-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JoA+hO3CONxcc5p83Ce4mQocBZAHGRyAz/IdigrRoiK5IcTgg8oqzcHF1M35SVlC MzE4ukLrktLB0I/iot1tVA== 0000749748-97-000006.txt : 19970605 0000749748-97-000006.hdr.sgml : 19970605 ACCESSION NUMBER: 0000749748-97-000006 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970604 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH ASSETS TRUST CENTRAL INDEX KEY: 0000749748 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136844974 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-04066 FILM NUMBER: 97619195 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE #300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: #2300 CITY: NEW YORK STATE: NY ZIP: 10017 N-30B-2 1 INVESTMENT ADVISER Hawaiian Trust Company, Limited Financial Plaza of the Pacific * P.O. Box 3170 Honolulu, Hawaii 96802 ADMINISTRATOR Aquila Management Corporation 380 Madison Avenue, Suite 2300 * New York, New York 10017 BOARD OF TRUSTEES Lacy B. Herrmann, Chairman Vernon R. Alden Arthur K. Carlson William M. Cole Thomas W. Courtney Richard W. Gushman, II Stanley W. Hong Theodore T. Mason Russell K. Okata Douglas Philpotts Oswald K. Stender OFFICERS Lacy B. Herrmann, President Diana P. Herrmann, Senior Vice President Charles E. Childs, III, Vice President Sherri Foster, Vice President Rose F. Marotta, Chief Financial Officer Richard F. West, Treasurer Edward M.W. Hines, Secretary DISTRIBUTOR Aquila Distributors, Inc. 380 Madison Avenue, Suite 2300 * New York, New York 10017 TRANSFER AND SHAREHOLDER SERVICING AGENT Administrative Data Management Corp. 581 Main Street * Woodbridge, New Jersey 07095-1198 CUSTODIAN Bank One Trust Company, N.A. 100 East Broad Street * Columbus, Ohio 43271 INDEPENDENT AUDITORS KPMG Peat Marwick LLP 345 Park Avenue * New York, New York 10154 Further information is contained in the Prospectus, which must precede or accompany this report. ANNUAL REPORT MARCH 31, 1997 THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST PACIFIC CAPITAL CASH ASSETS TRUST PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST PACIFIC CAPITAL U.S. TREASURIES CASH ASSETS TRUST [Logo of The Pacific Capital Funds of Cash Assets Trust: Side view of a standing lion above a thick rope] A CASH MANAGEMENT INVESTMENT THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST ANNUAL REPORT May 1, 1997 Dear Investor: We are pleased to provide you with the Annual Report for The Pacific Capital Funds of Cash Assets Trust (the "Trust") for the fiscal year ended March 31, 1997. The enclosed Annual Report includes the three series of Cash Assets Trust: Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Treasuries Cash Assets Trust and its two classes of shares: Original Shares and Service Shares. Each of the three portfolios were specifically created to meet the short-term investment needs of Hawaii investors and others. * * * * * * * ECONOMIC REVIEW The economic climate and the Federal Reserve's monetary policy once again had an impact on the short-term debt markets during the Trust's current report period. The Federal Reserve voted on March 25th to raise short-term interest rates for the first time in more than two years. The central bank took one of the smallest steps it could, raising the more important of the two short-term rates it controls - the Federal funds target rate for overnight loans between banks - by 25 basis points, to 5.50%. In doing so, the Federal Reserve was trying to keep the economy from growing so fast that it generates wage and price pressures strong enough to threaten the nation's six-year economic expansion. Indeed, forecasts of economic growth are being revised upward as business activity and consumer spending continue to expand at a strong pace - a pace which started late last year and continues unabated into 1997. The Federal Reserve is concerned that with a strong economy and low unemployment, inflation would worsen as the increased stress on labor markets would potentionally put additional upward pressure on wages and ultimately prices. MANAGEMENT DISCUSSION The three separate portfolios of the Trust - Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Treasuries Cash Assets Trust - continue to provide competitive returns to alternative short-term investment opportunities without wavering from their conservative investment approach. We should emphasize that safety of the principal value of your investment and ready liquidity have always been, and continue to be, two of the main goals in the management of investors' assets in The Pacific Capital Funds of Cash Assets Trust. Yield has always been a consideration in our management of your cash reserves. However, it has also always been the very strongest belief of the Trust's Board of Trustees, the Investment Adviser and management that investors' cash reserves is one area with which one does not take any undue risks in order to seek a marginally higher rate of return. Looking forward, we