-----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, P1MxMPCGRx0FmEQAS4Bgcrl9+zGnMqcEq+eZZodEM1YDjPDf+3Dpp78C8vrJaJb+ pgveHw8aX4D94tX9yFs8Zw== 0000749748-07-000018.txt : 20071205 0000749748-07-000018.hdr.sgml : 20071205 20071205135111 ACCESSION NUMBER: 0000749748-07-000018 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071205 DATE AS OF CHANGE: 20071205 EFFECTIVENESS DATE: 20071205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH ASSETS TRUST CENTRAL INDEX KEY: 0000749748 IRS NUMBER: 136844974 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04066 FILM NUMBER: 071286235 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE STREET 2: SUITE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: SUITE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 0000749748 S000006652 Pacific Capital Cash Assets Trust C000018146 Pacific Capital Cash Assets Trust Original Shares CATXX C000018147 Pacific Capital Cash Assets Trust Service Shares CASXX 0000749748 S000006653 Padific Capital Tax-Free Cash Assets Trust C000018148 Pacific Capital Tax-Free Cash Assets Trust Original Shares TFCXX C000018149 Pacific Capital Tax-Free Cash Assets Trust Service Shares TFAXX 0000749748 S000006654 Pacific Capital U.S. Government Securities Cash Assets Trust C000018150 Pacific Capital U.S.Government Securities Cash Assets Trust Original Shares USCXX C000018151 Pacific Capital U.S. Government Securities Cash Assets Trust Service Shares UCSXX N-CSR 1 catncsr.txt CASH ASSETS TRUST 9/30/07 FORM N-CSR 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 811-4066 Cash Assets Trust (Exact name of Registrant as specified in charter) 380 Madison Avenue New York, New York 10017 (Address of principal executive offices) (Zip code) Joseph P. DiMaggio 380 Madison Avenue New York, New York 10017 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 697-6666 Date of fiscal year end: 3/31 Date of reporting period: 9/30/07 FORM N-CSR ITEM 1. REPORTS TO STOCKHOLDERS. SEMI-ANNUAL REPORT SEPTEMBER 30, 2007 PACIFIC CAPITAL FUNDS(R) OF CASH ASSETS TRUST PACIFIC CAPITAL CASH ASSETS TRUST PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST [LOGO OF THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST: A LION STANDING ON A TWISTER ROPE AND SALE TO LEFT OF PACIFIC](R) A CASH MANAGEMENT INVESTMENT [LOGO OF THE PACIFIC PACIFIC CAPITAL FUNDS OF CASH CAPITAL FUNDS(R) ASSETS TRUST: A LION OF STANDING ON A TWISTER CASH ASSETS TRUST ROPE AND SALE TO LEFT OF PACIFIC](R) SEMI-ANNUAL REPORT November, 2007 Dear Investor: We are pleased to provide you with the Semi-Annual Report for The Pacific Capital Funds of Cash Assets Trust for the six-month period ended September 30, 2007. The enclosed Semi-Annual Report includes the three series of Cash Assets Trust (the "Trust"): Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust and their two classes of shares: Original Shares and Service Shares. ************************************ The current six-month reporting period was marked by the widespread turbulence in the financial markets with the impact felt across a broad range of asset classes. The financial markets became more volatile in reaction to increasing defaults on sub-prime mortgages, or loans with weaker underwriting standards. The problems and concerns surrounding sub-prime mortgage loans rippled through the fixed-income market, including short-term investment instruments which constitute a large portion of money market securities. As the liquidity crisis in the financial markets continued to unfold during the summer months, the Federal Reserve (the "Fed") voted to change the course of its monetary policy. Citing a need to induce liquidity into the banking system and to possibly curtail any threat of a slowdown in the economy, the Fed lowered the target on the Federal Funds rate to 4.75%. The Federal Funds rate is the interest rate banks charge one another on overnight loans and the Fed's primary tool for influencing economic activity. As you are aware, a reduction in interest rates usually means lower borrowing cost for consumers and businesses, resulting in an increase in economic activity. The action by the Fed was a bold attempt to restore investor confidence and a clear signal that the central bank viewed the turbulence and disruptions of the past couple of months as too dangerous to ignore. The move by the Fed was also the first rate reduction of any kind in four years, the steepest in nearly five years and its most abrupt reversal of course since January 2001, when Fed policy makers sharply reduced interest rates at an unscheduled emergency meeting just before the last recession. NOT A PART OF THE SEMI-ANNUAL REPORT Over the past couple of years, there has been a fundamental change in the way people look at their investments. Investors will always want competitive returns, yet, with the recent problem areas that have developed in the financial markets, the words most often heard these days are, "How safe is my investment?" This is especially true for investors' cash reserves. As you have read in previous shareholder report letters, we have used this opportunity to remind investors that safety of principal is first and foremost in the eyes of your Board of Trustees, Investment Adviser and Administrator when managing your cash reserves. Each of the Trust's investment portfolios has successfully weathered the recent financial crisis by adhering to each portfolios' stated objective. Rest assured, your Investment Adviser and its portfolio management team has always sought to ensure that no undue risks are taken in order to seek higher yield. Looking forward, we are optimistic that each of the Pacific Capital Funds of Cash Assets Trust will continue to provide investors with competitive returns without compromising safety of principal. As always, we again wish to express our appreciation for the confidence you have shown by your investment in the Pacific Capital Funds of Cash Assets Trust. We can assure you that we will consistently do our best to merit your continued level of trust. Sincerely, /s/ Diana P. Herrmann /s/ Lacy B. Herrmann Diana P. Herrmann Lacy B. Herrmann President Founder and Chairman Emeritus NOT A PART OF THE SEMI-ANNUAL REPORT PACIFIC CAPITAL CASH ASSETS TRUST SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2007 (UNAUDITED)
PRINCIPAL AMOUNT COMMERCIAL PAPER (45.8%) VALUE - -------------- ------------------------------------------------------------------------------- ------------- AUTOMOTIVE (5.5%) $ 20,000,000 Toyota Motor Credit Corp., 5.17%, 12/14/07 .................................... $ 19,787,456 ------------- BANKS (11.1%) 20,000,000 Barclays US Funding Corp., 5.40%, 10/23/07 19,934,000 20,000,000 Calyon NA, Inc., 5.17%, 01/08/08 .............................................. 19,715,375 ------------- 39,649,375 ------------- BROKERAGE (4.1%) 15,000,000 Morgan Stanley Dean Witter, 5.05%, 03/18/08 ................................... 14,644,396 ------------- FINANCE (16.7%) 20,000,000 American Express Credit Corp., 5.26%, 10/12/07 ................................ 19,967,856 20,000,000 General Electric Capital Corp., 5.21%, 11/08/07 ............................... 19,890,011 20,000,000 Swedish Export Credit Corp., 5.14%, 10/18/07 .................................. 19,951,408 ------------- 59,809,275 ------------- INSURANCE (8.4%) 15,000,000 MetLife Funding, Inc., 4.75%, 11/09/07 ........................................ 14,922,813 15,000,000 Prudential Funding Corp., 4.67%, 11/26/07 ..................................... 14,891,033 ------------- 29,813,846 ------------- Total Commercial Paper .................................................... 163,704,348 ------------- U. S. GOVERNMENT AGENCY OBLIGATIONS (34.6%) ------------------------------------------------------------------------------- 60,000,000 Federal Home Loan Bank, 4.57%, 10/19/07 ....................................... 59,862,900 64,000,000 Federal National Mortgage Corp., 5.11%, 11/19/07 .............................. 63,554,862 ------------- Total U. S. Government Agency Obligations ................................. 123,417,762 ------------- CERTIFICATE OF DEPOSIT (5.6%) ------------------------------------------------------------------------------- 20,000,000 Societe Generale N.A., Inc., 5.38%, 06/09/08 .................................. 20,000,000 ------------- REPURCHASE AGREEMENTS (14.0%) ------------------------------------------------------------------------------- 25,000,000 Banc of America Securities LLC, 4.80%, 10/01/07 ............................... 25,000,000 (Proceeds of $25,010,000 to be received at maturity, Collateral: $24,850,000 Federal Home Loan Mortgage Corp. 6.00% due 07/06/17; the collateral fair value plus interest receivable equals $25,512,425)
