N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number 811-4503

Aquila Municipal Trust

 (Exact name of Registrant as specified in charter)

120 West 45th Street, Suite 3600

New York, New York 10036

(Address of principal executive offices)  (Zip code)

Joseph P. DiMaggio

120 West 45th Street, Suite 3600

New York, New York 10036

(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 697-6666

Date of fiscal year end: 3/31/14

Date of reporting period: 9/30/14

FORM N-CSRS

ITEM 1.  REPORTS TO STOCKHOLDERS.

 

Semi-Annual

Report

September 30, 2014

 

Aquila Churchill Tax-Free Fund of Kentucky “Sooner Rather Than Later - The Miracle of Compound Interest” Serving Kentucky investors since 1987

November, 2014

Dear Fellow Shareholder:

     Type the words “compound interest” into any internet search engine and you’re bound to find literally hundreds of examples of the concept. Most examples would likely be fairly standard and show the effect that compound interest has on the growth of savings when the interest rate is applied to both the initial sum invested as well as to reinvested income.

     However, we’d like to share with you another example. The following table vividly demonstrates the power of both compounding and beginning to invest sooner rather than later.

• Example 1 assumes a hypothetical investment from age 19 through age 26.

• Example 2 assumes a hypothetical investment from age 27 through age 39.

     Both examples assume a $2,000 yearly investment, with no withdrawals and with no allowance for income taxes. In each case, income compounds at a hypothetical annual interest rate of 5%. These assumptions are for the sake of the illustration and do not represent past or future performance of any investment. The advantage of beginning a saving plan sooner, rather than later, applies whether you earn 3%, 5% or some other amount.

     As you can see, a person who begins to invest $2,000 per year at age 19 and continues to invest over a period of eight years (through age 26) will have more money at age 39 (through the “miracle of compound interest”) than will someone who begins to invest at a later age (27) and continues to invest through age 39.

     We encourage you to share these examples with your family and friends. Beginning a saving plan early can pay off over time, particularly with the assistance of the miracle of compound interest.

     You can take advantage of the powers of compounding when you set up an automatic investment plan in Aquila Churchill Tax-Free Fund of Kentucky and reinvest your dividends. To do so, please contact your investment professional or the Fund’s Shareholder Servicing Agent at 1-800-437-1000.

     Before investing in the Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

NOT A PART OF THE SEMI-ANNUAL REPORT

	EXAMPLE 1		EXAMPLE 2
	5% Annual Interest Rate		5% Annual Interest Rate
	Annual		Annual
Age	Investment	Year-End Value	Investment	Year-End Value
19	$2,000	$2,100	0	0
20	2,000	4,305	0	0
21	2,000	6,620	0	0
22	2,000	9,051	0	0
23	2,000	11,604	0	0
24	2,000	14,284	0	0
25	2,000	17,098	0	0
26	2,000	20,053	0	0
27	0	21,056	$2,000	$2,100
28	0	22,109	2,000	4,305
29	0	23,214	2,000	6,620
30	0	24,375	2,000	9,051
31	0	25,593	2,000	11,604
32	0	26,873	2,000	14,284
33	0	28,217	2,000	17,098
34	0	29,628	2,000	20,053
35	0	31,109	2,000	23,156
36	0	32,664	2,000	26,414
37	0	34,298	2,000	29,834
38	0	36,013	2,000	33,426
39	0	37,813	2,000	37,197

This chart is for illustration purposes only;

it does not represent past or future performance of any investment.

Sincerely,

Diana P. Herrmann, Vice Chair and President

Any information in this Semi-Annual Report regarding market or economic trends or the factors influencing the Fund’s historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that any market forecasts discussed will be realized.

NOT A PART OF THE SEMI-ANNUAL REPORT

Mutual fund investing involves risk and loss of principal is possible.

The market prices of the Fund’s securities may rise or decline in value due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment may go down.

The value of your investment may go down when interest rates rise. A rise in interest rates tends to have a greater impact on the prices of longer term securities. Conversely, when interest rates fall, the value of your investment may rise. Interest rates in the U.S. recently have been historically low and are expected to rise at some point in time.

Investments in the Fund are subject to possible loss due to the financial failure of the issuers of underlying securities and their inability to meet their debt obligations.

The value of municipal securities can be adversely a ected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory developments, legislative actions, and by uncertainties and public perceptions concerning these and other factors. The Fund may be a ected significantly by adverse economic, political or other events a ecting state and other municipal issuers in which it invests, and may be more volatile than a more geographically diverse fund.

If interest rates fall, an issuer may exercise its right to prepay its securities, and the Fund could be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security.

A portion of income may be subject to local, state, federal and/or alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

These risks may result in share price volatility.

NOT A PART OF THE SEMI-ANNUAL REPORT

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (4.1%)	and Fitch	Value
		Campbell County, Kentucky Public
		Project
$	1,625,000	4.375%, 12/01/25 Syncora Guarantee,
		Inc. Insured (pre-refunded)	Aa2/NR/NR	$	1,732,396
		Henderson County, Kentucky
	330,000	3.000%, 11/01/20	Aa3/NR/NR		348,018
		Lexington-Fayette Urban County,
		Kentucky
	4,175,000	4.250%, 05/01/23 NPFG Insured	Aa2/AA/NR		4,435,520
		Louisville & Jefferson County,
		Kentucky
	955,000	4.200%, 11/01/22 NPFG Insured	Aa1/AA+/AAA		1,0 15,232
		Warren County, Kentucky, Unlimited
		Tax
	615,000	4.000%, 06/01/25	Aa2/AA-/NR		661,869
	635,000	4.000%, 06/01/26	Aa2/AA-/NR		681,393
	660,000	4.000%, 06/01/27	Aa2/AA-/NR		704,906
		Total General Obligation Bonds			9,579,334
		Revenue Bonds (93.7%)
		Agencies (17.3%)
		Kentucky Asset & Liability Commission
		Federal Highway Notes
	1,000,000	5.000%, 09/01/22 Series A	A2/AA/A+		1,161,610
	2,000,000	5.250%, 09/01/25 Series A	A2/AA/A+		2,4 13,800
	2,000,000	5.000%, 09/01/26 Series A	A2/AA/A+		2,372,760
		Kentucky Asset & Liability Commission
		University of Kentucky Project
	1,500,000	4.500%, 10/01/22 NPFG/ FGIC
		Insured (pre-refunded)	Aa2/AA-/NR		1,564,350
	500,000	5.000%, 10/01/25 Series B	Aa2/AA-/NR		552,760
	750,000	5.000%, 10/01/26 Series B	Aa2/AA-/NR		828,210
	1,000,000	5.000%, 10/01/27 Series B	Aa2/AA-/NR		1,102,110
		Kentucky Economic Development
		Finance Authority Louisville Arena
		Project
	2,500,000	5.750%, 12/01/28 AGC Insured	A3/AA/NR		2,651,850
		Kentucky Higher Education Student
		Loan
	400,000	5.000%, 06/01/24 Senior Series A AMT	NR/A/A		433,440
	2,025,000	3.750%, 06/01/26 Senior Series A AMT	NR/A/A		2,027,572

1 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Agencies (continued)
		Kentucky Rural Water Finance Corp.
$	205,000	4.250%, 08/01/19 NPFG Insured	A3/AA-/NR	$	216,115
	85,000	5.000%, 02/01/20 NPFG Insured	A3/AA-/NR		85,224
	210,000	4.250%, 08/01/20 NPFG Insured	A3/AA-/NR		221,346
	200,000	4.375%, 08/01/22 NPFG Insured	A3/AA-/NR		210,510
	240,000	4.500%, 08/01/23 NPFG Insured	A3/AA-/NR		252,974
	255,000	4.500%, 08/01/24 NPFG Insured	A3/AA-/NR		268,548
	355,000	4.600%, 02/01/25	NR/A+/NR		371,930
	435,000	4.000%, 02/01/26 Series 2012F	NR/A+/NR		467,264
	450,000	4.000%, 02/01/27 Series 2012F	NR/A+/NR		482,144
	290,000	4.500%, 08/01/27 NPFG Insured	A3/AA-/NR		303,903
	375,000	4.000%, 02/01/28 Series 2012C	NR/A+/NR		396,454
	465,000	4.000%, 02/01/28 Series 2012F	NR/A+/NR		497,583
	245,000	4.600%, 08/01/28 NPFG Insured	A3/AA-/NR		253,950
	305,000	4.000%, 02/01/29 Series 2012C	NR/A+/NR		322,089
	490,000	4.000%, 02/01/29 Series 2012F	NR/A+/NR		524,668
	315,000	4.625%, 08/01/29 NPFG Insured	A3/AA-/NR		325,675
		Kentucky State Property and Buildings
		Commission
	1,020,000	5.000%, 11/01/20	Aa3/A+/A+		1,183,955
	1,375,000	5.375%, 11/01/23	Aa3/A+/A+		1,593,254
	2,820,000	5.750%, 04/01/24 Project 91	A1/A+/A		3,211,021
	1,000,000	5.000%, 10/01/25	Aa3/A+/A+		1,177,340
	625,000	4.000%, 04/01/26 Project 105	A1/A+/A		671,075
	655,000	4.000%, 04/01/27 Project 105	A1/A+/A		700,241
	2,800,000	5.250%, 02/01/28 AGC Insured	Aa3/AA/A+		3,205,412
	750,000	5.500%, 11/01/28	Aa3/A+/A+		863,092
	2,500,000	5.000%, 02/01/29 AGC Insured	Aa3/AA/A+		2,807,175
	2,625,000	5.750%, 04/01/29 Project 91	A1/A+/A		2,950,920
	1,500,000	5.000%, 10/01/29 Project 106	Aa3/A+/A+		1,723,485
		Total Agencies			40,395,809
		Airports (8.1%)
		Kenton County, Kentucky Airport
		Board Airport Revenue
	1,300,000	5.000%, 03/01/23 NPFG Insured AMT	A3/AA-/A-		1,304,017
		Lexington-Fayette Urban County
		Airport Board, Kentucky
	1,555,000	5.000%, 07/01/28 2012 Series A AMT	Aa2/AA/NR		1,756,963
	400,000	5.000%, 07/01/29 2012 Series A AMT	Aa2/AA/NR		448,440

2 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Airports (continued)
		Lexington-Fayette Urban County
		Airport Board, Kentucky (continued)
$	850,000	5.000%, 07/01/30 2012 Series A AMT	Aa2/AA/NR	$	947,996
	750,000	5.000%, 07/01/31 2012 Series A AMT	Aa2/AA/NR		828,915
		Louisville, Kentucky Regional Airport
		Authority
	1,060,000	5.000%, 07/01/18 AMT (pre-refunded)	A2/A+/A+		1,212,481
	1,000,000	5.250%, 07/01/23 AGMC Insured
		AMT (pre-refunded)	A2/AA/A+		1,153,010
	2,070,000	5.000%, 07/01/23 AMT	NR/A+/A+		2,427,965
	2,610,000	5.000%, 07/01/24 AMBAC Insured
		AMT (pre-refunded)	A2/A+/A+		2,699,549
	2,325,000	5.000%, 07/01/26 AMT	NR/A+/A+		2,689,723
	2,895,000	5.000%, 07/01/27 Series A AMT	NR/A+/A+		3,313,675
		Total Airports			18,782,734
		Higher Education (7.5%)
		Berea, Kentucky Educational Facilities
		(Berea College)
	1,000,000	4.125%, 06/01/25	Aaa/NR/NR		1,011,620
		Boyle County, Kentucky College
		Refunding & Improvement
	1,035,000	4.500%, 06/01/22 AGC Insured	A3/AA/NR		1,078,698
	200,000	4.625%, 06/01/24 AGC Insured	A3/AA/NR		209,238
		Eastern Kentucky University General
		Receipts
	1,250,000	4.000%, 10/01/27	Aa3/A+/NR		1,305,837
		Lexington-Fayette, Kentucky Urban
		County Government Transylvania
		University Project
	1,390,000	4.500%, 03/01/29	NR/A+/NR		1,469,174
		Louisville & Jefferson County,
		Kentucky University of Louisville
	525,000	5.000%, 06/01/20 AMBAC Insured	NR/NR/NR*		534,860
		Murray State University Project,
		Kentucky General Receipts
	745,000	4.500%, 09/01/23 AMBAC Insured	Aa3/A+/NR		779,091

3 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Higher Education (continued)
		University of Kentucky General
		Receipts
$	885,000	4.500%, 10/01/22 Syncora
		Guarantee, Inc. Insured	Aa2/AA-/NR	$	947,286
	1,545,000	4.500%, 10/01/23 Syncora
		Guarantee, Inc. Insured	Aa2/AA-/NR		1,653,428
	1,625,000	4.500%, 10/01/25 Syncora
		Guarantee, Inc. Insured	Aa2/AA-/NR		1,737,694
	1,010,000	4.500%, 10/01/26 Syncora
		Guarantee, Inc. Insured	Aa2/AA-/NR		1,078,185
		University of Louisville, Kentucky
		General Receipts
	1,000,000	5.000%, 09/01/30 2011 Series A	Aa2/AA-/NR		1,141,390
		Western Kentucky University General
		Receipts
	2,000,000	4.200%, 09/01/25 Series A NPFG
		Insured	Aa3/AA-/NR		2,059,060
	2,475,000	4.200%, 09/01/26 Series A NPFG
		Insured	Aa3/AA-/NR		2,543,211
		Total Higher Education			17,548,772
		Hospitals (14.2%)
		City of Ashland, Kentucky, Medical
		Center (Ashland Hospital Corp.)
	2,000,000	5.000%, 02/01/22 Series B	A3/BBB/A-		2,192,420
	1,535,000	5.000%, 02/01/23 Series B	A3/BBB/A-		1,665,368
		Hardin County, Kentucky, Hardin
		Memorial Hospital
	735,000	5.500%, 08/01/22 AGMC Insured	A2/AA/NR		860,641
	675,000	5.500%, 08/01/23 AGMC Insured	A2/AA/NR		795,244
	500,000	5.250%, 08/01/24 AGMC Insured	A2/AA/NR		573,295
		Kentucky Economic Development
		Finance Authority, Baptist
		Healthcare System
	4,795,000	5.375%, 08/15/24	A2/NR/A+		5,386,559
		Kentucky Economic Development
		Finance Authority, Catholic Health
	1,000,000	5.000%, 05/01/29	A1/A+/A+		1,002,770

4 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Hospitals (continued)
		Kentucky Economic Development
		Finance Authority, Kings Daughter
		Medical Center
$	1,000,000	5.000%, 02/01/30	A3/BBB/A-	$	1,046,040
		Louisville & Jefferson County, Kentucky
		Metropolitan Government Health
		System, Norton Healthcare, Inc.
	7,085,000	5.000%, 10/01/26	NR/A-/A-		7,411,973
	1,100,000	5.000%, 10/01/30	NR/A-/A-		1,146,189
		Louisville & Jefferson County, Kentucky
		Metropolitan Government, Louisville
		Medical Center, Laundry Facility
		Project
	695,000	4.250%, 05/01/23 Series 2012	NR/A/NR		754,235
		Louisville & Jefferson County, Kentucky
		Metropolitan Government, Louisville
		Medical Center, Steam & Chilled
		Water Plant Project
	915,000	4.250%, 05/01/22 Series 2012A	NR/A/NR		986,846
		Louisville & Jefferson County, Kentucky
		Metropolitan Government Revenue
		Refunding, Catholic Health Initiatives
	1,000,000	5.000%, 12/01/30	A1/A+/A+		1,125,740
		Russell, Kentucky Bon Secours Health
		System
	2,500,000	5.000%, 11/01/26 Series 2013	A3/A-/A-		2,850,475
		Warren County, Kentucky, Warren
		County Community Hospital Corp.
	3,975,000	5.000%, 04/01/28	NR/A/NR		4,490,875
	680,000	4.000%, 10/01/29	NR/A/NR		685,562
		Total Hospitals			32,974,232
		Housing (2.9%)
		Kentucky Housing Corporation
		Housing Revenue
	470,000	4.800%, 01/01/18 AMT	Aaa/AAA/NR		473,769
	575,000	4.800%, 07/01/18 AMT	Aaa/AAA/NR		579,485
	475,000	4.800%, 07/01/20 AMT	Aaa/AAA/NR		475,922
	1,570,000	4.800%, 07/01/22 AMT	Aaa/AAA/NR		1,603,284

5 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Housing (continued)
		Kentucky Housing Corporation
		Housing Revenue (continued)
$	1,275,000	5.000%, 01/01/23 AMT	Aaa/AAA/NR	$	1,313,773
	435,000	4.500%, 07/01/25	Aaa/AAA/NR		466,094
	600,000	4.750%, 07/01/26	Aaa/AAA/NR		628,104
		Kentucky Housing Multifamily
		Mortgage Revenue
	1,325,000	5.000%, 06/01/35 AMT	NR/NR/NR*		1,332,778
		Total Housing			6,873,209
		Local Public Property (6.9%)
		Grant County, Kentucky Public
		Property Corp. Justice Center Project
	1,000,000	4.500%, 12/01/24	Aa3/NR/NR		1,064,480
		Jefferson County, Kentucky Capital
		Projects
	1,575,000	4.250%, 06/01/23 AGMC Insured	Aa3/NR/AA+		1,674,792
	1,950,000	4.375%, 06/01/24 AGMC Insured	Aa3/NR/AA+		2,070,432
	2,060,000	4.375%, 06/01/26 Series A AGMC
		Insured	Aa3/NR/AA+		2,178,986
	1,070,000	4.375%, 06/01/27 Series A AGMC
		Insured	Aa3/NR/AA+		1,129,524
	1,640,000	4.375%, 06/01/28 AGMC Insured	Aa3/NR/AA+		1,726,871
		Kentucky Association of Counties
		Finance Corp. Financing Program
	1,145,000	4.250%, 02/01/24	NR/AA-/NR		1,210,288
	515,000	4.000%, 02/01/25	NR/AA-/NR		540,673
	315,000	5.375%, 02/01/27	NR/AA-/NR		351,275
	330,000	5.375%, 02/01/28	NR/AA-/NR		367,406
		Kentucky Bond Corp. Financing
		Program
	915,000	5.125%, 02/01/28	NR/AA-/NR		1,012,923
		Laurel County, Kentucky Public
		Property Corp. Justice Center
		Project
	250,000	4.625%, 03/01/28	Aa3/NR/NR		262,990
		Lexington-Fayette Urban County,
		Kentucky Public Facilities
	500,000	4.125%, 10/01/23 NPFG Insured	Aa3/NR/NR		516,895
	500,000	4.250%, 10/01/26 NPFG Insured	Aa3/NR/NR		513,085

6 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Local Public Property (continued)
		River City Parking Authority of River
		City, Inc., Kentucky First Mortgage
$	1,000,000	4.750%, 06/01/27 2013 Series B	Aa2/AA/NR	$	1,138,290
		Warren County, Kentucky Justice
		Center
	365,000	4.300%, 09/01/22 NPFG Insured	Aa3/NR/NR		376,063
		Total Local Public Property			16,134,973
		School Building (17.2%)
		Barren County, Kentucky School
		Building Revenue
	1,265,000	4.250%, 08/01/25 AGC Insured	Aa3/NR/NR		1,304,051
	1,670,000	4.375%, 08/01/26 AGC Insured	Aa3/NR/NR		1,721,920
		Boone County, Kentucky School
		District Finance Corp. School
		Building Revenue
	1,000,000	4.125%, 08/01/22 Syncora Guarantee,
		Inc. Insured (pre-refunded)	Aa3/NR/NR		1,032,610
	1,580,000	4.500%, 08/01/23 AGMC Insured	Aa3/NR/NR		1,639,803
	1,250,000	4.125%, 03/01/25 AGMC Insured	Aa3/NR/NR		1,296,325
		Bullitt County, Kentucky School
		District Finance Corp.
	1,145,000	4.500%, 04/01/27	Aa3/NR/NR		1,205,078
	1,200,000	4.500%, 04/01/28	Aa3/NR/NR		1,262,964
		Campbell County, Kentucky School
		District Finance Corp. School Building
	340,000	3.500%, 08/01/22	Aa3/NR/NR		358,367
		Christian County, Kentucky School
		District Finance Corp.
	750,000	4.125%, 08/01/23 Syncora Guarantee,
		Inc. Insured (pre-refunded)	Aa3/NR/NR		774,457
	1,590,000	4.125%, 08/01/24 Syncora Guarantee,
		Inc. Insured (pre-refunded)	Aa3/NR/NR		1,641,850
		Fayette County, Kentucky School
		District Finance Corp.
	4,335,000	4.375%, 05/01/26 AGMC Insured	A1/AA/NR		4,566,619
	1,000,000	5.000%, 10/01/27 Series A	A1/A+/NR		1,169,520
	750,000	4.250%, 06/01/29 Series A	A1/A+/NR		801,990

7 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		School Building (continued)
		Floyd County, Kentucky School Finance
		Corporation School Building
$	1,255,000	4.125%, 03/01/26 Syncora Guarantee,
		Inc. Insured	Aa3/NR/NR	$	1,268,617
		Fort Thomas, Kentucky Independent
		School District Finance Corp.
	610,000	4.375%, 04/01/25	Aa3/NR/NR		629,947
		Franklin County, Kentucky School
		District Finance Corp.
	1,135,000	4.000%, 04/01/24 Second Series	Aa3/NR/NR		1,243,892
	1,560,000	4.000%, 06/01/29	Aa3/NR/NR		1,633,336
		Jefferson County, Kentucky School
		District Finance Corp.
	4,000,000	4.000%, 07/01/26 Series B	Aa2/AA-/NR		4,292,760
		Kenton County, Kentucky School
		District Finance Corp.
	445,000	4.300%, 04/01/22 AGC Insured	Aa3/NR/NR		457,803
	590,000	4.250%, 10/01/22 AGMC Insured	Aa3/NR/NR		611,948
	750,000	4.375%, 04/01/24 AGC Insured	Aa3/NR/NR		771,615
	325,000	4.400%, 04/01/26 AGC Insured	Aa3/NR/NR		334,051
		Larue County, Kentucky School
		District Finance Corp.
	270,000	4.500%, 07/01/21 NPFG Insured
		(pre-refunded)	Aa3/NR/NR		289,321
	470,000	4.500%, 07/01/22 NPFG Insured
		(pre-refunded)	Aa3/NR/NR		503,633
	785,000	4.500%, 07/01/23 NPFG Insured
		(pre-refunded)	Aa3/NR/NR		841,175
		Laurel County, Kentucky School
		District Finance Corp.
	300,000	4.000%, 06/01/16 AGMC Insured	Aa3/NR/NR		316,677
		Magoffin County, Kentucky School
		District
	375,000	4.250%, 08/01/23 AMBAC Insured	Aa3/NR/NR		384,139
	475,000	4.250%, 08/01/25 AMBAC Insured	Aa3/NR/NR		485,298
		Ohio County, Kentucky School
		Building Revenue
	790,000	4.500%, 05/01/24	Aa3/NR/NR		856,431
	325,000	4.500%, 05/01/25	Aa3/NR/NR		351,978

8 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		School Building (continued)
		Oldham County, Kentucky School
		District Finance Corp.
$	1,000,000	4.500%, 09/01/27 NPFG Insured	Aa3/NR/NR	$	1,033,020
		Owensboro, Kentucky Independent
		School District Finance Corp.
		School Building Revenue
	890,000	4.375%, 09/01/24	Aa3/NR/NR		962,847
		Pendleton County, Kentucky School
		District Finance Corp. School
		Building Revenue
	730,000	4.000%, 02/01/23 NPFG Insured	Aa3/NR/NR		749,586
		Pike County, Kentucky School
		Building Revenue
	1,355,000	4.375%, 10/01/26 NPFG Insured	Aa3/NR/NR		1,403,644
		Spencer County, Kentucky School
		District Finance Corp., School
		Building Revenue
	1,000,000	4.500%, 08/01/27 AGMC Insured	Aa3/NR/NR		1,041,440
		Warren County, Kentucky School
		District Finance Corp.
	295,000	4.125%, 02/01/23 NPFG Insured	Aa3/NR/NR		299,511
	500,000	4.375%, 04/01/27 AGMC Insured	Aa3/NR/NR		522,140
		Total School Building			40,060,363
		Turnpike/Highway (9.3%)
		Kentucky State Turnpike Authority
	3,000,000	4.450%, 07/01/22 Series B	Aa2/AA+/A+		3,176,340
	3,500,000	5.000%, 07/01/25	Aa2/AA+/A+		4,013,905
	2,000,000	5.000%, 07/01/25 AMBAC Insured
		(pre-refunded)	Aa2/AA+/A+		2,071,680
	1,000,000	5.000%, 07/01/25	Aa2/AA+/A+		1,124,620
	2,750,000	5.000%, 07/01/27	Aa2/AA+/A+		3,084,180
	1,100,000	5.000%, 07/01/28	Aa2/AA+/A+		1,231,549
	5,000,000	5.000%, 07/01/29 Series A	Aa2/AA+/A+		5,810,000
	1,000,000	5.000%, 07/01/30 Series A	Aa2/AA+/A+		1,154,430
		Total Turnpike/Highway			21,666,704
		Utilities (10.3%)
		Campbell & Kenton Counties,
		Kentucky (Sanitation District)
	1,695,000	4.300%, 08/01/24 NPFG Insured	Aa2/AA/NR		1,791,276

9 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Utilities (continued)
		Campbell & Kenton Counties,
		Kentucky (Sanitation District)
		(continued)
$	300,000	4.300%, 08/01/27 NPFG Insured	Aa2/AA/NR	$	315,195
	2,370,000	4.000%, 08/01/27	Aa2/AA/NR		2,507,484
	1,450,000	4.300%, 08/01/28 NPFG Insured	Aa2/AA/NR		1,521,021
		Kentucky State Municipal Power
		Agency, Prairie St. Project
	1,000,000	5.000%, 09/01/23 AGMC Insured	A2/AA/NR		1,132,450
		Louisville & Jefferson County, Kentucky
		Metropolitan Sewer District
	1,570,000	4.250%, 05/15/20 AGMC Insured
		(pre-refunded)	Aa3/AA/NR		1,609,956
	810,000	4.250%, 05/15/20 AGMC Insured	Aa3/NR/NR		827,763
	1,655,000	4.250%, 05/15/21 AGMC Insured
		(pre-refunded)	Aa3/AA/NR		1,697,120
	855,000	4.250%, 05/15/21 AGMC Insured	Aa3/NR/NR		873,374
	990,000	5.000%, 05/15/26 AGMC Insured
		(pre-refunded)	Aa3/AA/NR		1,019,769
	510,000	5.000%, 05/15/26 AGMC Insured	Aa3/AA/NR		522,536
	500,000	5.000%, 05/15/28 Series A	Aa3/AA/AA-		572,945
		Northern Kentucky Water District
	1,000,000	5.000%, 02/01/26	Aa3/NR/NR		1,153,390
	1,825,000	6.000%, 02/01/28 AGMC Insured	Aa3/NR/NR		2,126,380
		Owensboro, Kentucky Electric, Light
		and Power
	1,000,000	5.000%, 01/01/21 AGMC Insured	A2/AA/NR		1,126,320
	3,500,000	5.000%, 01/01/26 AGMC Insured
		Series B	A2/AA/NR		3,784,200
		Owensboro, Kentucky Water Revenue
	500,000	5.000%, 09/15/27 AGC Insured	A1/NR/NR		563,385
		Owensboro-Daviess County, Kentucky
		Regional Water Resource Agency
		Wastewater Refunding &
		Improvement
	930,000	4.375%, 01/01/27 Series A Syncora
		Guarantee, Inc. Insured	NR/A+/NR		948,991
		Total Utilities			24,093,555
		Total Revenue Bonds			218,530,351

10 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

Total Investments (cost $217,222,511 -
note 4)	97.8	%	$	228,109,685
Other assets less liabilities	2.2			5,076,300
Net Assets	100.0	%	$	233,185,985

	Percent of
Portfolio Distribution By Quality Rating	Investments†
Aaa of Moody’s or AAA of S&P or Fitch		3.3	%
Pre-refunded bonds††/ Escrowed to Maturity bonds		8.7
Aa of Moody’s or AA of S&P or Fitch		62.1
A of Moody’s or S&P or Fitch		25.1
Not Rated*		0.8
		100.0	%

PORTFOLIO ABBREVIATIONS

AGC - Assured Guaranty Corp.