are optimistic that The Pacific Capital Funds of Cash Assets Trust will continue to provide investors attractive yields compared to alternative money market investments. With the possibility of further interest rate increases in the offing, each of the Trust's investment portfolios is well positioned to continually attract higher and competitive rates of return. Through alertness to market opportunities, the Trust can produce a highly competitive return for its investors without compromising safety. We wish to thank you for the continued support and confidence you have placed in The Pacific Capital Funds of Cash Assets Trust. We look forward to serving your cash management needs during the rest of 1997 and for many years to come. Sincerely, /s/ Lacy B. Herrmann Lacy B. Herrmann President and Chairman of the Board of Trustees KPMG Peat Marwick LLP Certified Public Accountants INDEPENDENT AUDITORS' REPORT To the Board of Trustees and Shareholders of Cash Assets Trust: We have audited the accompanying statements of assets and liabilities of The Pacific Capital Funds of Cash Assets Trust (the "Trust") (comprised of Cash Fund, Tax-Free Fund and Treasuries Fund), including the statements of investments, as of March 31, 1997, the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 1997, by correspondence with the custodian. An audit also includes assessing the accounting principles used, and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trust as of March 31, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP New York, New York May 9, 1997 PACIFIC CAPITAL CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 1997
FACE AMOUNT COMMERCIAL PAPER (46.3%) VALUE Automotive (3.1%) $ 15,000,000 Ford Motor Credit Co., 5.31%,04/17/97 $ 14,964,600 Banking/Credit Union (13.2%) 10,000,000 Banco de Credito Nacional S.A. New York Branch, 5.45%, 04/17/97 9,975,778 Letter of Credit: Barclays Bank PLC 9,400,000 Barclays Bank, PLC, 5.33%, 04/01/97 9,400,000 10,000,000 Bayerische Vereinsbank A.G., 5.35%, 04/09/97 9,988,111 15,000,000 National Bank of Pakistan New York Branch, 5.37%, 04/08/97 14,984,337 Letter of Credit: Credit Suisse 20,000,000 U.S. Central Credit Union, 5.32%, 05/09/97 19,887,689 64,235,915 Borrowing Conduit (4.1%) 20,000,000 Abbey National North American Corp., 5.26%, 04/23/97 19,935,711 Brokerage (3.1%) 15,000,000 Merrill Lynch & Company, Inc., 5.29%, 04/11/97 14,977,958 Diversified (3.6%) 17,500,000 Cargill Incorporated, 5.25%, 05/20/97 17,374,948 Education (1.2%) 6,000,000 Stanford University, 5.32% , 04/21/97 5,982,267 Finance (12.2%) 15,000,000 Associates Corporation of North America, 5.31%, 04/18/97 14,962,388 20,000,000 General Electric Capital Corp., 5.50%, 05/23/97 19,841,111 15,000,000 National Rural Utilities, 5.28%, 04/04/97 14,993,400 10,000,000 Safeco Credit Company, 5.40%, 06/17/97 9,884,500 59,681,399 Household Products (2.7%) 13,500,000 Formosa Plastics Corp. U.S.A., 5.60%, 06/23/97 13,325,700 Letter of Credit: ABN-AMRO Bank N.V. Insurance (3.1%) 15,000,000 Prudential Funding Corp., 5.32%, 04/16/97 14,966,750 Total Commercial Paper (cost $225,445,248) 225,445,248 U.S. TREASURY BILLS (5.1%) 10,000,000 5.16%, due 04/17/97 9,977,089 15,000,000 5.16%, due 04/17/97 14,965,600 Total U.S. Treasury Bills (cost $24,942,689) 24,942,689 NOTES (19.4%) U.S. Government Agencies (16.3%) 20,000,000 Farmer Mac, 5.23%, 04/15/97 19,959,283 20,000,000 Federal Home Loan Bank, 5.51%, 06/26/97 19,736,745 20,000,000 Federal Mortgage Corp., 5.175%, 05/16/97 19,870,625 20,000,000 Federal National Mortgage Association, 5.16%, 05/22/97 19,853,800 79,420,453 Insurance (3.1%) 15,000,000 Providian Life and Health Insurance Company Variable Rate Note, 5.59%, 06/30/97 (1) 15,000,000 Total Notes (cost $94,420,453) 94,420,453 REPURCHASE AGREEMENTS (29.6%) 72,000,000 Dresdner Kleinwort Benson North America LLC, 5.90%, due 04/01/97 72,000,000 (Proceeds of $72,011,800 to be received at maturity) Collateral: $50,000,000 U.S. Treasury Bonds 6.00% due 02/15/26 Collateral Market Value $43,186,800 Collateral: $23,000,000 U.S. Treasury Bonds 6.00% due 02/15/26 Collateral Market Value $19,874,700 Collateral: $10,580,000 U.S. Treasury Bonds 5.00% due 02/15/99 Collateral Market Value $10,378,500 72,345,000 SBC Warburg Inc., 6.25%, due 04/01/97 72,345,000 (Proceeds of $72,357,560 to be received at maturity) Collateral: $50,000,000 U.S. Treasury Note 8.25% due 07/15/98 Collateral Market Value $52,061,820 Collateral: $20,598,000 U.S. Treasury Note 8.75% due 10/15/97 Collateral Market Value $21,730,080 Total Repurchase Agreements (cost $144,345,000) 144,345,000 Total Investments (cost $489,153,390*) 100.4% 489,153,390 Liabilities in excess of other assets (.4) (2,024,932) Net Assets 100.0% $ 487,128,458 (*) Cost for Federal tax purposes is identical. (1) Illiquid security. The security is considered illiquid because it may not be sold, and may be redeemed only upon at least ninety days' notice to the issuer.