PRINCIPAL AMOUNT REPURCHASE AGREEMENTS (CONTINUED) VALUE - -------------- ------------------------------------------------------------------------------- ------------- AUTOMOTIVE (5.5%) $ 25,000,000 SG Americas Securities, LLC, 4.90%, 10/01/07 .................................. $ 25,000,000 (Proceeds of $25,010,208 to be received at maturity, Collateral: $26,040,000 Federal National Mortgage Association discount note due 03/12/08; the collateral fair value plus interest receivable equals $25,500,000) ------------- Total Repurchase Agreements ............................................... 50,000,000 ------------- SHARES INVESTMENT COMPANY (0.4%) - -------------- ------------------------------------------------------------------------------- 1,390,894 JP Morgan U.S. Government Money Market Fund, Capital Shares ................... 1,390,894 ------------- Total Investments (Amortized Cost $358,513,004*) .............................. 100.4% 358,513,004 Other assets less liabilities ................................................. (0.4) (1,329,736) ----- ------------- NET ASSETS .................................................................... 100.0% $ 357,183,268 ===== ============= * Cost for Federal income tax and financial reporting purposes is identical. PERCENT OF PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO ---------------------------------- ---------- Commercial Paper .............................................................. 45.7% U. S. Government Obligations .................................................. 34.4 Certificate of Deposit ........................................................ 5.6 Repurchase Agreements ......................................................... 13.9 Investment Company ............................................................ 0.4 ----- 100.0% =====
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2007 (UNAUDITED)
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (99.7%) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- COLORADO (1.9%): Colorado Housing & Finance Authority Revenue Bonds, Class I, Series A-1, Weekly Reset VRDO*, SPA: FHLB $ 4,360,000 3.730%, 10/01/30 ...................................... VMIG1/A-1+ $ 4,360,000 ------------- FLORIDA (0.5%): West Palm Beach, FL Utilities System Revenue, Prerefunded to 10/01/07 @101, Collateral: State & Local Government Series, FGIC Insured 1,000,000 5.500%, 10/01/29 ...................................... Aaa/NR 1,010,000 ------------- GEORGIA (0.5%): Columbia County, GA, Courthouse/Detention Center Project GO Bond, Prerefunded to 02/01/08 @ 102, Collateral: State & Local Government Series 1,000,000 5.625%, 02/01/20 ...................................... Aa2/AA 1,026,202 ------------- HAWAII (38.1%): City & County Honolulu, HI, GO Bond, Series B, MBIA Insured 200,000 5.000%, 07/01/08 ...................................... Aaa/AAA 201,727 City & County Honolulu, HI, GO Bond, Series C, FGIC Insured 500,000 5.500%, 11/01/07 ...................................... Aaa/AAA 500,715 City and County Honolulu, HI, GO Commercial Paper, Interest at Maturity, Series H, LOC: Heleba 15,000,000 3.680%, 11/01/07 ..................................... P-1/A1+ 15,000,000 City and County Honolulu, HI, GO Commercial Paper, Interest at Maturity, Series H, LOC: Heleba 2,000,000 3.650%, 02/05/08 .................................... P-1/A1- 2,000,000 City and County Honolulu, HI, GO Commercial Paper, Interest at Maturity Series W, LOC: Westdeutsche Landesbank 7,100,000 3.730%, 02/05/08 .................................... P-1/A1+ 7,100,000 City and County Honolulu, HI, GO Commercial Paper, Interest at Maturity Series W, LOC: Westdeutsche Landesbank 4,500,000 3.670%, 10/02/07 .................................... P1/A1+ 4,500,000 2,300,000 3.720%, 11/01/07 .................................... P1/A1+ 2,300,000
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- HAWAII (continued): Hawaii State, GO Bonds, Series C, Refunding, FSA Insured $ 250,000 5.125%, 02/01/08 .................................... Aaa/AAA $ 251,238 Hawaii State, GO Bond, Series CL, MBIA Insured 1,000,000 6.000%, 03/01/08 .................................... Aaa/AAA 1,009,518 Hawaii State, GO Bond, Series CN, FGIC Insured 1,050,000 6.250%, 03/01/08 .................................... Aaa/AAA 1,060,906 Hawaii State, GO Bond, Series CP, FGIC Insured, Prerefunded to 10/01/07 @ 101, Collateral: US Government Securities 200,000 5.000%, 10/01/14 .................................... Aaa/AAA 202,000 Hawaii State, GO Bond, Series CR, MBIA Insured, Prerefunded to 04/01/08 @ 101, Collateral: US Government Securities 700,000 5.250%, 04/01/12 .................................... Aaa/AAA 712,490 1,050,000 4.750%, 04/01/18 .................................... Aaa/AAA 1,065,814 Hawaii State, GO Bond, Series CS, MBIA Insured 4,000,000 5.000%, 04/01/08 .................................... Aaa/AAA 4,024,796 Hawaii State, GO Bonds, Series CU, MBIA Insured 750,000 5.750%, 10/01/07 .................................... Aaa/AAA 750,000 Hawaii State, GO Bond, Series CZ, FSA Insured 1,000,000 5.000%, 07/01/08 .................................... Aaa/AAA 1,009,775 Hawaii State, GO Bond, Series DB, MBIA Insured 1,000,000 4.000%, 09/01/08 .................................... Aaa/AAA 1,002,836 Hawaii State Department of Budget and Finance Special Purpose Revenue Bonds (Queen's Health Systems) Series A, Weekly Reset VRDO*, SPA: Bank of Nova Scotia, AMBAC Insured 4,600,000 3.580%, 07/01/29 .................................... VMIG1/A-1+ 4,600,000 Hawaii State Department of Budget and Finance Special Purpose Revenue Bonds (Queens Health Systems) Series C, Weekly Reset VRDO*, SPA: Bank of America N.A., AMBAC Insured 37,335,000 3.520%, 07/01/28 .................................... MIG1/AAA 37,335,000
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- HAWAII (continued): Hawaii State Highway Revenue, Prerefunded to 07/01/08 @101, Collateral: State & Local Government Series 100% $ 1,100,000 5.000%, 07/01/16 .................................... Aaa/AAA $ 1,121,521 ------------- 85,748,336 ------------- ILLINOIS (3.8%): Chicago, IL GO Bonds, Series B, Weekly Reset VRDO*, SPA: Landesbank Baden-Wurttemberg, FGIC Insured 6,000,000 3.740%, 01/01/37 .................................... VMIG1/A-1+ 6,000,000 Chicago, IL Met Water Reclamation District, Greater Chicago Capital Improvement, Escrowed to Maturity, Collateral: State & Government Series 100% 2,000,000 7.000%, 12/01/07 .................................... Aaa/AAA 2,010,618 Chicago, IL Water Revenue Bonds, Prerefunded to 11/01/07 @102, Collateral: State & Local Government Series, FGIC Insured 600,000 5.250%, 11/01/23 .................................... Aaa/AAA 612,756 ------------- 8,623,374 ------------- MASSACHUSETTS (0.4%): Massachusetts State Industrial Finance Agency, Assisted Living Facilities Revenue (TNG Marina Bay LLC Project), Revenue Bond, AMT, Prerefunded to 12/01/07 @103, Collateral: US Government Securities 915,000 7.500%, 12/01/27 .................................... NR/AAA 947,552 ------------- MICHIGAN (7.5%): Eastern Michigan University, University Revenue Bonds, Daily Reset VRDO*, FGIC Insured, SPA: FGIC-SPI 9,500,000 3.910%, 06/01/27 .................................... Aaa/A-1+ 9,500,000
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- MICHIGAN (continued): Macomb Township, MI Building Authority, Revenue Bonds, FGIC Insured, Prerefunded to 04/01/08 @101, Collateral: State & Local Government Series 100% $ 1,000,000 6.000%, 04/01/27 .................................... Aaa/AAA $ 1,021,247 Michigan Municipal Bond Authority Revenue Bonds, State Revolving Fund, Prerefunded to 10/01/07 @101, Collateral: State & Local Government Series 1,000,000 5.250%, 10/01/15 .................................... Aaa/AAA 1,010,000 Michigan State Building Authority Facilities Program Revenue Bonds, Series II, Prerefunded to 10/15/07 @101, Collateral: State & Local Government Series 2,535,000 5.000%, 10/15/11 .................................... Aa3/AA- 2,561,598 Northern Michigan University Revenue Bonds, Daily Reset VRDO*, SPA: DEPFA Bank PLC, AMBAC Insured 2,725,000 3.910%, 12/01/35 .................................... Aaa/AAA 2,725,000 ------------- 16,817,845 ------------- MISSOURI (13.3%): Kansas City, MO Industrial Development Authority Revenue Bonds, (Ewing Marion Kaufman Foundation), Daily Reset VRDO* 9,860,000 3.910%, 04/01/27 .................................... NR/A-1+ 9,860,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (St. Louis University), Series B, Daily Reset VRDO*, SPA: Bank of America N.A. 6,550,000 3.940%, 10/01/24 .................................... VMIG1/A-1+ 6,550,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (Washington University), Series B, SPA: JPMorgan Chase Bank NA, Daily Reset VRDO* 6,000,000 3.860%, 03/01/40 .................................... VMIG1/A-1+ 6,000,000 Missouri State Health & Educational Facilities Authority Educational Facilities Revenue, St. Louis University, SPA: US Bank NA, Daily Reset, VRDO* 760,000 3.940%, 07/01/32 .................................... VMIG1/NR 760,000
