0.05 | % | 01/06/12 | 11/15/38 | $ | 60,000,000 | ||||||||||||
20,705 | Sevier County Public Building Authority, TN, Local Government Public Improvement Ser VI-A-1 |
0.12 | 01/06/12 | 06/01/29 | 20,705,000 | |||||||||||||||
2,080 | South Carolina Educational Facilities Authority, Goodwill Industries Ser 2006 |
0.12 | 01/06/12 | 09/01/28 | 2,080,000 | |||||||||||||||
South Carolina Jobs Economic Development Authority, |
||||||||||||||||||||
1,000 | AnMed Health Ser 2009 A |
0.09 | 01/06/12 | 02/01/35 | 1,000,000 | |||||||||||||||
3,990 | AnMed Health Ser 2009 C |
0.09 | 01/06/12 | 02/01/33 | 3,990,000 | |||||||||||||||
26,455 | South Dakota Health & Educational Facilities Authority, Avera Health Ser 2008 A-2 |
0.08 | 01/06/12 | 07/01/38 | 26,455,000 | |||||||||||||||
6,360 | Southcentral Pennsylvania General Authority, WellSpan Health Series 2008 A ROCs II-R Ser 11686 |
0.10 | 01/06/12 | 12/01/24 | 6,360,000 | |||||||||||||||
Texas Transportation Commission, |
||||||||||||||||||||
37,800 | Mobility Fund Ser 2006 Eagle #20060126 Class A |
0.10 | 01/06/12 | 04/01/35 | 37,800,000 | |||||||||||||||
16,000 | Mobility Fund Ser 2007 Eagle #20070090 Class A |
0.10 | 01/06/12 | 04/01/37 | 16,000,000 | |||||||||||||||
16,070 | University of Colorado Hospital Authority, Ser 2011 A |
0.06 | 01/06/12 | 11/15/41 | 16,070,000 | |||||||||||||||
102,620 | University of Massachusetts Building Authority, Senior |
0.04 | 01/06/12 | 11/01/34 | 102,620,000 | |||||||||||||||
60,465 | University of Michigan Regents, General Ser 2008 B |
0.02 | 01/06/12 | 04/01/28 | 60,465,000 | |||||||||||||||
30,000 | University of North Carolina at Chapel Hill, Ser 2005 Eagle #720053014 Class A |
0.10 | 01/06/12 | 12/01/34 | 30,000,000 | |||||||||||||||
University of Texas Regents, |
||||||||||||||||||||
112,785 | Financing System Ser 2007 B |
0.02 | 01/06/12 | 08/01/33 | 112,785,000 | |||||||||||||||
66,225 | Financing System Ser 2008 B |
0.01 | 01/06/12 | 08/01/39 | 66,225,000 | |||||||||||||||
51,170 | Financing System Ser 2008 B |
0.02 | 01/06/12 | 08/01/32 | 51,170,000 | |||||||||||||||
77,300 | Permanent University Fund Ser 2008 A |
0.01 | 01/06/12 | 07/01/37 | 77,300,000 | |||||||||||||||
47,000 | Utah Board of Regents, Student Loan Ser 2011 A (AMT) |
0.12 | 01/06/12 | 11/01/45 | 47,000,000 | |||||||||||||||
Utah Water Finance Agency, |
||||||||||||||||||||
32,000 | Ser 2008 B |
0.10 | 01/06/12 | 10/01/37 | 32,000,000 | |||||||||||||||
28,700 | Ser 2008 B-2 |
0.10 | 01/06/12 | 10/01/35 | 28,700,000 | |||||||||||||||
Washington Health Care Facilities Authority, |
||||||||||||||||||||
36,180 | MultiCare Health System Ser 2007 C |
0.06 | 01/06/12 | 08/15/41 | 36,180,000 | |||||||||||||||
14,000 | Swedish Health Services Ser 2011 B |
0.09 | 01/06/12 | 11/15/46 | 14,000,000 | |||||||||||||||
9,530 | Washington Higher Education Facilities Authority, Seattle University Ser 2008 A |
0.10 | 01/06/12 | 05/01/28 | 9,530,000 | |||||||||||||||
|
|
|||||||||||||||||||
Total Weekly Variable Rate Bonds (Cost $6,042,905,000) | 6,042,905,000 | |||||||||||||||||||
|
|
See Notes to Financial Statements
13
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Daily Variable Rate Bonds (15.2%) |
||||||||||||||||||||
$ | 28,410 | Charlotte-Mecklenburg Hospital Authority, NC, Carolinas HealthCare System Ser 2007 H |
0.03 | % | 01/03/12 | 01/15/45 | $ | 28,410,000 | ||||||||||||
40,860 | Columbia, SC, Waterworks & Sewer System Ser 2009 |
0.05 | 01/03/12 | 02/01/38 | 40,860,000 | |||||||||||||||
51,600 | Geisinger Authority, PA, Geisinger Health System |
0.02 | 01/03/12 | 08/01/22 | 51,600,000 | |||||||||||||||
Harris County Cultural Education Facilities Financing Corporation, TX, |
||||||||||||||||||||
72,060 | Methodist Hospital System Ser 2008 C-1 |
0.04 | 01/03/12 | 12/01/24 | 72,060,000 | |||||||||||||||
43,085 | Methodist Hospital System Ser 2008 C-2 |
0.04 | 01/03/12 | 12/01/27 | 43,085,000 | |||||||||||||||
Harris County Health Facilities Development Corporation, TX, |
||||||||||||||||||||
57,995 | Methodist Hospital System Ser 2008 A-1 |
0.04 | 01/03/12 | 12/01/41 | 57,995,000 | |||||||||||||||
65,350 | Methodist Hospital System Ser 2008 A-2 |
0.04 | 01/03/12 | 12/01/41 | 65,350,000 | |||||||||||||||
J P Morgan Chase & Co., CA, |
||||||||||||||||||||
70,000 | Los Angeles Ser 2011 TRANs PUTTERs Ser 3930 |
0.07 | 01/03/12 | 08/12/12 | 70,000,000 | |||||||||||||||
25,460 | Los Angeles Ser 2011 TRANs PUTTERs Ser 3931 |
0.07 | 01/03/12 | 08/12/12 | 25,460,000 | |||||||||||||||
J P Morgan Chase & Co., TX, |
||||||||||||||||||||
49,000 | Texas Ser 2011 TRANs PUTTERs Ser 3945 |
0.07 | 01/03/12 | 08/30/12 | 49,000,000 | |||||||||||||||
99,995 | Texas Ser 2011 TRANs PUTTERs Ser 3946 |
0.07 | 01/03/12 | 08/30/12 | 99,995,000 | |||||||||||||||
49,610 | Texas Ser 2011 TRANs PUTTERs Ser 3953 |
0.07 | 01/03/12 | 08/30/12 | 49,610,000 | |||||||||||||||
20,000 | Texas Ser 2011 TRANs PUTTERs Ser 3964 |
0.07 | 01/03/12 | 08/30/12 | 20,000,000 | |||||||||||||||
57,525 | JEA, FL, Water & Sewer System Subser 2008 A-1 |
0.04 | 01/03/12 | 10/01/38 | 57,525,000 | |||||||||||||||
Massachusetts, |
||||||||||||||||||||
30,300 | Central Artery Ser 2000 B |
0.03 | 01/03/12 | 12/01/30 | 30,300,000 | |||||||||||||||
79,900 | Consolidated Loan Ser 2006 A |
0.04 | 01/03/12 | 03/01/26 | 79,900,000 | |||||||||||||||
10,000 | Massachusetts Health & Educational Facility Authority, Harvard University Ser 2005 C ROCs II-R Ser 10390 |