AGMC - Assured Guaranty Municipal Corp.

AMBAC - American Municipal Bond Assurance Corp.

AMT - Alternative Minimum Tax

FGIC - Financial Guaranty Insurance Co.

NPFG - National Public Finance Guarantee

NR - Not Rated

* Any security not rated (“NR”) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO”) has been determined by the Investment Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO.

† Where applicable, calculated using the highest rating of the three NRSROs.

†† Pre-refunded bonds are bonds for which U.S. Government Obligations usually have been placed in escrow to retire the bonds at their earliest call date.

See accompanying notes to financial statements.

11 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 2014 (unaudited)

ASSETS
Investments at value (cost $217,222,511)	$	228,109,685
Cash		2,456,918
Interest receivable		2,931,650
Receivable for Fund shares sold		27,616
Other assets		20,343
Total assets		233,546,212
LIABILITIES
Dividends payable		178,236
Management fee payable		76,946
Payable for Fund shares redeemed		21,196
Distribution and service fees payable		4,266
Accrued expenses payable		79,583
Total liabilities		360,227
NET ASSETS	$	233,185,985
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share	$	215,827
Additional paid-in capital		223,049,142
Net unrealized appreciation on investments (note 4)		10,887,174
Undistributed net investment income		199,871
Accumulated net realized loss on investments		(1,166,029	)
CLASS A	$	233,185,985
Net Assets	$	184,792,657
Capital shares outstanding		17,104,242
Net asset value and redemption price per share	$	10.80
Maximum offering price per share (100/96 of $10.80)	$	11.25
CLASS C
Net Assets	$	9,718,138
Capital shares outstanding		899,972
Net asset value and offering price per share	$	10.80
Redemption price per share (*a charge of 1% is imposed on the
redemption proceeds, or on the original price, whichever is
lower, if redeemed during the first 12 months after purchase)	$	10.80	*
CLASS I
Net Assets	$	7,608,698
Capital shares outstanding		704,562
Net asset value, offering and redemption price per share	$	10.80
CLASS Y
Net Assets	$	31,066,492
Capital shares outstanding		2,873,886
Net asset value, offering and redemption price per share	$	10.81

See accompanying notes to financial statements.

12 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

STATEMENT OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2014 (unaudited)

Investment Income:

Interest income			$	4,618,937
Expenses:
Management fee (note 3)	$	472,430
Distribution and service fees (note 3)		197,928
Legal fees		77,325
Transfer and shareholder servicing agent
fees (note 3)		54,267
Trustees’ fees and expenses (note 8)		52,219
Shareholders’ reports		20,692
Fund accounting fees		18,062
Registration fees and dues		14,590
Custodian fees (note 6)		12,219
Auditing and tax fees		10,215
Insurance		6,588
Chief compliance officer services (note 3)		2,771
Miscellaneous		20,376
Total expenses				959,682
Net investment income				3,659,255
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from securities
transactions		343,987
Change in unrealized appreciation on
investments		3,071,084
Net realized and unrealized gain (loss) on
investments				3,415,071
Net change in net assets resulting from
operations			$	7,074,326

See accompanying notes to financial statements.

13 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30, 2014			Year Ended
	(unaudited)			March 31, 2014
OPERATIONS:
Net investment income	$	3,659,255		$	7,807,058
Net realized gain (loss) from
securities transactions		343,987			(618,235	)
Change in unrealized appreciation
on investments		3,071,084			(7,680,543	)
Change in net assets from
operations		7,074,326			(491,720	)
DISTRIBUTIONS TO SHAREHOLDERS (note 10):
Class A Shares:
Net investment income		(2,924,487	)		(6,266,395	)
Class C Shares:
Net investment income		(110,704	)		(254,311	)
Class I Shares:
Net investment income		(110,897	)		(218,841	)
Class Y Shares:
Net investment income		(495,937	)		(1,032,726	)
Change in net assets from
distributions		(3,642,025	)		(7,772,273	)
CAPITAL SHARE TRANSACTIONS (note 7):
Proceeds from shares sold		8,145,693			15,701,039
Reinvested dividends and
distributions		2,143,208			4,465,536
Cost of shares redeemed		(15,666,923	)		(46,689,119	)
Change in net assets from capital
share transactions		(5,378,022	)		(26,522,544	)
Change in net assets		(1,945,721	)		(34,786,537	)
NET ASSETS:
Beginning of period		235,131,706			269,918,243
End of period*	$	233,185,985		$	235,131,706
*Includes undistributed net investment income of:	$	199,871		$	182,641

See accompanying notes to financial statements.

14 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2014 (unaudited)

1. Organization

     Aquila Churchill Tax-Free Fund of Kentucky (the “Fund”), a series of Aquila Municipal Trust, (from inception until the close of business on October 11, 2013, the Fund operated under the name Churchill Tax-Free Fund of Kentucky), a non-diversified, open-end investment company, was organized in March, 1987 as a Massachusetts business trust and commenced operations on May 21, 1987. The Fund is authorized to issue an unlimited number of shares. Class A Shares are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through authorized financial institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. Class I Shares are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares carry a distribution and a service fee. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.

2. Significant Accounting Policies

     The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.

a) Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are generally valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days.

b) Fair value measurements: The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s investments and are summarized in the following fair value hierarchy:

15 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

The following is a summary of the valuation inputs, representing 100% of the Fund’s investments, used to value the Fund’s net assets as of September 30, 2014:

Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	—
Level 2 – Other Significant Observable
Inputs — Municipal Bonds*		228,109,685
Level 3 – Significant Unobservable Inputs		—
Total	$	228,109,685

     * See schedule of investments for a detailed listing of securities.

c) Subsequent events: In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued.

d) 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 premium and accretion of original issue and market discount.

e) Federal income taxes: It is the policy of the 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. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.

16 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY NOTES TO FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2014 (unaudited)

Management has reviewed the tax positions for each of the open tax years (2011-2013) or expected to be taken in the Trust’s 2014 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements.

f) Multiple class allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis.

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. On March 31, 2014, the Fund decreased undistributed net investment income by $22,487, increased paid-in capital by $14,319 and increased realized gain by $8,168. These reclassifications had no effect on net assets or net asset value per share.

3. Fees and Related Party Transactions

a) Management Arrangements:

     Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Fund’s founder and sponsor, serves as the Manager for the Fund under an Advisory and Administration Agreement with the Fund. Under the Advisory and Administration Agreement, the Manager provides all investment management and administrative services to the Fund. The Manager’s services include providing the office of the Fund and all related services as well as managing relationships with all of the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, fund accounting agent, auditors and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.40% on the Fund’s average net assets.

     Under a Compliance Agreement with the Manager, the Manager is compensated by the Fund for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940.

     Specific details as to the nature and extent of the services provided by the Manager are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

17 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

b) Distribution and Service Fees:

     The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (the “Distributor”) including, but not limited to, any principal underwriter of the Fund, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund’s shares or servicing of shareholder accounts. The Fund makes payment of this distribution fee at the annual rate of 0.15% of the Fund’s average net assets represented by Class A Shares. For the six months ended September 30, 2014, distribution fees on Class A Shares amounted to $141,294 of which the Distributor retained $4,776.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund’s Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $36,833. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $12,277. For the six months ended September 30, 2014, the total of these payments with respect to Class C Shares amounted to $49,110 of which the Distributor retained $12,273.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class I Shares to Qualified Recipients. Class I payments, under the Plan, may not exceed for any fiscal year of the Fund a rate (currently 0.20%), set from time to time by the Board of Trustees, of not more than 0.25% of the average annual net assets represented by the Class I Shares. In addition, Class I has a Shareholder Services Plan under which it may pay service fees (currently 0.15%) of not more than 0.25% of the average annual net assets represented by Class I Shares. That is, the total payments under both plans will not exceed 0.50% of such net assets. For the six months ended September 30, 2014, these payments were made at the average annual rate of 0.35% of such net assets and amounted to $13,167 of which $7,524 related to the Plan and $5,643 related to the Shareholder Services Plan.

     Specific details about the Plans are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

     Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund’s shares. Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Fund’s shares are sold primarily through the facilities of these intermediaries having offices within Kentucky, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended September 30, 2014, total commissions on sales of Class A Shares amounted to $107,853 of which the Distributor received $10,401.

18 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

4. Purchases and Sales of Securities

     During the six months ended September 30, 2014, purchases of securities and proceeds from the sales of securities aggregated $19,304,758 and $24,100,742, respectively.

     At September 30, 2014, the aggregate tax cost for all securities was $217,024,623. At September 30, 2014, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $11,561,446 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $476,384 for a net unrealized appreciation of $11,085,062.

5. Portfolio Orientation

     Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Kentucky, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Kentucky and whatever effects these may have upon Kentucky issuers’ ability to meet their obligations.

6. Expenses

     The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.

19 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

7. Capital Share Transactions

     Transactions in Capital Shares of the Fund were as follows:

	Six Months Ended
	September 30, 2014						Year Ended
	(unaudited)						March 31, 2014
	Shares			Amount			Shares			Amount
Class A Shares:
Proceeds from shares sold		404,491		$	4,353,264			1,053,643		$	11,264,814
Reinvested distributions		178,208			1,919,864			370,606			3,929,791
Cost of shares redeemed		(1,158,566	)		(12,471,350	)		(3,379,501	)		(35,762,318	)
Net change		(575,867	)		(6,198,222	)		(1,955,252	)		(20,567,713	)
Class C Shares:
Proceeds from shares sold		60,227			648,450			158,033			1,686,566
Reinvested distributions		7,554			81,355			17,768			188,376
Cost of shares redeemed		(109,655	)		(1,180,159	)		(361,822	)		(3,802,292	)
Net change		(41,874	)		(450,354	)		(186,021	)		(1,927,350	)
Class I Shares:
Proceeds from shares sold		3,704			40,000			420			4,600
Reinvested distributions		8,279			89,164			19,838			210,590
Cost of shares redeemed		(17	)		(184	)		(11,501	)		(120,526	)
Net change		11,966			128,980			8,757			94,664
Class Y Shares:
Proceeds from shares sold		288,445			3,103,979			258,330			2,745,059
Reinvested distributions		4,900			52,825			12,877			136,779
Cost of shares redeemed		(187,353	)		(2,015,230	)		(660,676	)		(7,003,983	)
Net change		105,992			1,141,574			(389,469	)		(4,122,145	)
Total transactions in Fund
shares		(499,783	)	$	(5,378,022	)		(2,521,985	)	$	(26,522,544	)

20 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

8. Trustees’ Fees and Expenses

     At September 30, 2014 there were 12 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended September 30, 2014 was $39,834. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations and meals incurred in connection with attendance at Board Meetings and at the Annual Meeting of Shareholders. For the the six months ended September 30, 2014, such meeting-related expenses amounted to $12,385.

9. Securities Traded on a When-Issued Basis

     The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

10. Income Tax Information and Distributions

     The Fund declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. Dividends and capital gains distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.

     The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and Commonwealth of Kentucky income taxes. Due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund’s net investment income, and/or net realized securities gains. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income and/or capital gain rates. For certain shareholders, some dividend income may, under some circumstances, be subject to the alternative minimum tax. As a result of the passage of the Regulated Investment Company Modernization Act of 2010 (the “Act”), losses incurred in this fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act. At March 31, 2014, the Fund had capital loss carryforwards of $1,501,679 of which $112,779 expires in 2016, $175,082 expires in 2017 and $709,216 and $504,602 have no expiration and retain their character of short-term and long-term, respectively.

21 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

The tax character of distributions was as follows:

	Year		Three Months		Year
	Ended		Ended		Ended
	March 31, 2014		March 31, 2013		Dec. 31, 2012
Net tax-exempt income	$	7,760,895	$	2,066,050	$	8,555,151
Ordinary Income		11,378		–		876
	$	7,772,273	$	2,066,050	$	8,556,027

     As of March 31, 2014, the components of distributable earnings on a tax basis were as follows:

Accumulated net realized loss	$	(1,501,679	)
Unrealized appreciation		7,998,731
Undistributed tax-exempt income		142,327
Other temporary differences		(150,664	)
	$	6,488,715

     The difference between book basis and tax basis undistributed income is due to the timing difference in recognizing dividends paid and the tax treatment of market discount amortization.

22 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period

	Class A
	Six Months
	Ended			Year			Three Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.65		$	10.97		$	11.07		$	10.84		$	10.26		$	10.51		$	9.42
Income from investment operations:
Net investment income(1)		0.17			0.34			0.08			0.36			0.39			0.40			0.41
Net gain (loss) on securities (both
realized and unrealized)		0.15			(0.32	)		(0.10	)		0.23			0.58			(0.25	)		1.09
Total from investment operations		0.32			0.02			(0.02	)		0.59			0.97			0.15			1.50
Less distributions (note 10):
Dividends from net investment income		(0.17	)		(0.34	)		(0.08	)		(0.36	)		(0.39	)		(0.40	)		(0.41	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.17	)		(0.34	)		(0.08	)		(0.36	)		(0.39	)		(0.40	)		(0.41	)
Net asset value, end of period	$	10.80		$	10.65		$	10.97		$	11.07		$	10.84		$	10.26		$	10.51
Total return(not reflecting sales charge)		2.99	%(2)		0.21	%		(0.14	)%(2)		5.53	%		9.64	%		1.38	%		16.05	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	185		$	188		$	215		$	219		$	199		$	186		$	195
Ratio of expenses to average net assets		0.79	%(3)		0.80	%(4)(5)		0.77	%(3)		0.76	%		0.77	%		0.75	%		0.76	%
Ratio of net investment income to
average net assets		3.12	%(3)		3.18	%(4)(5)		3.11	%(3)		3.30	%		3.73	%		3.80	%		3.96	%
Portfolio turnover rate		8	%(2)		9	%		2	%(2)		12	%		12	%		8	%		8	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.79	%(3)		0.80	%(4)		0.77	%(3)		0.76	%		0.77	%		0.75	%		0.76	%

________________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.76% and 3.22%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

23 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class C
	Six Months
	Ended			Year			Three Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.64		$	10.96		$	11.07		$	10.83		$	10.25		$	10.51		$	9.42
Income from investment operations:
Net investment income(1)		0.12			0.25			0.06			0.27			0.30			0.31			0.32
Net gain (loss) on securities (both
realized and unrealized)		0.16			(0.32	)		(0.11	)		0.24			0.58			(0.26	)		1.09
Total from investment operations		0.28			(0.07	)		(0.05	)		0.51			0.88			0.05			1.41
Less distributions (note 10):
Dividends from net investment income		(0.12	)		(0.25	)		(0.06	)		(0.27	)		(0.30	)		(0.31	)		(0.32	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.12	)		(0.25	)		(0.06	)		(0.27	)		(0.30	)		(0.31	)		(0.32	)
Net asset value, end of period	$	10.80		$	10.64		$	10.96		$	11.07		$	10.83		$	10.25		$	10.51
Total return(not reflecting CDSC)		2.65	%(2)		(0.64	)%		(0.44	)%(2)		4.73	%		8.72	%		0.42	%		15.06	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	10		$	10		$	12		$	13		$	9		$	9		$	4
Ratio of expenses to average net assets		1.64	%(3)		1.65	%(4)(5)		1.62	%(3)		1.61	%		1.62	%		1.59	%		1.60	%
Ratio of net investment income to
average net assets		2.27	%(3)		2.33	%(4)(5)		2.26	%(3)		2.43	%		2.87	%		2.90	%		3.06	%
Portfolio turnover rate		8	%(2)		9	%		2	%(2)		12	%		12	%		8	%		8	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		1.64	%(3)		1.65	%(4)		1.62	%(3)		1.61	%		1.62	%		1.59	%		1.60	%

_________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 1.61% and 2.37%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

24 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class I
	Six Months
	Ended			Year			Three Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13			2012			2011			2010			2009
Net asset value, beginning of period	$	10.64		$	10.97		$	11.07		$	10.83		$	10.25		$	10.51		$	9.42
Income from investment operations:
Net investment income(1)		0.16			0.32			0.08			0.34			0.37			0.39			0.39
Net gain (loss) on securities (both
realized and unrealized)		0.16			(0.33	)		(0.10	)		0.24			0.58			(0.27	)		1.09
Total from investment operations		0.32			(0.01	)		(0.02	)		0.58			0.95			0.12			1.48
Less distributions (note 10):
Dividends from net investment income		(0.16	)		(0.32	)		(0.08	)		(0.34	)		(0.37	)		(0.38	)		(0.39	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.16	)		(0.32	)		(0.08	)		(0.34	)		(0.37	)		(0.38	)		(0.39	)
Net asset value, end of period	$	10.80		$	10.64		$	10.97		$	11.07		$	10.83		$	10.25		$	10.51
Total return		3.01	%(2)		(0.05	)%		(0.18	)%(2)		5.47	%		9.48	%		1.13	%		15.89	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	8		$	7		$	7		$	7		$	7		$	7		$	8
Ratio of expenses to average net assets		0.95	%(3)		0.96	%(4)(5)		0.94	%(3)		0.91	%		0.92	%		0.90	%		0.90	%
Ratio of net investment income to
average net assets		2.96	%(3)		3.02	%(4)(5)		2.94	%(3)		3.15	%		3.58	%		3.64	%		3.82	%
Portfolio turnover rate		8	%(2)		9	%		2	%(2)		12	%		12	%		8	%		8	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.95	%(3)		0.96	%(4)		0.94	%(3)		0.91	%		0.92	%		0.90	%		0.90	%

__________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.92% and 3.06%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

25 | Aquila Churchill Tax-Free Fund of Kentucky

AQUILA CHURCHILL TAX-FREE FUND OF KENTUCKY

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class Y
	Six Months
	Ended			Year			Three Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13			2012			2011			2010			2009
Net asset value, beginning of period	$	10.65		$	10.98		$	11.08		$	10.84		$	10.26		$	10.52		$	9.43
Income from investment operations:
Net investment income(1)		0.18			0.35			0.09			0.38			0.41			0.42			0.42
Net gain (loss) on securities (both
realized and unrealized)		0.16			(0.33	)		(0.10	)		0.24			0.58			(0.26	)		1.09
Total from investment operations		0.34			0.02			(0.01	)		0.62			0.99			0.16			1.51
Less distributions (note 10):
Dividends from net investment income		(0.18	)		(0.35	)		(0.09	)		(0.38	)		(0.41	)		(0.42	)		(0.42	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.18	)		(0.35	)		(0.09	)		(0.38	)		(0.41	)		(0.42	)		(0.42	)
Net asset value, end of period	$	10.81		$	10.65		$	10.98		$	11.08		$	10.84		$	10.26		$	10.52
Total return		3.17	%(2)		0.27	%		(0.10	)%(2)		5.78	%		9.81	%		1.44	%		16.21	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	31		$	29		$	35		$	34		$	33		$	40		$	46
Ratio of expenses to average net assets		0.64	%(3)		0.65	%(4)(5)		0.62	%(3)		0.61	%		0.62	%		0.60	%		0.61	%
Ratio of net investment income to
average net assets		3.27	%(3)		3.33	%(4)(5)		3.26	%(3)		3.45	%		3.89	%		3.95	%		4.10	%
Portfolio turnover rate		8	%(2)		9	%		2	%(2)		12	%		12	%		8	%		8	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.64	%(3)		0.65	%(4)		0.62	%(3)		0.61	%		0.62	%		0.60	%		0.61	%

__________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.61% and 3.37%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

26 | Aquila Churchill Tax-Free Fund of Kentucky

Additional Information (unaudited)

Renewal of the Advisory and Administration Agreement

     Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Fund pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). In order for the Manager to remain the investment adviser of the Fund, the Trustees of the Fund must determine annually whether to renew the Advisory Agreement for the Fund.

     In considering whether to approve the renewal of the Advisory Agreement, the Trustees requested and obtained such information as they deemed reasonably necessary. Contract review materials were provided to the Trustees in August, 2014. The independent Trustees met telephonically in August, 2014 to review and discuss the contract review materials. The Trustees considered, among other things, information presented by the Manager. They also considered information presented in a report prepared by an independent consultant with respect to the Fund’s fees, expenses and investment performance, which included comparisons of the Fund’s investment performance against peers and the Fund’s benchmark and comparisons of the advisory fee payable under the Advisory Agreement against the advisory fees paid by the Fund’s peers, as well as information regarding the operating margins of certain investment advisory firms (the “Consultant’s Report”). In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting.

     At a meeting held in September, 2014, based on their evaluation of the information provided by the Manager and the independent consultant, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of the Advisory Agreement until September 30, 2015. In considering the renewal of the Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement.

The nature, extent, and quality of the services provided by the Manager.

     The Trustees considered the nature, extent and quality of the services that had been provided by the Manager to the Fund, taking into account the investment objectives and strategies of the Fund. The Trustees reviewed the terms of the Advisory Agreement.

     The Trustees reviewed the Manager’s investment approach for the Fund and its research process. The Trustees considered that the Manager had provided all advisory and administrative services to the Fund that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Fund, given that it seeks to provide shareholders with as high a level of current income exempt from Kentucky state and regular Federal income taxes as is consistent with preservation of capital. The Trustees considered the personnel of the Manager who provide investment management services to the Fund. The Manager has employed Mr. Royden Durham and Mr. Todd Curtis as co-portfolio managers for the Fund and has established facilities and capabilities for credit analysis of the Fund’s portfolio securities. The Trustees noted the extensive experience of the co-portfolio managers. They considered that Mr. Durham is based in Louisville, Kentucky and that he has a comprehensive understanding regarding the economy of the State of Kentucky and the securities in which the Fund invests, including those securities with less than the highest ratings from the rating agencies.

27 | Aquila Churchill Tax-Free Fund of Kentucky

     The Manager has additionally provided all administrative services to the Fund and provided the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund’s business management and operations. The Trustees considered the nature and extent of the Manager’s supervision of third-party service providers, including the Fund’s shareholder servicing agent and custodian.

     Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager to the Fund were satisfactory and consistent with the terms of the Advisory Agreement.

The investment performance of the Fund.

     The Trustees reviewed the Fund’s performance and compared its performance to the performance of:

• the funds in the Fund’s peer group (the “Peer Group”), as selected by the independent consultant (four municipal single-state intermediate and municipal single-state long funds, as classified by Morningstar, that are similar to the Fund in size; three of the funds charge a front-end sales charge and one fund is a no-load fund that also is a Kentucky state-specific tax-free municipal bond fund);

• the funds in the Fund’s product category for performance (the “Product Category for Performance”) (all funds in the Peer Group and, without duplication, all funds (and all classes) included in the Morningstar Single-State Intermediate Municipal Bond Funds category); and

• the Fund’s benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index.

     The Trustees considered that the materials included in the Consultant’s Report indicated that the Fund’s average annual total return was lower than the average annual total return of the funds in the Peer Group for the one, three, five and ten year periods ended June 30, 2014. However, the Trustees considered that, as reflected in the Consultant’s Report, the Fund’s average annual total return was higher than the average annual total return of the funds in the Product Category for Performance for each of the one, three, five and ten year periods ended June 30, 2014, as well as the benchmark index for the three and five year periods ended June 30, 2014. The Trustees also noted that a no-load fund was included in the Peer Group and considered the impact of the inclusion of such fund in the average annual return of the funds in the Peer Group. The Trustees considered that, as reflected in the Consultant’s Report, the Fund delivered above-average results on a risk-adjusted basis for the three and five year periods ended June 30, 2014 (as evidenced by its Sharpe ratio) when compared to the funds in the Product Category for Performance .

     The Trustees discussed the Fund’s performance record with the Manager and considered the Manager’s view that the Fund’s performance, as compared to its peer group, was explained in part by the Fund’s generally higher-quality portfolio and its intermediate maturity structure.

28 | Aquila Churchill Tax-Free Fund of Kentucky

     The Trustees noted that, unlike the Fund’s returns, the performance of the benchmark index did not reflect any fees or expenses. The Trustees considered the Fund’s investment performance to be consistent with the investment objectives of the Fund.