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- MISSOURI (continued): Missouri State Health & Educational Facilities Authority Revenue, Washington University, Series A, SPA: Dexia Credit Local, Daily Reset, VRDO* $ 3,250,000 3.860%, 02/15/34 .................................... Aaa/AAA $ 3,250,000 University of Missouri University System Facilities Revenue Bonds, Series B, Daily Reset VRDO* 3,400,000 3.860%, 11/01/30 .................................... VMIG1/A-1+ 3,400,000 ------------- 29,820,000 ------------- NEBRASKA (0.4%): Nebraska Public Power District Revenue Bonds, Prerefunded 2005, Series A, Prerefunded to 01/01/08 @101, Collateral: U.S. Treasury Obligations, MBIA Insured 910,000 5.250%, 01/01/11 .................................... Aaa/AAA 922,672 ------------- NEVADA (4.5%): Clark County, NV Airport Revenue Bonds, Series C, Weekly Reset VRDO*, SPA: Landesbank Baden- Wurttemberg, FGIC Insured 10,100,000 3.740%, 07/01/29 .................................... VMIG1/A-1+ 10,100,000 ------------- NEW YORK (6.2%): Long Island, NY Power Authority Revenue Bonds, Series 1A, Weekly Reset VRDO*, LOC: 80% Bayerische Landesbank; 20% Landesbank Baden-Wurttemberg 9,000,000 3.770%, 05/01/33 .................................... VMIG1/A-1+ 9,000,000 New York, NY City Transitional Finance Authority Revenue Bonds, Series 3, Daily Reset VRDO*, SPA: Royal Bank of Canada 3,245,000 3.960%, 11/01/22 .................................... VMIG1,A-1+ 3,245,000 New York, NY City Transitional Finance Authority Revenue, Adjustable-Future Tax Secured- Series A-1, Weekly reset VRDO*, SPA: Westdeutsche Landesbank 1,800,000 3.850%, 11/15/28 .................................... VMIG1,A-1+ 1,800,000 ------------- 14,045,000 -------------
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- NORTH CAROLINA (7.5%): Concord, NC Utility Systems Revenue Bonds, Series B, Weekly Reset VRDO*, SPA: Wachovia Bank, FSA Insured $ 9,720,000 3.730%, 12/01/22 .................................... VMIG1/NR $ 9,720,000 Durham, NC Public Improvement Project GO Bonds, Weekly Reset VRDO*, SPA: Wachovia Bank of North Carolina 1,425,000 3.750%, 02/01/09 .................................... VMIG1/A-1+ 1,425,000 2,975,000 3.750%, 02/01/11 .................................... VMIG1/A-1+ 2,975,000 1,270,000 3.750%, 02/01/12 .................................... VMIG1/A-1+ 1,270,000 1,475,000 3.750%, 02/01/13 .................................... VMIG1/A-1+ 1,475,000 ------------- 16,865,000 ------------- NORTH DAKOTA (1.3%): Grand Forks, ND Senior Housing Revenue, 4000 Valley Square Project, Prerefunded to 12/01/07 @ 100, Collateral: State & Local Government Series 100% 3,000,000 6.250%, 12/01/34 .................................... NR/NR* 3,011,862 ------------- TENNESSEE (0.3%): Knox County, TN Public Improvement, GO Bond, Prerefunded to 05/01/08 @ 101, Collateral: State & Local Government Series 100% 750,000 5.375%, 05/01/18 .................................... Aa2/AA 764,619 ------------- TEXAS (0.9%): Tarrant County, TX Health Facilities Development Health System Revenues, Texas Health Resources System-Series A, MBIA Insured, Prerefunded to 2/15/08 @102, Collateral: State & Local Government Series 100% 2,000,000 5.750%, 02/15/09 .................................... Aaa/AAA 2,054,556 -------------
RATING PRINCIPAL MOODY'S/ AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- VIRGINIA (3.3%): University of Virginia Revenue Bonds, Series A, Weekly Reset VRDO* $ 7,315,000 3.700%, 06/01/34 .................................... VMIG1/A-1+ $ 7,315,000 ------------- WASHINGTON (0.5%): Island County, WA School District #201 Oak Harbor, GO Bond, FGIC Insured, Prerefunded to 12/01/07 @ 100, Collateral: US Government Securities 1,010,000 5.550%, 12/01/11 .................................... Aaa/NR 1,013,000 ------------- PUERTO RICO (8.8%): Puerto Rico Commonwealth Highway & Transportation Authority Revenue, Series A- Variable Rate, Weekly Reset, AMBAC Insured, SPA: Bank of Nova Scotia 2,500,000 3.700%, 07/01/28 .................................... VMIG1/A-1+ 2,500,000 Puerto Rico Commonwealth Highway & Transportation Authority Transportation Revenue Prerefunded Series A, Revenue Bonds, AMBAC Insured, Prerefunded to 07/01/08 @ 101, Collateral: State & Local Government Series 100% 2,675,000 5.000%, 07/01/28 .................................... Aaa/AAA 2,726,633 Puerto Rico Commonwealth Infrastructure Financing Authority Revenue Bonds, Series A, Prerefunded to 01/01/08 @101, Collateral: U.S. Government Agencies 98%; U.S. Treasury Obligations 2%, AMBAC Insured 8,300,000 5.000%, 07/01/28 .................................... Aaa/AAA 8,412,540 Puerto Rico Electric Power Authority Power Revenue, Series DD, FSA Insured, Prerefunded to 07/01/08 @ 101.50 1,000,000 5.000%, 07/01/28 .................................... Aaa/AAA 1,025,796 Puerto Rico Government Development Bank Refunding Adjustable Rate, Revenue Bond, MBIA Insured, SPA: Credit Suisse, Weekly Reset, VRDO* 5,100,000 3.510%, 12/01/15 .................................... Aaa/AAA 5,100,000 ------------- 19,764,969 -------------
RATING MOODY'S/ SHARES INVESTMENT COMPANY (1.9%) S&P VALUE - ------------ -------------------------------------------------------- -------- ------------- 4,270,000 Goldman Sachs Financial Square Tax-Free Money Market Fund Institutional Shares ................ $ 4,270,000 -------------- Total Investments (Amortized Cost $228,479,987**) ... 101.6% 228,479,987 Other assets less liabilities ....................... (1.6) (3,601,823) -------------- NET ASSETS .......................................... 100.0% $ 224,878,164 ===== ==============
* Variable rate demand obligations (VRDOs) are payable upon demand within the same day for securities with daily liquidity or seven days for securities with weekly liquidity. ** Cost for Federal income tax and financial reporting purposes is identical. *** Any security not rated (NR) by either credit rating service must be determined by the Investment Adviser to have sufficient quality to be ranked in the top four ratings if a credit rating were to be assigned by a rating service. Portfolio Distribution (unaudited) Percentage Percentage Percentage of Portfolio of Portfolio of Portfolio ------------ ------------ ------------ Colorado 1.9% Michigan 7.4% Puerto Rico 8.7% Florida 0.4 Missouri 13.1 Tennessee 0.3 Georgia 0.5 Nebraska 0.4 Texas 0.9 Hawaii 37.5 Nevada 4.4 Virginia 3.2 Illinois 3.8 New York 6.1 Washington 0.4 Investment Company 1.9 North Carolina 7.4 100.0% Massachusetts 0.4 North Dakota 1.3 PORTFOLIO ABBREVIATIONS: AMBAC - American Municipal Bond Assurance Corp. AMT - Alternative Minimum Tax ETM - Escrowed to Maturity FGIC - Financial Guaranty Insurance Corporation FHLB - Federal Home Loan Bank FSA - Financial Security Assurance GO - General Obligation LOC - Letter of Credit MBIA - Municipal Bond Investors Assurance NR - Not Rated SPA - Standby Bond Purchase Agreement SPI - Securities Purchase, Inc. VRDO - Variable Rate Demand Obligation See accompanying notes to financial statements. PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2007 (UNAUDITED)