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 1997
RATING FACE MOODY'S/ AMOUNT BONDS AND NOTES (99.5%) S&P VALUE CALIFORNIA (2.1%) County of San Mateo, Tax and Revenue Anticipation Notes, General Obligation, $ 2,400,000 4.50%, 07/01/97 MIG1/SP1+ $ 2,403,165 FLORIDA (1.7%) Jacksonville, FL Electric Authority Revenue Bonds St. Johns River, 1,000,000 5.00%, 10/01/97 Aa1/AA 1,005,500 Jacksonville, FL Electric Authority Revenue Bonds St. Johns River, Tax Exempt Commercial Paper Series 1,000,000 3.25%, 05/09/97 P-1/A-1+ 1,000,000 Total Florida 2,005,500 GEORGIA (2.6%) Cobb County, GA School District, General Obligation, 3,000,000 5.00%, 2/1/98 Aa1/AA 3,035,451 HAWAII (45.8%) City and County of Honolulu, HI General Obligation Bond Anticipation Notes Tax Exempt Commercial Paper Series, 2,850,000 3.35%, 04/03/97 P-1/A-1+ 2,850,000 1,700,000 3.35%, 04/08/97 1,700,000 Hawaii State, General Obligation Bonds 1993 Series CD, 3,285,000 4.30%, 02/01/98 Aa3/A+ 3,300,529 Hawaii State, General Obligation Bonds 1993 Series CH, 3,300,000 3.60%, 11/01/97 Aa3/A+ 3,298,463 Hawaii State, General Obligation Bonds 1988 Series BK, 2,195,000 7.40%, 04/01/06, Pre-Refunded 04/01/97 Aaa/A+ 2,227,925 Hawaii State, General Obligation Bonds 1989 Series BN, 1,450,000 7.00%, 06/01/97 Aa3/A+ 1,457,601 Hawaii State, General Obligation Bonds 1992 Series BZ, 3,500,000 5.50%, 10/01/97 Aa3/A+ 3,528,123 Hawaii State Department of Budget & Finance Special Purpose Mortgage Revenue Bonds, (Kaiser Medical Care Program), Adjustable Rate Series A, 3,300,000 3.45%, 03/01/15, Putable 04/07/97* VMIG1/A-1+ 3,300,000 Hawaii State Department of Budget & Finance Citizens Utility- Revenue Bonds Series B. (Tax-Exempt Commercial Paper Series), 2,190,000 3.40%, 04/04/97 NR/A-1+ 2,190,000 2,810,000 3.45%, 04/14/97 NR/A-1+ 2,810,000 1,000,000 3.40%, 05/01/97 NR/A-1+ 1,000,000 Hawaii State Department of Budget & Finance Citizens Utility-Revenue Bonds Series 85. (Tax-Exempt Commercial Paper Series), 1,750,000 3.25%, 05/16/97 NR/A-1+ 1,750,000 Hawaii State Department Of Budget & Finance Special Purpose Mortgage Revenue Bonds (Kaiser Pemanente), Series A, 6,540,000 3.50%, 03/01/14, 6 month Put, next putable date 09/02/97 NR/A-1+ 6,540,000 Hawaii State Department Of Budget & Finance Special Purpose Mortgage Revenue Bonds (The Queens Health System) Series A, 1,250,000 4.00%, 07/01/97 Aa3/AA 1,250,000 Hawaii State Housing Finance & Development Corp. Revenue Bonds (Rental Housing System) Series 89 A, Letter of Credit: Banque National De Paris 2,000,000 3.55%, 07/01/24, Putable 04/07/97* VMIG1/NR 2,000,000 Hawaii State Highway Improvement Revenue Bonds, 1,500,000 3.80%, 07/01/97 Aa/AA3 1,500,000 Hawaii State Housing Finance & Development Corp. Revenue Bonds (Affordable Rental Housing Program) Series A, 5,300,000 3.70%, 07/01/27, Putable 04/07/97* VMIG1/NR 5,300,000 Letter of Credit: Banque National De Paris Honolulu County, HI General Obligation Bonds, Series A, 1,000,000 7.30%, 04/01/98 Aa/AA 1,035,373 Honolulu County, HI General Obligation Bonds, Series B, Refunding Bonds, 500,000 4.20%, 10/01/97 Aa/AA 501,235 Maui County, HI General Obligation Bonds, Series A, 450,000 4.00%, 06/1/97 Aaa/AAA 450,000 Insurance: Municipal Bond Investors Assurance Secondary Market Services Corporation Hawaii Student Loan Revenue, Senior Series II, 5,400,000 3.50%, 09/01/10, Putable 04/07/97* VMIG1/A-1+ 5,400,000 Letter of Credit: National Westminster, Guaranteed Student Loans Total Hawaii 53,389,249 IDAHO(2.3%) Idaho Health Facilities Authorized Revenue Bonds (St Lukes Regional Medical Center Project), 2,690,000 3.85%, 05/01/22, Putable 04/01/97* VMIG1/NR 2,690,000 Letter of Credit: Credit Suisse ILLINOIS(3.3%) Illinois Health Facilities Authority Revenue Bonds (Central Dupage Health Corp. Project), 3,850,000 3.85%, 11/01/20, Putable 04/01/97* VMIG1/NR 3,850,000 Letter of Credit: Rabobank Nederland INDIANA (6.3%) Gary, IN Environmental Improvement Revenue Bonds (US Steel Corporation Project), 3,100,000 3.45%, 07/07/02, Putable 04/07/97* P-1/A-1+ 3,100,000 Letter of Credit: Bank of Nova Scotia Indianapolis, IN Economic Development Revenue Bonds (Jewish Federation