0.07 | 01/03/12 | 01/15/14 | 10,000,000 | |||||||||||||||
Mississippi Business Finance Corporation, |
||||||||||||||||||||
40,500 | Chevron USA Ser 2010 I |
0.02 | 01/03/12 | 11/01/35 | 40,500,000 | |||||||||||||||
25,000 | Chevron USA Ser 2010 J |
0.03 | 01/03/12 | 11/01/35 | 25,000,000 | |||||||||||||||
31,000 | Missouri Health & Educational Facilities Authority, BJC Health System Ser 2005 B |
0.04 | 01/03/12 | 05/15/34 | 31,000,000 | |||||||||||||||
Murray City, UT, |
||||||||||||||||||||
19,000 | IHC Health Services, Inc. Ser 2005 A |
0.06 | 01/03/12 | 05/15/37 | 19,000,000 | |||||||||||||||
26,530 | IHC Health Services, Inc. Ser 2005 D |
0.03 | 01/03/12 | 05/15/37 | 26,530,000 | |||||||||||||||
New York City, NY, |
||||||||||||||||||||
29,600 | Fiscal 2006 Subser I-8 |
0.07 | 01/03/12 | 04/01/36 | 29,600,000 | |||||||||||||||
89,300 | Fiscal 2008 Ser J Subser J-3 |
0.06 | 01/03/12 | 08/01/23 | 89,300,000 | |||||||||||||||
45,785 | Fiscal 2012 Ser D Subser D-3 |
0.02 | 01/03/12 | 10/01/39 | 45,785,000 | |||||||||||||||
New York City Municipal Water Finance Authority, NY, |
||||||||||||||||||||
23,020 | Second General Fiscal 2007 Ser CC-1 |
0.06 | 01/03/12 | 06/15/38 | 23,020,000 | |||||||||||||||
30,675 | Water & Sewer System Fiscal 2011 Ser DD-1 |
0.04 | 01/03/12 | 06/15/43 | 30,675,000 | |||||||||||||||
27,600 | Water & Sewer System Fiscal 2011 Ser DD-2 |
0.02 | 01/03/12 | 06/15/43 | 27,600,000 |
See Notes to Financial Statements
14
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Ohio Water Development Authority, |
||||||||||||||||||||
$ | 45,240 | FirstEnergy Nuclear Generation Corp. Ser 2006-A |
0.04 | % | 01/03/12 | 05/15/19 | $ | 45,240,000 | ||||||||||||
31,400 | FirstEnergy Nuclear Generation Corp. Ser 2010-C |
0.05 | 01/03/12 | 06/01/33 | 31,400,000 | |||||||||||||||
41,235 | University of Michigan Regents, Hospital Ser 2005 A |
0.04 | 01/03/12 | 12/01/35 | 41,235,000 | |||||||||||||||
44,635 | Washington Health Care Facilities Authority, MultiCare Health System Ser 2007 D |
0.05 | 01/03/12 | 08/15/41 | 44,635,000 | |||||||||||||||
|
|
|||||||||||||||||||
Total Daily Variable Rate Bonds (Cost $1,401,670,000) | 1,401,670,000 | |||||||||||||||||||
|
|
|||||||||||||||||||
COUPON RATE |
YIELD TO MATURITY ON DATE OF PURCHASE |
|||||||||||||||||||
Commercial Paper (9.4%) |
||||||||||||||||||||
20,000 | California Statewide Communities Development Authority, Kaiser Permanente Ser 2004 I |
0.23 | % | 0.23 | % | 02/09/12 | 20,000,000 | |||||||||||||
Harris County Cultural Education Facilities Finance Corporation, TX, |
||||||||||||||||||||
32,000 | Methodist Hospital System Ser 2009 C-1 |
0.28 | 0.28 | 03/05/12 | 32,000,000 | |||||||||||||||
10,000 | Methodist Hospital System Ser 2009 C-1 |
0.28 | 0.28 | 07/10/12 | 10,000,000 | |||||||||||||||
50,000 | Methodist Hospital System Ser 2009 C-1 |
0.30 | 0.30 | 07/25/12 | 50,000,000 | |||||||||||||||
35,000 | Methodist Hospital System Ser 2009 C-2 |
0.28 | 0.28 | 04/05/12 | 35,000,000 | |||||||||||||||
35,000 | Methodist Hospital System Ser 2009 C-2 |
0.28 | 0.28 | 05/03/12 | 35,000,000 | |||||||||||||||
Houston, TX, |
||||||||||||||||||||
20,000 | Combined Utility System Ser B-1 |
0.12 | 0.12 | 02/16/12 | 20,000,000 | |||||||||||||||
12,000 | Ser G-2 |
0.14 | 0.14 | 01/05/12 | 12,000,000 | |||||||||||||||
20,000 | Ser H-2 |
0.13 | 0.13 | 01/19/12 | 20,000,000 | |||||||||||||||
Las Vegas Valley Water District, NV, |
||||||||||||||||||||
60,310 | Water Ser 2004 A |
0.10 | 0.10 | 01/05/12 | 60,310,000 | |||||||||||||||
74,000 | Water Ser 2004 B |
0.11 | 0.11 | 01/17/12 | 74,000,000 | |||||||||||||||
80,000 | Lincoln, NE, Lincoln Electric System Ser 1995 |
0.12 | 0.12 | 01/19/12 | 80,000,000 | |||||||||||||||
39,000 | Long Island Power Authority, NY, Electric System |
0.11 | 0.11 | 01/10/12 | 39,000,000 | |||||||||||||||
15,000 | Metropolitan Transportation Authority, NY, Ser CP-2 |
0.11 | 0.11 | 01/12/12 | 15,000,000 | |||||||||||||||
120,300 | Michigan Hospital Finance Authority, Trinity Health Credit Group Ser 2008 C |
0.09 | 0.09 | 01/18/12 | 120,300,000 | |||||||||||||||
Montgomery County, MD, |
||||||||||||||||||||
55,000 | 2009 Ser A BANs |
0.12 | 0.12 | 01/10/12 | 55,000,000 | |||||||||||||||
10,000 | 2010 Ser B BANs |
0.14 | 0.14 | 01/17/12 | 10,000,000 | |||||||||||||||
21,000 | Nebraska Public Power District, Ser A Notes |
0.13 | 0.13 | 01/18/12 | 21,000,000 | |||||||||||||||
40,000 | New York City Municipal Water Finance Authority, NY, Fiscal 1994 Ser 1 |
0.12 | 0.12 | 01/19/12 | 40,000,000 | |||||||||||||||
20,000 | Norfolk Economic Development Authority, VA, Sentara Healthcare Ser 2008 |
0.12 | 0.12 | 01/20/12 | 20,000,000 |
See Notes to Financial Statements
15
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE |
YIELD TO MATURITY ON DATE OF |
MATURITY DATE |
VALUE | ||||||||||||||||
Rochester, MN, |
||||||||||||||||||||
$ | 30,000 | Health Care Facilities Mayo Foundation Ser 2000 B |
0.15 | % | 0.15 | % | 01/26/12 | $ | 30,000,000 | |||||||||||
40,000 | Health Care Facilities Mayo Foundation Ser 2000 C |
0.10 | 0.10 | 01/23/12 | 40,000,000 | |||||||||||||||
Texas, |
||||||||||||||||||||
15,000 | TRANs CP Notes Ser 2011B |
0.20 | 0.20 | 02/21/12 | 15,000,000 | |||||||||||||||
16,000 | TRANs CP Notes Ser 2011B |
0.20 | 0.20 | 02/22/12 | 16,000,000 | |||||||||||||||
|
|
|||||||||||||||||||
Total Commercial Paper (Cost $869,610,000) | 869,610,000 | |||||||||||||||||||