PRINCIPAL AMOUNT U.S. GOVERNMENT AGENCIES (100.3%) VALUE - ------------- ---------------------------------------------------------------- --------------- FEDERAL HOME LOAN BANK (100.3%) $146,000,000 4.00%, 10/01/07 ............................................... $ 146,000,000 85,000,000 4.92%, 10/03/07 ............................................... 84,976,767 100,000,000 5.09%, 10/09/07 ............................................... 99,886,889 140,700,000 4.60%, 10/19/07 ............................................... 140,376,390 152,747,000 4.63%, 10/22/07 ............................................... 152,334,435 51,010,000 4.74%, 10/23/07 ............................................... 50,862,397 150,000,000 5.13%, 10/24/07 ............................................... 149,508,615 257,000,000 4.84%, 10/26/07 ............................................... 256,135,659 50,000,000 4.75%, 11/01/07 ............................................... 49,795,486 150,000,000 4.94%, 11/14/07 ............................................... 149,094,333 100,000,000 5.08%, 11/16/07 ............................................... 99,350,889 50,000,000 4.83%, 11/21/07 ............................................... 49,657,875 80,000,000 4.55%, 11/23/07 ............................................... 79,464,111 40,000,000 4.90%, 11/30/07 ............................................... 39,673,333 100,000,000 4.72%, 12/07/07 ............................................... 99,121,556 7,371,000 4.87%, 12/14/07 ............................................... 7,297,212 110,000,000 4.54%, 12/21/07 ............................................... 108,876,350 15,000,000 5.07%, 01/16/08 ............................................... 14,773,963 50,000,000 4.89%, 02/01/08 ............................................... 49,164,625 24,000,000 4.62%, 03/12/08 ............................................... 23,497,960 --------------- Total U.S. Government Agencies ............................ 1,849,848,845 --------------- SHARES INVESTMENT COMPANY (0.1%) - ------------ --------------------------------------------------------------- 1,162,972 JP Morgan U.S. Government Money Market Fund, Capital Shares ... 1,162,972 --------------- Total Investments (Amortized Cost $1,851,011,817*) ............ 100.4% 1,851,011,817 Other assets less liabilities ................................. (0.4) (7,463,769) ----- --------------- NET ASSETS .................................................... 100.0% $ 1,843,548,048 ===== =============== * Cost for Federal income tax and financial reporting purposes is identical. PERCENT OF PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO ---------------------------------- ---------- U.S. Government Agencies 99.9% Investment Company 0.1 ----- 100.0% =====
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2007 (UNAUDITED)
CASH TAX-FREE GOVERNMENT FUND FUND FUND --------------- --------------- --------------- ASSETS: Investments at value and amortized cost (note 2) ............... $ 308,513,004 $ 228,479,987 $ 1,851,011,817 Repurchase agreements (note 2) ................................. 50,000,000 -- -- Cash ........................................................... -- 8,510 -- Interest receivable ............................................ 369,672 1,635,618 5,114 Other assets ................................................... 23,792 13,439 115,820 --------------- --------------- --------------- Total Assets ............................................... 358,906,468 230,137,554 1,851,132,751 --------------- --------------- --------------- LIABILITIES: Payable for investment securities purchased .................... -- 4,545,000 -- Dividends payable .............................................. 1,458,800 612,529 6,736,780 Adviser and Administrator fees payable ......................... 159,864 77,397 604,049 Distribution fees payable ...................................... 27,509 14,999 221,196 Accrued expenses ............................................... 77,027 9,465 22,678 --------------- --------------- --------------- Total Liabilities .......................................... 1,723,200 5,259,390 7,584,703 --------------- --------------- --------------- NET ASSETS ..................................................... $ 357,183,268 $ 224,878,164 $ 1,843,548,048 =============== =============== =============== NET ASSETS CONSIST OF: Capital Stock - Authorized an unlimited number of shares, par value $0.01 per share .................................. $ 3,571,689 $ 2,248,808 $ 18,434,778 Additional paid-in capital ..................................... 353,610,399 222,634,163 1,825,111,400 Distributions in excess of net investment income ............... -- (4,807) -- Accumulated net realized gain (loss) on investments ............ 1,180 -- 1,870 --------------- --------------- --------------- $ 357,183,268 $ 224,878,164 $ 1,843,548,048 =============== =============== =============== SHARES OF BENEFICIAL INTEREST: Original Shares Class: Net Assets ................................................. $ 239,629,654 $ 158,398,400 $ 750,758,908 =============== =============== =============== Shares outstanding ......................................... 239,848,014 158,399,658 750,729,112 =============== =============== =============== Net asset value per share .................................. $ 1.00 $ 1.00 $ 1.00 =============== =============== =============== Service Shares Class: Net Assets ................................................. $ 117,553,614 $ 66,479,764 $ 1,092,789,140 =============== =============== =============== Shares outstanding ......................................... 117,320,863 66,481,131 1,092,748,665 =============== =============== =============== 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 SIX MONTHS ENDED SEPTEMBER 30, 2007 (UNAUDITED)
CASH TAX-FREE GOVERNMENT FUND FUND FUND --------------- --------------- --------------- INVESTMENT INCOME: Interest income .............................................. $ 11,646,927 $ 4,386,783 $ 47,629,425 ------------ ------------ ------------ EXPENSES: Investment Advis er fees (note 3) ............................ 782,209 366,896 3,001,450 Administrator fees (note 3) .................................. 316,289 112,374 658,496 Distribution fees (note 3) ................................... 190,852 87,761 1,378,871 Trustees' fees and expenses .................................. 47,019 30,826 106,760 Insurance .................................................... 19,469 8,863 36,033 Legal fees (note 3) .......................................... 15,844 3,834 31,215 Registration fees and dues ................................... 13,514 2,713 24,947 Fund accounting fees ......................................... 12,016 11,183 15,474 Shareholders' reports ........................................ 10,602 815 10,208 Transfer and shareholder servicing agent fees ................ 6,661 6,450 6,480 Auditing and tax fees ........................................ 6,378 6,500 6,500 Custodian fees ............................................... 3,794 8,100 4,869 Chief Compliance Officer (note 3) ............................ 2,278 2,278 2,278 Miscellaneous ................................................ 5,057 1,411 20,183 ------------ ------------ ------------ Total expenses ............................................... 1,431,982 650,004 5,303,764 Expenses paid indirectly (note 5) ............................ (7,495) (2,362) (429) ------------ ------------ ------------ Net expenses ..................................................... 1,424,487 647,642 5,303,335 ------------ ------------ ------------ Net investment income ............................................ 10,222,440 3,739,141 42,326,090 Net realized gain (loss) from securities transactions ............ -- -- -- ------------ ------------ ------------ Net change in net assets resulting from operations ............... $ 10,222,440 $ 3,739,141 $ 42,326,090 ============ ============ ============