Campus), 2,200,000 3.45%, 04/01/05, Putable 04/07/97* VMIG1/NR 2,200,000 Letter of Credit: NBD Bank Purdue University, IN University Revenue Bonds (Student Fee) Series E, 2,000,000 3.30%, 07/01/11, Putable 04/07/97* VMIG1/A-1+ 2,000,000 Total Indiana 7,300,000 KENTUCKY (2.0%) Warsaw, KY Industrial Building Revenue Bonds (Operating Partnership) , 2,300,000 3.55%, 08/01/09, Putable 04/07/97* NR/A-1+ 2,300,000 Letter of Credit: Fifth Third Bank, Ohio LOUISIANA (2.1%) De Soto Parish, LA Pollution Control Revenue Bonds (Central Louisiana Electric Company) Series A, 2,500,000 3.30%, 07/01/18, Putable 04/07/97* VMIG1/A-1+ 2,500,000 Letter of Credit: Swiss Bank MARYLAND (0.9%) Baltimore County, MD General Obligation Bonds, Conservation Public Improvement, 1,000,000 6.80%, 09/01/97 Aaa/AAA 1,013,474 NEW JERSEY (3.4%) Morris County, NJ General Obligation Bonds Bond Anticipation Notes, 4,000,000 3.97%, 08/07/97 MIG1/SP1+ 4,000,942 NEW MEXICO (5.6%) Albuquerque, NM Airport Revenue Bonds Series A, 3,500,000 3.45%, 07/01/17, Putable 04/07/97* VMIG1/A-1+ 3,500,000 Letter of Credit: Bayerische Landesbank New Mexico State General Obligation Bonds, Capital Improvement Project, 3,000,000 6.10%, 09/01/97 Aa1/AA+ 3,029,280 Total New Mexico 6,529,280 NEW YORK (3.4%) New York, NY General Obligation Bonds, Series B , 2,000,000 3.80%, 10/01/22, Putable 04/01/97* VMIG1/A-1+ 2,000,000 Letter of Credit: Financial Guaranty Insurance Corporation New York, NY Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series A, 2,000,000 3.80%, 06/15/25, Putable 04/01/97* VMIG1/A-1+ 2,000,000 Letter of Credit: Financial Guaranty Insurance Corporation Total New York 4,000,000 NORTH CAROLINA (1.2%) Durham County, NC General Obligation Bonds, Public Improvement Project 1,400,000 3.40%, 02/01/09, Putable 04/07/97* VMIG1/A-1+ 1,400,000 Letter of Credit: Wachovia Bank OHIO (4.4%) Ohio State University Revenue Bonds, General Receipts, Series B, 2,035,000 3.35%, 12/01/01, Putable 04/07/97* VMIG1/A-1+ 2,035,000 Letter of Credit: National Westminster Ohio State University Revenue Bonds, General Receipts, Series B, 2,045,000 3.35%, 12/01/06, Putable 04/07/97* VMIG1/A-1+ 2,045,000 Letter of Credit: National Westminster Ohio State Highway General Obligation Bonds, Series T, 1,000,000 4.80%, 05/15/97 Aa1/AAA 1,001,346 Total Ohio 5,081,346 TENNESSEE (0.9%) Memphis, TN General Obligation Bonds, 1,040,000 4.00%, 08/01/97 Aa/AA 1,040,505 TEXAS (3.9%) Lower Neches Valley Authority of Texas Revenue Bonds (Chevron USA Income Project), 2,500,000 3.50%, 02/15/17, 6 month put, next putable date 08/15/97 P-1/A-1+ 2,500,000 Texas State Tax & Revenue Anticipation Notes Series A, 2,000,000 4.75%, 08/29/97 MIG1/Sp1+ 2,006,717 Total Texas 4,506,717 VIRGINIA (0.9%) Virginia Beach General Obligation Bonds Series C, 1,000,000 6.10%, 8/1/97 Aa/AA 1,007,472 VERMONT (0.9%) Vermont State Student Assistance Corp. Revenue Bonds (Student Loan Revenue), 1,100,000 3.55%, 01/01/04, Putable 04/07/97* VMIG1/NR 1,100,000 Letter of Credit: National Westminster WASHINGTON (2.8%) Washington State Health Care Facilty Authority Variable Rate Demand (Fred Hutchinson Cancer Research Center, Seattle) Series 1991 A&C, 1,490,000 3.85%, 01/01/18, Putable 04/01/97* VMIG1/NR 1,490,000 1,810,000 3.85%, 01/01/23, Putable 04/01/97* 1,810,000 Total Washington 3,300,000 WISCONSIN (2.1%) Wisconsin State Health Facilities Authority Variable Rate Demand Bonds (Franciscan Health Care), Series Ab1 & Ab2, 500,000 3.35%, 01/01/16, Putable 04/07/97* VMIG1/A-1+ 500,000 1,940,000 3.35%, 01/01/16, Putable 04/07/97* 1,940,000 Letter of Credit: Toronto Dominion Bank Total Wisconsin 2,440,000 WYOMING (0.9%) Sweetwater County, WY Pollution Control Revenue Refunding Bonds (Pacific Corp Project) Series 1990 A, 1,000,000 3.40%, 07/01/15, Putable 04/07/97* VMIG1/A-1+ 1,000,000 Letter of Credit: Credit Suisse Total Investments (cost $115,893,101**) 99.5% 115,893,101 Other assets in excess of liabilities .5 618,408 Net Assets 100.0% $ 116,511,509 (*) Variable rate obligation payable at par on demand at any time on no more than seven days notice. (**) Cost for Federal tax purposes is identical.