|
|
|||||||||||||||||||
COUPON RATE (a) |
DEMAND DATE (b) |
|||||||||||||||||||
Closed-End Investment Companies (4.6%) |
||||||||||||||||||||
24,700 | BlackRock Municipal Intermediate Duration Fund, Inc. (MUI), VRDP Ser W-7 (AMT) |
0.23 | % | 01/06/12 | 03/01/41 | 24,700,000 | ||||||||||||||
15,000 | BlackRock MuniYield Investment Fund, Inc. (MYF), |
0.24 | 01/06/12 | 06/01/41 | 15,000,000 | |||||||||||||||
13,500 | BlackRock MuniYield Michigan Quality Fund II, Inc., |
0.24 | 01/06/12 | 06/01/41 | 13,500,000 | |||||||||||||||
15,500 | BlackRock MuniYield New Jersey Fund, Inc. (MYJ), |
0.24 | 01/06/12 | 05/01/41 | 15,500,000 | |||||||||||||||
20,000 | BlackRock MuniYield New York Quality Fund, Inc. (MYN), |
0.22 | 01/06/12 | 05/01/41 | 20,000,000 | |||||||||||||||
34,000 | BlackRock MuniYield Quality Fund, Inc. III (MYI), |
0.24 | 01/06/12 | 06/01/41 | 34,000,000 | |||||||||||||||
52,200 | Nuveen Insured Municipal Opportunity Fund, Inc., |
0.24 | 01/06/12 | 12/01/40 | 52,200,000 | |||||||||||||||
20,000 | Nuveen Investment Quality Municipal Fund, Inc., |
0.25 | 01/06/12 | 05/01/41 | 20,000,000 | |||||||||||||||
45,000 | Nuveen Municipal Market Opportunity Fund, Inc., |
0.28 | 01/06/12 | 03/01/40 | 45,000,000 | |||||||||||||||
15,000 | Nuveen New York Quality Income Municipal Fund, Inc., |
0.22 | 01/06/12 | 12/01/40 | 15,000,000 | |||||||||||||||
15,000 | Nuveen Premier Insured Municipal Fund, Inc., |
0.24 | 01/06/12 | 12/01/40 | 15,000,000 | |||||||||||||||
100,000 | Nuveen Premium Income Municipal Fund 2, Inc., |
0.25 | 01/06/12 | 05/05/41 | 100,000,000 | |||||||||||||||
50,000 | Nuveen Quality Income Municipal Fund, Inc., |
0.23 | 01/06/12 | 12/01/40 | 50,000,000 | |||||||||||||||
|
|
|||||||||||||||||||
Total Closed-End Investment Companies (Cost $419,900,000) | 419,900,000 | |||||||||||||||||||
|
|
See Notes to Financial Statements
16
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE (a) |
DEMAND DATE (b) |
MATURITY DATE |
VALUE | ||||||||||||||||
Put Option Bonds (2.5%) |
||||||||||||||||||||
$ | 7,500 | Fairfax County Industrial Development Authority, VA, Inova Health System Window Ser 2020 A-1 |
0.22 | % | 07/27/12 | 05/15/39 | $ | 7,500,000 | ||||||||||||
7,000 | Illinois Finance Authority, Advocate Health Care Network Ser 2008 Subser A-1 |
0.48 | 02/01/12 | 11/01/30 | 7,000,000 | |||||||||||||||
8,500 | Illinois Finance Authority, Advocate Health Care Window Ser 2011 B Illinois Finance Authority, Advocate Health Care Window Ser 2011 B |
0.23 | 07/27/12 | 04/01/51 | 8,500,000 | |||||||||||||||
7,680 | Kentucky Economic Development Finance Authority, Catholic Health Initiatives Window Ser 2011 B-1 |
0.20 | 07/27/12 | 02/01/46 | 7,680,000 | |||||||||||||||
9,600 | Kentucky Economic Development Finance Authority, Catholic Health Initiatives Window Ser 2011 B-3 |
0.21 | 07/27/12 | 02/01/46 | 9,600,000 | |||||||||||||||
11,000 | Massachusetts Bay Transportation Authority, Senior Sales Tax Window Ser 2010 A |
0.19 | 07/27/12 | 07/01/30 | 11,000,000 | |||||||||||||||
20,000 | Michigan Hospital Finance Authority, Ascension Health Senior Credit Group Window Ser 2010 F-8 |
0.19 | 07/27/12 | 11/15/49 | 20,000,000 | |||||||||||||||
26,800 | New York City Transitional Finance Authority, NY, Future Tax Fiscal 2010 Ser G Subser G5 |
0.06 | 01/03/12 | 05/01/34 | 26,800,000 | |||||||||||||||
62,000 | New York Liberty Development Corporation, NY, Recovery Zone 3 World Trade Center Ser 2010 A-1 |
0.30 | 11/08/12 | 12/01/50 | 62,000,000 | |||||||||||||||
7,700 | Norfolk Economic Development Authority, VA, Sentara Healthcare Window Ser 2010 B |
0.22 | 07/27/12 | 11/01/34 | 7,700,000 | |||||||||||||||
6,000 | Norfolk Economic Development Authority, VA, Sentara Healthcare Window Ser 2010 C |
0.22 | 07/27/12 | 11/01/34 | 6,000,000 | |||||||||||||||
5,000 | Orlando Utilities Commission, FL, Utility System Window Ser 2011 A |
0.21 | 07/27/12 | 10/01/27 | 5,000,000 | |||||||||||||||
40,000 | Palm Beach County Solid Waste Authority, FL, Improvement Ser 2010 |
1.00 | 01/12/12 | 10/01/31 | 40,011,024 | |||||||||||||||
10,000 | RBC Municipal Products Trust, Inc., MN, Minneapolis Fairview Health Services Ser 2010 C&D Floater Certificates Ser E-19 |
0.17 | 04/02/12 | 11/15/47 | 10,000,000 | |||||||||||||||
4,500 | Tarrant County Cultural Education Facilities Finance Corporation, TX, Baylor Health Care System Window Ser 2011 B |
0.24 | 07/27/12 | 11/15/50 | 4,500,000 | |||||||||||||||
|
|
|||||||||||||||||||
Total Put Option Bonds (Cost $233,291,024) | 233,291,024 | |||||||||||||||||||
|
|
See Notes to Financial Statements
17
Active Assets Tax-Free Trust
Portfolio of Investments n December 31, 2011 (unaudited) continued
PRINCIPAL AMOUNT IN THOUSANDS |
COUPON RATE |
YIELD TO MATURITY ON DATE OF PURCHASE |
MATURITY DATE |
VALUE | ||||||||||||||||
Municipal Bonds & Notes (2.0%) |
||||||||||||||||||||
$ | 24,500 | Kentucky Rural Water Finance Corporation, Public Projects Construction Notes Ser D-2011-1, |
1.25 | % | 0.55 | % | 11/01/12 | $ | 24,642,771 | |||||||||||
26,000 | Los Angeles, CA, Ser 2011 TRANs, dtd 07/12/11 |
2.50 | 0.33 | 04/30/12 | 26,185,861 | |||||||||||||||
Los Angeles County, CA, |
||||||||||||||||||||
10,000 | 2011-2012 Ser A TRANs, dtd 07/01/11 |
2.50 | 0.32 | 02/29/12 | 10,035,506 | |||||||||||||||
40,000 | 2011-2012 Ser B TRANs, dtd 07/01/11 |
2.50 | 0.34 | 03/30/12 | 40,212,176 | |||||||||||||||