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 GOVERNMENT FUND ---------------------------- ---------------------------- -------------------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2007 YEAR ENDED 2007 YEAR ENDED 2007 YEAR ENDED (UNAUDITED) MARCH 31, 2007 (UNAUDITED) MARCH 31, 2007 (UNAUDITED) MARCH 31, 2007 ------------- -------------- ------------- -------------- ------------- -------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income ........ $ 10,222,440 $ 21,770,080 $ 3,739,141 $ 6,389,796 $ 42,326,090 $ 62,145,714 Net realized gain (loss) from securities transactions ............... -- -- -- 237 -- 340 ------------- -------------- ------------- ------------- -------------- -------------- Net change in net assets resulting from operations .. 10,222,440 21,770,080 3,739,141 6,390,033 42,326,090 62,146,054 ------------- -------------- ------------- ------------- -------------- -------------- DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares ............ (6,794,586) (13,877,905) (2,696,901) (4,219,673) (17,355,870) (22,368,853) Service Shares ............. (3,427,854) (7,892,175) (1,029,936) (2,197,571) (24,970,220) (39,776,861) ------------- -------------- ------------- ------------- -------------- -------------- Total dividends to shareholders from net investment income ........ (10,222,440) (21,770,080) (3,726,837) (6,417,244) (42,326,090) (62,145,714) ------------- -------------- ------------- ------------- -------------- -------------- CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares ............ 250,420,097 729,865,243 117,841,386 230,204,313 789,247,207 1,604,790,944 Service Shares ............. 290,964,105 633,141,409 51,880,011 130,614,157 1,219,614,878 3,243,154,899 ------------- -------------- ------------- ------------- -------------- -------------- 541,384,202 1,363,006,652 169,721,397 360,818,470 2,008,862,085 4,847,945,843 ------------- -------------- ------------- ------------- -------------- -------------- Reinvested dividends: Original Shares ............ 105,120 307,349 15,549 45,489 94,116 175,409 Service Shares ............. 2,960,708 7,891,836 860,890 2,197,555 21,057,034 39,776,852 ------------- -------------- ------------- ------------- -------------- -------------- 3,065,828 8,199,185 876,439 2,243,044 21,151,150 39,952,261 ------------- -------------- ------------- ------------- -------------- -------------- Cost of shares redeemed: Original Shares ............ (297,944,068) (728,327,507) (130,076,785) (192,184,780) (723,912,472) (1,349,057,009) Service Shares ............. (341,959,643) (645,130,780) (74,613,692) (137,479,845) (1,226,754,087) (3,091,306,685) ------------- -------------- ------------- ------------- -------------- -------------- (639,903,711) (1,373,458,287) (204,690,477) (329,664,625) (1,950,666,559) (4,440,363,694) ------------- -------------- ------------- ------------- -------------- -------------- Change in net assets from capital share transactions ................ (95,453,681) (2,252,450) (34,092,641) 33,396,889 79,346,676 447,534,410 ------------- -------------- ------------- ------------- -------------- -------------- Total change in net assets (95,453,681) (2,252,450) (34,080,337) 33,369,678 79,346,676 447,534,750 ------------- -------------- ------------- ------------- -------------- -------------- NET ASSETS: Beginning of period .......... 452,636,949 454,889,399 258,958,501 225,588,823 1,764,201,372 1,316,666,622 ------------- -------------- ------------- ------------- -------------- -------------- End of period* ............... $ 357,183,268 $ 452,636,949 $ 224,878,164 $ 258,958,501 $1,843,548,048 $1,764,201,372 ============= ============== ============= ============= ============== ============== *Includes undistributed (distributions in excess of) net investment income of: .......... $ -- $ -- $ (4,807) $ (17,111) $ -- $ -- ============= ============== ============= ============= ============== ==============
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2007 (UNAUDITED) 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 ("Cash Fund") (a diversified portfolio which commenced operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust ("Tax-Free Fund") (a non-diversified portfolio which commenced operations on April 4, 1989), and Pacific Capital U.S. Government Securities Cash Assets Trust ("Goverment Fund") (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 $0.01 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 accounting principles generally accepted in the United States of America. a) PORTFOLIO VALUATION: Each Fund's portfolio securities are valued by the amortized cost method permitted in accordance with Rule 2a-7 under 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 each Fund's shares is determined as of 4:00 p.m. New York time on each day that the New York Stock Exchange and the custodian are 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. d) MULTIPLE CLASS ALLOCATIONS: 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. e) FEDERAL INCOME TAXES: It is the policy of each Fund to continue 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. f) 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 in order to compare the value of the collateral to the amount of the "loan" (repurchase agreements being defined as "loans" in the 1940 Act), including the accrued interest earned thereon. If the value of the collateral is less than 102% of the loan plus the accrued interest thereon, additional collateral is required from the borrower. g) USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. h) RECLASSIFICATION OF CAPITAL ACCOUNTS: Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. On March 31, 2007, a reclassification was made to increase (decrease) undistributed net investment income (distributions in excess of net investment income) and accumulated net realized gain (loss) on investments for the Funds as follows: TAX-FREE GOVERNMENT CASH FUND FUND FUND --------- -------- ---------- Accumulated net realized gain (loss) on investements .................... $ -- $ (10,337) $ -- Undistributed net investment income... -- 10,337 -- These reclassifications are primarily due to dividend redesignations. Net assets were not affected by these changes. i) ACCOUNTING PRONOUNCEMENTS: In July 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 required the evaluation of tax positions taken or expected to be taken in the course of preparing the Trust's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would have been recorded as a tax benefit or expense in the current year. FIN 48 was effective for the Trust on September 28, 2007 and there were no uncertain tax positions to be reflected in the Trust's financial statements at September 30, 2007. In September 2006, FASB issued FASB Statement No. 157, "Fair Value Measurement" ("SFAS 157"), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Trust believes adoption of SFAS 157 will have no material impact on the Trust's financial statements. 3. FEES AND RELATED PARTY TRANSACTIONS a) MANAGEMENT ARRANGEMENTS: The Asset Management Group of Bank of Hawaii (the "Adviser"), serves as Investment Adviser to the Funds. In this role, under Investment Advisory Agreements, the Adviser supervises the Funds' investments and provides various services. Aquila Investment Management LLC the ("Administrator"), a wholly-owned subsidiary of Aquila Management Corporation, the Trust's founder and sponsor, serves as the Administrator for the Trust under Administration Agreements with the Funds. The Administrator provides all administrative services to the Funds other than those relating to the investment portfolios. 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 Trust. 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: Cash Fund - 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. Tax-Free Fund - 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. Government Fund - 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. 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. Advisory and administrative fees in a given fiscal year may be recouped prior to the end of such year if interest rates were to increase. Contractual reduction of fees, if any, is calculated on a fiscal year basis. No such reduction in fees was required for the six months ended September 30, 2007. Under a Compliance Agreement with the Administrator, the Administrator is compensated for Chief Compliance Officer related services provided to enable the Trust to comply with Rule 38a-1 of the Investment Company Act of 1940. b) DISTRIBUTION AND SERVICE 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 respective 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 respective Fund's 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 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 Trust. Under Distribution Agreements, Aquila Distributors, Inc. (the "Distributor") serves as the exclusive distributor of each Fund's shares. No compensation or fees are paid to the Distributor for such share distribution. c) OTHER RELATED PARTY TRANSACTIONS: For the six months ended September 30, 2007, the following amounts were incurred for legal fees allocable to Hollyer Brady Barrett & Hines LLP ("Hollyer Brady") and its successor, Butzel Long PC, counsel to the Trust, for legal services in conjunction with the respective Fund's ongoing operations: Cash Fund $15,711; Tax-Free Fund $3,834; Government Fund $30,905. The Secretary of the Trust was a partner at Hollyer Brady and is a shareholder of its successor. 4. 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. 5. EXPENSES The Funds have negotiated an expense offset arrangement with their custodian, wherein they receive credit toward the reduction of custodian fees and other expenses whenever there are uninvested cash balances. The Statements of Operations reflect the total expenses before any offset, the amount of offset and the net expenses. 6. PORTFOLIO ORIENTATION Since the Tax-Free Fund has a significant portion of its investments in obligations of issuers within Hawaii, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Hawaii and whatever effects these may have upon Hawaii issuers' ability to meet their obligations. 7. INCOME TAX INFORMATION AND DISTRIBUTIONS The Funds declare dividends daily from net investment income and make payments monthly in additional shares at the net asset value per share, in cash, or a combination of both, at the shareholder's option. The tax character of distributions during fiscal 2007 and 2006 were as follows:
CASH FUND TAX-FREE FUND GOVERNMENT FUND -------------------------- -------------------------- -------------------------- 2007 2006 2007 2006 2007 2006 ----------- ----------- ----------- ----------- ----------- ----------- Ordinary income ........ $21,537,828 $14,497,718 $ 10,100 $ -- $60,709,774 $33,395,289 Net tax-exempt income .. -- -- 6,253,366 4,452,274 -- -- Capital gain ........... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Total .................. $21,537,828 $14,497,718 $ 6,263,466 $ 4,452,274 $60,709,744 $33,395,289 =========== =========== =========== =========== =========== ===========
As of March 31, 2007, the components of distributable earnings on a tax basis were as follows: TAX-FREE GOVERNMENT CASH FUND FUND FUND ---------- ---------- ---------- Undistributed ordinary income ........ $1,159,141 $ 237 $2,843,235 Undistributed tax exempt income ...... -- 423,046 -- Accumulated net realized loss on investments ................... -- -- -- ---------- ---------- ---------- $1,159,141 $ 423,283 $2,843,235 ========== ========== ========== PACIFIC CAPITAL CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES ---------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED MARCH 31, 9/30/07 -------------------------------------------------------- (UNAUDITED) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.02 0.05 0.03 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.02) (0.05) (0.03) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 2.39%* 4.75% 3.20% 1.36% 0.90% 1.35% Ratios/supplemental data Net assets, end of period (in millions) $ 240 $ 287 $ 286 $ 366 $ 287 $ 361 Ratio of expenses to average net assets 0.57%** 0.57% 0.58% 0.37% 0.21% 0.36% Ratio of net investment income to average net assets .................. 4.74%** 4.65% 3.09% 1.39% 0.90% 1.34% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.57% 0.57% 0.58% Ratio of net investment income to average net assets .................. ++ ++ ++ 1.19% 0.54% 1.12% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets 0.56%** 0.57% 0.58% 0.37%# 0.21%# 0.36%# SERVICE SHARES ----------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED MARCH 31, 9/30/07 -------------------------------------------------------- (UNAUDITED) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.02 0.04 0.03 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.02) (0.04) (0.03) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 2.26%* 4.49% 2.94% 1.11% 0.65% 1.09% Ratios/supplemental data Net assets, end of period (in millions) $ 118 $ 166 $ 169 $ 166 $ 119 $ 123 Ratio of expenses to average net assets 0.81%** 0.82% 0.83% 0.61% 0.46% 0.61% Ratio of net investment income to average net assets .................. 4.48%** 4.40% 2.91% 1.12% 0.65% 1.10% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.81% 0.82% 0.83% Ratio of net investment income to average net assets .................. ++ ++ ++ 0.91% 0.29% 0.88% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets 0.81%** 0.82% 0.83% 0.61%# 0.46%# 0.61%#
- ---------- + Per share amounts have been calculated using the monthly average shares method. ++ No reduction in the Adviser's and the Administrator's fees was required during the period. # Net of contractual caps on fees. * 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
ORIGINAL SHARES ---------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED MARCH 31, 9/30/07 -------------------------------------------------------- (UNAUDITED) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.02 0.03 0.02 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.02) (0.03) (0.02) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 1.60%* 3.09% 2.21% 1.16% 0.84% 1.15% Ratios/supplemental data Net assets, end of period (in millions) $ 158 $ 171 $ 133 $ 134 $ 99 $ 130 Ratio of expenses to average net assets 0.47%** 0.50% 0.50% 0.29% 0.17% 0.28% Ratio of net investment income to average net assets .................. 3.17%** 3.04% 2.20% 1.17% 0.84% 1.13% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.49% 0.52% 0.50% Ratio of net investment income to average net assets .................. ++ ++ ++ 0.96% 0.50% 0.90% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets . 0.47%** 0.49% 0.50% 0.28%# 0.17%# 0.27%# SERVICE SHARES ----------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED MARCH 31, 9/30/07 -------------------------------------------------------- (UNAUDITED) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.01 0.03 0.02 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.01) (0.03) (0.02) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 1.48%* 2.83% 1.96% 0.90% 0.59% 0.90% Ratios/supplemental data Net assets, end of period (in millions) $ 66 $ 88 $ 93 $ 72 $ 50 $ 56 Ratio of expenses to average net assets 0.72%** 0.75% 0.75% 0.53% 0.42% 0.53% Ratio of net investment income to average net assets .................. 2.92%** 2.78% 1.94% 0.92% 0.59% 0.89% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.75% 0.77% 0.76% Ratio of net investment income to average net assets .................. ++ ++ ++ 0.71% 0.25% 0.66% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets . 0.72%** 0.75% 0.75% 0.53%# 0.42%# 0.52%#
- ---------- + Per share amounts have been calculated using the monthly average shares method. ++ No reduction in the Adviser's and the Administrator's fees was required during the period. # Net of contractual caps on fees. * Not annualized. ** Annualized. See accompanying notes to financial statements. FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES ---------------------------------------------------------------------- Six Months Ended Year Ended March 31, 9/30/07 -------------------------------------------------------- (unaudited) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.02 0.05 0.03 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.02) (0.05) (0.03) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 2.41%* 4.80% 3.25% 1.41% 0.96% 1.34% Ratios/supplemental data Net assets, end of period (in millions) $ 751 $ 685 $ 429 $ 354 $ 263 $ 270 Ratio of expenses to average net assets 0.43%** 0.44% 0.45% 0.27% 0.11% 0.25% Ratio of net investment income to average net assets .................. 4.78%** 4.72% 3.25% 1.42% 0.96% 1.34% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.45% 0.46% 0.46% Ratio of net investment income to average net assets .................. ++ ++ ++ 1.24% 0.62% 1.12% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets 0.43%** 0.44% 0.45% 0.27%# 0.11%# 0.24%#
SERVICE SHARES ----------------------------------------------------------------------- Six Months Ended Year Ended March 31, 9/30/07 -------------------------------------------------------- (unaudited) 2007 2006 2005 2004 2003 ----------- -------- -------- -------- -------- -------- Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income+ ................ 0.02 0.04 0.03 0.01 0.01 0.01 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .. (0.02) (0.04) (0.03) (0.01) (0.01) (0.01) -------- -------- -------- -------- -------- -------- Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return ............................. 2.29%* 4.54% 3.00% 1.16% 0.71% 1.09% Ratios/supplemental data Net assets, end of period (in millions) $ 1,093 $ 1,079 $ 887 $ 578 $ 575 $ 448 Ratio of expenses to average net assets 0.68%** 0.69% 0.70% 0.52% 0.36% 0.49% Ratio of net investment income to average net assets .................. 4.53%** 4.46% 3.02% 1.16% 0.71% 1.08% The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual caps on fees were (note 3): Ratio of expenses to average net assets ++ ++ ++ 0.70% 0.71% 0.71% Ratio of net investment income to average net assets .................. ++ ++ ++ 0.98% 0.36% 0.86% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets 0.68%** 0.69% 0.70% 0.52%# 0.36%# 0.49%#