See accompanying notes to financial statements PACIFIC CAPITAL U.S. TREASURIES CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 1997
FACE AMOUNT U.S. TREASURY BILLS (33.5%) VALUE $ 15,000,000 5.02%, due 04/03/97 $ 14,995,812 15,000,000 5.13%, due 04/17/97 14,965,833 10,000,000 5.16%, due 04/17/97 9,977,067 10,000,000 5.27%, due 04/17/97 9,976,578 Total U.S. Treasury Bills (cost $49,915,290) 49,915,290 U.S. TREASURY NOTES (40.3%) 15,000,000 6.875%, due 04/30/97 15,019,741 15,000,000 6.500%, due 05/15/97 15,022,986 15,000,000 5.875%, due 07/31/97 15,031,510 15,000,000 5.500%, due 09/30/97 15,004,519 Total U.S. Treasury Notes (cost $60,078,756) 60,078,756 REPURCHASE AGREEMENTS (26.0%) 18,851,000 SBC Warburg Inc., 6.25%, due 04/01/97 18,851,000 (Proceeds of $18,854,273 to be received at maturity) Collateral: $13,541,000 U.S. Treasury Bond 11.25% due 02/15/15 Collateral Market Value $19,228,020 20,000,000 Dresdner Kleinwort Benson North America LLC, 5.90%, due 4/01/97 20,000,000 (Proceeds of $20,003,278 to be received at maturity) Collateral: $20,047,000 U.S. Treasury Note 6.00% due 05/31/98 Collateral Market Value $20,400,000 Total Repurchase Agreements (cost $38,851,000) 38,851,000 Total Investments (cost $148,845,046*) 99.8% 148,845,046 Other assets in excess of liabilities .2 285,668 Net Assets 100.0% $ 149,130,714 (*) Cost for Federal tax purposes is identical.
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1997
CASH TAX-FREE TREASURIES FUND FUND FUND ASSETS: Investments, at value $ 489,153,390 $ 115,893,101 $ 148,845,046 (cost: $489,153,390, $115,893,101, and $148,845,046, respectively) Cash 918 1,607 538 Interest receivable 96,606 956,006 960,389 Other assets 12,181 632 409 Total Assets 489,263,095 116,851,346 149,806,382 LIABILITIES: Dividends payable 1,882,833 271,852 594,553 Adviser and Administrator fees payable 197,705 39,752 52,193 Distribution fees payable 14,164 5,327 18,786 Accrued expenses 39,935 22,906 10,136 Total Liabilities 2,134,637 339,837 675,668 NET ASSETS $ 487,128,458 $ 116,511,509 $ 149,130,714 NET ASSETS CONSIST OF: Capital Stock - Authorized an unlimited number of shares, par value $.01 per share $ 4,878,444 $ 1,165,094 $ 1,491,212 Additional paid-in capital 482,965,952 115,344,284 147,629,947 Accumulated net realized gain (loss) on investments (715,938) 2,131 9,555 $ 487,128,458 $ 116,511,509 $ 149,130,714 SHARES OF BENEFICIAL INTEREST: Original Shares Class: Net Assets $ 421,365,448 $ 90,995,199 $ 65,706,444 Shares outstanding 422,093,185 90,993,746 65,699,376 Net asset value per share $1.00 $1.00 $1.00 Service Shares Class: Net Assets $ 65,763,010 $ 25,516,310 $ 83,424,270 Shares outstanding 65,751,211 25,515,631 83,421,783 Net asset value per share $1.00 $1.00 $1.00
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
CASH TAX-FREE TREASURIES FUND FUND FUND INVESTMENT INCOME: Interest income $ 21,924,205 $ 4,979,053 $ 6,564,367 EXPENSES: Investment Adviser fees (note 3) 1,424,936 410,547 379,291 Administrator fees (note 3) 609,175 156,130 124,062 Distribution fees (note 3) 125,694 50,847 141,496 Legal fees 118,541 46,799 33,526 Trustees' fees and expenses 118,325 55,904 45,189 Shareholders' reports and proxy statements 41,713 10,108 7,057 Fund accounting fees 29,424 28,441 29,807 Audit and accounting fees 22,050 22,050 19,300 Transfer and shareholder servicing agent fees 18,196 17,006 13,253 Registration fees and dues 15,859 5,155 3,703 Custodian fees (note 6) 15,104 12,776 12,893 Insurance 6,882 2,880 1,727 Miscellaneous 34,951 9,986 24,952 Total expenses 2,580,850 828,629 836,256 Expenses paid indirectly (note 6) (6,461) (1,267) (7,202) Net expenses 2,574,389 827,362 829,054 Net investment income 19,349,816 4,151,691 5,735,313 Net realized gain from securities transactions 46,777 2,857 4,476 Net increase in net assets resulting from operations $ 19,396,593 $ 4,154,548 $ 5,739,789
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF CHANGES IN NET ASSETS
CASH FUND TAX-FREE FUND TREASURIES FUND Year Year Year Year Year Year Ended Ended Ended Ended Ended Ended March 31,1997 March 31, 1996 March 31, 1997 March 31, 1996 March 31, 1997 March 31, 1996 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 19,349,816 $ 20,398,306 $ 4,151,691 $ 4,503,165 $ 5,735,313 $ 3,774,744 Net realized gain from securities transactions 46,777 123,536 2,857 2,817 4,476 5,079 Net increase in net assets resulting from operations 19,396,593 20,521,842 4,154,548 4,505,982 5,739,789 3,779,823 DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares (17,064,462) (19,582,910) (3,599,870) (4,171,075) (3,218,910) (3,521,108) Service Shares (2,285,354) (815,396) (551,821) (332,090) (2,516,403) (253,636) Total dividends to shareholders from net investment income (19,349,816) (20,398,306) (4,151,691) (4,503,165) (5,735,313) (3,774,744) CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares 1,381,029,520 1,151,381,874 253,991,606 317,952,322 347,794,907 297,398,080 Service Shares 363,384,239 155,686,423 57,483,211 33,774,004 614,489,280 32,654,749 1,744,413,759 1,307,068,297 311,474,817 351,726,326 962,284,187 330,052,829 Reinvested dividends and distributions: Original Shares 123,463 202,235 131,295 149,023 58,222 76,296 Service Shares 2,156,127 703,688 535,951 281,888 2,238,344 209,080 2,279,590 905,923 667,246 430,911 2,296,566 285,376 Cost of shares redeemed: Original Shares (1,268,495,494) (1,329,689,125) (288,308,370) (331,260,352) (356,184,998) (287,477,003) Service Shares (332,639,067) (127,041,609) (50,112,294) (17,825,199) (545,111,791) (21,563,607) (1,601,134,561) (1,456,730,734) (338,420,664) (349,085,551) (901,296,789) (309,040,610) Change in net assets from capital share transactions 145,558,788 (148,756,514) (26,278,601) 3,071,686 63,283,964 21,297,595 Total increase (decrease) in net assets 145,605,565 (148,632,978) (26,275,744) 3,074,503 63,288,440 21,302,674 NET ASSETS: Beginning of period 341,522,893 490,155,871 142,787,253 139,712,750 85,842,274 64,539,600 End of period $ 487,128,458 $ 341,522,893 $ 116,511,509 $ 142,787,253 $ 149,130,714 $ 85,842,274