15,000 | Los Angeles County Schools Pooled Financing Program, CA, Pooled 2011-2012 Ser A-1 TRANs, dtd 07/01/11 |
2.00 | 0.46 | 06/29/12 | 15,113,672 | |||||||||||||||
45,000 | New York State Thruway Authority, General Ser 2011 BANs, dtd 07/13/11 |
2.00 | 0.35 | 07/12/12 | 45,392,013 | |||||||||||||||
20,000 | Rhode Island & Providence Plantations, Fiscal Year 2012 TANs, dtd 10/27/11 |
2.00 | 0.30 | 06/29/12 | 20,167,756 | |||||||||||||||
6,500 | St. Louis, MO, General Fund Ser 2011 TRANs, |
2.00 | 0.38 | 06/29/12 | 6,551,858 | |||||||||||||||
|
|
|||||||||||||||||||
Total Municipal Bonds & Notes (Cost $188,301,613) | 188,301,613 | |||||||||||||||||||
|
|
|||||||||||||||||||
NUMBER OF SHARES (000) |
||||||||||||||||||||
Investment Company (0.1%) |
||||||||||||||||||||
4,200 | Morgan Stanley Institutional Liquidity Funds Government Portfolio (See Note 5) (Cost $4,200,000) |
|
4,200,000 | |||||||||||||||||
|
|
|||||||||||||||||||
Total Investments (Cost $9,159,877,637) | 99.4 | % | 9,159,877,637 | |||||||||||||||||
Other Assets in Excess of Liabilities | 0.6 | 57,683,757 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
Net Assets | 100.0 | % | $ | 9,217,561,394 | ||||||||||||||||
|
|
|
|
AMT | Alternative Minimum Tax. | |
BANs | Bond Anticipation Notes. | |
PUTTERS | Puttable Tax-Exempt Receipts. | |
ROCs | Reset Option Certificates. | |
TANs | Tax Anticipation Notes. | |
TRANs | Tax and Revenue Anticipation Notes. | |
VRDP | Variable Rate Demand Preferred. | |
(a) | Rate shown is the rate in effect at December 31, 2011. | |
(b) | Date on which the principal amount can be recovered through demand. | |
Bond Insurance: | ||
AGC | Assured Guaranty Corporation. | |
AGM | Assured Guaranty Municipal Corporation. | |
BHAC | Berkshire Hathaway Assurance Corporation. |
See Notes to Financial Statements
18
Active Assets Tax-Free Trust
Financial Statements
Statement of Assets and Liabilities
December 31, 2011 (unaudited)
Assets: |
| |||
Investments in securities, at value (cost $9,155,677,637) |
$ | 9,155,677,637 | ||
Investment in affiliate, at value (cost $4,200,000 ) |
4,200,000 | |||
|
|
|||
Total investments in securities, at value (cost $9,159,877,637) |
9,159,877,637 | |||
Cash |
90,204 | |||
Receivable for: |
||||
Shares of beneficial interest sold |
180,079,856 | |||
Interest |
2,973,702 | |||
Dividends from affiliate |
3 | |||
Prepaid expenses and other assets |
61,385 | |||
|
|
|||
Total Assets |
9,343,082,787 | |||
|
|
|||
Liabilities: |
||||
Payable for: |
||||
Shares of beneficial interest redeemed |
124,021,131 | |||
Transfer agent fee |
698,979 | |||
Administration fee |
375,075 | |||
Investment advisory fee |
136,002 | |||
Accrued expenses and other payables |
290,206 | |||
|
|
|||
Total Liabilities |
125,521,393 | |||
|
|
|||
Net Assets |
$ | 9,217,561,394 | ||
|
|
|||
Composition of Net Assets: |
||||
Paid-in-capital |
$ | 9,217,516,294 | ||
Dividends in excess of net investment income |
(47,775 | ) | ||
Accumulated undistributed net realized gain |
92,875 | |||
|
|
|||
Net Assets |
$ | 9,217,561,394 | ||
|
|
|||
Net Asset Value Per Share |
||||
9,217,245,157 shares outstanding (unlimited shares authorized of $0.01 par value) |
$ | 1.00 | ||
|
|
See Notes to Financial Statements
19
Active Assets Tax-Free Trust
Financial Statements continued
For the six months ended December 31, 2011 (unaudited)
Net Investment Income: |
||||
Interest Income |
$ | 6,004,502 | ||
Dividends from affiliate (Note 5) |
1,864 | |||
|
|
|||
Total Income |
6,006,366 | |||
|
|
|||
Expenses |
||||
Investment advisory fee (Note 3) |
10,583,863 | |||
Distribution fee (Note 4) |
4,479,432 | |||
Administration fee (Note 3) |
2,239,716 | |||
Transfer agent fees and expenses |
648,222 | |||
Custodian fees |
110,267 | |||
Trustees fees and expenses |
96,763 | |||
Professional fees |
30,731 | |||
Registration fees |
9,317 | |||
Shareholder reports and notices |
264 | |||
Other |
55,481 | |||
|
|
|||
Total Expenses |
18,254,056 | |||
Less: amounts waived/reimbursed (Note 4) |
(12,705,279 | ) | ||
Less: rebate from Morgan Stanley affiliated cash sweep (Note 5) |
(2,160 | ) | ||
|
|
|||
Net Expenses |
5,546,617 | |||
|
|
|||
Net Investment Income |
459,749 | |||
Net Realized Gain |
22,159 | |||
|
|
|||
Net Increase |
$ | 481,908 | ||
|
|
See Notes to Financial Statements
20
Active Assets Tax-Free Trust
Financial Statements continued
Statements of Changes in Net Assets
FOR THE SIX MONTHS ENDED DECEMBER 31, 2011 |
FOR THE YEAR ENDED JUNE 30, 2011 |
|||||||
(unaudited) | ||||||||
Increase (Decrease) in Net Assets: |
||||||||
Operations: |
||||||||
Net investment income |
$ | 459,749 | $ | 614,708 | ||||
Net realized gain |
22,159 | 68,897 | ||||||
|
|
|
|
|||||
Net Increase |
481,908 | 683,605 | ||||||
|
|
|
|
|||||
Dividends and Distributions to Shareholders from: |
||||||||
Net investment income |
(449,151 | ) | (563,151 | ) | ||||
Net realized gain |
| (62,108 | ) | |||||
|
|
|
|
|||||
Total Dividends and Distributions |
(449,151 | ) | (625,259 | ) | ||||
|
|
|
|
|||||
Net increase from transactions in shares of beneficial interest |
533,253,520 | 3,093,441,368 | ||||||
|
|
|
|
|||||
Net Increase |
533,286,277 | 3,093,499,714 | ||||||
Net Assets: |
||||||||
Beginning of period |
8,684,275,117 | 5,590,775,403 | ||||||
|
|
|
|
|||||
End of Period |
||||||||
(Including dividends in excess of net investment income of $47,775 and $58,373, respectively) |