     The Trustees concluded that the performance of the Fund was competitive, in light of market conditions, the length of its average maturities and its investment objectives. Evaluation of the investment performance of the Fund indicated to the Trustees that renewal of the Advisory Agreement would be appropriate.

Advisory Fees and Fund Expenses.

     The Trustees reviewed the Fund’s advisory fees and expenses and compared them to the advisory fee and expense data for:

• the funds in the Peer Group (as defined above); and

• the funds in the product category for expenses (the “Product Category for Expenses”) (Morningstar Single-State Intermediate Municipal Bond Funds and Morningstar Single State Long Municipal Bond Funds from states within which 4-7 mutual funds are operating, with similar operating expense structures).

     The Trustees considered that the Fund’s contractual advisory fee was lower than the average contractual advisory fees of the funds in the Peer Group (at the Fund’s current asset level) and lower than the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses (at various asset levels). They also noted that the Fund’s expenses exceeded the average actual expenses of the funds in both the Product Category for Expenses and the Peer Group and considered the impact of the onetime expenses incurred by the Fund in connection with the reorganization of the Fund into Aquila Municipal Trust.

     The Trustees reviewed management fees charged by the Manager to its other clients. It was noted that the Manager does not have any other clients except for other funds in the Aquila Group of Funds. The Trustees noted that in most instances the fee rates for those clients were comparable to the fees paid to the Manager with respect to the Fund. In evaluating the fees associated with the other funds, the Trustees took into account the respective demands, resources and complexity associated with the Fund and those funds.

     The Trustees concluded that the advisory fee and expenses of the Fund were reasonable in relation to the nature and quality of the services provided by the Manager to the Fund.

Profitability.

     The Trustees received materials from the Manager and the independent consultant related to profitability. The Manager provided information which showed the profitability to the Manager of its services to the Fund, as well as the profitability of Aquila Distributors, Inc. of distribution services provided to the Fund. The independent consultant provided publicly available data regarding the profitability of other asset managers in comparison to the overall profitability of the Manager.

     The Trustees considered the information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Fund, including the methodology used by the Manager in allocating certain of its costs to the management of the Fund. The Trustees also considered information regarding the profitability of the Manager provided to the Trustees by the independent consultant. The Trustees concluded that profitability to the Manager with respect to the advisory services provided to the Fund did not argue against approval of the fees to be paid under the Advisory Agreement.

29 | Aquila Churchill Tax-Free Fund of Kentucky

The extent to which economies of scale would be realized as the Fund grows.

     The Trustees considered the extent to which the Manager may realize economies of scale or other efficiencies in managing the Fund. The Trustees considered that the materials indicated that the Fund’s fees are already generally lower than those of its peers, including those funds with breakpoints. The Trustees noted that the Manager’s profitability also may be an indicator of the availability of any economies of scale. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund.

Benefits derived or to be derived by the Manager and its affiliate from the relationship with the Fund.

     The Trustees observed that, as is generally true of most fund complexes, the Manager and its affiliate, by providing services to a number of funds including the Fund, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that produces efficiencies and increased profitability for the Manager and its affiliate, it also makes their services available to the Fund at favorable levels of quality and cost which are more advantageous to the Fund than would otherwise have been possible.

30 | Aquila Churchill Tax-Free Fund of Kentucky

Analysis of Expenses (unaudited)

     As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution (12b-1) and/or service fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     The table below is based on an investment of $1,000 invested on April 1, 2014 and held for the six months ended September 30, 2014.

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 “Expenses Paid During the Period”.

Six months ended September 30, 2014

	Actual
	Total Return	Beginning	Ending	Expenses
	Without	Account	Account	Paid During
	Sales Charges(1)	Value	Value	the Period(2)
Class A	2.99%	$1,000.00	$1,029.90	$4.02
Class C	2.65%	$1,000.00	$1,026.50	$8.33
Class I	3.01%	$1,000.00	$1,030.10	$4.83
Class Y	3.17%	$1,000.00	$1,031.70	$3.26

(1) Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable CDSC with respect to Class C shares. Total return is not annualized; as such, it may not be representative of the total return for the year.

(2) Expenses are equal to the annualized expense ratio of 0.79%, 1.64%, 0.95% and 0.64% for the Fund’s Class A, C, I and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

31 | Aquila Churchill Tax-Free Fund of Kentucky

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 Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of CDSC with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.

Six months ended September 30, 2014

	Hypothetical
	Annualized	Beginning	Ending	Expenses
	Total	Account	Account	Paid During
	Return	Value	Value	the Period(1)
Class A	5.00%	$1,000.00	$1,021.11	$4.00
Class C	5.00%	$1,000.00	$1,016.85	$8.29
Class I	5.00%	$1,000.00	$1,020.31	$4.81
Class Y	5.00%	$1,000.00	$1,021.86	$3.24

(1) Expenses are equal to the annualized expense ratio of 0.79%, 1.64%, 0.95% and 0.64% for the Fund’s Class A, C, I and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

32 | Aquila Churchill Tax-Free Fund of Kentucky

Information Available (unaudited)

     Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Fund’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Fund policies, the Manager publicly discloses the complete schedule of the Fund’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available. You may obtain a copy of the Fund’s portfolio holdings schedule for the most recently completed period by visiting the Fund’s website at www.aquilafunds.com. The Fund may also disclose other portfolio holdings as of a specified date (currently the Fund discloses its five largest holdings and/or sector holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Fund’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.

     The Fund additionally files a complete list of its portfolio holdings 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 www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.

Proxy Voting Record (unaudited)

     During the 12 month period ended June 30, 2014, the Fund did not hold any portfolio securities for which the Fund was entitled to participate in proxy voting. Applicable regulations require us to inform you that the Fund’s proxy voting information is available on the SEC website at www.sec.gov.

Federal Tax Status of Distributions (unaudited)

     This information is presented in order to comply with a requirement of the Internal Revenue Code. No action on the part of shareholders is required.

     For the fiscal year ended March 31, 2014, $7,760,895 of dividends paid by Aquila Churchill Tax-Free Fund of Kentucky, constituting 99.9% of total dividends paid, were exempt-interest dividends; and the balance was ordinary income.

     Prior to February 15, 2015, shareholders will be mailed the appropriate tax form(s) which will contain information on the status of distributions paid for the 2014 calendar year.

33 | Aquila Churchill Tax-Free Fund of Kentucky

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(THIS PAGE INTENTIONALLY LEFT BLANK)

Founders

     Lacy B. Herrmann (1929-2012)

Aquila Management Corporation, Sponsor

Manager

AQUILA INVESTMENT MANAGEMENT LLC

120 West 45th Street, Suite 3600

New York, New York 10036

Board of Trustees

     John C. Lucking, Chair

Diana P. Herrmann, Vice Chair

Ernest Calderón

Thomas A. Christopher

Gary C. Cornia

David A. Duffy

Grady Gammage, Jr.

     Lyle W. Hillyard

Glenn P. O’Flaherty

John J. Partridge

James R. Ramsey

Laureen L. White

Officers

Diana P. Herrmann, President

Charles E. Childs, III, Executive Vice President

and Secretary

Marie E. Aro, Senior Vice President

Paul G. O’Brien, Senior Vice President

Todd W. Curtis, Vice President

and Co-Portfolio Manager

Royden P. Durham, Vice President

and Co-Portfolio Manager

Brandon M. Moody, Vice President

Randall S. Fillmore, Chief Compliance Officer

Joseph P. DiMaggio, Chief Financial Officer

and Treasurer

Distributor

AQUILA DISTRIBUTORS, INC.

120 West 45th Street, Suite 3600

New York, New York 10036

Transfer and Shareholder Servicing Agent

     BNY MELLON

4400 Computer Drive

Westborough, Massachusetts 01581

Custodian

JPMORGAN CHASE BANK, N.A.

14201 N. Dallas Parkway

Dallas, Texas 75254

Further information is contained in the Prospectus,

which must precede or accompany this report.

 

Semi-Annual

Report

September 30, 2014

 

Aquila Narragansett Tax-Free Income Fund   “Sooner Rather Than Later - The Miracle of Compound Interest”   Serving Rhode Island investors since 1992

November, 2014

Dear Fellow Shareholder:

     Type the words “compound interest” into any internet search engine and you’re bound to find literally hundreds of examples of the concept. Most examples would likely be fairly standard and show the effect that compound interest has on the growth of savings when the interest rate is applied to both the initial sum invested as well as to reinvested income.

     However, we’d like to share with you another example. The following table vividly demonstrates the power of both compounding and beginning to invest sooner rather than later.

• Example 1 assumes a hypothetical investment from age 19 through age 26.

• Example 2 assumes a hypothetical investment from age 27 through age 39.

     Both examples assume a $2,000 yearly investment, with no withdrawals and with no allowance for income taxes. In each case, income compounds at a hypothetical annual interest rate of 5%. These assumptions are for the sake of the illustration and do not represent past or future performance of any investment. The advantage of beginning a saving plan sooner, rather than later, applies whether you earn 3%, 5% or some other amount.

     As you can see, a person who begins to invest $2,000 per year at age 19 and continues to invest over a period of eight years (through age 26) will have more money at age 39 (through the “miracle of compound interest”) than will someone who begins to invest at a later age (27) and continues to invest through age 39.

     We encourage you to share these examples with your family and friends. Beginning a saving plan early can pay off over time, particularly with the assistance of the miracle of compound interest.

     You can take advantage of the powers of compounding when you set up an automatic investment plan in Aquila Narragansett Tax-Free Income Fund and reinvest your dividends. To do so, please contact your investment professional or the Fund’s Shareholder Servicing Agent at 1-800-437-1000.

     Before investing in the Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

NOT A PART OF THE SEMI-ANNUAL REPORT

	EXAMPLE 1		EXAMPLE 2
	5% Annual Interest Rate		5% Annual Interest Rate
	Annual		Annual
Age	Investment	Year-End Value	Investment	Year-End Value
19	$2,000	$2,100	0	0
20	2,000	4,305	0	0
21	2,000	6,620	0	0
22	2,000	9,051	0	0
23	2,000	11,604	0	0
24	2,000	14,284	0	0
25	2,000	17,098	0	0
26	2,000	20,053	0	0
27	0	21,056	$2,000	$2,100
28	0	22,109	2,000	4,305
29	0	23,214	2,000	6,620
30	0	24,375	2,000	9,051
31	0	25,593	2,000	11,604
32	0	26,873	2,000	14,284
33	0	28,217	2,000	17,098
34	0	29,628	2,000	20,053
35	0	31,109	2,000	23,156
36	0	32,664	2,000	26,414
37	0	34,298	2,000	29,834
38	0	36,013	2,000	33,426
39	0	37,813	2,000	37,197

     This chart is for illustration purposes only;

it does not represent past or future performance of any investment.

Sincerely,

Diana P. Herrmann, Vice Chair and President

Any information in this Semi-Annual Report regarding market or economic trends or the factors influencing the Fund’s historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that any market forecasts discussed will be realized.

NOT A PART OF THE SEMI-ANNUAL REPORT

Mutual fund investing involves risk and loss of principal is possible.

The market prices of the Fund’s securities may rise or decline in value due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment may go down. The value of your investment may go down when interest rates rise. A rise in interest rates tends to have a greater impact on the prices of longer term securities. Conversely, when interest rates fall, the value of your investment may rise. Interest rates in the U.S. recently have been historically low and are expected to rise at some point in time.

Investments in the Fund are subject to possible loss due to the financial failure of the issuers of underlying securities and their inability to meet their debt obligations.

The value of municipal securities can be adversely a ected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory developments, legislative actions, and by uncertainties and public perceptions concerning these and other factors. The Fund may be a ected significantly by adverse economic, political or other events a ecting state and other municipal issuers in which it invests, and may be more volatile than a more geographically diverse fund.

If interest rates fall, an issuer may exercise its right to prepay its securities, and the Fund could be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security.

A portion of income may be subject to local, state, federal and/or alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

These risks may result in share price volatility.

NOT A PART OF THE SEMI-ANNUAL REPORT

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (27.3%)	and Fitch	Value
		Barrington, Rhode Island
$	1,120,000	2.500%, 08/01/25	Aa1/NR/NR	$	1,148,090
		Bristol, Rhode Island
	2,200,000	4.000%, 02/15/26 AGC Insured	Aa2/AA+/NR		2,309,582
	2,000,000	4.375%, 02/15/29 AGC Insured	Aa2/AA+/NR		2,115,900
		Coventry, Rhode Island
	500,000	3.375%, 11/01/21 AGMC Insured	A1/NR/NR		506,125
		Cranston, Rhode Island
	2,455,000	4.625%, 07/01/25 AGMC Insured	A2/AA/NR		2,622,136
	990,000	4.750%, 07/01/28 AGMC Insured	A2/AA/NR		1,053,419
	750,000	4.300%, 07/01/30 AGMC Insured
		Series 2010 A	A2/AA/A		802,703
	1,000,000	4.250%, 04/01/18 NPFG Insured	A2/AA-/A		1,040,490
	1,000,000	4.250%, 04/01/19 NPFG Insured	A2/AA-/A		1,036,120
	1,000,000	4.300%, 04/01/20 NPFG Insured	A2/AA-/A		1,033,700
	1,000,000	4.500%, 04/01/23 NPFG Insured	A2/AA-/A		1,027,230
	1,500,000	4.500%, 04/01/26 NPFG Insured	A2/AA-/A		1,548,645
		Cumberland, Rhode Island
	1,000,000	4.250%, 08/01/17 AGMC Insured	Aa3/AA/NR		1,093,020
	600,000	4.250%, 08/01/18 AGMC Insured	Aa3/AA/NR		667,062
	500,000	4.250%, 11/01/27 Series 2011 A	NR/AA/NR		542,570
	500,000	4.625%, 11/01/31 Series 2011 A	NR/AA/NR		545,790
		East Providence, Rhode Island
		Refunding
	2,500,000	4.550%, 05/15/30 AGMC Insured	A2/AA/NR		2,611,950
		Hopkinton, Rhode Island
	500,000	4.375%, 08/15/31	Aa3/NR/NR		536,260
		Johnston, Rhode Island
	1,020,000	3.450%, 06/01/29 Series A	A3/AA-/NR		1,031,414
	1,020,000	3.700%, 06/01/33 Series A	A3/AA-/NR		1,032,811
		Lincoln, Rhode Island
	1,000,000	4.500%, 08/01/24 NPFG Insured	Aa2/NR/AA		1,049,790
	1,775,000	4.500%, 08/01/25 NPFG Insured	Aa2/NR/AA		1,861,087
	2,000,000	4.500%, 08/01/26 NPFG Insured	Aa2/NR/AA		2,093,660
		Narragansett, Rhode Island
	1,025,000	3.500%, 07/15/28	Aa2/AA/NR		1,119,956
		North Kingstown, Rhode Island
	1,040,000	3.000%, 04/15/24 Series A	Aa2/AA+/NR		1,104,594

1 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		North Providence, Rhode Island
$	2,225,000	3.625%, 07/15/15 AGMC Insured	A2/AA/NR	$	2,275,908
		Pawtucket, Rhode Island
	1,950,000	4.500%, 07/15/26 AGC Insured	A3/NR/NR		2,032,485
	1,500,000	4.750%, 07/15/29 AGC Insured	A3/NR/NR		1,568,385
		Providence, Rhode Island
	1,500,000	5.000%, 01/15/23 AGMC Insured
		Series 2010 A Refunding	A2/AA/NR		1,649,820
	1,500,000	5.000%, 01/15/26 AGMC Insured
		Series 2010 A Refunding	A2/AA/NR		1,632,030
	975,000	3.625%, 01/15/29 Series A AGMC
		Insured	A2/AA/BBB		961,574
	2,510,000	3.750%, 01/15/30 Series A AGMC
		Insured	A2/AA/BBB		2,483,946
	1,000,000	3.750%, 01/15/32 Series A AGMC
		Insured	A2/AA/BBB		981,220
	500,000	4.000%, 07/15/19 Series A Refunding	Baa1/BBB/NR		547,300
		Rhode Island State & Providence
		Plantations Consolidated Capital
		Development Loan
	2,000,000	3.750%, 11/01/23 Series A	Aa2/AA/AA		2,219,040
	1,150,000	4.000%, 10/15/24 Series B	Aa2/AA/AA		1,282,814
	2,110,000	4.250%, 10/15/25 Series A	Aa2/AA/AA		2,412,405
	1,750,000	3.250%, 10/15/31 Series B	Aa2/AA/AA		1,689,835
		Richmond, Rhode Island
	1,020,000	3.000%, 08/01/24	Aa3/NR/NR		1,105,833
		Warwick, Rhode Island
	1,000,000	4.000%, 08/01/16 AGMC Insured
		Series 2008	A1/AA/NR		1,051,200
	1,015,000	4.000%, 08/01/17 AGMC Insured
		Series 2008	A1/AA/NR		1,084,396
	905,000	4.250%, 01/15/18 Syncora
		Guarantee, Inc. Insured	A1/AA-/NR		934,150
		West Warwick, Rhode Island
	1,900,000	4.625%, 04/01/26 AGC Insured	A3/NR/NR		1,949,191
	1,000,000	4.750%, 04/01/29 AGC Insured	A3/NR/NR		1,021,900
		Westerly, Rhode Island
	900,000	4.000%, 07/01/17 NPFG Insured
		(pre-refunded)	Aa2/AA/NR		956,592
	900,000	4.000%, 07/01/18 NPFG Insured
		(pre-refunded)	Aa2/AA/NR		956,592
		Total General Obligation Bonds			62,330,720

2 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (69.0%)	and Fitch	Value
		Development (5.3%)
		Providence, Rhode Island
		Redevelopment Agency Refunding
		Public Safety Building Project
$	2,000,000	4.750%, 04/01/22 AMBAC Insured
		Series A	Baa2/BBB-/NR	$	2,010,500
	1,000,000	5.000%, 04/01/28 AMBAC Insured
		Series A	Baa2/BBB-/NR		1,003,440
		Rhode Island Certificates of
		Participation (Central Power Plant)
	1,000,000	4.000%, 10/01/20 Series D AGMC
		Insured	Aa3/AA/AA-		1,057,850
		Rhode Island Certificates of
		Participation (Kent County Court
		House Project)
	250,000	5.000%, 10/01/22 NPFG Insured
		Series 2004 A (pre-refunded)	Aa3/AA-/AA-		250,000
		Rhode Island Convention Center
		Authority Refunding
	2,000,000	5.000%, 05/15/21 AGMC Insured	Aa3/AA/NR		2,054,960
	4,000,000	5.000%, 05/15/23 AGMC Insured
		Series 2005 A	Aa3/AA/NR		4,106,120
	1,500,000	5.500%, 05/15/27 AGC Insured
		Series A	Aa3/AA/AA-		1,663,230
		Total Development			12,146,100
		Higher Education (11.4%)
		Rhode Island Health and Education
		Building Corp., Bryant University
	1,115,000	4.500%, 12/01/27 Series 2011	A2/A/NR		1,209,296
	1,455,000	4.750%, 12/01/29 Series 2011	A2/A/NR		1,592,410
	1,000,000	5.000%, 12/01/30 Series 2011	A2/A/NR		1,109,610
	1,425,000	5.000%, 12/01/31 Series 2011	A2/A/NR		1,575,451
		Rhode Island Health and Education
		Building Corp., Higher Educational
		Facilities
	4,000,000	5.000%, 09/15/30 AGMC Insured	A1/NR/NR		4,337,560
		Rhode Island Health and Education
		Building Corp., Johnson & Wales
		University
	465,000	5.500%, 04/01/15 Series 1999 A
		NPFG Insured	NR/AA-/NR		476,355

3 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Higher Education (continued)
$	900,000	5.500%, 04/01/16 Series 1999 A NPFG
		Insured	NR/AA-/NR	$	962,433
	785,000	5.500%, 04/01/17 Series 1999 A NPFG
		Insured	NR/AA-/NR		870,581
		Rhode Island Health and Educational
		Building Corp., Higher Education
		Facility, New England Institute of
		Technology
	1,250,000	4.750%, 03/01/30 Series 2010 A	NR/A/A+		1,316,300
		Rhode Island Health and Educational
		Building Corp., Higher Education
		Facility, Rhode Island School of Design
	1,500,000	3.500%, 08/15/29 AGMC Insured
		Series B	A1/AA/NR		1,491,345
	1,000,000	3.500%, 08/15/30 AGMC Insured Series B A1/AA/NR			986,770
	3,000,000	3.500%, 06/01/29 Series 2012	A1/NR/A+		2,982,870
	2,000,000	4.000%, 06/01/31 Series 2012	A1/NR/A+		2,050,380
		Rhode Island Health and Educational
		Building Corp., Higher Education
		Facility, University of Rhode Island
		Auxiliary Enterprise
	2,000,000	5.000%, 09/15/30 Series 2010 B
		AGMC Insured	A1/AA/NR		2,214,160
		Rhode Island Health and Educational
		Building Corp., University of
		Rhode Island
	1,000,000	4.500%, 09/15/26 Series 2005 G
		Refunding AMBAC Insured	Aa3/A+/NR		1,023,590
		Rhode Island Health and Education
		Facilities Authority, Providence College
	1,000,000	4.000%, 11/01/31	A2/A/NR		1,032,350
		Rhode Island State Economic
		Development Corp., University of
		Rhode Island
	750,000	5.000%, 11/01/14 Series 1999 AGMC
		Insured	A2/NR/NR		752,610
		Total Higher Education			25,984,071

4 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Hospital (4.6%)
		Rhode Island Health & Education
		Building Corp., Hospital Financing,
		Care New England
$	500,000	5.000%, 09/01/20 Series 2013 A	NR/BBB-/BBB	$	549,520
	500,000	5.000%, 09/01/22 Series 2013 A	NR/BBB-/BBB		543,495
		Rhode Island Health & Education
		Building Corp., Lifespan Obligation
	1,500,000	5.250%, 05/15/26 NPFG Insured	A3/AA-/NR		1,501,575
	2,500,000	5.000%, 05/15/20 Series A AGMC
		Insured	A2/AA/NR		2,642,500
	5,000,000	5.000%, 05/15/26 Series A AGMC
		Insured	A2/AA/NR		5,217,800
		Total Hospital			10,454,890
		Housing (7.5%)
		Rhode Island Housing & Mortgage
		Finance Corp. Home Funding
	2,485,000	4.000%, 10/01/25 Series 2010 #3	Aa2/NR/NR		2,617,749
	1,490,000	4.100%, 04/01/28 Series 2010 #3	Aa2/NR/NR		1,542,627
	1,505,000	4.050%, 10/01/26 2011 Series 4	Aa2/NR/NR		1,575,886
	1,250,000	3.050%, 10/01/28 Series 5	Aa2/NR/NR		1,216,563
	985,000	3.350%, 10/01/33 Series 5	Aa2/NR/NR		939,562
	2,185,000	3.450%, 04/01/35 Series 5	Aa2/NR/NR		2,079,792
		Rhode Island Housing & Mortgage
		Finance Corp. Multi-Family Housing
	2,500,000	4.625%, 10/01/25 Series 2010 A	Aaa/NR/NR		2,671,700
	2,000,000	5.000%, 10/01/30 Series 2010 A	Aaa/NR/NR		2,120,040
	1,000,000	3.250%, 10/01/27 Series 1B	Aa2/NR/NR		970,000
	1,500,000	3.625%, 10/01/32 Series 1B	Aa2/NR/NR		1,497,045
		Total Housing			17,230,964
		Public School (23.9%)
		Providence, Rhode Island Public
		Building Authority, School Projects
	3,000,000	4.500%, 05/15/27 Series A AGMC
		Insured	A2/AA/NR		3,100,110
	2,000,000	4.500%, 05/15/26 Series 2007 A
		AGMC Insured	A2/AA/NR		2,070,820
	3,000,000	4.500%, 05/15/28 Series 2007 A
		AGMC Insured	A2/AA/NR		3,094,770

5 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Public School (continued)
		Providence, Rhode Island Public
		Building Authority, School Projects
		(continued)
$	3,000,000	4.500%, 05/15/27 Series 2007 B
		AGMC Insured	A2/AA/NR	$	3,100,110
	2,000,000	4.500%, 05/15/28 Series 2007 C
		AGMC Insured	A2/AA/NR		2,063,180
		Rhode Island Certificates of Participation
		(School for the Deaf Project)
	1,000,000	5.500%, 04/01/27 Series C 2009 AGC
		Insured	Aa3/AA/AA-		1,106,160
	500,000	5.625%, 04/01/29 Series C 2009 AGC
		Insured	Aa3/AA/AA-		553,695
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program
	1,000,000	5.000%, 05/15/17 Series 2006 A
		AGMC Insured	A2/AA/NR		1,062,140
	500,000	5.000%, 05/15/20 Series 2007 A
		AGMC Insured	Aa3/NR/NR		545,810
	500,000	5.000%, 05/15/17 Series 2008 A
		AGMC Insured	Aa3/NR/NR		553,440
	1,000,000	4.250%, 05/15/21 Series 2007 B
		AGMC Insured	A2/AA/NR		1,043,260
	1,125,000	5.000%, 05/15/24 Series 2008 B	A2/NR/NR		1,212,750
	1,500,000	4.250%, 05/15/21 Series A AGMC
		Insured	Aa3/NR/NR		1,610,100
	2,000,000	4.375%, 05/15/22 Series A AGMC
		Insured	Aa3/NR/NR		2,141,020
	3,000,000	4.500%, 05/15/25 Series A AGMC
		Insured	Aa3/NR/NR		3,190,140
	2,000,000	4.750%, 05/15/29 Series A AGMC
		Insured	Aa3/NR/NR		2,122,580
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program - Chariho Regional
		School District
	1,000,000	5.000%, 05/15/26 Series 2011 B	Aa3/NR/NR		1,133,300