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the "1940 Act") as an open-end investment company. The Trust consists of the following three investment portfolios (referred to individually as a "Fund" and collectively as the "Funds"): Pacific Capital Cash Assets Trust (a diversified portfolio which commenced operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust (a non-diversified portfolio which commenced operations on April 4, 1989), and Pacific Capital U.S. Treasuries Cash Assets Trust (a diversified portfolio which commenced operations on April 4, 1989). The Trust is authorized to issue for each Fund an unlimited number of shares of $.01 par value in two classes of shares; the Original Shares Class and the Service Shares Class. The Original Shares Class includes all currently outstanding shares of each Fund that were issued prior to January 20, 1995, the date on which the Capital structure was changed to include two classes rather than one. The two classes of shares are substantially identical, except that Service Shares bear the fees that are payable under the Trust's Distribution Plan. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles for investment companies. a) PORTFOLIO VALUATION: Each Fund's portfolio securities are valued by the amortized cost method permitted in accordance with Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"), which, after considering accrued interest thereon, approximates market. Under this method, a portfolio security is valued at cost adjusted for amortization of premiums and accretion of discounts. Amortization of premiums and accretion of discounts are included in interest income. b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities transactions are recorded on the trade date. Realized gains and losses from securities transactions are reported on the identified cost basis. Interest income is recorded daily on the accrual basis and is adjusted for amortization of premiums and accretion of discounts as discussed in the preceding paragraph. c) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The net asset value per share for each class of the Funds' shares is determined as of 4:00 p.m. New York time on each day that the New York Stock Exchange is open by dividing the value of the assets of the Fund allocable to that class less Fund liabilities allocable to the class and any liabilities charged directly to the class, exclusive of surplus, by the total number of shares of the class outstanding. Investment income, realized and unrealized gains and losses, if any, and expenses other than class specific expenses, are allocated daily to each class of shares based upon the proportion of net assets of each class. Class specific expenses are borne by the affected class. Service fee payments under Rule 12b-1 are borne solely by and charged to the Service Shares based on net assets of that class. d) FEDERAL INCOME TAXES: It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. Each Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes. e) REPURCHASE AGREEMENTS: It is each Fund's policy to monitor closely the creditworthiness of all firms with which it enters into repurchase agreements, and to take possession of, or otherwise perfect its security interest in, securities purchased under agreements to resell. The securities purchased under agreements to resell are marked to market every business day so that the value of the "collateral" is at least equal to the value of the "loan" (repurchase agreements being defined as "loans" in the 1940 Act), including the accrued interest earned thereon, plus sufficient additional market value as is considered necessary to provide a margin of safety. f) USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. 3. FEES AND RELATED PARTY TRANSACTIONS a) MANAGEMENT ARRANGEMENTS: Hawaiian Trust Company, Limited (the "Adviser") serves as Investment Adviser to the Trust. In this role, under Investment Advisory Agreements, the Adviser supervises the Funds' investments and provides various services. The Funds also have Administration Agreements with Aquila Management Corporation (the "Administrator", formerly Sub-Adviser and Administrator) to provide all administrative services to the Funds other than those relating to the investment portfolio and the maintenance of the accounting books and records. Specific details as to the nature and extent of the services provided by the Adviser and the Administrator are more fully defined in the Prospectus and Statement of Additional Information of the Funds. For their services, the Adviser and the Administrator each receive a fee which is payable monthly and computed as of the close of business each day on the net assets of each Fund at the following annual rates: Pacific Capital Cash Assets Trust - On net assets up to $325 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.33% and 0.17%, respectively and on net assets above that amount at the annual rate of 0.43% and 0.07%, respectively. For the year ended March 31, 1997, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $1,424,936 and $609,175, respectively. Pacific