$ | 9,217,561,394 | $ | 8,684,275,117 | ||||
|
|
|
|
See Notes to Financial Statements
21
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited)
1. Organization and Accounting Policies
Active Assets Tax-Free Trust (the Fund) is registered under the Investment Company Act of 1940, as amended (the Act), as a diversified, open-end management investment company. The Funds investment objective is to provide a high level of daily income which is exempt from federal income tax consistent with stability of principal and liquidity. The Fund was organized as a Massachusetts business trust on March 30, 1981 and commenced operations on July 7, 1981.
The following is a summary of significant accounting policies:
A. Valuation of Investments Portfolio securities are valued at amortized cost, which approximates fair value, in accordance with Rule 2a-7 under the Act. Investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day.
B. Accounting for Investments Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income. Interest income is accrued daily as earned.
C. Dividends and Distributions to Shareholders The Fund records dividends and distributions to shareholders as of the close of each business day.
D. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.
E. Indemnifications The Fund enters into contracts that contain a variety of indemnifications. The Funds maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
2. Fair Valuation Measurements
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs); and (2) inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish
22
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited) continued
classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds investments. The inputs are summarized in the three broad levels listed below.
| Level 1 unadjusted quoted prices in active markets for identical investments |
| Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| Level 3 significant unobservable inputs including the Funds own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuers financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.
The following is a summary of the inputs used to value the Funds investments as of December 31, 2011.
INVESTMENT TYPE |
LEVEL 1 UNADJUSTED QUOTED PRICES |
LEVEL 2 OTHER SIGNIFICANT OBSERVABLE INPUTS |
LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS |
TOTAL | ||||||||||
Assets: |
||||||||||||||
Weekly Variable Rate Bonds |
| $ | 6,042,905,000 | | $ | 6,042,905,000 | ||||||||
Daily Variable Rate Bonds |
| 1,401,670,000 | | 1,401,670,000 | ||||||||||
Commercial Paper |
| 869,610,000 | | 869,610,000 | ||||||||||
Closed-End Investment Companies |
| 419,900,000 | | 419,900,000 | ||||||||||
Put Option Bonds |
| 233,291,024 | | 233,291,024 | ||||||||||
Municipal Bonds & Notes |
| 188,301,613 | | 188,301,613 | ||||||||||
Investment Company |
$ | 4,200,000 | | | 4,200,000 | |||||||||
|
|
|
|
|
|
|
||||||||
Total Assets |
$ | 4,200,000 | $ | 9,155,677,637 | | $ | 9,159,877,637 | |||||||
|
|
|
|
|
|
|
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investments valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of December 31, 2011, the Fund did not have any investments transfer between investment levels.
3. Investment Advisory/Administration Agreements
Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Management Inc. (the Adviser), the Fund pays the Adviser an advisory fee, accrued daily and payable monthly, by applying the following annual rates to the net assets of the Fund determined as of the close of each business day: 0.45%
23
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited) continued
to the portion of the daily net assets not exceeding $500 million; 0.375% to the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.325% to the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.30% to the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.275% to the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.25% to the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.225% to the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.20% to the portion of the daily net assets exceeding $3 billion but not exceeding $15 billion; and 0.199% to the portion of the daily net assets exceeding $15 billion.
Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the Administrator), an affiliate of the Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.05% to the Funds daily net assets.
Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company (State Street), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.
4. Plan of Distribution
Morgan Stanley Distribution, Inc. (the Distributor), an affiliate of the Adviser and Administrator, is the distributor of the Funds shares and in accordance with a Plan of Distribution (the Plan) pursuant to Rule 12b-1 under the Act, finances certain expenses in connection with the promotion of sales of Fund shares.
Reimbursements for these expenses are made in monthly payments by the Fund to the Distributor, which will in no event exceed an amount equal to a payment at the annual rate of 0.15% of the Funds average daily net assets during the month. Expenses incurred by the Distributor pursuant to the Plan in any fiscal year will not be reimbursed by the Fund through payments accrued in any subsequent fiscal year. For the six months ended December 31, 2011, the distribution fee was accrued at the annual rate of 0.10%.