6 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Public School (continued)
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, City of Warwick
$	800,000	3.500%, 05/15/26 Series B MAC
		Insured	NR/AA/NR	$	860,192
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, East Greenwich
	1,150,000	3.125%, 05/15/28	Aa1/AA+/NR		1,153,462
	1,000,000	3.250%, 05/15/29	Aa1/AA+/NR		1,006,700
	1,000,000	3.375%, 05/15/30	Aa1/AA+/NR		1,011,050
	1,200,000	3.500%, 05/15/31	Aa1/AA+/NR		1,218,444
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, City of East
		Providence
	500,000	3.375%, 05/15/27 Series B	Aa3/NR/NR		507,215
	1,000,000	3.625%, 05/15/32 Series B	Aa3/NR/NR		1,002,950
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, City of Newport
	1,000,000	4.000%, 05/15/27 Series 2013C	NR/AA+/NR		1,077,500
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Providence
		Public Schools
	1,000,000	5.000%, 05/15/20 AGMC Insured	A2/AA/NR		1,057,830
	2,000,000	4.500%, 05/15/22 Series 2013 A	A1/NR/NR		2,198,580
	2,000,000	4.500%, 05/15/23 Series 2013 A	A1/NR/NR		2,189,660
	2,000,000	4.500%, 05/15/24 Series 2013 A	A1/NR/NR		2,175,540
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Town of Coventry
	1,000,000	3.750%, 05/15/28 Series 2013 B
		AGMC Insured	A1/AA/NR		1,021,260
	1,000,000	4.000%, 05/15/33 AGMC Insured	A1/AA/NR		1,024,400
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Town of Little
		Compton
	1,620,000	4.000%, 05/15/25 Series 2013 H	NR/AAA/NR		1,800,646

7 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Public School (continued)
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Town of North
		Kingstown
$	1,500,000	3.750%, 05/15/28 Series 2013 A	Aa2/AA+/NR $		1,578,150
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Town of North
		Providence
	1,000,000	4.000%, 11/15/20 Series 2013 I	A1/A/NR		1,089,310
	1,100,000	4.500%, 11/15/22 Series 2013 I	A1/A/NR		1,219,724
		Rhode Island Health and Education
		Building Corp., Public School
		Financing Program, Town of West
		Warwick
	935,000	4.000%, 05/15/21	A1/NR/NR		1,021,216
	745,000	3.000%, 11/15/21	A1/NR/NR		765,212
		Total Public School			54,682,426
		Student Loan (0.5%)
		State of Rhode Island Student Loan
		Authority
	1,000,000	4.750%, 12/01/23 Senior Series 2010 B	NR/A+/A		1,048,670
		Transportation (8.2%)
		Rhode Island State Economic
		Development Corp., Airport Revenue
	1,000,000	5.000%, 07/01/24 Series B	A3/BBB+/BBB+		1,140,400
	2,000,000	4.000%, 07/01/24 Series B	A3/BBB+/BBB+		2,113,300
	540,000	4.625%, 07/01/26 AGC Insured Series B	A3/AA/BBB+		576,963
	1,000,000	5.000%, 07/01/18 AGC Insured Series C	A3/AA/BBB+		1,126,960
	1,500,000	5.000%, 07/01/22 NPFG Insured
		Series C	A3/AA-/BBB+		1,542,780
		Rhode Island State Economic
		Development Corp., Motor Fuel Tax
		(Rhode Island Department of
		Transportation)
	1,000,000	4.000%, 06/15/15 Series A AMBAC
		Insured	A3/A+/A		1,002,790
	2,385,000	4.700%, 06/15/23 Series 2003 A
		AMBAC Insured	A3/A+/A		2,388,267
	1,000,000	4.000%, 06/15/18 Series 2006 A
		AMBAC Insured	A3/A+/A		1,029,000

8 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Transportation (continued)
		Rhode Island State Economic
		Development Corp. (Rhode Island
		Airport Corp. Intermodal Facility
		Project)
$	1,000,000	4.250%, 07/01/17 CIFG Assurance
		North America, Inc. Insured	Baa1/BBB+/NR	$	1,051,060
		Rhode Island Economic Development
		Corp. (Rhode Island Department of
		Transportation)
	1,500,000	5.250%, 06/15/21 AGC Insured	A2/AA/A+		1,708,200
		Rhode Island State Turnpike & Bridge
		Authority
	1,600,000	4.625%, 12/01/27 Series 2010 A	NR/A-/A		1,715,408
	2,000,000	5.125%, 12/01/35 Series 2010 A	NR/A-/A		2,152,220
	1,000,000	5.000%, 12/01/35 Series 2010 A	NR/A-/A		1,069,280
		Total Transportation			18,616,628
		Water and Sewer (7.3%)
		Bristol County, Rhode Island Water
		Authority
	1,000,000	3.500%, 12/01/14 Series 2004
		Refunding A NPFG Insured	A3/AA-/NR		1,004,010
		Narragansett, Rhode Island Bay
		Commission Wastewater System
	365,000	5.000%, 08/01/27 Series 2003 A NPFG
		Insured	A3/AA-/NR		375,432
	1,000,000	5.000%, 02/01/32 Series 2007 A NPFG
		Insured	NR/AA-/NR		1,061,290
	3,500,000	5.000%, 08/01/35 Series A NPFG
		Insured	A3/AA-/NR		3,586,275
		Rhode Island Clean Water Protection
		Finance Agency
	325,000	4.750%, 10/01/14 Series A AMBAC
		Insured	Aaa/NR/NR		325,000
	1,545,000	4.750%, 10/01/18 Series A AMBAC
		Insured	Aaa/NR/NR		1,549,975
	500,000	4.750%, 10/01/20 1999 Series A
		AMBAC Insured	Aaa/NR/NR		501,490
	500,000	5.400%, 10/01/15 1993 Series A NPFG
		Insured	Aaa/AA-/NR		511,380

9 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Water and Sewer (continued)
		Rhode Island Clean Water Finance
		Agency, Water Pollution Control Bonds
$	310,000	5.000%, 10/01/18 Series B NPFG
		Insured	Aaa/AAA/NR	$	311,187
	4,765,000	4.375%, 10/01/21 Series 2002 B NPFG
		Insured	Aaa/AAA/AAA		4,777,484
		Rhode Island Clean Water Protection
		Finance Agency Safe Drinking Water
		Revolving Fund
	1,000,000	3.750%, 10/01/33	NR/AAA/AAA		1,028,490
	1,000,000	3.750%, 10/01/34	NR/AAA/AAA		1,024,580
		Rhode Island Water Resources Board
		Public Drinking Water Protection
	595,000	4.250%, 03/01/15 Series 2002 NPFG
		Insured	A3/AA-/NR		596,511
		Total Water and Sewer			16,653,104
		Other Revenue (0.3%)
		State of Rhode Island Depositors
		Economic Protection Corp.
	250,000	5.750%, 08/01/21 Series A AGMC
		Insured ETM	NR/NR/NR*		311,353
	215,000	6.375%, 08/01/22 Series A NPFG
		Insured ETM	NR/AA-/NR		279,934
		Total Other Revenue			591,287
		Total Revenue Bonds			157,408,140
		Total Investments (cost $212,351,467-
		note 4)	96.3%		219,738,860
		Other assets less liabilities	3.7		8,559,523
		Net Assets	100.0%	$	228,298,383

10 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

	Percent of
Portfolio Distribution by Quality Rating	Investments†
Aaa of Moody’s or AAA of S&P or Fitch		7.6	%
Pre-Refunded bonds††/Escrowed to Maturity bonds		1.2
Aa of Moody’s or AA of S&P or Fitch		65.6
A of Moody’s or S&P or Fitch		23.0
Baa of Moody’s or BBB of S&P		2.6
		100.0	%

PORTFOLIO ABBREVIATIONS:

AGC - Assured Guaranty Corp

AGMC - Assured Guaranty Municipal Corp.

AMBAC - American Municipal Bond Assurance Corp.

CIFG - CDC IXIS Financial Guaranty

ETM - Escrowed to Maturity

MAC - Municipal Assurance Corp.

NPFG - National Public Finance Guarantee

NR - Not Rated

*  Any security not rated (“NR”) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO”) has been determined by the Investment Sub-Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO.

† Where applicable, calculated using the highestrating of the three NRSROs.

†† Pre-refunded bonds are bonds for which U.S.Government Obligations usually have been placed in escrow to retire the bonds at their earliest call date.

See accompanying notes to financial statements.

11 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 2014 (unaudited)

ASSETS
Investments at value (cost $212,351,467)	$	219,738,860
Cash		5,744,123
Interest receivable		3,128,623
Receivable for Fund shares sold		165,689
Other assets		19,403
Total assets		228,796,698
LIABILITIES
Dividends payable		284,983
Management fees payable		70,659
Payable for Fund shares redeemed		54,465
Distribution and service fees payable		3,812
Accrued expenses payable		84,396
Total liabilities		498,315
NET ASSETS	$	228,298,383
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value
$0.01 per share	$	213,650
Additional paid-in capital		222,733,162
Net unrealized appreciation on investments (note 4)		7,387,393
Accumulated net realized loss on investments		(2,094,284	)
Undistributed net investment income		58,462
	$	228,298,383
CLASS A
Net Assets	$	124,037,473
Capital shares outstanding		11,608,199
Net asset value and redemption price per share	$	10.69
Maximum offering price per share (100/96 of $10.69)	$	11.14
CLASS C
Net Assets	$	16,164, 437
Capital shares outstanding		1,512,951
Net asset value and offering price per share	$	10.68
Redemption price per share (*a charge of 1% is imposed on the
redemption proceeds, or on the original price, whichever is
lower, if redeemed during the first 12 months after purchase)	$	10.68	*
CLASS I
Net Assets	$	267,290
Capital shares outstanding		25,027
Net asset value, offering and redemption price per share	$	10.68
CLASS Y
Net Assets	$	87,829,183
Capital shares outstanding		8,218,846
Net asset value, offering and redemption price per share	$	10.69

See accompanying notes to financial statements.

12 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

STATEMENT OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2014 (unaudited)

Investment Income:
Interest income				$	4,404,613
Expenses:
Management fees (note 3)	$	562,952
Distribution and service fees (note 3)		172,657
Legal fees		62,478
Transfer and shareholder servicing
agent fees (note 3)		59,452
Trustees’ fees and expenses (note 8)		43,796
Shareholders’ reports		20,469
Registration fees and dues		15,289
Fund accounting fees		13,303
Custodian fees (note 6)		11,881
Auditing and tax fees		10,334
Insurance		6,199
Chief compliance officer services (note 3)		2,771
Miscellaneous		23,700
Total expenses		1,005,281
Management fees waived (note 3)		(141,123	)
Net expenses					864,158
Net investment income					3,540,455
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from securities
transactions		(108	)
Change in unrealized appreciation on
investments		4,392,441
Net realized and unrealized gain (loss) on
investments					4,392,333
Net change in net assets resulting from
operations				$	7,932,788

See accompanying notes to financial statements.

13 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30, 2014			Year Ended
	(unaudited)			March 31, 2014
OPERATIONS:
Net investment income	$	3,540,455		$	7,786,168
Net realized gain (loss) from
securities transactions		(108	)		(1,935,039	)
Change in unrealized appreciation
on investments		4,392,441			(6,349,488	)
Change in net assets from
operations		7,392,788			(498,359	)
DISTRIBUTIONS TO SHAREHOLDERS (note 9):
Class A Shares:
Net investment income		(1,920,789	)		(4,207,230	)
Class C Shares:
Net investment income		(185,062	)		(459,646	)
Class I Shares:
Net investment income		(3,981	)		(8, 180	)
Class Y Shares:
Net investment income		(1,425,032	)		(3,097,406	)
Change in net assets from
distributions		(3,534,864	)		(7,772,462	)
CAPITAL SHARE TRANSACTIONS (note 7):
Proceeds from shares sold		13,928,841			26,462,934
Reinvested dividends and
distributions		1,489,208			3,367,560
Cost of shares redeemed		(12,946,639	)		(59,054,773	)
Change in net assets from
capital share transactions		2,471,410			(29,224,279	)
Change in net assets		6,869,334			(37,495, 100	)
NET ASSETS:
Beginning of period		221,429,049			258,924,149
End of period*	$	228,298,383		$	221,429,049
* Includes undistributed net investment income of:	$	58,462		$	52,871

See accompanying notes to financial statements.

14 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2014 (unaudited)

1. Organization

     Aquila Narragansett Tax-Free Income Fund (the “Fund”), a series of Aquila Municipal Trust and a non-diversified, open-end investment company, was organized on January 22, 1992 as a Massachusetts business trust and commenced operations on September 10, 1992. Class A Shares are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through authorized financial institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. Class I Shares are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares carry a distribution and a service fee. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.

2. Significant Accounting Policies

     The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.

a) Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are generally valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days.

b) Fair value measurements: The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s investments and are summarized in the following fair value hierarchy:

15 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities

The following is a summary of the valuation inputs, representing 100% of the Fund’s investments, used to value the Fund’s net assets as of September 30, 2014:

Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	–
Level 2 – Other Significant Observable
Inputs – Municipal Bonds*		219,738,860
Level 3 – Significant Unobservable Inputs		–
Total	$	219,738,860

*See schedule of investments for a detailed listing of securities.

c) Subsequent events: In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued.

d) 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 premium and accretion of original issue and market discount.

e) Federal income taxes: It is the policy of the 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. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.   Management has reviewed the tax positions for each of the open tax years (2011-2013) or expected to be taken in the Fund’s 2014 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements.

16 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

f) Multiple class allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis.

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. On March 31, 2014, the Fund increased additional paid-in capital by $22,711, decreased undistributed net investment income by $29,552 and decreased accumulated net realized loss on investments by $6,841. These reclassifications had no effect on net assets or net asset value per share.

3. Fees and Related Party Transactions

a) Management Arrangements:

     Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Fund’s founder and sponsor, serves as the Manager for the Fund under an Advisory and Administration Agreement with the Fund. The portfolio management of the Fund has been delegated to a Sub-Adviser as described below. Under the Advisory and Administration Agreement, the Manager provides all administrative services to the Fund, other than those relating to the day-to-day portfolio management. The Manager’s services include providing the office of the Fund and all related services as well as overseeing the activities of the Sub-Adviser and managing relationships with all the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, fund accounting agent, auditor and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.50% on the Fund’s net assets.

     Citizens Investment Advisors, a department of Citizens Bank, N.A. (the “Sub-Adviser”), serves as the Investment Sub-Adviser for the Fund under a Sub-Advisory Agreement between the Manager and the Sub-Adviser. Under this agreement, the Sub-Adviser continuously provides, subject to oversight of the Manager and the Board of Trustees of the Fund, the investment program of the Fund and the composition of its portfolio, arranges for the purchases and sales of portfolio securities, and provides for daily pricing of the Fund’s portfolio. For its services, the Sub-Adviser is entitled to receive a fee from the Manager which is payable monthly and computed as of the close of business each day at the annual rate of 0.23% on the Fund’s net assets.

17 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     The Manager has contractually undertaken to waive fees and/or reimburse Fund expenses so that total Fund expenses will not exceed 0.83% for Class A Shares, 1.68% for Class C Shares, 0.99% for Class I Shares or 0.68% for Class Y Shares for the period ended September 30, 2014 and 0.84% for Class A Shares, 1.69% for Class C Shares, 0.99% for Class I Shares and 0.69% for Class Y Shares for the period October 1, 2014 through September 30, 2015. The Manager may not terminate the arrangement without the approval of the Board of Trustees. For the six months ended September 30, 2014, the Fund incurred management fees of $562,952 of which $141,123 was waived.

     Under a Compliance Agreement with the Manager, the Manager is compensated by the Fund for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940.

     Specific details as to the nature and extent of the services provided by the Manager and the Sub-Adviser are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

b) Distribution and Service Fees:

     The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (“the Distributor”), including, but not limited to, any principal underwriter of the Fund with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund’s shares or servicing of shareholder accounts. The Fund makes payment of this distribution fee at the annual rate of 0.15% of the Fund’s average net assets represented by Class A Shares. For the six months ended September 30, 2014, distribution fees on Class A Shares amounted to $91,669, of which the Distributor retained $3,704.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund’s Class C Shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $60,541. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $20,181. The total of these payments with respect to Class C Shares amounted to $80,722, of which the Distributor retained $20,182.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class I Shares to Qualified Recipients. Class I payments, under the Plan, may not exceed, for any fiscal year of the Fund a rate (currently 0.20%) set from time to time by the Board of Trustees of not more than 0.25% of the average annual net assets represented by the Class I Shares. In addition, the Fund has a Shareholder Services Plan under which it may pay service fees (currently 0.15%) of not more than 0.25% of the average annual net assets of the Fund represented by Class I Shares. That is, the total payments under both plans will not exceed 0.50% of such net assets. For the six months ended September 30, 2014, these payments were made at the average annual rate of 0.35% of such net assets amounting to $465 of which $266 related to the Plan and $199 related to the Shareholder Services Plan.

18 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     Specific details about the Plans are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

     Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund’s shares. Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Fund’s shares are sold primarily through the facilities of these intermediaries having offices within Rhode Island, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended September 30, 2014, total commissions on sales of Class A Shares amounted to $90,626, of which the Distributor received $7,682.

4. Purchases and Sales of Securities

     During the six months ended September 30, 2014, purchases of securities and proceeds from the sales of securities aggregated $12,167,999 and $10,353,238, respectively.

     At September 30, 2014, the aggregate tax cost for all securities was $212,307,432. At September 30, 2014, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $8,002,750 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $571,322 for a net unrealized appreciation of $7,431,428.

5. Portfolio Orientation

     Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Rhode Island, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Rhode Island and whatever effects these may have upon Rhode Island issuers’ ability to meet their obligations.

    The Fund is also permitted to invest in U.S. territorial municipal obligations meeting comparable quality standards and providing income which is exempt from both regular Federal and Rhode Island income taxes. The general policy of the Fund is to invest in such securities only when comparable securities of Rhode Island issuers are not available in the market. At September 30, 2014, the Fund had all of its net assets invested in the securities of Rhode Island issuers.

6. Expenses

     The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.

19 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

7. Capital Share Transactions

Transactions in Capital Shares of the Fund were as follows:

	Six Months Ended
	September 30, 2014						Year Ended
	(unaudited)						March 31, 2014
	Shares			Amount			Shares			Amount
Class A Shares:
Proceeds from shares sold		593,889		$	6,311,833			816,816		$	8,525,955
Reinvested distributions		100,931			1,073,796			222,622			2,303,273
Cost of shares redeemed		(483,896	)		(5,140,010	)		(2,908,955	)		(30,144,671	)
Net change		210,924			2,245,619			(1,869,517	)		(19,315,443	)
Class C Shares:
Proceeds from shares sold		83,720			890,059			227,217			2,380,974
Reinvested distributions		10,912			116,068			29,276			302,957
Cost of shares redeemed		(117,654	)		(1,247,323	)		(776,061	)		(7,987,005	)
Net change		(23,022	)		(241,196	)		(519,568	)		(5,303,074	)
Class I Shares:
Proceeds from shares sold		—			—			—			—
Reinvested distributions		315			3,347			790			8,180
Cost of shares redeemed		(225	)		(2,388	)		(568	)		(5,884	)
Net change		90			959			222			2,296
Class Y Shares:
Proceeds from shares sold		632,906			6,726,949			1,477,832			15,556,005
Reinvested distributions		27,830			295,997			72,622			753,150
Cost of shares redeemed		(617,371	)		(6,556,918	)		(2,023,784	)		(20,917,213	)
Net change		43,365			466,028			(473,330	)		(4,608,058	)
Total transactions in Fund
shares		231,357		$	2,471,410			(2,862,193	)	$	(29,224,279	)

20 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

8. Trustees’ Fees and Expenses

     At September 30, 2014 there were 12 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended September 30, 2014 was $35,469. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the Independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations and meals incurred in connection with attendance at Board Meetings and the Annual Meeting of Shareholders. For the six months ended September 30, 2014, such meeting-related expenses amounted to $8,327.

9. Securities Traded on a When-Issued Basis

     The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

10. Income Tax Information and Distributions

     The Fund declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. These distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.

     The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Rhode Island income taxes. Due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund’s net investment income, and/or net realized securities gains. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income rates. As a result of the passage of the Regulated Investment Company Act of 2010 (“the Act”), losses incurred in this fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act.

     At March 31, 2014, the Fund had a capital loss carryover of $73,498 acquired in the acquisition of Ocean State Tax-Exempt Fund, which expires on June 30, 2016 and a capital loss carryover of $813,839 which is short-term and has no expiration. This carryover is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code. At March 31, 2014, the Fund had post October loss referrals of $1,206,838 which will be recognized in the following year.

21 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

The tax character of distributions was as follows:

	Year		Nine Months		Year
	Ended		Ended		Ended
	March 31, 2014		March 31, 2013		June 30, 2012
Net tax-exempt income	$	7,754,144	$	6,090,029	$	8,366,991
Ordinary Income		18,318		–		7,331
	$	7,772,462	$	6,090,029	$	8,374,322

     As of March 31, 2014, the components of distributable earnings on a tax basis were as follows:

     The difference between book basis and tax basis unrealized appreciation and undistributed income is due to the timing difference in recognizing dividends paid and the amortization of discount securities.

Undistributed tax-exempt income	$	234,565
Accumulated net realized loss		(887,337	)
Unrealized appreciation		3,047,822
Other temporary differences		(1,441,403	)
	$	953,647

22 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period

	Class A
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44		$	10.39
Income (loss) from investment operations:
Net investment income(1)		0.17			0.35			0.26			0.37			0.39			0.39			0.38
Net gain (loss) on securities (both
realized and unrealized)		0.21			(0.31	)		0.02			0.27			(0.13	)		0.20			0.06
Total from investment operations		0.38			0.04			0.28			0.64			0.26			0.59			0.44
Less distributions (note 9):
Dividends from net investment income		(0.17	)		(0.35	)		(0.27	)		(0.37	)		(0.39	)		(0.39	)		(0.39	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.17	)		(0.35	)		(0.27	)		(0.37	)		(0.39	)		(0.39	)		(0.39	)
Net asset value, end of period	$	10.69		$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44
Total return(not reflecting sales charge)		3.62	%(2)		0.42	%		2.53	%(2)		6.15	%		2.48	%		5.71	%		4.30	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	124		$	119		$	143		$	146		$	150		$	151		$	134
Ratio of expenses to average net assets		0.76	%(3)		0.79	%(4)		0.77	%(3)		0.71	%		0.62	%		0.59	%		0.60	%
Ratio of net investment income to
average net assets		3.15	%(3)		3.34	%(4)		3.22	%(3)		3.45	%		3.68	%		3.63	%		3.68	%
Portfolio turnover rate		5	%(2)		15	%		8	%(2)		11	%		9	%		3	%		6	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.89	%(3)		0.92	%(4)(5)		0.90	%(3)		0.87	%		0.84	%		0.87	%		0.90	%
Ratio of net investment income to
average net assets		3.02	%(3)		3.21	%(4)(5)		3.09	%(3)		3.29	%		3.46	%		3.35	%		3.38	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		0.76	%(3)		0.79	%(4)		0.77	%(3)		0.71	%		0.62	%		0.59	%		0.59	%

_______________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.88% and 3.25%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

23 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class C
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44		$	10.39
Income (loss) from investment operations:
Net investment income(1)		0.12			0.26			0.19			0.28			0.30			0.29			0.29
Net gain (loss) on securities (both
realized and unrealized)		0.20			(0.31	)		0.02			0.27			(0.13	)		0.21			0.06
Total from investment operations		0.32			(0.05	)		0.21			0.55			0.17			0.50			0.35
Less distributions (note 9):
Dividends from net investment income		(0.12	)		(0.26	)		(0.20	)		(0.28	)		(0.30	)		(0.30	)		(0.30	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.12	)		(0.26	)		(0.20	)		(0.28	)		(0.30	)		(0.30	)		(0.30	)
Net asset value, end of period	$	10.68		$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44
Total return(not reflecting sales charge)		3.08	%(2)		(0.43	)%		1.88	%(2)		5.25	%		1.62	%		4.81	%		3.42	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	16		$	16		$	22		$	21		$	24		$	22		$	12
Ratio of expenses to average net assets		1.61	%(3)		1.64	%(4)		1.62	%(3)		1.57	%		1.47	%		1.44	%		1.45	%
Ratio of net investment income to
average net assets		2.30	%(3)		2.49	%(4)		2.37	%(3)		2.60	%		2.83	%		2.75	%		2.82	%
Portfolio turnover rate		5	%(2)		15	%		8	%(2)		11	%		9	%		3	%		6	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		1.74	%(3)		1.77	%(4)(5)		1.75	%(3)		1.72	%		1.69	%		1.72	%		1.75	%
Ratio of net investment income to
average net assets		2.17	%(3)		2.36	%(4)(5)		2.24	%(3)		2.45	%		2.61	%		2.47	%		2.52	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		1.61	%(3)		1.64	%(4)		1.62	%(3)		1.57	%		1.47	%		1.44	%		1.44	%

_______________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 1.73% and 2.40%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

24 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class I
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.47		$	10.79		$	10.78		$	10.51		$	10.63		$	10.44		$	10.39
Income (loss) from investment operations:
Net investment income(1)		0.16			0.33			0.25			0.35			0.37			0.37			0.37
Net gain (loss) on securities (both
realized and unrealized)		0.21			(0.32	)		0.01			0.27			(0.12	)		0.19			0.06
Total from investment operations		0.37			0.01			0.26			0.62			0.25			0.56			0.43
Less distributions (note 9):
Dividends from net investment income		(0.16	)		(0.33	)		(0.25	)		(0.35	)		(0.37	)		(0.37	)		(0.38	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.16	)		(0.33	)		(0.25	)		(0.35	)		(0.37	)		(0.37	)		(0.38	)
Net asset value, end of period	$	10.68		$	10.47		$	10.79		$	10.78		$	10.51		$	10.63		$	10.44
Total return		3.54	%(2)		0.17	%		2.41	%(2)		5.99	%		2.42	%		5.45	%		4.17	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	0.3		$	0.3		$	0.3		$	0.3		$	0.3		$	0.3		$	0.3
Ratio of expenses to average net assets		0.91	%(3)		0.94	%(4)		0.93	%(3)		0.87	%		0.78	%		0.74	%		0.74	%
Ratio of net investment income to
average net assets		3.00	%(3)		3.18	%(4)		3.07	%(3)		3.29	%		3.25	%		3.49	%		3.54	%
Portfolio turnover rate		5	%(2)		15	%		8	%(2)		11	%		9	%		3	%		6	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		1.04	%(3)		1.07	%(4)(5)		1.06	%(3)		1.02	%		1.00	%		1.02	%		1.04	%
Ratio of net investment income to
average net assets		2.88	%(3)		3.05	%(4)(5)		2.94	%(3)		3.14	%		3.30	%		3.20	%		3.24	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		0.91	%(3)		0.94	%(4)		0.93	%(3)		0.87	%		0.78	%		0.74	%		0.73	%

_______________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 1.03% and 3.09%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

25 | Aquila Narragansett Tax-Free Income Fund

AQUILA NARRAGANSETT TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class Y
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44		$	10.39
Income (loss) from investment operations:
Net investment income(1)		0.18			0.36			0.28			0.38			0.40			0.40			0.40
Net gain (loss) on securities (both
realized and unrealized)		0.21			(0.31	)		–			0.27			(0.13	)		0.20			0.05
Total from investment operations		0.39			0.05			0.28			0.65			0.27			0.60			0.45
Less distributions (note 9):
Dividends from net investment income		(0.18	)		(0.36	)		(0.27	)		(0.38	)		(0.40	)		(0.40	)		(0.40	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.18	)		(0.36	)		(0.27	)		(0.38	)		(0.40	)		(0.40	)		(0.40	)
Net asset value, end of period	$	10.69		$	10.48		$	10.79		$	10.78		$	10.51		$	10.64		$	10.44
Total return		3.70	%(2)		0.56	%		2.65	%(2)		6.31	%		2.64	%		5.86	%		4.46	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	88		$	86		$	93		$	82		$	67		$	52		$	50
Ratio of expenses to average net assets		0.61	%(3)		0.64	%(4)		0.62	%(3)		0.57	%		0.47	%		0.44	%		0.45	%
Ratio of net investment income to
average net assets		3.30	%(3)		3.48	%(4)		3.37	%(3)		3.59	%		3.83	%		3.78	%		3.83	%
Portfolio turnover rate		5	%(2)		15	%		8	%(2)		11	%		9	%		3	%		6	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.74	%(3)		0.77	%(4)(5)		0.75	%(3)		0.72	%		0.69	%		0.72	%		0.75	%
Ratio of net investment income to
average net assets		3.17	%(3)		3.35	%(4)(5)		3.24	%(3)		3.43	%		3.61	%		3.49	%		3.53	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		0.61	%(3)		0.64	%(4)		0.62	%(3)		0.57	%		0.47	%		0.44	%		0.44	%

_______________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.73% and 3.39%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

26 | Aquila Narragansett Tax-Free Income Fund

Additional Information (unaudited)

Renewal of the Advisory and Administration Agreement and the Sub-Advisory Agreement

     Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Fund pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). The Manager has retained Citizens Investment Advisors, a department of Citizens Bank, N.A. (formerly known as RBS Citizens, N.A.) (the “Sub-Adviser”) to serve as the sub-adviser to the Fund pursuant to a Sub-Advisory Agreement between the Manager and the Sub-Adviser (the “Sub-Advisory Agreement”). In order for the Manager and the Sub-Adviser to continue to serve in their respective roles, the Trustees of the Fund must determine annually whether to renew the Advisory Agreement and the Sub-Advisory Agreement for the Fund.