Capital Tax-Free Cash Assets Trust - On net assets up to $95 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.27% and 0.13%, respectively and on net assets above that amount at the annual rate of 0.33% and 0.07%, respectively. For the year ended March 31, 1997, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $410,547 and $156,130, respectively. Pacific Capital U.S. Treasuries Cash Assets Trust - On net assets up to $60 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.27% and 0.13%, respectively and on net assets above that amount at the annual rate of 0.33% and 0.07%, respectively. For the year ended March 31, 1997, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $379,291 and $124,062 respectively. The Adviser and the Administrator each agrees that the above fees shall be reduced, but not below zero, by an amount equal to its proportionate share (determined on the basis of the respective fees computed as described above) of the amount, if any, by which the total expenses of a Fund in any fiscal year, exclusive of taxes, interest and brokerage fees, shall exceed the lesser of (i) 2.5% of the first $30 million of average annual net assets of the Fund plus 2% of the next $70 million of such assets and 1.5% of its average annual net assets in excess of $100 million, or (ii) 25% of the Fund's total annual investment income. The payment of the above fees at the end of any month will be reduced or postponed so that at no time will there be any accrued but unpaid liability under this expense limitation. No such reduction in fees was required during the year ended March 31, 1997. b) DISTRIBUTION AND SERVICING FEES: Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain distribution or service fees by the Service Shares class of the Fund. Such payments are made to "Designated Payees"-broker-dealers, other financial institutions and service providers who have entered into appropriate agreements with the Distributor and which have rendered assistance in the distribution and/or retention of the Funds' Service Shares or in the servicing of Service Share accounts. The total payments under this part of a Fund's Plan may not exceed 0.25 of 1% of its average annual assets represented by Service Shares. No such payments will be made by the Original Share class. Specific details about each Plan are more fully defined in the Prospectus and Statement of Additional Information of the Funds. Under a Distribution Agreement, Aquila Distributors, Inc. (the "Distributor") serves as the exclusive distributor of the Funds' shares. No compensation or fees are paid to Aquila Distributors, Inc. for such share distribution. 4. DISTRIBUTIONS The Funds declare dividends daily from net investment income and make payments monthly in additional shares at the net asset value per share or in cash, at the shareholder's option. At March 31, 1997, the Cash Fund had a capital loss carryover of approximately $716,000 which expires at March 31, 2003 and is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code. To the extent that this loss is used to offset future realized capital gains, it is probable the gains so offset will not be distributed. 5. GUARANTEES OF CERTAIN COMMERCIAL PAPER Various banks and other institutions have issued irrevocable letters of credit or guarantees for the benefit of the holders of certain commercial paper. Payment at maturity of principal and interest of certain commercial paper held by the Funds is supported by such letters of credit or guarantees. 6. CUSTODIAN FEES The Funds have negotiated an offset arrangement with their custodian wherein they receive credit toward the reduction of custodian fees whenever there are uninvested cash balances. During the year ended March 31, 1997, the custodian fees of the Cash Fund, the Tax-Free Fund and the Treasuries Fund, amounted to $15,104, $12,776 and $12,893, respectively. Of these amounts, $6,461, $1,267 and $7,202, respectively, were offset by such credits. The Funds could have invested their cash balances in an income-producing asset if they had not agreed to a reduction in fees under the expense offset arrangement with the custodian. PACIFIC CAPITAL CASH ASSETS TRUST FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
SERVICE SHARES(1) Year Year Period Ended Ended Ended ORIGINAL SHARES(2) March March March Year ended March 31, 31, 31, 31, 1997 1996 1995** 1997 1996 1995 1994 1993 Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Income from Investment Operations: Net investment income 0.05 0.05 0.01 0.05 0.05 0.04 0.03 0.03 Less Distributions: Dividends from net investment income (0.05) (0.05) (0.01) (0.05) (0.05) (0.04) (0.03) (0.03) Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Total Return (%) 4.62 5.06 0.85# 4.88 5.32 4.40 2.74 3.15 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 65.8 32.9 3.5 421.4 308.7 486.7 407.1 268.0 Ratio of Expenses to Average Net Assets (%) 0.85 0.86 0.83* 0.60 0.60 0.59 0.59 0.61 Ratio of Net Investment Income to Average Net Assets (%) 4.53 4.84 5.26* 4.79 5.24 4.40 2.71 3.13 For periods after April 1, 1995, net investment income per share and the ratios of income and expenses to average net assets without the expense offset in custodian fees for uninvested cash balances would have been: Net investment income ($) 0.05 0.05 0.05 0.05 Ratio of Expenses to Average Net Assets (%) 0.85 0.86 0.60 0.61 Ratio of Net Investment Income to Average Net Assets (%) 4.53 4.84 4.78 5.23 (1) New class of shares established on January 20, 1995. (2) Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. # Not annualized. * Annualized.