The Distributor, Adviser and Administrator have agreed to waive and/or reimburse all or a portion of the Funds distribution fee, advisory fee and administration fee, respectively, to the extent that total expenses exceed total income of the Fund on a daily basis. For the six months ended December 31, 2011, the Distributor waived $4,479,432, and the Adviser waived $8,225,847. These fee waivers and/or expense reimbursements will continue for one year or until such time that the Board of Trustees acts to discontinue all or a portion of such waivers and/or expense reimbursements when it deems such action is appropriate.
5. Transactions with Affiliates
The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds Government Portfolio (the Liquidity Funds), an open-end management investment company managed by the Adviser.
24
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited) continued
Investment advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended December 31, 2011, advisory fees paid were reduced by $2,160 relating to the Funds investment in the Liquidity Funds.
A summary of the Funds transactions in shares of the Liquidity Funds during the six months ended December 31, 2011 is as follows:
VALUE |
PURCHASES AT COST |
SALES | DIVIDEND INCOME |
VALUE DECEMBER 31, 2011 |
||||||||||||
$ | $ | 835,300,000 | $ | 831,100,000 | $ | 1,864 | $ | 4,200,000 | ||||||||
|
|
|
|
|
|
|
|
|
Morgan Stanley Services Company Inc., an affiliate of the Adviser and Distributor, is the Funds transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. The Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003. Aggregate pension costs for the six months ended December 31, 2011, included in trustees fees and expenses in the Statement of Operations amounted to $2,137. At December 31, 2011, the Fund had an accrued pension liability of $61,096, which is included in accrued expenses and other payables in the Statement of Assets and Liabilities.
The Fund has an unfunded Deferred Compensation Plan (the Compensation Plan), which allows each independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund.
6. Shares of Beneficial Interest
Transactions in shares of beneficial interest, at $1.00 per share, were as follows:
FOR THE SIX MONTHS ENDED DECEMBER 31, 2011 |
FOR THE YEAR ENDED JUNE 30, 2011 |
|||||||
(unaudited) | ||||||||
Shares sold |
14,995,625,520 | 23,048,791,686 | ||||||
Shares issued in reinvestment of dividends and distributions |
445,951 | 620,172 | ||||||
|
|
|
|
|||||
14,996,071,471 | 23,049,411,858 | |||||||
Shares Redeemed |
(14,462,817,951 | ) | (19,955,970,490 | ) | ||||
|
|
|
|
|||||
Net increase in shares outstanding |
533,253,520 | 3,093,441,368 | ||||||
|
|
|
|
25
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited) continued
7. Federal Income Tax Status
It is the Funds intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for Federal income taxes is required in the financial statements.
FASB ASC 740-10, Income Taxes Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in Interest Expense and penalties in Other Expenses in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended June 30, 2011, remains subject to examination by taxing authorities.
The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal 2011 and 2010 was as follows:
2011 DISTRIBUTIONS PAID FROM: | 2010 DISTRIBUTIONS PAID FROM: | |||||||
Tax-exempt income |
$ | 562,291 | $ | 626,852 | ||||
Ordinary income |
2,480 | 5,081 | ||||||
Long-term capital gains |
60,488 | 27,676 | ||||||
|
|
|
|
|||||
Total distributions | $ | 625,259 | $ | 659,609 | ||||
|
|
|
|
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.
Temporary differences are primarily due to differing book and tax treatments in the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.
Permanent differences, due to nondeductible expenses, resulted in the following reclassifications among the Funds components of net assets at June 30, 2011:
DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME |
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN |
PAID-IN-CAPITAL | ||||||||
$ | 6,826 | $ | (2,278 | ) | $ | (4,548 | ) | |||
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At December 31, 2011, the aggregate cost for federal income tax purposes is the same as the cost for book purposes.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the Modernization Act) was signed into law. The Modernization Act modernizes several tax provisions related to Regulated
26
Active Assets Tax-Free Trust
Notes to Financial Statements n December 31, 2011 (unaudited) continued
Investment Companies (RICs) and their shareholders. One key change made by the Modernization Act is the capital losses will generally retain their character as short-term or long-term and may be carried forward indefinitely to offset future gains. These losses are utilized before other capital loss carryforwards that expire. Generally, the Modernization Act is effective for taxable years beginning after December 22, 2010.
8. Expense Offset
The Fund has entered into an arrangement with State Street (the Custodian), whereby credits realized on uninvested cash balances were used to offset a portion of the Funds expenses. If applicable, these custodian credits are shown as expense offset in the Statement of Operations.
9. Accounting Pronouncement
In May 2011, FASB issued Accounting Standards Update (ASU) 2011-04. The amendments in this update are the results of the work of FASB and the International Accounting Standards Board to develop common requirements for measuring fair value and for disclosing information about fair value measurements, which are effective during interim and annual periods beginning after December 15, 2011. Consequently, these amendments improve the comparability of fair value measurements presented and disclosed in the financial statements prepared in accordance with GAAP and International Financial Reporting Standards. At this time, the Funds management is evaluating the implications of ASU 2011-04.