     In considering whether to approve the renewal of the Advisory Agreement and the Sub-Advisory Agreement, the Trustees requested and obtained such information as they deemed reasonably necessary. Contract review materials were provided to the Trustees in August, 2014. The independent Trustees met telephonically in August, 2014 to review and discuss the contract review materials. The Trustees considered, among other things, information presented by the Manager and Sub-Adviser. They also considered information presented in a report prepared by an independent consultant with respect to the Fund’s fees, expenses and investment performance, which included comparisons of the Fund’s investment performance against peers and the Fund’s benchmark and comparisons of the advisory fee payable by the Fund under the Advisory Agreement against the advisory fees paid by the Fund’s peers, as well as information regarding the operating margins of certain investment advisory firms (the “Consultant’s Report”). In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting. The Trustees considered the Advisory Agreement and the Sub-Advisory Agreement separately as well as in conjunction with each other to determine their combined effects on the Fund.

     At a meeting held in September, 2014, based on their evaluation of the information provided by the Manager, the Sub-Adviser and the independent consultant, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of each of the Advisory Agreement and the Sub-Advisory Agreement until September 30, 2015. In considering the renewal of the Advisory Agreement and the Sub-Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement or the Sub-Advisory Agreement.

The nature, extent, and quality of the services provided by the Manager and the Sub-Adviser.

     The Trustees considered the nature, extent and quality of the services that had been provided by the Manager and the Sub-Adviser to the Fund, taking into account the investment objectives and strategies of the Fund. The Trustees reviewed the terms of the Advisory Agreement and the Sub-Advisory Agreement.

     The Manager has retained the Sub-Adviser to provide investment management of the Fund’s portfolio. The Trustees reviewed the Sub-Adviser’s investment approach for the Fund. The Trustees considered the personnel of the Sub-Adviser who provide investment management services to the Fund. The Trustees noted the extensive experience of the Sub-Adviser’s co-portfolio managers, Messrs. Salvatore C. DiSanto and Jeffrey K. Hanna. They considered that Messrs. Salvatore C. DiSanto and Jeffrey K. Hanna are based in Providence, Rhode Island and that they have a comprehensive understanding regarding the economy of the State of Rhode Island and the securities in which the Fund invests, including those securities with less than the highest ratings from the rating agencies.

27 | Aquila Narragansett Tax-Free Income Fund

     The Trustees considered that the Manager supervised and monitored the performance of the Fund’s service providers (including the Sub-Adviser). The Manager has additionally provided all administrative services to the Fund and provided the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund’s business management and operations.

     The Trustees considered that the Manager and the Sub-Adviser had provided all administrative and advisory services to the Fund that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Fund, given that it seeks to provide shareholders with as high a level of current income exempt from Rhode Island state and regular Federal income taxes as is consistent with preservation of capital.

     Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager and the Sub-Adviser to the Fund were satisfactory and consistent with the terms of the Advisory Agreement and Sub-Advisory Agreement, as applicable.

The investment performance of the Fund.

     The Trustees reviewed the Fund’s performance and compared its performance to the performance of:

• the funds in the Fund’s peer group (the “Peer Group”), as selected by the independent consultant (nine municipal single-state intermediate and municipal single-state long funds, as classified by Morningstar, that are similar to the Fund in size and that charge a front-end sales charge);

• the funds in the Fund’s product category for performance (the “Product Category for Performance”) (all funds in the Peer Group and, without duplication, all funds (and all classes) included in the Morningstar Single-State Intermediate Municipal Bond Funds category); and

• the Fund’s benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index.

     The Trustees considered that the materials included in the Consultant’s Report indicated that the Fund’s average annual total return was higher than the average annual total return of the funds in the Peer Group for the one year period but lower than the average annual total return of the funds in the Peer Group for the three, five and ten year periods ended June 30, 2014. They also considered that the Fund’s average annual total return was higher than the average annual total return of the funds in the Product Category for Performance for the one, three and ten year periods, but lower than the average annual total return of the funds in the Product Category for Performance for the five year period ended June 30, 2014. The Trustees noted that the Fund’s average annual return was higher than that of its benchmark index for the one year period but was lower than the average annual return of the benchmark index for the three, five and ten year periods ended June 30, 2014.

28 | Aquila Narragansett Tax-Free Income Fund

     The Trustees discussed the Fund’s performance record and considered the Manager’s and Sub-Adviser’s view that the Fund’s performance, as compared to the Product Category for Performance and the Peer Group, was explained in part by the Fund’s somewhat higher-quality portfolio and its historical intermediate maturity structure.

     The Trustees noted that, unlike the Fund’s returns, the performance of the benchmark index did not reflect any fees, expenses or sales charges. The Trustees also noted that the Fund was the only Rhode Island state-specific tax-free municipal bond fund in the State and considered the economic conditions in the State. The Trustees agreed that they would continue to monitor the performance of the Fund.

Advisory and Sub-Advisory Fees and Fund Expenses.

     The Trustees evaluated the fee payable under the Advisory Agreement. They noted that the Manager, and not the Fund, paid the Sub-Adviser under the Sub-Advisory Agreement. The Trustees evaluated both the fee under the Sub-Advisory Agreement and the portion of the advisory fee paid under the Advisory Agreement and retained by the Manager. The Trustees reviewed the Fund’s advisory fees and expenses and compared them to the advisory fee and expense data for:

• the funds in the Peer Group (as defined above); and

• the funds in the product category for expenses (the “Product Category for Expenses”) (Morningstar Single-State Intermediate Municipal Bond Funds and Morningstar Single State Long Municipal Bond Funds from states within which 1-3 mutual funds are operating, with similar operating expense structures).

     The Trustees considered that the Fund’s contractual advisory fee was lower than the average contractual advisory fee of the funds in the Peer Group (at the Fund’s current asset level). They also considered that the Fund’s contractual advisory fee was lower than the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at the Fund’s current asset level and lower than or about equal to the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at various higher asset levels. They also noted that the Fund’s expenses were lower than the average actual expenses of the funds in both the Product Category for Expenses and the Peer Group.

     The Trustees reviewed management fees charged by each of the Manager and the Sub-Adviser to its other clients. It was noted that the Manager does not have any other clients except for other funds in the Aquila Group of Funds. The Trustees noted that in most instances the fee rates for those clients were comparable to the fees paid to the Manager or Sub-Adviser with respect to the Fund. In evaluating the fees associated with the client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and those client accounts.

     The Trustees considered that the Manager and, in turn, the Sub-Adviser was currently waiving a portion of its fees and had been since the Fund’s inception. Additionally, it was noted that the Manager had contractually undertaken to waive fees and/or reimburse Fund expenses so that total Fund expenses will not exceed 0.83% for Class A Shares, 1.68% for Class C Shares, 0.99% for Class I Shares or 0.68% for Class Y Shares through September 30, 2014, and 0.84% for Class A Shares, 1.69% for Class C Shares, 0.99% for Class I Shares and 0.69% for Class Y Shares for the period October 1, 2014 through September 30, 2015. The Manager may not terminate these arrangements without the approval of the Trustees. The Manager had indicated that it intended to continue waiving fees as necessary in order that the Fund would remain competitive. The Trustees concluded that the advisory and sub-advisory fees were reasonable in relation to the nature and quality of the services provided to the Fund by the Manager and the Sub-Adviser.

29 | Aquila Narragansett Tax-Free Income Fund

Profitability.

     The Trustees received materials from each of the Manager and the Sub-Adviser and from the independent consultant related to profitability. The Manager provided information which showed the profitability to the Manager of its services to the Fund, as well as the profitability of Aquila Distributors, Inc. of distribution services provided to the Fund. The independent consultant provided publicly available data regarding the profitability of other asset managers in comparison to the overall profitability of the Manager.

     The Trustees considered the information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Fund, including the methodology used by the Manager in allocating certain of its costs to the management of the Fund. The Trustees also considered information regarding the profitability of the Manager provided to the Trustees by the independent consultant. The Trustees concluded that profitability to the Manager with respect to advisory services provided to the Fund did not argue against approval of the fees to be paid under the Advisory Agreement.

     The Trustees also considered information provided by the Sub-Adviser regarding the profitability of the Sub-Adviser with respect to the sub-advisory services provided by the Sub-Adviser to the Fund. The Trustees concluded that the profitability of the Sub-Adviser with respect to sub-advisory services provided to the Fund did not argue against approval of the fees to be paid under the Sub-Advisory Agreement.

The extent to which economies of scale would be realized as the Fund grows.

     The Trustees considered the extent to which the Manager may realize economies of scale or other efficiencies in managing the Fund. The Trustees considered that the materials indicated that the Fund’s fees, after fee waivers, were generally lower than those of its peers, including those funds with breakpoints in the advisory fee schedule. Additionally, the Trustees noted that the Manager continued to waive a portion of its fees. The Trustees noted that the Manager’s profitability also may be an indicator of the availability of any economies of scale. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund.

Benefits derived or to be derived by the Manager and the Sub-Adviser and their affiliates from their relationships with the Fund.

     The Trustees observed that, as is generally true of most fund complexes, the Manager and Sub-Adviser and their affiliates, by providing services to a number of funds or other investment clients including the Fund, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that produces efficiencies and increased profitability for the Manager and Sub-Adviser and their affiliates, it also makes their services available to the Fund at favorable levels of quality and cost which are more advantageous to the Fund than would otherwise have been possible.

30 | Aquila Narragansett Tax-Free Income Fund

Analysis of Expenses (unaudited)

     As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution (12b-1) and/or service fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     The table below is based on an investment of $1,000 invested on April 1, 2014 and held for the six months ended September 30, 2014.

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 “Expenses Paid During the Period”.

Six months ended September 30, 2014

	Actual
	Total Return	Beginning	Ending	Expenses
	Without	Account	Account	Paid During
	Sales Charges(1)	Value	Value	the Period(2)
Class A	3.62%	$1,000.00	$1,036.20	$3.88
Class C	3.08%	$1,000.00	$1,030.80	$8.20
Class I	3.54%	$1,000.00	$1,035.40	$4.64
Class Y	3.70%	$1,000.00	$1,037.00	$3.11

(1) Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable CDSC with respect to Class C shares.Total return is not annualized; as such, it may not be representative of the total return for the year.

(2) Expenses are equal to the annualized expense ratio of 0.76%, 1.61%, 0.91% and 0.61% for the Fund’s Class A, C, I and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

31 | Aquila Narragansett Tax-Free Income Fund

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 Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of CDSC with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.

Six months ended September 30, 2014

	Hypothetical
	Annualized	Beginning	Ending	Expenses
	Total	Account	Account	Paid During
	Return	Value	Value	the Period(1)
Class A	5.00%	$1,000.00	$1,021.26	$3.84
Class C	5.00%	$1,000.00	$1,017.00	$8.14
Class I	5.00%	$1,000.00	$1,020.51	$4.60
Class Y	5.00%	$1,000.00	$1,022.01	$3.08

(1) Expenses are equal to the annualized expense ratio of 0.76%, 1.61%, 0.91% and 0.61% for the Trust’s Class A, C, I and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

32 | Aquila Narragansett Tax-Free Income Fund

Information Available (unaudited)

     Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Fund’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Fund policies, the Manager publicly discloses the complete schedule of the Fund’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available. You may obtain a copy of the Fund’s portfolio holdings schedule for the most recently completed period by visiting the Fund’s website at www.aquilafunds.com. The Fund may also disclose other portfolio holdings as of a specified date (currently the Fund discloses its five largest holdings and/or sector holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Fund’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.

     The Fund additionally files a complete list of its portfolio holdings 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 www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.

Proxy Voting Record (unaudited)

     During the 12 month period ended June 30, 2014, the Fund did not hold any portfolio securities for which the Fund was entitled to participate in proxy voting. Applicable regulations require us to inform you that the Fund’s proxy voting information is available on the SEC website at www.sec.gov.

Federal Tax Status of Distributions (unaudited)

     This information is presented in order to comply with a requirement of the Internal Revenue Code. No action on the part of shareholders is required.

     For the fiscal year ended March 31, 2014, $7,754,144 of dividends paid by Aquila Narragansett Tax-Free Income Fund, constituting 99.76% of total dividends paid, were exempt-interest dividends; and the balance was ordinary income.

     Prior to February 15, 2015, shareholders will be mailed the appropriate tax form(s) which will contain information on the status of distributions paid for the 2014 calendar year.

33 | Aquila Narragansett Tax-Free Income Fund

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Founders

     Lacy B. Herrmann (1929-2012)

Aquila Management Corporation, Sponsor

Manager

AQUILA INVESTMENT MANAGEMENT LLC

120 West 45th Street, Suite 3600

New York, New York 10036

Investment Sub-Adviser

     CITIZENS INVESTMENT ADVISORS,

A DEPARTMENT OF CITIZENS BANK, N. A.

     One Citizens Plaza

Providence, Rhode Island 02903

Board of Trustees

     John C. Lucking, Chair

Diana P. Herrmann, Vice Chair

Ernest Calderón

Thomas A. Christopher

Gary C. Cornia

David A. Duffy

Grady Gammage, Jr.

     Lyle W. Hillyard

Glenn P. O’Flaherty

John J. Partridge

James R. Ramsey

Laureen L. White

Officers

Diana P. Herrmann, President

Charles E. Childs, III, Executive Vice President

and Secretary

Marie E. Aro, Senior Vice President

Stephen J. Caridi, Senior Vice President

Paul G. O’Brien, Senior Vice President

Randall S. Fillmore, Chief Compliance Officer

Joseph P. DiMaggio, Chief Financial Officer

and Treasurer

Distributor

AQUILA DISTRIBUTORS, INC.

120 West 45th Street, Suite 3600

New York, New York 10036

Transfer and Shareholder Servicing Agent

BNY MELLON

4400 Computer Drive

Westborough, Massachusetts 01581

Custodian

     JPMORGAN CHASE BANK, N.A.

14201 N. Dallas Parkway

Dallas, Texas 75254

Further information is contained in the Prospectus,

which must precede or accompany this report.

 

Semi-Annual

Report

September 30, 2014

 

Aquila Tax-Free Fund For Utah “Sooner Rather Than Later - The Miracle of Compound Interest” Serving Utah investors since 1992

November, 2014

Dear Fellow Shareholder:

     Type the words “compound interest” into any internet search engine and you’re bound to find literally hundreds of examples of the concept. Most examples would likely be fairly standard and show the effect that compound interest has on the growth of savings when the interest rate is applied to both the initial sum invested as well as to reinvested income.

     However, we’d like to share with you another example. The following table vividly demonstrates the power of both compounding and beginning to invest sooner rather than later.

• Example 1 assumes a hypothetical investment from age 19 through age 26.

• Example 2 assumes a hypothetical investment from age 27 through age 39.

     Both examples assume a $2,000 yearly investment, with no withdrawals and with no allowance for income taxes. In each case, income compounds at a hypothetical annual interest rate of 5%. These assumptions are for the sake of the illustration and do not represent past or future performance of any investment. The advantage of beginning a saving plan sooner, rather than later, applies whether you earn 3%, 5% or some other amount.

     As you can see, a person who begins to invest $2,000 per year at age 19 and continues to invest over a period of eight years (through age 26) will have more money at age 39 (through the “miracle of compound interest”) than will someone who begins to invest at a later age (27) and continues to invest through age 39.

     We encourage you to share these examples with your family and friends. Beginning a saving plan early can pay off over time, particularly with the assistance of the miracle of compound interest.

     You can take advantage of the powers of compounding when you set up an automatic investment plan in Aquila Tax-Free Fund For Utah and reinvest your dividends. To do so, please contact your investment professional or the Fund’s Shareholder Servicing Agent at 1-800-437-1000.

     Before investing in the Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

NOT A PART OF THE SEMI-ANNUAL REPORT

	EXAMPLE 1		EXAMPLE 2
	5% Annual Interest Rate		5% Annual Interest Rate
	Annual		Annual
Age	Investment	Year-End Value	Investment	Year-End Value
19	$2,000	$2,100	0	0
20	2,000	4,305	0	0
21	2,000	6,620	0	0
22	2,000	9,051	0	0
23	2,000	11,604	0	0
24	2,000	14,284	0	0
25	2,000	17,098	0	0
26	2,000	20,053	0	0
27	0	21,056	$2,000	$2,100
28	0	22,109	2,000	4,305
29	0	23,214	2,000	6,620
30	0	24,375	2,000	9,051
31	0	25,593	2,000	11,604
32	0	26,873	2,000	14,284
33	0	28,217	2,000	17,098
34	0	29,628	2,000	20,053
35	0	31,109	2,000	23,156
36	0	32,664	2,000	26,414
37	0	34,298	2,000	29,834
38	0	36,013	2,000	33,426
39	0	37,813	2,000	37,197

     This chart is for illustration purposes only;

it does not represent past or future performance of any investment.

Sincerely,

Diana P. Herrmann, Vice Chair and President

Any information in this Semi-Annual Report regarding market or economic trends or the factors influencing the Fund’s historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that any market forecasts discussed will be realized.

NOT A PART OF THE SEMI-ANNUAL REPORT

Mutual fund investing involves risk and loss of principal is possible.

The market prices of the Fund’s securities may rise or decline in value due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment may go down. The value of your investment may go down when interest rates rise. A rise in interest rates tends to have a greater impact on the prices of longer term securities. Conversely, when interest rates fall, the value of your investment may rise. Interest rates in the U.S. recently have been historically low and are expected to rise at some point in time.

Investments in the Fund are subject to possible loss due to the financial failure of the issuers of underlying securities and their inability to meet their debt obligations.

The value of municipal securities can be adversely a ected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory developments, legislative actions, and by uncertainties and public perceptions concerning these and other factors. The Fund may be a ected significantly by adverse economic, political or other events a ecting state and other municipal issuers in which it invests, and may be more volatile than a more geographically diverse fund.

If interest rates fall, an issuer may exercise its right to prepay its securities, and the Fund could be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. A portion of income may be subject to local, state, federal and/or alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

These risks may result in share price volatility.

NOT A PART OF THE SEMI-ANNUAL REPORT

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (19.1%)	and Fitch	Value
		City, County and State (2.4%)
		Coral Canyon, Utah Special Service
		District
$	60,000	4.850%, 07/15/17	NR/NR/NR*	$	60,629
		Houston, Texas Public Improvement
	1,000,000	5.000%, 03/01/29	Aa2/AA+/NR		1,139,660
		McKinney, Texas
	1,700,000	4.500%, 08/15/23 Syncora Guarantee,
		Inc. Insured (pre-refunded)	Aa1/AAA/NR		1,764,328
	1,375,000	5.000%, 08/15/24 AMBAC Insured	Aa1/AAA/NR		1,448,494
		Washington State Various Purpose
	1,405,000	5.000%, 07/01/30 Series A	Aa1/AA+/AA+		1,552,314
	2,465,000	5.000%, 07/01/31 Series A	Aa1/AA+/AA+		2,721,335
		Total City, County and State			8,686,760
		Education - Public Schools (0.7%)
		Florida State Board of Education Public
		Education Capital Outlay
	2,000,000	4.750%, 06/01/30 2005 Series F	Aa1/AAA/AAA		2,138,060
		Houston, Texas Community College
		System (Harris and Fort Bend
		Counties)
	500,000	5.000%, 02/15/27	Aa1/AA+/NR		508,210
		Total Education - Public Schools			2,646,270
		Hospital (0.6%)
		Skagit County, Washington Public
		Hospital District No. 002, Refunding,
		Island Hospital
	1,120,000	0.250%, 12/01/15	A1/NR/NR		1,119,093
		Whidbey Island, Washington Public
		Hospital District
	1,000,000	5.500%, 12/01/33	A2/NR/NR		1,115,300
		Total Hospital			2,234,393
		Local Public Property (7.4%)
		Clark County, Nevada, Refunding
	2,280,000	5.000%, 12/01/29 Series A	Aa1/AA/NR		2,613,769
	1,000,000	5.000%, 07/01/23 Series B	Aa1/AA/NR		1,124,750
	2,000,000	5.000%, 11/01/28 AGMC Insured	Aa1/AA/AA		2,169,700
	2,000,000	4.750%, 06/01/30 AGMC Insured	Aa1/AA/NR		2,108,920
	1,000,000	4.750%, 11/01/27 NPFG/ FGIC Insured	Aa1/AA/NR		1,053,700

1 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		Local Public Property (continued)
		Henderson, Nevada Refunding Various
		Purpose
$	1,000,000	5.000%, 06/01/33 Series B	Aa2/AA/NR	$	1,125,510
	750,000	5.000%, 06/01/30 Series 2014	Aa2/AA/NR		871,552
	750,000	5.000%, 06/01/35 Series 2014	Aa2/AA/NR		856,710
		Hurst, Texas Refunding & Improvement
	570,000	0.050%, 08/15/15	Aa2/AA/NR		568,963
		Miami-Dade County, Florida Building
		Better Communities Program
	1,170,000	5.000%, 07/01/29 NPFG/ FGIC Insured	Aa2/AA/AA		1,209,148
	1,605,000	5.625%, 07/01/38	Aa2/AA/NR		1,816,314
		Miami Gardens, Florida
	1,000,000	5.000%, 07/01/29	A1/A+/NR		1,148,720
		Reno, Nevada, Capital Improvement
		Refunding
	1,000,000	5.000%, 06/01/28	A1/A-/NR		1,116,740
		San Angelo, Texas Certificates of
		Obligation
	2,765,000	5.000%, 02/15/30 Series A	Aa2/AA/AA+		3,015,647
		San Patricio County, Texas Certificates
		of Obligation
	2,260,000	4.750%, 04/01/31 AMBAC Insured	Aa3/NR/NR		2,320,387
		State of Washington
	1,500,000	zero coupon, 01/01/18 Series S-2
		AGMC Insured	Aa1/AA+/AA+		1,456,935
		Washoe County, Nevada Refunding
		Reno Sparks Convention
	2,000,000	5.000%, 07/01/28	Aa2/AA/NR		2,225,720
		Total Local Public Property			26,803,185
		School District (4.3%)
		Brownsboro, Texas Independent
		School District
	490,000	zero coupon, 08/15/16 PSF Guaranteed	NR/AAA/NR		481,141
		Clark County, Nevada School District
	500,000	5.000%, 06/15/28 Series A	A1/AA-/A		558,150
		Comal, Texas Independent School
		District
	1,125,000	5.000%, 02/01/36 PSF Guaranteed	Aaa/NR/AAA		1,171,699