- ---------- + Per share amounts have been calculated using the monthly average shares method. ++ No reduction in the Adviser's and the Administrator's fees was required during the period. # Net of contractual caps on fees. * Not annualized. ** Annualized. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- ANALYSIS OF EXPENSES (UNAUDITED) As a shareholder of the Trust, you may incur ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in each of the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The table below is based on an investment of $1,000 invested on April 1, 2007 and held for the six months ended September 30, 2007. ACTUAL EXPENSES This table provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Expenses Paid During the Period". SIX MONTHS ENDED SEPTEMBER 30, 2007 BEGINNING ENDING EXPENSES ACTUAL ACCOUNT ACCOUNT PAID DURING TOTAL RETURN(1) VALUE VALUE THE PERIOD(2) - ----------------------------------------------------------------------------- CASH FUND Original Shares 2.39% $1,000.00 $1,023.90 $2.83 Service Shares 2.26% $1,000.00 $1,022.60 $4.10 - ----------------------------------------------------------------------------- TAX-FREE FUND Original Shares 1.60% $1,000.00 $1,016.00 $2.37 Service Shares 1.48% $1,000.00 $1,014.80 $3.63 - ----------------------------------------------------------------------------- GOVERNMENT FUND Original Shares 2.41% $1,000.00 $1,024.10 $2.18 Service Chares 2.29% $1,000.00 $1,022.90 $3.44 - ----------------------------------------------------------------------------- (1) ASSUMES REINVESTMENT OF ALL DIVIDENDS. TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR. (2) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.56% AND 0.81%, RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.47% AND 0.72%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES, AND 0.43% AND 0.68%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND SERVICE SHARES MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 183/366 (TO REFLECT THE ONE-HALF YEAR PERIOD). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ANALYSIS OF EXPENSES (UNAUDITED) (CONTINUED) HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of each of the respective Funds. 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 the information provided in this table to compare the ongoing costs of investing in the portfolios of the Trust and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the respective Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds. SIX MONTHS ENDED SEPTEMBER 30, 2007 HYPOTHETICAL BEGINNING ENDING EXPENSES ANNUALIZED ACCOUNT ACCOUNT PAID DURING TOTAL RETURN VALUE VALUE THE PERIOD - --------------------------------------------------------------------------- CASH FUND Original Shares 5.00% $1,000.00 $1,022.20 $2.83 Service Shares 5.00% $1,000.00 $1,020.95 $4.09 - --------------------------------------------------------------------------- TAX-FREE FUND Original Shares 5.00% $1,000.00 $1,022.65 $2.38 Service Shares 5.00% $1,000.00 $1,021.40 $3.64 - --------------------------------------------------------------------------- GOVERNMENT FUND Original Shares 5.00% $1,000.00 $1,022.85 $2.17 Service Chares 5.00% $1,000.00 $1,021.60 $3.44 - --------------------------------------------------------------------------- (1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.56% AND 0.81%, RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.47% AND 0.72%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES, AND 0.43% AND 0.68%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND SERVICE SHARES MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 183/366 (TO REFLECT THE ONE-HALF YEAR PERIOD). - -------------------------------------------------------------------------------- RENEWAL OF INVESTMENT ADVISORY AGREEMENT Renewal until June 30, 2008 of the Investment Advisory Agreement (the "Advisory Agreement") for each fund between the Trust and the Adviser was approved by the Board of Trustees and the independent Trustees in June, 2007. At a meeting called and held for that purpose at which a majority of the independent Trustees were present in person, the following materials were considered: o Copies of the agreements to be renewed; o A term sheet describing the material terms of the agreements; o The Annual Report of the Trust for the year ended March 31, 2007; o A report, prepared by the Adviser and Administrator and provided to the Trustees in advance of the meeting for the Trustees' review, containing data about the performance of each of the portfolios and data about their respective fees, expenses, purchases and redemptions of capital stock together with comparisons of such data with similar data about other comparable funds, as well as data as to the profitability of the Adviser and the Administrator; and o Quarterly materials reviewed at prior meetings on each portfolio's performance, operations, portfolio and compliance. The Trustees considered each Advisory Agreement separately. The Trustees reviewed materials relevant to, and considered, the following factors as to each agreement and reached the conclusions described. THE NATURE, EXTENT, AND QUALITY OF THE SERVICES PROVIDED BY THE ADVISER. The investment objective of each of the Trust's portfolios is to seek to provide safety of principal while achieving as a high a level of liquidity and of current income (and with respect to the Tax-Free Fund, current income exempt from Federal and Hawaii income taxes). To achieve these objectives, the Adviser has provided management of each fund's portfolio, as well as provided facilities for credit analysis of each of the funds' portfolio securities. With respect to the Government Securities Fund, the Adviser has managed the investment portfolio in order to achieve a Aaa/AAA rating from both Moody's Investors Service and Standard and Poor's, respectively. The Board considered that the Adviser had provided all services the Board deemed necessary or appropriate, including the specific services that the Board has determined are required for the Trust, given that its purpose is to provide shareholders with safety of principal while achieving as a high a level of liquidity and of current income. The Board concluded that the services provided were appropriate and satisfactory and that the Trust would be well served if they continued. Evaluation of this factor weighed in favor of renewal of the Advisory Agreement. THE INVESTMENT PERFORMANCE OF THE TRUST (AND EACH OF ITS PORTFOLIOS) AND ADVISER. The Board reviewed each aspect of each fund's performance and compared its performance with that of its respective benchmark. It was noted that the materials provided by the Administrator indicated that compared to each fund's respective benchmark, the Trust's portfolios had investment performance that was either comparable to or favorable for one-, five- and ten-year periods as compared with the benchmark. The Board considered these results to be consistent with the purposes of each of the Trust's portfolios. The Board concluded that the performance of each fund, in light of market conditions, was satisfactory. Evaluation of this factor indicated to the Trustees that renewal of each Advisory Agreement would be appropriate. THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE ADVISER AND ITS AFFILIATES FROM THE RELATIONSHIP WITH THE TRUST (AND EACH OF ITS PORTFOLIOS). The information provided in connection with renewal contained expense data for each fund and its major local competitor as well as data for each of the funds with respect to their respective peer groups, including data for money market funds of a comparable asset size. The materials also showed the profitability to the Adviser of its services to the Trust. The Board compared the expense and fee data with respect to each of the portfolios to similar data about other funds that it found to be relevant. The Board concluded that the expenses of the each of the portfolios and the fees paid were similar to and were reasonable as compared to those being paid by its local competitor and by other money market funds nationwide. The Board considered that the foregoing indicated the appropriateness of the costs of the services to the Trust, which was being well managed as indicated by the factors considered previously. The Board further concluded that the profitability to the Adviser did not argue against approval of the fees to be paid under each Advisory Agreement. THE EXTENT TO WHICH ECONOMIES OF SCALE WOULD BE REALIZED AS THE TRUST, AND ITS PORTFOLIOS, GROWS. Data