27
Active Assets Tax-Free Trust
Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:
FOR THE SIX MONTHS ENDED DECEMBER 31, 2011 |
FOR THE YEAR ENDED JUNE 30, | |||||||||||||||||||||||
2011 | 2010^ | 2009^ | 2008^ | 2007^ | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Selected Per Share Data: |
||||||||||||||||||||||||
Net asset value, beginning of period |
$1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||
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Net income from investment operations |
0.000 | (1) | 0.000 | (1) | 0.000 | (1) | 0.008 | 0.026 | 0.032 | |||||||||||||||
Less dividends from net investment income |
(0.000 | )(1) | (0.000 | )(1)(2) | (0.000 | )(1)(2) | (0.008 | )(2) | (0.026 | )(2) | (0.032 | ) | ||||||||||||
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Net asset value, end of period |
$1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||
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Total Return |
0.01 | %(7) | 0.01 | % | 0.01 | % | 0.79 | % | 2.60 | % | 3.22 | % | ||||||||||||
Ratios to Average Net Assets: |
||||||||||||||||||||||||
Total expenses |
0.12 | %(3)(5)(8) | 0.24 | %(3)(5) | 0.29 | %(3)(4)(5) | 0.43 | %(3)(4)(5) | 0.42 | %(3) | 0.45 | % | ||||||||||||
Net investment income |
0.01 | %(3)(5)(8) | 0.01 | %(3)(5) | 0.01 | %(3)(4)(5) | 0.85 | %(3)(4)(5) | 2.42 | %(3) | 3.19 | % | ||||||||||||
Rebate from Morgan Stanley affiliate |
0.00 | %(6)(8) | 0.00 | %(6) | 0.00 | %(6) | 0.01 | % | 0.00 | %(6) | | |||||||||||||
Supplemental Data: |
||||||||||||||||||||||||
Net assets, end of period, in millions |
$9,218 | $8,684 | $5,591 | $7,160 | $11,355 | $6,154 |
^ | Beginning with the year ended June 30, 2011, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm. |
(1) | Amount is less than $0.001. |
(2) | Includes capital gain distribution of less than $0.001. |
(3) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as Rebate from Morgan Stanley affiliate. |
(4) | Reflects fees paid in connection with the U.S. Treasurys Temporary Guarantee Program for Money Market Funds. This fee had an effect of 0.01% and 0.04% for the year ended 2010 and 2009, respectively. |
(5) | If the Fund had borne all of its expenses that were reimbursed or waived by the Distributor, Adviser, and Administrator, the annualized expense and net investment income (loss) ratios, would have been as follows: |
PERIOD ENDED |
EXPENSE RATIO |
NET INVESTMENT INCOME (LOSS) RATIO |
||||||
December 31, 2011 |
0.41 | % | (0.28 | )% | ||||
June 30, 2011 |
0.43 | (0.18 | ) | |||||
June 30, 2010 |
0.46 | (0.16 | ) | |||||
June 30, 2009 |
0.45 | 0.83 |
(6) | Amount is less than 0.005%. |
(7) | Not annualized. |
(8) | Annualized. |
See Notes to Financial Statements
28
Active Assets Tax-Free Trust
An Important Notice Concerning Our U.S. Privacy Policy (unaudited)
This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds (us, our, we).
We are required by federal law to provide you with notice of our U.S. privacy policy (Policy). This Policy applies to both our current and former clients unless we state otherwise and is intended for individual clients who purchase products or receive services from us for personal, family or household purposes. This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, or accounts subject to the Uniform Gifts to Minors Act.
This notice sets out our business practices to protect your privacy; how we collect and share personal information about you; and how you can limit our sharing or certain uses by others of this information. We may amend this Policy at any time, and will inform you of any changes to our Policy as required by law.
We Respect Your Privacy
We appreciate that you have provided us with your personal financial information and understand your concerns about your information. We strive to safeguard the information our clients entrust to us. Protecting the confidentiality and security of client information is an important part of how we conduct our business.
This notice describes what personal information we collect about you, how we collect it, when we may share it with others, and how certain others may use it. It discusses the steps you may take to limit our sharing of certain information about you with our affiliated companies, including, but not limited to our affiliated banking businesses, brokerage firms and credit service affiliates. It also discloses how you may limit our affiliates use of shared information for marketing purposes.
Throughout this Policy, we refer to the nonpublic information that personally identifies you as personal information. We also use the term affiliated company in this notice. An affiliated company is a company in our family of companies and includes companies with the Morgan Stanley name. These affiliated companies are financial institutions such as broker-dealers, banks, investment advisers and credit card issuers. We refer to any company that is not an affiliated company as a nonaffiliated third party. For purposes of Section 5 of this notice, and your ability to limit certain uses of personal information by our affiliates, this notice applies to the use of personal information by our affiliated companies.
1. | What Personal Information Do We Collect From You? |
We may collect the following types of information about you: (i) information provided by you, including information from applications and other forms we receive from you, (ii) information about your transactions
29
Active Assets Tax-Free Trust
An Important Notice Concerning Our U.S. Privacy Policy (unaudited) continued
with us or our affiliates, (iii) information about your transactions with nonaffiliated third parties, (iv) information from consumer reporting agencies, (v) information obtained from our websites, and (vi) information obtained from other sources.
For example:
| We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us. |
| We may obtain information about account balances, your use of account(s) and the types of products and services you prefer to receive from us through your dealings and transactions with us and other sources. |
| We may obtain information about your creditworthiness and credit history from consumer reporting agencies. |
| We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements. |
2. | When Do We Disclose Personal Information We Collect About You? |
We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.
a. Information We Disclose to Affiliated Companies. We may disclose personal information that we collect about you to our affiliated companies to manage your account(s) effectively, to service and process your transactions, and to let you know about products and services offered by us and affiliated companies, to manage our business, and as otherwise required or permitted by law. Offers for products and services from affiliated companies are developed under conditions designed to safeguard your personal information.
b. Information We Disclose to Third Parties. We may disclose personal information that we collect about you to nonaffiliated third parties to provide marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements. We may also disclose all of the information we collect to other nonaffiliated third parties for our everyday business purposes, such as to process transactions, maintain account(s), respond to court orders and legal investigations, report to credit bureaus, offer our own products and services, protect against fraud, for institutional risk control, to perform services on our behalf, and as otherwise required or permitted by law.
When we share personal information about you with a nonaffiliated third party, they are required to limit their use of personal information about you to the particular purpose for which it was shared and they are not allowed to share personal information about you with others except to fulfill that limited purpose or as may be permitted or required by law.
30
Active Assets Tax-Free Trust
An Important Notice Concerning Our U.S. Privacy Policy (unaudited) continued
3. | How Do We Protect The Security and Confidentiality Of Personal Information We Collect About You? |
We maintain physical, electronic and procedural security measures that comply with applicable law and regulations to help safeguard the personal information we collect about you. We have internal policies governing the proper handling of client information by employees. Third parties that provide support or marketing services on our behalf may also receive personal information about you, and we require them to adhere to appropriate security standards with respect to such information.
4. | How Can You Limit Our Sharing Certain Personal Information About You With Our Affiliated Companies For Eligibility Determination? |
By following the opt-out procedures in Section 6, below, you may limit the extent to which we share with our affiliated companies, personal information that was collected to determine your eligibility for products and services such as your credit reports and other information that you have provided to us or that we may obtain from third parties (eligibility information). Eligibility information does not include your identification information or personal information pertaining to our transactions or experiences with you. Please note that, even if you direct us not to share eligibility information with our affiliated companies, we may still share your personal information, including eligibility information, with our affiliated companies under circumstances that are permitted under applicable law, such as to process transactions or to service your account.
5. | How Can You Limit the Use of Certain Personal Information About You by Our Affiliated Companies for Marketing? |
By following the opt-out instructions in Section 6, below, you may limit our affiliated companies from marketing their products or services to you based on personal information we disclose to them. This information may include, for example, your income and account history with us. Please note that, even if you choose to limit our affiliated companies from using personal information about you that we may share with them for marketing their products and services to you, our affiliated companies may use your personal information that they obtain from us to market to you in circumstances permitted by law, such as if the affiliated party has its own relationship with you.