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
SERVICE SHARES(1) Year Year Period Ended Ended Ended ORIGINAL SHARES(2) March March March Year ended March 31, 31, 31, 31, 1997 1996 1995** 1997 1996 1995 1994 1993 Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Income from Investment Operations: Net investment income 0.03 0.03 0.01 0.03 0.03 0.03 0.02 0.02 Less Distributions: Dividends from net investment income (0.03) (0.03) (0.01) (0.03) (0.03) (0.03) (0.02) (0.02) Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Total Return (%) 2.75 3.11 0.52# 3.00 3.37 2.74 2.02 2.52 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 25.5 17.6 1.4 91.0 125.2 138.3 113.9 69.3 Ratio of Expenses to Average Net Assets (%) 0.80 0.80 0.77* 0.55 0.54 0.55 0.56 0.54 Ratio of Net Investment Income to Average Net Assets (%) 2.70 2.97 3.22* 2.97 3.32 2.74 1.99 2.52 For the years 1994 and 1993, net investment income per share and the ratios of income and expenses to average net assets without the Adviser's and Administrator's voluntary waiver of fees and for periods after April 1, 1995, without the expense offset in custodian fees for uninvested cash balances, would have been: Net Investment Income ($) 0.03 0.03 0.03 0.03 0.02 0.02 Ratio of Expenses to Average Net Assets (%) 0.80 0.80 0.55 0.54 0.58 0.59 Ratio of Net Investment Income to Average Net Assets (%) 2.70 2.97 2.97 3.32 1.97 2.47 (1) New class of shares established on January 20, 1995. (2) Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. # Not annualized. * Annualized.
See accompanying notes to financial statements. PACIFIC CAPITAL U.S. TREASURIES CASH ASSETS TRUST FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
SERVICE SHARES(1) Year Year Period Ended Ended Ended ORIGINAL SHARES(2) March March March Year ended March 31, 31, 31, 31, 1997 1996 1995** 1997 1996 1995 1994 1993 Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Income from Investment Operations: Net investment income 0.04 0.05 0.01 0.05 0.05 0.04 0.03 0.03 Less Distributions: Dividends from net investment income (0.04) (0.05) (0.01) (0.05) (0.05) (0.04) (0.03) (0.03) Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Total Return (%) 4.50 4.94 0.94# 4.76 5.20 4.20 2.59 2.90 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 83.4 11.8 0.5 65.7 74.0 64.0 91.7 26.1 Ratio of Expenses to Average Net Assets (%) 0.79 0.79 0.85* 0.55 0.54 0.54 0.52 0.61 Ratio of Net Investment Income to Average Net Assets (%) 4.43 4.68 5.09* 4.66 5.07 4.04 2.58 2.96 Net investment income per share and the ratios of income and expenses to average net assets without the Adviser's and Administrator's voluntary waiver of fees for periods prior to April 1, 1996, and for periods after April 1, 1995, without the expense offset in custodian fees for uninvested cash balances, would have been: Net Investment Income ($) 0.04 0.05 0.01 0.05 0.05 0.04 0.03 0.03 Ratio of Expenses to Average Net Assets (%) 0.80 0.88 0.98* 0.56 0.63 0.59 0.52 0.66 Ratio of Net Investment Income to Average Net Assets (%) 4.42 4.60 4.96* 4.65 4.98 3.99 2.58 2.9 (1) New class of shares established on January 20, 1995. (2) Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. # Not annualized. * Annualized.
See accompanying notes to financial statements. REPORT OF THE ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED) The Annual Meeting of Shareholders of Cash Assets Trust (the "Trust") was held on March 27, 1997.* At the meeting, the following matters were submitted to a shareholder vote and approved: (i) the election of Lacy B. Herrmann, Vernon R. Alden, Arthur K. Carlson, William M. Cole, Thomas W. Courtney, Richard W. Gushman, II, Stanley W. Hong, Theodore T. Mason, Russell K. Okata, Douglas Philpotts, and Oswald K. Stender as Trustees to hold office until the next annual meeting of the Trust's shareholders or until his or her successor is duly elected (each Trustee received at least 508,484,124.90 affirmative votes (99.80%); no more than 1,018,091.67 votes were withheld for any Trustee (0.20%)), and (ii) the ratification of the selection of KPMG Peat Marwick LLP as the Trust's independent auditors for the fiscal year ending March 31, 1997 (votes for: 508,678,846.57 (99.84%); votes against: 556,751.00 (0.11%); abstentions: 266,618.00 (0.05%); broker non-votes: 0.00 (0.00%)). - ----------- * On the record date for this meeting, 656,154,884.17 shares of the Trust were outstanding and entitled to vote. The holders of 509,502,216.57 shares (77.65%) entitled to vote were present in person or by proxy at the meeting. FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED) This information is presented in order to comply with a requirement of the Internal Revenue Code AND NO CURRENT ACTION ON THE PART OF SHAREHOLDERS IS REQUIRED. For the fiscal year ended March 31, 1997, the Federal tax status of the total amount of dividends paid by each of the investment portfolios comprising Cash Assets Trust is as follows:
Fund Federal Tax Status Pacific Capital Cash Assets Trust Ordinary dividend income Pacific Capital Tax-Free Cash Assets Trust Exempt-interest dividends Pacific Capital U.S. Treasuries Cash Assets Trust Ordinary dividend income
Prior to January 31, 1997, shareholders were mailed IRS Form 1099-DIV which contained information on the status of distributions paid for the 1996 CALENDAR YEAR. -----END PRIVACY-ENHANCED MESSAGE-----