provided to the Trustees showed that the asset size of each of the portfolios had been generally increasing in recent years. However, they concluded that the uncertain interest rate environment might make it difficult to achieve substantial growth in assets in the near future. The Trustees also noted that the materials indicated that the each portfolio's fees were generally comparable to those of its peers, including those with breakpoints. Evaluation of this factor indicated to the Board that each Advisory Agreement should be renewed without additional breakpoints at this time. BENEFITS DERIVED OR TO BE DERIVED BY THE ADVISER AND ITS AFFILIATES FROM THE RELATIONSHIP WITH THE TRUST (AND EACH OF ITS PORTFOLIOS). The Board observed that, as is generally true of most fund complexes, the Adviser and its affiliates, by providing services to a number of funds or other investment clients including the Trust's three portfolios, were able to spread costs as they would otherwise be unable to do. The Board noted that while that produces efficiencies and increased profitability for the Adviser and its affiliates, it also makes their services available to the three portfolios of the Trust at favorable levels of quality and cost which are more advantageous to the Trust's portfolios than would otherwise have been possible. - -------------------------------------------------------------------------------- INFORMATION AVAILABLE (UNAUDITED) Much of the information that the funds in the Aquila Group of Fundssm produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent the entire list of portfolio securities of your Trust twice a year in the semi-annual and annual reports you receive. Additionally, we prepare, and have available portfolio listings at the end of each quarter. Whenever you may be interested in seeing a listing of your Trust's portfolios other than in your shareholder reports, please check our website http://www.aquilafunds.com or call us at 1-800-437-1020. The Trust additionally files a complete list of its portfolio holdings for each of the three portfolios with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC website at http://www.sec.gov. You may also review or, for a fee, copy the forms at the SEC's Public Reference Room in Washington, DC or by calling 800-SEC-0330. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROXY VOTING RECORD (UNAUDITED) The three portfolios of the Trust do not invest in equity securities. Accordingly, there were no matters relating to a portfolio security considered at any shareholder meeting held during the 12 months ended June 30, 2007 with respect to which any of the three portfolios of the Trust were entitled to vote. Applicable regulations require us to inform you that the foregoing proxy voting information is available on the SEC website at http://www.sec.gov. - -------------------------------------------------------------------------------- (THIS PAGE INTENTIONALLY LEFT BLANK) (THIS PAGE INTENTIONALLY LEFT BLANK) INVESTMENT ADVISER Asset Management Group of Bank of Hawaii P.O. Box 3170 o Honolulu, Hawaii 96802 ADMINISTRATOR Aquila Investment Management LLC 380 Madison Avenue, Suite 2300 o New York, New York 10017 BOARD OF TRUSTEES Theodore T. Mason, Chair Diana P. Herrmann, Vice Chair Thomas W. Courtney Stanley W. Hong Russell K. Okata Douglas Philpotts Oswald K. Stender FOUNDER AND CHAIRMAN EMERITUS Lacy B. Herrmann OFFICERS Diana P. Herrmann, President Charles E. Childs, III, Executive Vice President Sherri Foster, Vice President Robert W. Anderson, Chief Compliance Officer Joseph P. DiMaggio, Chief Financial Officer and Treasurer Edward M.W. Hines, Secretary DISTRIBUTOR Aquila Distributors, Inc. 380 Madison Avenue, Suite 2300 o New York, New York 10017 TRANSFER AND SHAREHOLDER SERVICING AGENT PFPC Inc. 101 Sabin Street o Pawtucket, RI 02860 CUSTODIAN JPMorgan Chase Bank, N.A. 1111 Polaris Parkway o Columbus, Ohio 43240 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Tait, Weller & Baker LLP 1818 Market Street, Suite 2400 o Philadelphia, PA 19103 Further information is contained in the Prospectus which must precede or accompany this report. ITEM 2. CODE OF ETHICS. Not applilcable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Included in Item 1 above ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Board of Directors of the Registrant has adopted a Nominating Committee Charter which provides that the Nominating Committee (the 'Committee') may consider and evaluate nominee candidates properly submitted by shareholders if a vacancy among the Independent Trustees of the Registrant occurs and if, based on the Board's then current size, composition and structure, the Committee determines that the vacancy should be filled. The Committee will consider candidates submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. A copy of the qualifications and procedures that must be met or followed by shareholders to properly submit a nominee candidate to the Committee may be obtained by submitting a request in writing to the Secretary of the Registrant. ITEM 11. CONTROLS AND PROCEDURES. (a) Based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) as of a date within 90 days of the fling of this report, the registrant's chief financial and executive officers have concluded that the disclosure controls and procedures of the registrant are appropriately designed to ensure tat information required to be disclosed in the registrant's reports that are filed under the Securities Exchange Act of 1934 are accumulated and communicated t registrant's management, including its principal executive officer(s) and principal financial officer(s), to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation, including no significant deficiencies or material weaknesses that required corrective action. ITEM 12. EXHIBITS. (a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. (b) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. 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. CASH ASSETS TRUST By: /s/ Diana P. Herrmann - - --------------------------------- Vice Chair, President and Trustee December 5, 2007 By: /s/ Joseph P. DiMaggio - - ----------------------------------- Chief Financial Officer and Treasurer December 5, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Diana P. Herrmann - - --------------------------------- Diana P. Herrmann Vice Chair, President and Trustee December 5, 2007 By: /s/ Joseph P. DiMaggio - - ----------------------------------- Joseph P. DiMaggio Chief Financial Officer and Treasurer December 5, 2007 CASH ASSETS TRUST EXHIBIT INDEX (a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. (b) Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940. EX-99.CERT 2 cat306cert.txt SECTION 306 CERTIFICATION I, Diana P. Herrmann, certify that: 1. I have reviewed this report on Form N-CSR of Cash Assets Trust; 2. 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; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report ("Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: December 5, 2007 /s/ Diana P. Herrmann - - ---------------------- Title: Vice Chair, President and Trustee I, Joseph P. DiMaggio, certify that: 1. I have reviewed this report on Form N-CSR of Cash Assets Trust; 2. 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, 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; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report ("Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: December 5, 2007 /s/ Joseph P. DiMaggio - - ------------------------ Title: Chief Financial Officer and Treasurer EX-99.906 CERT 3 cat906cert.txt SECTION 906 CERTIFICATION CERTIFICATION Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (subsections and (b) of section 1350, chapter 63 of title 18,United States Code), each of the undersigned officers of Cash Assets Trust, do hereby certify to such officer's knowledge, that: The report on Form N-CSR of Cash Assets Trust for the period ended September 30, 2007 (the "Form N-CSR")fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Cash Assets Trust. Dated: December 5, 2007 /s/ Diana P. Herrmann ---------------------- Vice Chair, President and Trustee Cash Assets Trust Dated: December 5, 2007 /s/ Joseph P. DiMaggio ----------------------- Chief Financial Officer and Treasurer Cash Assets Trust A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Hawaiian Tax-Free Trust and will be retained by Hawaiian Tax-Free Trust and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document. -----END PRIVACY-ENHANCED MESSAGE-----