2 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		School District (continued)
		Granite School District, Utah, Salt Lake
		County School Building School Board
		Guaranty Program
$	1,000,000	5.000%, 06/01/31	Aaa/NR/AAA	$	1,128,270
		Irving, Texas Independent School
		District Capital Appreciation
		Refunding
	1,000,000	zero coupon, 02/15/20 PSF
		Guaranteed	Aaa/AAA/NR		807,690
		Magnolia, Texas Independent School
		District Schoolhouse
	1,495,000	5.000%, 08/15/25 NPFG/ FGIC Insured
		(pre-refunded)	Aa3/NR/NR		1,557,371
		Midlothian, Texas Independent School
		District
	1,145,000	zero coupon, 02/15/18 PSF
		Guaranteed	Aaa/AAA/NR		1,097,963
		Schertz-Cibolo Universal City, Texas
		Independent School District
	2,325,000	5.000%, 02/01/36 PSF Guaranteed	Aaa/NR/AAA		2,423,068
		Spring, Texas Independent School
		District
	1,000,000	5.000%, 08/15/25 BAMI Insured	Aa3/AA/NR		1,202,830
		Uintah County, Utah School District
		School Board Guaranty Program
	455,000	4.250%, 02/01/24 (pre-refunded)	Aaa/NR/NR		487,473
		Wasatch County, Utah School District
		School Board Guaranty Program
	880,000	5.000%, 06/01/25 (pre-refunded)	Aaa/NR/NR		948,015
		Washoe County, Nevada School
		District Refunding & School
		Improvement
	2,000,000	5.000%, 06/01/30 Series A	Aa3/AA/NR		2,227,040
		Yakima County, Washington School
		District #201 School Board Guaranty
		Program
	1,475,000	0.050%, 12/01/14	Aa1/NR/NR		1,474,557
		Total School District			15,565,267

3 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		Transportation (1.8%)
		Texas State Transportation Commission
		Mobility Fund
$	1,140,000	5.000%, 04/01/27 Series A	Aaa/AAA/AAA	$	1,254,741
	5,000,000	5.000%, 04/01/35	Aaa/AAA/AAA		5,289,800
		Total Transportation			6,544,541
		Utilities (1.9%)
		Central Utah Water Conservancy
		District Refunding
	765,000	5.000%, 04/01/28 Series B	NR/AA+/AAA		872,590
		Harris County, Texas Flood Control
		District Improvement
	1,000,000	4.750%, 10/01/29	Aaa/AAA/AAA		1,067,500
		Las Vegas Valley, Nevada Water
		District Refunding
	1,000,000	5.000%, 06/01/30 Series C	Aa2/AA+/NR		1,125,690
		Las Vegas Valley, Nevada Water
		District Refunding & Water
		Improvement
	2,600,000	5.000%, 02/01/38 Series A	Aa2/AA+/NR		2,768,506
		Virgin Valley, Nevada Water District
	955,000	5.000%, 03/01/34 AGC Insured	A1/NR/NR		997,211
		Total Utilities			6,831,497
		Total General Obligation Bonds			69,311,913
		Revenue Bonds (75.9%)
		Airport (2.2%)
		Alaska State International Airport
		Revenue
	35,000	5.000%, 10/01/24 AMBAC Insured
		AMT	A1/NR/A+		35,119
		Broward County, Florida Airport System
		Revenue Refunding
	1,000,000	5.375%, 10/01/29 Series O	A1/A+/A		1,146,850
		Clark County, Nevada Passenger
		Facilities Charge Revenue Las
		Vegas-McCarran International Airport
	1,500,000	5.000%, 07/01/30	A1/A+/NR		1,691,055
		Jacksonville, Florida Aviation Authority
	1,895,000	5.000%, 10/01/26 AMBAC Insured AMT	A2/A/A		2,048,230

4 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Airport (continued)
		Miami-Dade County, Florida Aviation
		Revenue Miami International Airport
$	1,675,000	5.000%, 10/01/22 Series A-1	A2/A/A	$	1,924,860
		Reno-Tahoe, Nevada Airport Authority
		Revenue Refunding
	1,000,000	5.000%, 07/01/26 AGMC Insured	A2/NR/A		1,022,250
		Total Airport			7,868,364
		Education (8.9%)
		Florida Higher Education Facilities
		Authority Revenue, Refunding,
		Rollins College Project
	1,000,000	5.000%, 12/01/37 Series A	A2/NR/NR		1,101,910
		Hammond, Indiana School Building
		Corp. First Mortgage
	1,030,000	5.000%, 07/15/31 NPFG Insured
		(pre-refunded)	A3/AA+/NR		1,044,080
		Hillsborough County, Florida School
		Board COP
	1,500,000	5.000%, 07/01/31 NPFG Insured	Aa2/AA-/AA		1,588,425
		Salt Lake County, Utah Westminster
		College Project
	825,000	4.750%, 10/01/20	NR/BBB/NR		882,016
	870,000	4.750%, 10/01/21	NR/BBB/NR		929,247
	2,300,000	5.000%, 10/01/22	NR/BBB/NR		2,381,949
	1,250,000	5.000%, 10/01/25	NR/BBB/NR		1,289,625
	600,000	5.000%, 10/01/27	NR/BBB/NR		632,034
	2,025,000	5.125%, 10/01/28	NR/BBB/NR		2,083,543
	315,000	5.125%, 10/01/30	NR/BBB/NR		322,352
		Texas State University System
		Financing Revenue
	2,000,000	5.250%, 03/15/25	Aa2/NR/AA		2,266,400
		Tooele County, Utah Municipal
		Building Authority School District
		Lease Revenue
	1,000,000	5.000%, 06/01/28	A1/A+/NR		1,068,100
		Utah State Board of Regents
	2,980,000	4.500%, 04/01/29	Aa2/AA/NR		3,246,680

5 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Education (continued)
		Utah State Board of Regents Lease
		Revenue
$	410,000	4.500%, 05/01/20 AMBAC Insured	NR/AA/NR	$	432,407
	425,000	4.500%, 05/01/21 AMBAC Insured	NR/AA/NR		447,742
	450,000	4.625%, 05/01/22 AMBAC Insured	NR/AA/NR		474,449
	120,000	4.650%, 05/01/23 AMBAC Insured	NR/AA/NR		126,431
		Utah State Board of Regents Office
		Facility Revenue
	1,045,000	5.000%, 04/01/23 NPFG Insured
		(pre-refunded)	Aa2/AA-/NR		1,069,934
		Utah State Board of Regents, Utah,
		Valley University Student Center
		Building Fee And Unified System
		Revenue
	3,005,000	5.000%, 11/01/28 Series 2012A	NR/AA/NR		3,437,870
		Utah State University Student
		Building Fee
	1,285,000	5.000%, 12/01/29 Series B	NR/AA/NR		1,474,409
	1,355,000	5.000%, 12/01/30 Series B	NR/AA/NR		1,549,185
		Warsaw, Indiana Multi-School Building
		Corp., First Mortgage
	1,800,000	5.450%, 01/15/28 Series B	NR/AA+/NR		2,041,794
		Washington State Higher Education
		Facilities Authority Revenue, Refunding,
		Gonzaga University Project
	950,000	5.000%, 04/01/24 Series B	A3/NR/NR		1,007,570
		Weber State University, Utah Student
		Facilities System
	1,275,000	5.125%, 04/01/32 NPFG Insured	A3/AA/NR		1,304,121
		Total Education			32,202,273
		Education - Charter Schools (8.2%)
		Utah County, Utah Charter School
		Revenue Lakeview Academy
	125,000	5.350%, 07/15/17 Series A	NR/BBB-/NR		130,716
	610,000	4.500%, 07/15/22	NR/BBB-/NR		618,571
		Utah County, Utah Charter School
		Revenue Renaissance Academy
	150,000	5.350%, 07/15/17 Series A 144A	NR/NR/NR*		153,290

6 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Education - Charter Schools (continued)
		Utah County, Utah Charter School
		Revenue, Ronald Wilson Reagan
		Academy
$	1,000,000	6.000%, 02/15/38 Series A	NR/BB+/NR	$	1,025,890
		Utah State Charter School Finance
		Authority Fast Forward Academy
	2,717,000	6.500%, 11/15/37 144A	NR/NR/NR*		2,653,314
		Utah State Charter School Finance
		Authority George Washington
		Academy
	1,000,000	6.750%, 07/15/28	NR/BB+/NR		1,055,110
		Utah State Charter School Finance
		Authority Hawthorn Academy Project
	2,165,000	5.000%, 10/15/29 Series 2014	NR/AA/NR		2,489,144
		Utah State Charter School Finance
		Authority Legacy Preparatory
		Academy
	405,000	4.000%, 04/15/22	NR/AA/NR		448,529
	440,000	4.000%, 04/15/24	NR/AA/NR		488,963
	2,530,000	5.000%, 04/15/29	NR/AA/NR		2,920,506
	1,635,000	5.000%, 04/15/34	NR/AA/NR		1,852,815
		Utah State Charter School Finance
		Authority Monticello Academy
		(School Board Guaranty Program)
	1,000,000	5.000%, 04/15/37 Series 2014	NR/AA/NR		1,102,780
		Utah State Charter School Finance
		Authority Ogden Preparatory
		Academy School Board Guaranty
		Program
	475,000	4.000%, 10/15/22	NR/AA/NR		525,469
	505,000	4.000%, 10/15/23	NR/AA/NR		551,743
	525,000	4.000%, 10/15/24	NR/AA/NR		570,428
		Utah State Charter School Finance
		Authority Providence Hall Elementary
		School (School Board Guaranty
		Program)
	1,000,000	5.250%, 10/15/28 Series 2013A	NR/AA/NR		1,162,260
	1,000,000	5.000%, 10/15/33 Series 2013A	NR/AA/NR		1,113,660

7 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Education - Charter Schools (continued)
		Utah State Charter School Finance
		Authority, Refunding & Improvement,
		Davinci Academy
$	1,000,000	7.050%, 09/15/26 Series 2011A	NR/BBB-/NR	$	1,113,550
		Utah State Charter School Finance
		Authority Ronald Wilson Reagan
		Academy
	1,100,000	5.750%, 02/15/22 Series A	NR/BB+/NR		1,150,490
		Utah State Charter School Finance
		Authority Venture Academy
	6,905,000	6.750%, 11/15/38 144A	NR/BBB-/NR		6,911,560
		Utah State Charter School Finance
		Authority Wasatch Peak Academy
		Project, School Board Guaranty
		Program
	740,000	5.000%, 10/15/29	NR/AA/NR		836,415
	700,000	5.000%, 10/15/36	NR/AA/NR		767,669
		Total Education - Charter Schools			29,642,872
		Hospital (4.6%)
		Brevard County, Florida Health Facilities
		Authority Health First Inc. Project
	1,215,000	5.000%, 04/01/18	A3/A-/NR		1,275,021
		Campbell County, Wyoming Hospital
		District, Hospital Revenue, Memorial
		Hospital Project
	1,040,000	5.000%, 12/01/20	NR/A-/NR		1,172,111
	1,000,000	5.500%, 12/01/34	NR/A-/NR		1,097,600
		Harris County, Texas Health Facilities
		Development Corp., Christus Health
	260,000	4.750%, 07/01/30 AGMC Insured
		(pre-refunded)	NR/NR/NR*		307,278
		Harris County, Texas Health Facilities
		Development Corp., Christus Health,
		unrefunded balance
	540,000	4.750%, 07/01/30 AGMC Insured	NR/AA/NR		561,416
		Henderson, Nevada Health Care
		Facilities, Catholic Healthcare West
	1,350,000	5.250%, 07/01/31 Series B	A3/A/A		1,415,205

8 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Hospital (continued)
		Indiana Finance Authority Hospital
		Revenue, Parkview Health System,
		unrefunded balance
$	300,000	5.875%, 05/01/29	A1/A+/NR	$	300,033
		King County, Washington Public
		Hospital District No. 002, Refunding,
		Evergreen Healthcare
	1,000,000	5.250%, 12/01/28	Aa3/A+/NR		1,138,940
		Murray City, Utah Hospital Revenue,
		IHC Health Services, Inc.
	2,000,000	0.010%, 05/15/37 Series D VRDO**	Aa1/AA+/NR		2,000,000
		Reno, Nevada Hospital Revenue,
		Washoe Medical Center
	725,000	5.000%, 06/01/23 AGMC Insured	A2/AA/NR		762,287
	680,000	5.000%, 06/01/23 AGMC Insured	A2/AA/NR		714,972
		Richmond, Indiana Hospital Revenue
	250,000	5.000%, 01/01/19	NR/A/A		263,658
		Riverton, Utah Hospital Revenue,
		Intermountain Health Care Health
		Services, Inc.
	940,000	5.000%, 08/15/36	Aa1/AA+/NR		1,022,288
		Tarrant County, Texas Cultural Education
		Facilities Finance Corp. Hospital
		Refunding, Scott & White Healthcare
		Project
	1,000,000	5.250%, 08/15/25	Aa3/A+/NR		1,143,880
		Utah County, Utah Hospital Revenue,
		IHC Health Services, Inc.
	880,000	5.000%, 05/15/28	Aa1/AA+/NR		1,000,155
	500,000	5.000%, 05/15/29	Aa1/AA+/NR		564,395
		Utah State Board of Regents, University
		of Utah Hospital Revenue,
		unrefunded balance
	1,245,000	5.000%, 08/01/31	NR/AA/NR		1,369,488
		Washington State Health Care Facilities
		Authority Revenue, Refunding, Fred
		Hutchinson Cancer
	595,000	5.000%, 01/01/18	A3/A/NR		659,694
		Total Hospital			16,768,421

9 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Housing (0.9%)
		Utah Housing Corporation Single
		Family Mortgage
$	670,000	6.100%, 01/01/29 AMT	Aa3/AA-/AA-	$	694,180
	405,000	4.950%, 01/01/32 Series A Class II	Aa2/AA/AA		422,237
	1,360,000	4.500%, 01/01/24 Series A Class III	Aa3/AA-/AA-		1,419,813
	240,000	4.625%, 07/01/32 Series B-1 Class II	Aa2/AA/AA		249,492
	525,000	4.500%, 07/01/23 Series C	Aa3/AA-/AA-		549,381
		Total Housing			3,335,103
		Local Public Property (14.3%)
		CIVIC Ventures, Alaska Revenue
		Anchorage Convention Center
	1,285,000	4.625%, 09/01/30 NPFG Insured	A1/AA-/A+		1,296,090
		Clark County, Nevada Improvement
		District Special Local Improvement
		#128 (Summerlin)
	500,000	5.000%, 02/01/21 Series A	NR/NR/NR*		465,230
		Cottonwood Heights, Utah Sales Tax
		Revenue
	2,000,000	5.000%, 07/01/32 Series 2014	NR/AA-/NR		2,284,840
		Draper, Utah Sales Tax Revenue
	1,000,000	5.000%, 05/01/32 Series A	NR/AA/NR		1,132,470
		Eagle Mountain, Utah Special
		Assessment Area
	670,000	5.250%, 05/01/28 Series 2013	NR/A+/NR		741,563
		Herriman, Utah Special Assessment
		Towne Center Assessment Area
	1,045,000	4.875%, 11/01/23	NR/AA-/NR		1,144,359
	1,150,000	5.000%, 11/01/25	NR/AA-/NR		1,258,020
	1,975,000	5.000%, 11/01/29	NR/AA-/NR		2,079,813
		Jacksonville, Florida Special Revenue
		and Refunding Bonds
	1,015,000	5.250%, 10/01/32 Series A	Aa3/AA-/AA		1,180,821
		New Albany, Indiana Development
		Authority
	500,000	4.250%, 02/01/22	NR/A+/NR		517,700
		Orem, Utah Special Assessment
	1,150,000	7.750%, 11/01/25	NR/NR/NR*		1,152,231
		Reedy Creek, Florida Improvement
		District
	1,000,000	5.250%, 06/01/29 Series A	Aa3/A+/AA-		1,159,700

10 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Local Public Property (continued)
		Riverton City, Utah Franchise & Sales
		Tax Revenue
$	1,585,000	5.000%, 06/01/31 AMBAC Insured	NR/AA-/AA	$	1,714,019
	1,000,000	5.250%, 12/01/36	NR/AA-/AA		1,127,340
		Salt Lake City, Utah Local Building
		Authority Lease Revenue
	955,000	4.000%, 10/15/23 Series A	Aa1/NR/AA+		1,048,304
		Salt Lake Valley, Utah Fire Service
		District Lease Revenue
	2,645,000	5.200%, 04/01/28	Aa2/NR/AA-		2,969,277
	1,000,000	5.250%, 04/01/30	Aa2/NR/AA-		1,120,670
		St. Augustine, Florida Capital
		Improvement Refunding
	500,000	5.000%, 10/01/34	Aa3/A+/A+		548,945
		St. Lucie County, Florida School Board
		COP Master Lease Program
	500,000	5.000%, 07/01/30 Series A	Aa3/A/A+		558,850
		Twin Creeks, Utah Special Services
		District
	10,713,528	10.000%, 07/15/30 144A	NR/NR/NR*		10,750,383
		Uintah County, Utah Municipal Building
		Authority Lease Revenue
	500,000	5.000%, 06/01/24	NR/A+/NR		532,975
	2,000,000	5.300%, 06/01/28	NR/A+/NR		2,119,080
	1,005,000	5.500%, 06/01/37	NR/A+/NR		1,070,968
	1,120,000	5.500%, 06/01/40	NR/A+/NR		1,189,160
		Wasatch County, Utah Municipal
		Building Authority
	535,000	0.250%, 12/01/14	NR/AA-/AA-		534,775
		Washington County/St. George
		Interlocal Agency, Utah Lease
		Revenue Refunding
	650,000	0.500%, 12/01/15 Series A	A1/A+/NR		647,822
	1,365,000	0.500%, 12/01/16 Series A	A1/A+/NR		1,344,102
		Weber County, Utah Municipal
		Building Authority
	325,000	5.250%, 12/15/19 AMBAC Insured	Aa3/NR/NR		327,129
		Weber County, Utah Special
		Assessment Summit Mountain Area
	1,500,000	5.500%, 01/15/28	NR/AA-/NR		1,731,510
	4,130,000	5.750%, 01/15/33	NR/AA-/NR		4,748,096

11 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Local Public Property (continued)
		West Valley City, Utah Municipal
		Building Authority Lease Revenue
		Refunding
$	1,645,000	4.500%, 08/01/22 Series A NPFG/
		FGIC Insured	A3/AA-/A+	$	1,748,997
		West Valley City, Utah Sales Tax
		Revenue Capital Appreciation Bonds,
		Refunding
	3,500,000	zero coupon, 07/15/35	NR/AA+/NR		1,379,595
		Total Local Public Property			51,624,834
		State Agency (1.9%)
		Utah Infrastructure Agency
		Telecommunications & Franchise Tax
	1,000,000	5.500%, 10/15/30 Series A AGMC
		Insured	A2/AA/NR		1,133,720
	1,475,000	5.250%, 10/15/33 Series A AGMC
		Insured	A2/AA/NR		1,631,778
		Utah State Building Ownership Authority
		Lease Revenue Refunding State
		Facilities Master Lease Program
	465,000	5.000%, 05/15/21 (pre-refunded)	Aa1/AA+/NR		500,298
	510,000	5.000%, 05/15/23 (pre-refunded)	Aa1/AA+/NR		548,714
	1,000,000	5.000%, 05/15/24	Aa1/AA+/NR		1,204,910
	1,575,000	5.000%, 05/15/26	Aa1/AA+/NR		1,784,585
		Total State Agency			6,804,005
		Tax Revenue (4.0%)
		Bountiful City, Utah Sales Tax
		Refunding Bond
	635,000	4.000%, 06/01/17	NR/AA/NR		671,811
		Brigham, Utah Special Assessment
		Voluntary Assessment Area
	1,140,000	5.250%, 08/01/23	A1/NR/NR		1,203,475
	617,000	5.500%, 08/01/29	A1/NR/NR		651,682
		Clark County, Nevada Improvement
		District
	250,000	5.000%, 08/01/16	NR/NR/NR*		250,055

12 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Tax Revenue (continued)
		Henderson, Nevada Local
		Improvement District
$	280,000	5.000%, 09/01/15	NR/NR/NR*	$	284,735
	210,000	5.000%, 03/01/16	NR/NR/NR*		210,046
		Holladay, Utah Redevelopment Agency
	1,967,500	4.900%, 12/30/20	NR/NR/NR*		1,961,086
		Jordanelle, Utah Special Service District
	186,000	5.000%, 11/15/14	NR/NR/NR*		186,236
	196,000	5.100%, 11/15/15	NR/NR/NR*		196,120
	206,000	5.200%, 11/15/16	NR/NR/NR*		206,072
	216,000	5.300%, 11/15/17	NR/NR/NR*		216,069
	228,000	5.400%, 11/15/18	NR/NR/NR*		228,046
	240,000	5.500%, 11/15/19	NR/NR/NR*		240,010
	253,000	5.600%, 11/15/20	NR/NR/NR*		252,077
	268,000	5.700%, 11/15/21	NR/NR/NR*		265,207
	283,000	5.800%, 11/15/22	NR/NR/NR*		278,848
	299,000	6.000%, 11/15/23	NR/NR/NR*		295,265
		La Verkin, Utah Sales and Franchise
		Tax Revenue
	571,000	5.100%, 07/15/27***	NR/NR/NR*		577,549
		Mesquite, Nevada New Special
		Improvement District
	120,000	5.250%, 08/01/17	NR/NR/NR*		117,256
	255,000	5.350%, 08/01/19	NR/NR/NR*		240,672
	105,000	5.400%, 08/01/20	NR/NR/NR*		97,583
	400,000	5.500%, 08/01/25	NR/NR/NR*		352,440
		Payson City, Utah Sales Tax Revenue
	445,000	5.000%, 08/01/21 AGMC Insured
		(pre-refunded)	A2/AA/NR		482,411
		Riverton City, Utah Franchise & Sales
		Tax Revenue
	750,000	5.000%, 06/01/24 AMBAC Insured	NR/AA-/AA		819,450
		Salt Lake City, Utah Sales Tax
	1,060,000	5.000%, 02/01/23 (pre-refunded)	NR/AAA/NR		1,076,769
	1,115,000	5.000%, 02/01/24 (pre-refunded)	NR/AAA/NR		1,132,639
		Springville, Utah Special Assessment
		Revenue
	116,000	5.500%, 01/15/17	NR/NR/NR*		116,021
	122,000	5.650%, 01/15/18	NR/NR/NR*		122,001
	130,000	5.800%, 01/15/19	NR/NR/NR*		129,988
	112,000	5.900%, 01/15/20	NR/NR/NR*		110,989

13 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Tax Revenue (continued)
		West Valley City, Utah Redevelopment
		Agency
$	320,000	5.000%, 03/01/22	NR/A-/NR	$	324,768
	350,000	5.000%, 03/01/23	NR/A-/NR		355,156
	1,000,000	5.000%, 03/01/24	NR/A-/NR		1,014,520
		Total Tax Revenue			14,667,052
		Transportation (7.0%)
		Dallas, Texas Area Rapid Transit Sales
		Tax Revenue Refunding Senior Lien
	2,470,000	5.000%, 12/01/36 AMBAC Insured	Aa2/AA+/AA		2,638,380
		North Texas Turnpike Authority
		Revenue
	2,000,000	6.100%, 01/01/28	A2/A-/NR		2,351,640
		Utah Transit Authority Sales Tax
		Revenue
	2,000,000	5.000%, 06/15/27 Series A	Aa2/AAA/AA		2,246,380
	1,000,000	5.000%, 06/15/28 Series A	Aa2/AAA/AA		1,120,120
	6,920,000	5.000%, 06/15/36 AGMC Insured
		Series A	Aa2/AAA/AA		7,622,795
		Utah Transit Authority Sales Tax
		Revenue Capital Appreciation
		Refunding
	2,000,000	zero coupon, 06/15/29 NPFG Insured
		Series A	A1/AA-/A+		1,055,500
		Utah Transit Authority Sales Tax
		Revenue Refunding
	5,185,000	zero coupon, 06/15/23 Series A NPFG
		Insured	A1/AA-/A+		3,734,963
	1,000,000	5.000%, 06/15/32	A1/A/A+		1,111,840
		Utah Transit Authority Sales Tax &
		Transportation Revenue
	195,000	5.250%, 06/15/32 AGMC Insured	Aa2/AAA/AA		249,990
		Washoe County, Nevada Highway
		Revenue Fuel Tax
	1,000,000	5.500%, 02/01/28	A1/A+/NR		1,093,060
	1,000,000	5.000%, 02/01/32	A1/A+/NR		1,095,880
	1,000,000	5.000%, 02/01/38	A1/A+/NR		1,058,060
		Total Transportation			25,378,608

14 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Utility (11.3%)
		Clark County, Washington Public Utility
		District No. 001 Generating Refunding
$	1,000,000	5.000%, 01/01/24	A2/A/A+	$	1,131,060
		Consolidated Wyoming Municipalities
		Electric Facilities Improvement Lease,
		Gillette, Wyoming
	1,000,000	5.000%, 06/01/31	A2/A+/NR		1,133,420
		Cowlitz County, Washington Public
		Utility District Electric Revenue
	650,000	4.500%, 09/01/26 NPFG Insured	A1/NR/A		685,080
		Douglas County, Washington Public
		Utility District No. 001 Electric
		Distribution System
	635,000	0.050%, 12/01/15	Aa3/AA/NR		633,749
		Eagle Mountain, Utah Gas & Electric
	1,440,000	5.000%, 06/01/21 Radian Insured	NR/NR/NR*		1,456,574
	1,215,000	5.000%, 06/01/22 Radian Insured	NR/NR/NR*		1,228,426
	325,000	5.000%, 06/01/24 AGMC Insured	NR/AA/A		363,343
		Energy Northwest Washington Wind
		Project
	1,000,000	4.500%, 07/01/30 Series A AMBAC
		Insured	A2/A/A-		1,038,770
		Houston, Texas Utility System Revenue,
		Refunding
	450,000	5.000%, 11/15/35 AGMC Insured
		(pre-refunded)	Aa2/AA/AA		474,183
		Intermountain Power Agency, Utah
		Power Supply Revenue, Refunding
	1,000,000	4.250%, 07/01/19 Series B
		(pre-refunded)	A1/A+/AA-		1,009,960
		Jacksonville Electric Authority, Florida
		Electric System Revenue
	500,000	4.500%, 10/01/32 Series Three 2012A	Aa2/AA-/AA		530,310
		Lower Colorado River Authority, Texas
	60,000	5.250%, 05/15/29 (pre-refunded)	NR/NR/NR*		71,207
	5,000	5.250%, 05/15/29 (pre-refunded)	NR/NR/NR*		5,934
		Lower Colorado River Authority, Texas,
		unrefunded balance
	1,470,000	5.250%, 05/15/29	A1/A/A		1,639,079