31
Active Assets Tax-Free Trust
An Important Notice Concerning Our U.S. Privacy Policy (unaudited) continued
6. | How Can You Send Us an Opt-Out Instruction? |
If you wish to limit our sharing of eligibility information about you with our affiliated companies, or our affiliated companies use of personal information for marketing purposes, as described in this notice, you may do so by:
| Calling us at (800) 548-7786 Monday-Friday between 8a.m. and 5p.m. (EST) |
| Writing to us at the following address: |
Morgan Stanley Services Company Inc.
c/o Privacy Coordinator
201 Plaza Two, 3rd Floor
Jersey City, New Jersey 07311
If you choose to write to us, your request should include: your name, address, telephone number and account number(s) to which the opt-out applies and whether you are opting out with respect to sharing of eligibility information (Section 4 above), or information used for marketing (Section 5 above), or both. Written opt-out requests should not be sent with any other correspondence. In order to process your request, we require that the request be provided by you directly and not through a third party. Once you have informed us about your privacy preferences, your opt-out preference will remain in effect with respect to this Policy (as it may be amended) until you notify us otherwise. If you are a joint account owner, we will accept instructions from any one of you and apply those instructions to the entire account.
Please understand that if you limit our sharing or our affiliated companies use of personal information, you and any joint account holder(s) may not receive information about our affiliated companies products and services, including products or services that could help you manage your financial resources and achieve your investment objectives.
If you have more than one account or relationship with us, please specify the accounts to which you would like us to apply your privacy choices. If you have accounts or relationships with our affiliates, you may receive multiple privacy policies from them, and will need to separately notify those companies of your privacy choices for those accounts or relationships.
7. | What if an affiliated company becomes a nonaffiliated third party? |
If, at any time in the future, an affiliated company becomes a nonaffiliated third party, further disclosures of personal information made to the former affiliated company will be limited to those described in Section 2(b) above relating to nonaffiliated third parties. If you elected under Section 6 to limit disclosures we make to affiliated companies, or use of personal information by affiliated companies, your election will not apply to use by any former affiliated company of your personal information in their possession once it becomes a nonaffiliated third party.
32
Active Assets Tax-Free Trust
An Important Notice Concerning Our U.S. Privacy Policy (unaudited) continued
Special Notice To Residents Of Vermont
The following section supplements our Policy with respect to our individual clients who have a Vermont address and supersedes anything to the contrary in the above Policy with respect to those clients only.
The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with nonaffiliated third parties, or eligibility information with affiliated companies, other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or eligibility information with affiliated companies, unless you provide us with your written consent to share such information.
Special Notice To Residents Of California
The following section supplements our Policy with respect to our individual clients who have a California address and supersedes anything to the contrary in the above Policy with respect to those clients only.
In response to a California law, if your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us.
33
Trustees
Frank L. Bowman
Michael Bozic
Kathleen A. Dennis
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Michael E. Nugent
W. Allen Reed
Fergus Reid
Officers
Michael E. Nugent
Chairperson of the Board
Kevin Klingert
President and Principal Executive Officer
Mary Ann Picciotto
Chief Compliance Officer
Stefanie V. Chang Yu
Vice President
Francis J. Smith
Treasurer and Principal Financial Officer
Mary E. Mullin
Secretary
Transfer Agent
Morgan Stanley Services Company Inc.
P.O. Box 219886
Kansas City, Missouri 64121
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
Legal Counsel
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036
Counsel to the Independent Trustees
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Investment Adviser
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036
The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon.
This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Funds Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling
(800) 869-NEWS.
This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.
Morgan Stanley Distribution, Inc., member FINRA.
© 2012 Morgan Stanley
M O R G A N S T A N L E Y F U N D S
Active Assets
Tax-Free Trust
Semiannual Report
December 31, 2011
AATSAN |
IU12-00320P-Y12/11 |
Item 2. | Code of Ethics. |
Not applicable for semiannual reports.
Item 3. | Audit Committee Financial Expert. |
Not applicable for semiannual reports.
Item 4. | Principal Accountant Fees and Services |
Not applicable for semiannual reports.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable for semiannual reports.
Item 6. |
(a) Refer to Item 1.
(b) Not applicable.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable for semiannual reports.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Applicable only to reports filed by closed-end funds.
Item 9. | Closed-End Fund Repurchases |
Applicable to reports filed by closed-end funds.
Item 10. | Submission of Matters to a Vote of Security Holders |
Not applicable.
Item 11. | Controls and Procedures |
(a) The Funds principal executive officer and principal financial officer have concluded that the Funds disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, based upon such officers evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.
(b) There were no changes in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 12. | Exhibits |
(a) Code of Ethics Not applicable for semiannual reports.
(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.
2
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.
Active Asset Tax Free Trust
/s/ Kevin Klingert
Kevin Klingert
Principal Executive Officer
February 15, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Kevin Klingert
Kevin Klingert
Principal Executive Officer
February 15, 2012
/s/ Francis Smith
Francis Smith
Principal Financial Officer
February 15, 2012
1
EXHIBIT 12 B1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
CERTIFICATIONS
I, Kevin Klingert, certify that:
I have reviewed this report on Form N-CSR of Active Asset Tax Free Trust
1. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
2. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
3. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
4. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
1
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting. |
Date: February 15, 2012
/s/ Kevin Klingert
Kevin Klingert
Principal Executive Officer
2
EXHIBIT 12 B2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
CERTIFICATIONS
I, Francis Smith, certify that:
I have reviewed this report on Form N-CSR of Active Asset Tax Free Trust
1. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
2. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
3. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
4. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
3
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting. |
Date: February 15, 2012
/s/ Francis Smith
Francis Smith
Principal Financial Officer
4
SECTION 906 CERTIFICATION
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Active Asset Tax Free Trust
In connection with the Report on Form N-CSR (the Report) of the above-named issuer for the period ended December 31, 2011 that is accompanied by this certification, the undersigned hereby certifies that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. |
Date: February 15, 2012
/s/ Kevin Klingert
Kevin Klingert
Principal Executive Officer
A signed original of this written statement required by Section 906 has been provided to Active Asset Tax Free Trust and will be retained by Active Asset Tax Free Trust and furnished to the Securities and Exchange Commission or its staff upon request.
1
SECTION 906 CERTIFICATION
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Active Asset Tax Free Trust
In connection with the Report on Form N-CSR (the Report) of the above-named issuer for the period ended December 31, 2011 that is accompanied by this certification, the undersigned hereby certifies that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. |
Date: February 15, 2012
/s/ Francis Smith
Francis Smith
Principal Financial Officer
A signed original of this written statement required by Section 906 has been provided to Active Asset Tax Free Trust and will be retained by Active Asset Tax Free Trust and furnished to the Securities and Exchange Commission or its staff upon request.
2
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