15 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Utility (continued)
		North Slope Borough, Alaska Service
		Area 10 Water & Wastewater Facilities
$	1,000,000	5.250%, 06/30/27	NR/A-/NR	$	1,159,100
	1,000,000	5.250%, 06/30/28	NR/A-/NR		1,155,790
	1,000,000	5.250%, 06/30/34	NR/A-/NR		1,096,280
		San Antonio, Texas Electric & Gas
		Revenue System
	1,000,000	5.000%, 02/01/32	Aa1/AA/AA+		1,098,460
		San Jacinto, Texas River Authority
		Woodlands Waste Disposal
	1,000,000	5.000%, 10/01/30 BAMI Insured	NR/AA/NR		1,140,560
		Santa Clara, Utah Electric Revenue
	1,005,000	4.250%, 08/01/26 AGC Insured	A3/NR/NR		1,000,327
		Sarasota, Florida Utility System
		Revenue Refunding
	1,455,000	5.000%, 10/01/27	NR/AA+/AA+		1,696,224
		St. George, Utah Electric Revenue
	500,000	4.500%, 06/01/20 AGMC Insured
		(pre-refunded)	A2/NR/NR		514,265
	3,750,000	5.000%, 06/01/38 AGMC Insured	A2/NR/NR		3,916,612
		Tacoma, Washington Solid Waste
		Utility Revenue
	1,000,000	5.000%, 12/01/23 Syncora
		Guarantee, Inc. Insured	A2/AA/AA-		1,082,600
		Utah Associated Municipal Power
		System Revenue, Horse Butte Wind
		Project
	1,005,000	5.000%, 09/01/32 Series A	NR/A-/A-		1,113,480
		Utah Associated Municipal Power
		System Revenue Refunding, Payson
		Power Project
	2,000,000	5.000%, 04/01/24	NR/A-/A		2,306,540
	1,000,000	5.000%, 04/01/25	NR/A-/A		1,148,450
	6,375,000	5.000%, 04/01/26	NR/A-/A		7,242,956
		Utah Infrastructure Agency
		Telecommunications & Franchise Tax
	1,000,000	5.000%, 10/15/33	A2/AA-/NR		1,112,840
	1,630,000	5.250%, 10/15/38	A2/AA-/NR		1,817,189

16 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Utility (continued)
		Wyoming Municipal Power Agency
		Power Supply System Revenue
$	720,000	5.500%, 01/01/28 Series A	A2/A-/NR	$	805,262
		Total Utility			40,808,030
		Water and Sewer (12.6%)
		Cape Coral, Florida Water & Sewer
		Revenue
	1,000,000	5.000%, 10/01/36 AGMC-AMBAC
		Insured	A1/AA/A		1,039,030
		Central Utah Water Conservancy
		District Refunding, Jordanelle Hydrant
	1,125,000	4.500%, 10/01/27 Series A	NR/AA+/AA		1,251,011
		Central Weber, Utah Sewer
		Improvement District Revenue
		Refunding
	1,000,000	5.000%, 03/01/28 Series A AGMC
		Insured	NR/AA/AA		1,113,450
	4,000,000	5.000%, 03/01/33 Series A AGMC
		Insured	NR/AA/AA		4,400,920
		Davie, Florida Water & Sewer Revenue
	1,000,000	5.000%, 10/01/32 AGMC Insured	A1/AA/NR		1,089,110
		Jordan Valley, Utah Water Conservancy
		District Revenue
	6,000,000	5.000%, 10/01/35 Series B	NR/AA+/AA		6,692,100
		King County, Washington Sewer
		Revenue
	660,000	5.000%, 01/01/33 AGMC Insured	Aa2/AA+/NR		721,492
		Laredo, Texas Waterworks Sewer
		System Revenue
	1,450,000	5.000%, 03/01/24 Series 2010	A1/AA-/AA-		1,687,379
		Miami-Dade County, Florida Water and
		Sewer Revenue System
	1,500,000	5.000%, 10/01/29 AGMC Insured	Aa3/AA/A+		1,679,190
	1,000,000	5.000%, 10/01/31 Series A	Aa3/A+/A+		1,129,090
		Mountain Regional Water Special
		Service District Utah Water Revenue
		Refunding
	3,000,000	5.000%, 12/15/33 AGMC Insured	NR/AA/A+		3,359,010

17 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Water and Sewer (continued)
		Ogden City, Utah Sewer & Water
		Revenue Bonds
$	1,160,000	5.250%, 06/15/30 Series B	Aa3/AA-/NR	$	1,339,290
	750,000	4.625%, 06/15/38 AGMC Insured	Aa3/NR/NR		771,390
		Ogden City, Utah Storm Drain Revenue
		Bonds
	500,000	5.250%, 06/15/28	NR/AA/NR		584,310
		Orem, Utah Water & Storm Sewer
		Revenue
	1,000,000	5.000%, 07/15/26	NR/AA/AA+		1,127,450
	1,250,000	5.250%, 07/15/28	NR/AA/AA+		1,418,787
		Pleasant Grove City, Utah Water
		Revenue
	450,000	4.300%, 12/01/20 NPFG Insured	A3/AA-/NR		481,964
	1,000,000	5.250%, 12/01/29 AGMC Insured	NR/AA/NR		1,115,550
	1,370,000	5.000%, 12/01/31 Series B NPFG Insured A3/AA-/NR			1,469,133
		Salt Lake & Sandy, Utah Metropolitan
		Water District, Water Revenue,
		Refunding
	1,190,000	5.000%, 07/01/31 Series A	NR/AA+/AA+		1,361,289
	650,000	5.000%, 07/01/31 Series A	NR/AA+/AA+		718,263
	1,000,000	5.000%, 07/01/37 Series A	NR/AA+/AA+		1,121,830
		San Antonio, Texas Water Revenue
		Refunding
	1,050,000	5.000%, 05/15/36 NPFG Insured	Aa1/AA+/AA+		1,074,958
		South Valley, Utah Water Reclamation
		Facility Sewer Revenue
	425,000	5.000%, 08/15/30 AMBAC Insured
		(pre-refunded)	NR/A+/NR		442,731
		South Weber City, Utah Water
		Revenue
	930,000	5.000%, 06/01/40 AGMC Insured	NR/AA/NR		1,037,424
		Utah Water Conservancy District
	1,400,000	5.250%, 01/15/27	NR/A/NR		1,515,710
		Utah Water Finance Agency Revenue
	830,000	4.500%, 10/01/22 AMBAC Insured
		(pre-refunded)	Aa3/NR/NR		847,754
	870,000	4.500%, 10/01/23 AMBAC Insured
		(pre-refunded)	Aa3/NR/NR		888,609
	1,645,000	4.500%, 10/01/28 AMBAC Insured	Aa3/NR/NR		1,757,024

18 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch			Value
		Water and Sewer (continued)
		White City, Utah Water Improvement
		District Revenue
$	500,000	5.000%, 02/01/23 AGMC Insured	A2/NR/NR			$	533,585
	700,000	5.000%, 02/01/25 AGMC Insured	A2/NR/NR				745,367
	840,000	5.000%, 02/01/27 AGMC Insured	A2/NR/NR				892,273
		Total Water and Sewer					45,406,473
		Total Revenue Bonds					274,506,035
		Total Investments (cost $328,621,456
		- note 4)		95.1	%		343,817,948
		Other assets less liabilities		4.9			17,696,170
		Net Assets		100.0	%	$	361,514,118
						Percent of
		Portfolio Distribution by Quality Rating				Investments†
		Aaa of Moody’s or AAA of S&P and Fitch					8.9	%
		Pre-Refunded bonds††/ Escrowed to Maturity bonds					4.3
		Aa of Moody’s or AA of S&P and Fitch					52.8
		A of Moody’s or S&P and Fitch					20.9
		Baa of Moody’s or BBB of S&P					5.0
		BB+ of S&P					0.9
		Not Rated*					7.2
							100.0	%
		PORTFOLIO ABBREVIATIONS:
		AGC - Assured Guaranty Corp.
		AGMC - Assured Guaranty Municipal Corp.
		AMBAC - American Municipal Bond Assurance Corp.
		AMT - Alternative Minimum Tax
		BAMI - Build America Mutual Insurance
		COP - Certificates of Participation
		FGIC - Financial Guaranty Insurance Co.
		NPFG - National Public Finance Guarantee
		NR - Not Rated
		PSF - Permanent School Fund
		VRDO - Variable Rate Demand Obligation

19 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

* Any security not rated (“NR”) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO”) has been determined by the Investment Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO.

** 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.

*** Illiquid security: Considered Illiquid because of restrictons as to sale. This security represents 0.2% of net assets.   Note: 144A – Private placement subject to SEC Rule 144A, which modifies a two-year holding period requirement to permit qualified institutional buyers to trade these securities among themselves, thereby significantly improving the liquidity of these securities.

† Calculated using the highest rating of the three NRSROs.

††   Pre-refunded bonds are bonds for which U.S. Government Obligations usually have been placed in escrow to retire the bonds at their earliest call date.

See accompanying notes to financial statements.

20 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 2014 (unaudited)

ASSETS
Investments at value (cost $328,621,456)	$	343,817,948
Cash		12,936,156
Interest receivable		5,054,956
Receivable for Fund shares sold		636,897
Other assets		29,358
Total assets		362,475,315
LIABILITIES
Dividends payable		335,225
Deferred income		218,039
Payable for Fund shares redeemed		185,009
Management fee payable		125,975
Distribution and service fees payable		13,018
Accrued expenses payable		83,931
Total liabilities		961,197
NET ASSETS	$	361,514,118
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01per share	$	348,706
Additional paid-in capital		345,383,495
Net unrealized appreciation on investments (note 4)		15,196,492
Accumulated net realized gain on investments		403,001
Undistributed net investment income		182,424
	$	361,514,118
CLASS A
Net Assets	$	201,271,194
Capital shares outstanding		19,425,654
Net asset value and redemption price per share	$	10.36
Maximum offering price per share (100/96 of $10.36)	$	10.79
CLASS C
Net Assets	$	78,599,193
Capital shares outstanding		7,589,142
Net asset value and offering price per share	$	10.36
Redemption price per share (*a charge of 1% is imposed
on the redemption proceeds, or on the original price,
whichever is lower, if redeemed during the first 12
months after purchase)	$	10.36	*
CLASS Y
Net Assets	$	81,643,731
Capital shares outstanding		7,855,817
Net asset value, offering and redemption price per share	$	10.39

See accompanying notes to financial statements.

21 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

STATEMENT OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2014 (unaudited)

Investment Income:
Interest income				$	7,355,506
Other income					8,603
					7,364,109
Expenses:
Management fee (note 3)	$	900,190
Distribution and service fees (note 3)		603,135
Transfer and shareholder servicing agent fees .		124,647
Trustees’ fees and expenses (note 7)		70,205
Legal fees		63,650
Shareholders’ reports		26,594
Registration fees and dues		19,324
Custodian fees (note 6)		14,270
Fund accounting fees		13,164
Auditing and tax fees		11,090
Insurance		10,320
Chief compliance officer services (note 3)		1,801
Miscellaneous		24,960
Total expenses		1,883,350
Management fee waived (note 3)		(145,978	)
Net expenses					1,737,372
Net investment income					5,626,737
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from securities
transactions		123,897
Change in unrealized appreciation on
investments		8,910,042
Net realized and unrealized gain (loss) on
investments					9,033,939
Net change in net assets resulting from operations				$	14,660,676

See accompanying notes to financial statements.

22 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30, 2014			Year Ended
	(unaudited)			March 31, 2014
OPERATIONS:
Net investment income	$	5,626,737		$	12,427,047
Net realized gain (loss) from
securities transactions		123,897			258,971
Change in unrealized appreciation
(depreciation) on investments		8,910,042			(11,908,990	)
Change in net assets from
operations		14,660,676			777,028
DISTRIBUTIONS TO SHAREHOLDERS (note 10):
Class A Shares:
Net investment income		(3,300,949	)		(7,436,016	)
Net realized gain on investments		—			(539,381	)
Class C Shares:
Net investment income		(979,629	)		(2,286,305	)
Net realized gain on investments		—			(215,339	)
Class Y Shares:
Net investment income		(1,327,012	)		(2,660,091	)
Net realized gain on investments		—			(179,243	)
Change in net assets from
distributions		(5,607,590	)		(13,316,375	)
CAPITAL SHARE TRANSACTIONS (note 8):
Proceeds from shares sold		31,091,920			53,840,892
Reinvested dividends and
distributions		4,090,009			10,055,976
Cost of shares redeemed		(38,618,821	)		(146,535,445	)
Change in net assets from
capital share transactions		(3,436,892	)		(82,638,577	)
Change in net assets		5,616,194			(95,177,924	)
NET ASSETS:
Beginning of period		355,897,924			451,075,848
End of period*	$	361,514,118		$	355,897,924
*Includes undistributed net investment income,
respectively, of:	$	182,424		$	163,277

See accompanying notes to financial statements.

23 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2014 (unaudited)

1. Organization

     Aquila Tax-Free Fund For Utah (the “Fund”), a series of Aquila Municipal Trust (from inception until the close of business on October 11, 2013, the Fund operated under the name Tax-Free Fund for Utah), a non-diversified, open-end investment company, was organized on December 12, 1990 as a Massachusetts business trust and commenced operations on July 24, 1992. The Fund is authorized to issue an unlimited number of shares. Class A Shares are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through authorized financial institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. Class I Shares are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares carry a distribution and a service fee. As of the report date, there were no Class I Shares outstanding. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.

2. Significant Accounting Policies

     The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.

a) Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are generally valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days.

b) Fair value measurements: The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s investments and are summarized in the following fair value hierarchy:

24 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities The following is a summary of the valuation inputs, representing 100% of the Fund’s investments, used to value the Fund’s net assets as of September 30, 2014:

Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	—
Level 2 – Other Significant Observable
Inputs — Municipal Bonds*		343,817,948
Level 3 – Significant Unobservable Inputs		—
Total	$	343,817,948

*See schedule of investments for a detailed listing of securities.

c) Subsequent events: In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued.

d) 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 premium and accretion of original issue and market discount. In connection with certain bonds, fee income is recognized by the Fund on a daily basis over the life of the bonds.

e) Federal income taxes: It is the policy of the 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. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.   Management has reviewed the tax positions for each of the open tax years (2011-2013) or expected to be taken in the Fund’s 2014 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements.

25 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

f) Multiple class allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis.

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. On March 31, 2014, the Fund decreased undistributed net investment income by $62,124, increased additional paid-in capital by $39,773 and increased net realized gain on investments by $22,351. These reclassifications had no effect on net assets or net asset value per share.

3. Fees and Related Party Transactions

a) Management Arrangements:

     Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Fund’s founder and sponsor, serves as the Manager for the Fund under an Advisory and Administration Agreement with the Fund. Under the Advisory and Administration Agreement, the Manager provides all investment management and administrative services to the Fund. The Manager’s services include providing the office of the Fund and all related services as well as managing relationships with all the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, fund accounting agent, auditors and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.50% on the Fund’s net assets.

     The Manager has contractually undertaken to waive fees and/or reimburse Fund expenses so that total Fund expenses will not exceed 0.83% for Class A Shares, 1.63% for Class C Shares, 0.97% for Class I Shares (none of which are currently outstanding) and 0.63% for Class Y Shares for the period ended September 30, 2014 and 0.84% for a Class A Shares, 1.64% for Class C Shares, 0.99% for Class I Shares and 0.64% for Class Y Shares for the period October 1, 2014 through September 30, 2015. The Manager may not terminate the arrangement without the approval of the Board of Trustees. For the six months ended September 30, 2014, the Fund incurred management fees of $900,190 of which $145,978 was waived.

     Under a Compliance Agreement with the Manager, the Manager is compensated by the Fund for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940.

26 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     Specific details as to the nature and extent of the services provided by the Manager are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

b) Distribution and Service Fees:

     The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (the “Distributor”) including, but not limited to, any principal underwriter of the Fund, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund’s shares or servicing of shareholder accounts. The Fund makes payment of this distribution fee at the annual rate of 0.20% of the Fund’s average net assets represented by Class A Shares. For the six months ended September 30, 2014, distribution fees on Class A Shares amounted to $203,186, of which the Distributor retained $6,644.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund’s Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund’s average net assets represented by Class C Shares. For the six months ended September 30, 2014, these payments amounted to $299,962. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $99,987. The total of these payments with respect to Class C Shares amounted to $399,949, of which the Distributor retained $95,056.

     Specific details about the Plans are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

     Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund’s shares.Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Fund’s shares are sold primarily through the facilities of these intermediaries having offices within Utah, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended September 30, 2014, total commissions on sales of Class A Shares amounted to $141,110, of which the Distributor received $11,566.

4. Purchases and Sales of Securities

     During the six months ended September 30, 2014, purchases of securities and proceeds from the sales of securities aggregated $25,048,414 and $37,348,105, respectively.

     At September 30, 2014, the aggregate tax cost for all securities was $328,442,112. At September 30, 2014, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $15,788,492 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $412,656, for a net unrealized appreciation of $15,375,836.

27 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

5. Portfolio Orientation

     At least 50% of the Fund’s assets will always consist of obligations of Utah-based issuers. At September 30, 2014, the Fund had 58% of its net assets invested in municipal obligations of issuers within Utah. The Fund is also permitted to invest in tax-free municipal obligations of non-Utah-based issuers that are exempt from regular Federal income taxes and, pursuant to an administrative determination of the Utah State Tax Commission issued under statutory authority, the interest on which is currently exempt from Utah individual income taxes. Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Utah, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Utah and whatever effects these may have upon Utah issuers’ ability to meet their obligations.

6. Expenses

     The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.

7. Trustees’ Fees and Expenses

     At September 30, 2014 there were 12 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended September 30, 2014 was $55,187. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the Independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations and meals incurred in connection with attendance at Board Meetings and the Annual Meeting of Shareholders. For the six months ended September 30, 2014, such meeting-related expenses amounted to $15,018.

28 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

8. Capital Share Transactions

Transactions in Capital Shares of the Fund were as follows:

	Six Months Ended
	September 30, 2014						Year Ended
	(unaudited)						March 31, 2014
	Shares			Amount			Shares			Amount
Class A Shares:
Proceeds from shares sold		945,111		$	9,703,482			2,383,945		$	24,046,155
Reinvested distributions		246,883			2,540,525			612,713			6,136,323
Cost of shares redeemed		(1,916,652	)		(19,686,697	)		(7,646,693	)		(76,751,690	)
Net change		(724,658	)		(7,442,690	)		(4,650,035	)		(46,569,212	)
Class C Shares:
Proceeds from shares sold		586,637			6,032,516			1,317,588			13,347,387
Reinvested distributions		73,424			755,088			192,925			1,931,462
Cost of shares redeemed		(1,132,318	)		(11,626,192	)		(3,651,794	)		(36,644,823	)
Net change		(472,257	)		(4,838,588	)		(2,141,281	)		(21,365,974	)
Class Y Shares:
Proceeds from shares sold		1,489,788			15,355,922			1,628,016			16,447,350
Reinvested distributions		76,959			794,396			197,532			1,988,191
Cost of shares redeemed		(708,426	)		(7,305,932	)		(3,287,216	)		(33,138,932	)
Net change		858,321			8,844,386			(1,461,668	)		(14,703,391	)
Total transactions in Fund
shares		(338,594	)	$	(3,436,892	)		(8,252,984	)	$	(82,638,577	)

29 | Aquila Tax-Free Fund For Utah

     AQUILA TAX-FREE FUND FOR UTAH

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

9. Securities Traded on a When-Issued Basis

     The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

10. Income Tax Information and Distributions

     The Fund declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. These distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.

     The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Utah income taxes. Due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund’s net investment income, and/or net realized securities gains. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income rates. For certain shareholders some dividend income may, under some circumstances, be subject to the alternative minimum tax. As a result of the passage of the Regulated Investment Company Act of 2010 (the “Act”), losses incurred in this fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act.

     The tax character of distributions was as follows:

	Year		Nine Months		Year
	Ended		Ended		Ended
	March 31, 2014		March 31, 2013		June 30, 2012
Net tax-exempt income	$	12,391,442	$	10,496,289	$	14,072,731
Ordinary Income		419,559		–		225
Capital Gains		505,374		–		–
	$	13,316,375	$	10,496,289	$	14,072,956

     As of March 31, 2014, the components of distributable earnings on a tax basis were:

Undistributed tax-exempt income	$	164,034
Accumulated net realized gain		279,104
Unrealized appreciation		6,449,727
Other temporary differences		(164,034	)
	$	6,728,831

     The difference between book basis and tax basis unrealized appreciation and undistributed income is due to the timing difference in recognizing dividends paid and market discount.

30 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period

	Class A
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.10		$	10.37		$	10.27		$	9.74		$	9.80		$	9.35		$	9.73
Income (loss) from investment operations:
Net investment income(1)		0.17			0.33			0.26			0.38			0.42			0.43			0.44
Net gain (loss) on securities (both
realized and unrealized)		0.26			(0.24	)		0.10			0.53			(0.05	)		0.47			(0.37	)
Total from investment operations		0.43			0.09			0.36			0.91			0.37			0.90			0.07
Less distributions (note 10):
Dividends from net investment income		(0.17	)		(0.33	)		(0.26	)		(0.38	)		(0.43	)		(0.45	)		(0.45	)
Distributions from capital gains		–			(0.03	)		–			–			–			–			–
Total distributions		(0.17	)		(0.36	)		(0.26	)		(0.38	)		(0.43	)		(0.45	)		(0.45	)
Net asset value, end of period	$	10.36		$	10.10		$	10.37		$	10.27		$	9.74		$	9.80		$	9.35
Total return(not reflecting sales charge)		4.25	%(2)		0.96	%		3.48	%(2)		9.49	%		3.87	%		9.74	%		0.91	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	201		$	204		$	257		$	255		$	212		$	232		$	166
Ratio of expenses to average net assets		0.83	%(3)		0.83	%		0.83	%(3)		0.83	%		0.83	%		0.80	%		0.75	%
Ratio of net investment income to
average net assets		3.26	%(3)		3.33	%		3.28	%(3)		3.79	%		4.31	%		4.43	%		4.80	%
Portfolio turnover rate		7	%(2)		12	%		20	%(2)		17	%		25	%		9	%		25	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.91	%(3)		0.91	%(4)		0.88	%(3)		0.88	%		0.87	%		0.87	%		0.87	%
Ratio of net investment income to
average net assets		3.18	%(3)		3.26	%(4)		3.23	%(3)		3.74	%		4.28	%		4.37	%		4.68	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		0.83	%(3)		0.83	%		0.83	%(3)		0.83	%		0.83	%		0.80	%		0.74	%

___________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust. Without these expenses, the expense ratio and the net investment income ratio would have been 0.86% and 3.31%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

31 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class C
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.10		$	10.37		$	10.27		$	9.74		$	9.79		$	9.34		$	9.72
Income (loss) from investment operations:
Net investment income(1)		0.13			0.25			0.19			0.30			0.34			0.35			0.37
Net gain (loss) on securities (both
realized and unrealized)		0.26			(0.24	)		0.11			0.53			(0.04	)		0.47			(0.37	)
Total from investment operations		0.39			0.01			0.30			0.83			0.30			0.82			–
Less distributions (note 10):
Dividends from net investment income		(0.13	)		(0.25	)		(0.20	)		(0.30	)		(0.35	)		(0.37	)		(0.38	)
Distributions from capital gains		–			(0.03	)		–			–			–			–			–
Total distributions		(0.13	)		(0.28	)		(0.20	)		(0.30	)		(0.35	)		(0.37	)		(0.38	)
Net asset value, end of period	$	10.36		$	10.10		$	10.37		$	10.27		$	9.74		$	9.79		$	9.34
Total return(not reflecting CDSC)		3.84	%(2)		0.15	%		2.86	%(2)		8.62	%		3.15	%		8.87	%		0.10	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	79		$	81		$	106		$	96		$	83		$	89		$	50
Ratio of expenses to average net assets		1.63	%(3)		1.63	%		1.63	%(3)		1.63	%		1.63	%		1.60	%		1.55	%
Ratio of net investment income to
average net assets		2.46	%(3)		2.53	%		2.47	%(3)		2.98	%		3.51	%		3.60	%		3.99	%
Portfolio turnover rate		7	%(2)		12	%		20	%(2)		17	%		25	%		9	%		25	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		1.71	%(3)		1.70	%(4)		1.67	%(3)		1.68	%		1.67	%		1.66	%		1.67	%
Ratio of net investment income to
average net assets		2.38	%(3)		2.46	%(4)		2.42	%(3)		2.93	%		3.48	%		3.54	%		3.88	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		1.63	%(3)		1.63	%		1.63	%(3)		1.63	%		1.63	%		1.60	%		1.54	%

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust. Without these expenses, the expense ratio and the net investment income ratio would have been 1.66% and 2.50%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

32 | Aquila Tax-Free Fund For Utah

AQUILA TAX-FREE FUND FOR UTAH

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class Y
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13			2012			2011			2010			2009
Net asset value, beginning of period	$	10.13		$	10.41		$	10.30		$	9.77		$	9.83		$	9.38		$	9.76
Income (loss) from investment operations:
Net investment income(1)		0.18			0.36			0.27			0.40			0.44			0.45			0.46
Net gain (loss) on securities (both
realized and unrealized)		0.26			(0.26	)		0.11			0.53			(0.05	)		0.47			(0.37	)
Total from investment operations		0.44			0.10			0.38			0.93			0.39			0.92			0.09
Less distributions (note 10):
Dividends from net investment income		(0.18	)		(0.35	)		(0.27	)		(0.40	)		(0.45	)		(0.47	)		(0.47	)
Distributions from capital gains		–			(0.03	)		–			–			–			–			–
Total distributions		(0.18	)		(0.38	)		(0.27	)		(0.40	)		(0.45	)		(0.47	)		(0.47	)
Net asset value, end of period	$	10.39		$	10.13		$	10.41		$	10.30		$	9.77		$	9.83		$	9.38
Total return		4.35	%(2)		1.07	%		3.83	%(2)		9.69	%		4.08	%		9.94	%		1.13	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	82		$	71		$	88		$	76		$	56		$	59		$	44
Ratio of expenses to average net assets		0.63	%(3)		0.63	%		0.63	%(3)		0.63	%		0.63	%		0.60	%		0.55	%
Ratio of net investment income to
average net assets		3.46	%(3)		3.53	%		3.47	%(3)		3.98	%		4.51	%		4.64	%		5.00	%
Portfolio turnover rate		7	%(2)		12	%		20	%(2)		17	%		25	%		9	%		25	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.71	%(3)		0.70	%(4)		0.68	%(3)		0.68	%		0.67	%		0.67	%		0.67	%
Ratio of net investment income to
average net assets		3.38	%(3)		3.46	%(4)		3.43	%(3)		3.93	%		4.47	%		4.57	%		4.88	%
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3):
Ratio of expenses to average net assets		0.63	%(3)		0.63	%		0.63	%(3)		0.63	%		0.63	%		0.60	%		0.54	%

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust. Without these expenses, the expense ratio and the net investment income ratio would have been 0.66% and 3.50%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

33 | Aquila Tax-Free Fund For Utah

Additional Information (unaudited)

Renewal of the Advisory and Administration Agreement

     Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Fund pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). In order for the Manager to remain the investment adviser of the Fund, the Trustees of the Fund must determine annually whether to renew the Advisory Agreement for the Fund.

     In considering whether to approve the renewal of the Advisory Agreement, the Trustees requested and obtained such information as they deemed reasonably necessary. Contract review materials were provided to the Trustees in August, 2014. The independent Trustees met telephonically in August, 2014 to review and discuss the contract review materials. The Trustees considered, among other things, information presented by the Manager. They also considered information presented in a report prepared by an independent consultant with respect to the Fund’s fees, expenses and investment performance, which included comparisons of the Fund’s investment performance against peers and the Fund’s benchmark and comparisons of the advisory fee payable under the Advisory Agreement against the advisory fees paid by the Fund’s peers, as well as information regarding the operating margins of certain investment advisory firms (the “Consultant’s Report”). In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting.

     At a meeting held in September, 2014, based on their evaluation of the information provided by the Manager and the independent consultant, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of the Advisory Agreement until September 30, 2015. In considering the renewal of the Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement.

The nature, extent, and quality of the services provided by the Manager.

     The Trustees considered the nature, extent and quality of the services that had been provided by the Manager to the Fund, taking into account the investment objectives and strategies of the Fund. The Trustees reviewed the terms of the Advisory Agreement.

     The Trustees reviewed the Manager’s investment approach for the Fund and its research process. The Trustees considered that the Manager had provided all advisory and administrative services to the Fund that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Fund, given that it seeks to provide shareholders with as high a level of current income exempt from Utah state and regular Federal income taxes as is consistent with preservation of capital. The Trustees considered the personnel of the Manager who provide investment management services to the Fund. The Manager has employed Mr. James Thompson and Mr. Todd Curtis as co-portfolio managers for the Fund and has established facilities and capabilities for credit analysis of the Fund’s portfolio securities. The Trustees noted the extensive experience of the co-portfolio managers. They considered that Mr. Thompson is based in Salt Lake City, Utah and that he has a comprehensive understanding regarding the economy of the State of Utah and the securities in which the Fund invests, including non-rated securities and those securities with less than the highest ratings from the rating agencies.

34 | Aquila Tax-Free Fund For Utah

     The Manager has additionally provided all administrative services to the Fund and provided the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund’s business management and operations. The Trustees considered the nature and extent of the Manager’s supervision of third-party service providers, including the Fund’s shareholder servicing agent and custodian.

     Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager to the Fund were satisfactory and consistent with the terms of the Advisory Agreement.

The investment performance of the Fund.

     The Trustees reviewed the Fund’s performance and compared its performance to the performance of:

• the funds in the Fund’s peer group (the “Peer Group”), as selected by the independent consultant (five municipal single-state intermediate and municipal single-state long funds, as classified by Morningstar, that are similar to the Fund in size and that charge a front-end sales charge);

• the funds in the Fund’s product category for performance (the “Product Category for Performance”) (all funds in the Peer Group and, without duplication, all funds (and all classes) included in the Morningstar Single-State Intermediate Municipal Bond Funds category); and

• the Fund’s benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index.

     The Trustees considered that the materials included in the Consultant’s Report indicated that the Fund’s average annual total return was higher than the average annual total return of the funds in the Peer Group and the funds in the Product Category for Performance, in each case for the one, three, five and ten year periods ended June 30, 2014. They also considered that the Fund’s average annual total return was higher than the average annual total return of the benchmark index for each of those periods. The Trustees noted that the Fund was the only Utah state-specific tax-free municipal bond fund in the State. The Trustees noted that, unlike the Fund’s returns, the performance of the benchmark index did not reflect any fees or expenses.

     The Trustees considered the Fund’s investment performance to be consistent with the investment objectives of the Fund. Evaluation of this factor indicated to the Trustees that renewal of the Advisory Agreement would be appropriate.

Advisory Fees and Fund Expenses.

     The Trustees reviewed the Fund’s advisory fees and expenses and compared them to the advisory fee and expense data for: • the funds in the Peer Group (as defined above); and • the funds in the product category for expenses (the “Product Category for Expenses”) (Morningstar Single-State Intermediate Municipal Bond Funds and Morningstar Single State Long Municipal Bond Funds from states within which 1-3 mutual funds are operating, with similar operating expense structures).

     The Trustees considered that the Fund’s contractual advisory fee was lower than the average contractual advisory fees of the funds in the Peer Group (at the Fund’s current asset level). They also considered that the Fund’s contractual advisory fee was lower than the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at the Fund’s current asset level and lower than or about equal to the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at various higher asset levels. They also noted that the Fund’s expenses were less than the average actual expenses of the funds in the Product Category for Expenses, but higher than the average actual expenses of the funds in the Peer Group.

35 | Aquila Tax-Free Fund For Utah

     The Trustees reviewed management fees charged by the Manager to its other clients. It was noted that the Manager does not have any other clients except for other funds in the Aquila Group of Funds. The Trustees noted that, in most instances, the fee rates for those clients were comparable to the fees paid to the Manager with respect to the Fund. In evaluating the fees associated with the other funds, the Trustees took into account the respective demands, resources and complexity associated with the Fund and those funds.

     The Trustees considered that the Manager was currently waiving a portion of its fees and had been since the Fund’s inception. Additionally, it was noted that the Manager had contractually undertaken to waive fees and/or reimburse Fund expenses so that total Fund expenses would not exceed 0.83% for Class A Shares, 1.63% for Class C Shares, 0.97% for Class I Shares and 0.63% for Class Y Shares through September 30, 2014, and 0.84% for Class A Shares, 1.64% for Class C Shares, 0.99% for Class I Shares and 0.64% for Class Y Shares for the period October 1, 2014 through September 30, 2015. The Manager may not terminate these arrangements without the approval of the Trustees. The Manager had indicated that it intended to continue waiving fees as necessary in order that the Fund would remain competitive. The Trustees concluded that the advisory fee was reasonable in relation to the nature and quality of the services provided by the Manager to the Fund.

Profitability.

     The Trustees received materials from the Manager and the independent consultant related to profitability. The Manager provided information which showed the profitability to the Manager of its services to the Fund, as well as the profitability of Aquila Distributors, Inc. of distribution services provided to the Fund. The independent consultant provided publicly available data regarding the profitability of other asset managers in comparison to the overall profitability of the Manager.

     The Trustees considered the information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Fund, including the methodology used by the Manager in allocating certain of its costs to the management of the Fund. The Trustees also considered information regarding the profitability of the Manager provided to the Trustees by the independent consultant. The Trustees concluded that profitability to the Manager with respect to the advisory services provided to the Fund did not argue against approval of the fees to be paid under the Advisory Agreement.

The extent to which economies of scale would be realized as the Fund grows.

     The Trustees considered the extent to which the Manager may realize economies of scale or other efficiencies in managing the Fund. The Trustees considered that the materials indicated that the Fund’s fees, after fee waivers, are comparable to those of its peers, including those funds with breakpoints in the advisory fee schedule. Additionally, the Trustees noted that the Manager continued to waive a portion of its fees. The Trustees noted that the Manager’s profitability also may be an indicator of the availability of any economies of scale. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund.

36 | Aquila Tax-Free Fund For Utah

Benefits derived or to be derived by the Manager and its affiliate from the relationship with the Fund.

     The Trustees observed that, as is generally true of most fund complexes, the Manager and its affiliate, by providing services to a number of funds including the Fund, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that produces efficiencies and increased profitability for the Manager and its affiliate, it also makes their services available to the Fund at favorable levels of quality and cost which are more advantageous to the Fund than would otherwise have been possible.

37 | Aquila Tax-Free Fund For Utah

Analysis of Expenses (unaudited)

     As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution (12b-1) and/or service fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     The table below is based on an investment of $1,000 invested on April 1, 2014 and held for the six months ended September 30, 2014.

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 “Expenses Paid During the Period”.

Six months ended September 30, 2014

	Actual
	Total Return	Beginning	Ending	Expenses
	Without	Account	Account	Paid During
	Sales Charges(1)	Value	Value	the Period(2)
Class A	4.25%	$1,000.00	$1,042.50	$4.25
Class C	3.84%	$1,000.00	$1,038.40	$8.33
Class Y	4.35%	$1,000.00	$1,043.50	$3.23

(1) Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable CDSC with respect to Class C shares. Total return is not annualized; as such, it may not be representative of the total return for the year.

(2) Expenses are equal to the annualized expense ratio of 0.83%, 1.63% and 0.63% for the Fund’s Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

38 | Aquila Tax-Free Fund For Utah

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 Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of CDSC with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.

Six months ended September 30, 2014

	Hypothetical
	Annualized	Beginning	Ending	Expenses
	Total	Account	Account	Paid During
	Return	Value	Value	the Period(1)
Class A	5.00%	$1,000.00	$1,020.91	$4.20
Class C	5.00%	$1,000.00	$1,016.90	$8.24
Class Y	5.00%	$1,000.00	$1,021.91	$3.19

(1) Expenses are equal to the annualized expense ratio of 0.83%, 1.63% and 0.63% for the Fund’s Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

39 | Aquila Tax-Free Fund For Utah

Information Available (unaudited)

     Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Fund’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Fund policies, the Manager publicly discloses the complete schedule of the Fund’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available. You may obtain a copy of the Fund’s portfolio holdings schedule for the most recently completed period by visiting the Fund’s website at www.aquilafunds.com. The Fund may also disclose other portfolio holdings as of a specified date (currently the Fund discloses its five largest holdings and/ or sector holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Fund’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.

     The Fund additionally files a complete list of its portfolio holdings 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 www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.

Proxy Voting Record (unaudited)

     During the 12 month period ended June 30, 2014, the Fund did not hold any portfolio securities for which the Fund was entitled to participate in proxy voting. Applicable regulations require us to inform you that the Fund’s proxy voting information is available on the SEC website at www.sec.gov.

Federal Tax Status of Distributions (unaudited)

     This information is presented in order to comply with a requirement of the Internal Revenue Code. No action on the part of shareholders is required.

     For the fiscal year ended March 31, 2014, $12,391,442 of dividends paid by Aquila Tax-Free Fund For Utah, constituting 93.1% of total dividends paid, were exempt-interest dividends; $505,374 of dividends paid by the Fund constituting 3.8% of total dividends paid were capital gains distributions; and the balance was ordinary income.

     Prior to February 15, 2015, shareholders will be mailed the appropriate tax form(s) which will contain information on the status of distributions paid for the 2014 calendar year.

40 | Aquila Tax-Free Fund For Utah

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Founders

     Lacy B. Herrmann (1929-2012)

Aquila Management Corporation, Sponsor

Manager

AQUILA INVESTMENT MANAGEMENT LLC

120 West 45th Street, Suite 3600

New York, New York 10036

Board of Trustees

     John C. Lucking, Chair

Diana P. Herrmann, Vice Chair

Ernest Calderón

Thomas A. Christopher

Gary C. Cornia

David A. Duffy

Grady Gammage, Jr.

Lyle W. Hillyard

Glenn P. O’Flaherty

John J. Partridge

James R. Ramsey

Laureen L. White

Officers

     Diana P. Herrmann, President

Charles E. Childs, III, Executive Vice President

and Secretary

Marie E. Aro, Senior Vice President

Paul G. O’Brien, Senior Vice President

Todd W. Curtis, Vice President

and Co-Portfolio

Manager James T. Thompson, Vice President

and Co-Portfolio

Manager M. Kayleen Willis, Vice President

Randall S. Fillmore, Chief Compliance Officer

Joseph P. DiMaggio, Chief Financial Officer

and Treasurer

Distributor

AQUILA DISTRIBUTORS, INC.

120 West 45th Street, Suite 3600

New York, New York 10036

Transfer and Shareholder Servicing Agent

     BNY MELLON

4400 Computer Drive

Westborough, Massachusetts 01581

Custodian

JPMORGAN CHASE BANK, N.A.

14201 N. Dallas Parkway

Dallas, Texas 75254

Further information is contained in the Prospectus,

which must precede or accompany this report.

 

Semi-Annual

Report

September 30, 2014

 

Aquila Tax-Free Fund of Colorado “Sooner Rather Than Later - The Miracle of Compound Interest” Serving Colorado investors since 1987

November, 2014

Dear Fellow Shareholder:

     Type the words “compound interest” into any internet search engine and you’re bound to find literally hundreds of examples of the concept. Most examples would likely be fairly standard and show the effect that compound interest has on the growth of savings when the interest rate is applied to both the initial sum invested as well as to reinvested income.

     However, we’d like to share with you another example. The following table vividly demonstrates the power of both compounding and beginning to invest sooner rather than later.

• Example 1 assumes a hypothetical investment from age 19 through age 26.

• Example 2 assumes a hypothetical investment from age 27 through age 39.

     Both examples assume a $2,000 yearly investment, with no withdrawals and with no allowance for income taxes. In each case, income compounds at a hypothetical annual interest rate of 5%. These assumptions are for the sake of the illustration and do not represent past or future performance of any investment. The advantage of beginning a saving plan sooner, rather than later, applies whether you earn 3%, 5% or some other amount.

     As you can see, a person who begins to invest $2,000 per year at age 19 and continues to invest over a period of eight years (through age 26) will have more money at age 39 (through the “miracle of compound interest”) than will someone who begins to invest at a later age (27) and continues to invest through age 39.

     We encourage you to share these examples with your family and friends. Beginning a saving plan early can pay off over time, particularly with the assistance of the miracle of compound interest.

     You can take advantage of the powers of compounding when you set up an automatic investment plan in Aquila Tax-Free Fund of Colorado and reinvest your dividends. To do so, please contact your investment professional or the Fund’s Shareholder Servicing Agent at 1-800-437-1000.

     Before investing in the Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

NOT A PART OF THE SEMI-ANNUAL REPORT

	EXAMPLE 1		EXAMPLE 2
	5% Annual Interest Rate		5% Annual Interest Rate
	Annual		Annual
Age	Investment	Year-End Value	Investment	Year-End Value
19	$2,000	$2,100	0	0
20	2,000	4,305	0	0
21	2,000	6,620	0	0
22	2,000	9,051	0	0
23	2,000	11,604	0	0
24	2,000	14,284	0	0
25	2,000	17,098	0	0
26	2,000	20,053	0	0
27	0	21,056	$2,000	$2,100
28	0	22,109	2,000	4,305
29	0	23,214	2,000	6,620
30	0	24,375	2,000	9,051
31	0	25,593	2,000	11,604
32	0	26,873	2,000	14,284
33	0	28,217	2,000	17,098
34	0	29,628	2,000	20,053
35	0	31,109	2,000	23,156
36	0	32,664	2,000	26,414
37	0	34,298	2,000	29,834
38	0	36,013	2,000	33,426
39	0	37,813	2,000	37,197

This chart is for illustration purposes only;

it does not represent past or future performance of any investment.

Sincerely,

Diana P. Herrmann, Vice Chair and President

Any information in this Semi-Annual Report regarding market or economic trends or the factors influencing the Fund’s historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that any market forecasts discussed will be realized.

NOT A PART OF THE SEMI-ANNUAL REPORT

Mutual fund investing involves risk and loss of principal is possible.

The market prices of the Fund’s securities may rise or decline in value due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment may go down.

The value of your investment may go down when interest rates rise. A rise in interest rates tends to have a greater impact on the prices of longer term securities. Conversely, when interest rates fall, the value of your investment may rise. Interest rates in the U.S. recently have been historically low and are expected to rise at some point in time.

Investments in the Fund are subject to possible loss due to the financial failure of the issuers of underlying securities and their inability to meet their debt obligations.

The value of municipal securities can be adversely a ected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory developments, legislative actions, and by uncertainties and public perceptions concerning these and other factors. The Fund may be a ected significantly by adverse economic, political or other events a ecting state and other municipal issuers in which it invests, and may be more volatile than a more geographically diverse fund.

If interest rates fall, an issuer may exercise its right to prepay its securities, and the Fund could be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security.

A portion of income may be subject to local, state, federal and/or alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

These risks may result in share price volatility.

NOT A PART OF THE SEMI-ANNUAL REPORT

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (24.9%)	and Fitch	Value
		Hospital (0.8%)
		Rangely, Colorado Hospital District
		Refunding
$	2,000,000	5.500%, 11/01/22	Baa1/NR/NR	$	2,254,140
		Metropolitan District (5.3%)
		Denver, Colorado Urban Renewal
		Authority, Tax Increment Revenue,
		Stapleton Senior Series A-1
	2,600,000	5.000%, 12/01/25	NR/NR/A-		2,973,854
		Fraser Valley, Colorado Metropolitan
		Recreational District
	1,875,000	5.000%, 12/01/25 (pre-refunded)	NR/A/NR		2,124,712
		Hyland Hills Metro Park & Recreation
		District, Colorado
	875,000	4.375%, 12/15/26 ACA Insured	NR/NR/NR*		899,552
		Meridian Metropolitan District,
		Colorado Refunding
	1,645,000	4.500%, 12/01/23 Series A	NR/A-/A		1,784,118
		North Metro Fire Rescue District,
		Colorado
	1,200,000	4.625%, 12/01/20 AMBAC Insured	NR/AA/NR		1,299,480
		Park Creek Metropolitan District,
		Colorado Revenue Refunding &
		Improvement - Senior Property Tax
		Support
	2,000,000	5.500%, 12/01/21 AGC Insured	NR/AA/BBB		2,218,160
		Poudre Tech Metropolitan District,
		Colorado Unlimited Property Tax
		Supported Revenue Refunding &
		Improvement, Series B
	1,990,000	5.000%, 12/01/28 AGMC Insured	NR/AA/NR		2,225,337
		Stonegate Village Metropolitan District,
		Colorado Refunding & Improvement
	500,000	5.000%, 12/01/23 NPFG Insured	A3/AA-/NR		534,745
	900,000	5.000%, 12/01/24 NPFG Insured	A3/AA-/NR		961,551
		Total Metropolitan District			15,021,509
		School Districts (18.3%)
		Adams 12 Five Star Schools, Colorado
	1,000,000	5.000%, 12/15/25	Aa2/AA-/NR		1,247,300

1 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		School Districts (continued)
		Adams County, Colorado School
		District #50
$	1,000,000	4.000%, 12/01/23	Aa2/AA-/NR	$	1,124,230
	3,000,000	4.000%, 12/01/24	Aa2/AA-/NR		3,353,760
		Adams & Arapahoe Counties, Colorado
		Joint School District #28J
	2,500,000	5.500%, 12/01/23 (pre-refunded)	Aa2/AA-/NR		2,959,600
		Adams & Weld Counties, Colorado
		School District #27J
	1,030,000	5.000%, 12/01/22	Aa2/AA-/NR		1,236,670
	2,000,000	5.000%, 12/01/24	Aa2/AA-/NR		2,381,620
	1,000,000	5.375%, 12/01/26 NPFG Insured	Aa2/AA-/NR		1,102,370
		Arapahoe County, Colorado School
		District #001 Englewood
	3,235,000	5.000%, 12/01/27	Aa2/NR/NR		3,755,253
		Boulder Larimer & Weld Counties,
		Colorado
	1,260,000	5.000%, 12/15/26 AGMC Insured	Aa2/AA/NR		1,372,556
	1,500,000	5.000%, 12/15/28	Aa2/AA-/NR		1,702,410
		Denver, Colorado City & County
		School District No. 1
	3,000,000	4.000%, 12/01/26	Aa2/AA-/AA+		3,303,630
	3,000,000	5.250%, 12/01/27	Aa2/AA-/AA+		3,456,330
		Eagle County School District, Colorado,
		Eagle, Garfield & Routt School
		District #50J
	1,170,000	5.000%, 12/01/25	Aa2/AA-/NR		1,403,883
		El Paso County, Colorado School
		District #20
	1,500,000	4.500%, 12/15/25 AGMC Insured	Aa2/NR/NR		1,636,605
		El Paso County, Colorado School
		District #20 Refunding
	1,945,000	4.375%, 12/15/23	Aa2/NR/NR		2,181,142
		Gunnison Watershed, Colorado
		School District
	1,025,000	5.250%, 12/01/26	Aa2/AA-/NR		1,154,724
		Jefferson County, Colorado School
		District #R-001
	3,000,000	5.250%, 12/15/25 AGMC Insured
		(pre-refunded)	Aa2/AA/NR		3,315,570

2 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		School Districts (continued)
		La Plata County, Colorado School
		District #9-R Durango Refunding
$	2,470,000	5.000%, 11/01/22	Aa2/NR/NR	$	2,892,716
	3,000,000	4.500%, 11/01/23	Aa2/NR/NR		3,393,180
		Larimer, Weld & Boulder Counties,
		Colorado School District No. R-2J,
		Thompson Refunding
	1,500,000	4.250%, 12/15/24	Aa2/NR/NR		1,684,020
		Mesa County, Colorado Valley School
		District No. 051, Grand Junction
		Refunding
	3,000,000	5.000%, 12/01/23	Aa2/NR/NR		3,665,550
		Summit County, Colorado School
		District No. RE 1 Refunding
	2,000,000	4.000%, 12/01/24	Aa1/NR/NR		2,192,780
		Teller County, Colorado School
		District #2 Woodland Park
	1,265,000	5.000%, 12/01/17 NPFG Insured
		(pre-refunded)	Aa2/AA-/NR		1,274,880
		Weld County, Colorado School
		District #2
	170,000	5.000%, 12/01/15 AGMC Insured	Aa2/AA/NR		170,615
		Total School Districts			51,961,394
		Water & Sewer (0.5%)
		Central Colorado Water Conservancy
		District, Adams Morgan & Weld
		Counties
	1,185,000	5.000%, 12/01/24	NR/A/NR		1,397,482
		Total General Obligation Bonds			70,634,525
		Revenue Bonds (73.2%)
		Airport (3.8%)
		Denver, Colorado City & County
		Airport Revenue System, Series A
	4,340,000	5.000%, 11/15/24	A1/A+/A+		4,965,003
	1,210,000	5.250%, 11/15/28	A1/A+/A+		1,411,223
	3,000,000	5.250%, 11/15/29	A1/A+/A+		3,471,900

3 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Airport (continued)
		Walker Field, Colorado Public Airport
		Authority Airport Revenue
$	1,000,000	5.000%, 12/01/22	Baa2/NR/NR	$	1,066,080
		Total Airport			10,914,206
		Electric (4.0%)
		Colorado Springs, Colorado Utilities
		Revenue, Refunding Series A
	2,000,000	4.750%, 11/15/27	Aa2/AA/AA		2,234,180
		Colorado Springs, Colorado Utilities
		Revenue, Refunding Series A-1
	1,000,000	4.000%, 11/15/26	Aa2/AA/AA		1,076,920
	1,000,000	4.000%, 11/15/27	Aa2/AA/AA		1,071,070
		Colorado Springs, Colorado Utilities
		Revenue Refunding Series B
	1,285,000	5.250%, 11/15/23	Aa2/AA/AA		1,479,433
	2,600,000	5.000%, 11/15/23	Aa2/AA/AA		3,140,514
		Colorado Springs, Colorado Utilities
		Revenue, Series C-2
	1,060,000	5.000%, 11/15/23	Aa2/AA/AA		1,280,363
		Colorado Springs, Colorado Utilities
		Revenue Subordinated Lien
		Improvement Series B
	1,160,000	5.000%, 11/15/23 (pre-refunded)	Aa2/AA/AA		1,166,554
		Total Electric			11,449,034
		Higher Education (18.1%)
		Adams State College, Colorado
		Auxiliary Facilities Improvement
		Series A
	1,000,000	5.200%, 05/15/27	Aa2/AA-/NR		1,139,000
		Adams State College, Colorado
		Auxiliary Facilities Refunding, Series B
	3,000,000	4.500%, 05/15/29	Aa2/AA-/NR		3,133,260
		Colorado Educational & Cultural
		Facility Authority, Student Housing -
		Campus Village Apartments Refunding
	2,935,000	5.375%, 06/01/28	NR/A/NR		3,220,810
		Colorado Educational & Cultural Facility
		Authority, University Corp.
		Atmosphere Project, Refunding
	1,700,000	5.000%, 09/01/22	A2/A+/NR		1,872,227
	1,635,000	5.000%, 09/01/28	A2/A+/NR		1,762,170

4 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Higher Education (continued)
		Colorado Educational & Cultural
		Facility Authority, University of
		Denver Project
$	845,000	4.000%, 03/01/24	A1/NR/NR	$	925,148
		Colorado Educational & Cultural
		Facility Authority Refunding,
		University of Denver Project
	1,000,000	5.250%, 03/01/26 NPFG Insured	A1/AA-/NR		1,227,990
		Colorado Educational & Cultural
		Facility Authority Refunding,
		University of Denver Project, Series B
	3,085,000	5.000%, 03/01/22 NPFG/ FGIC
		Insured (pre-refunded)	A1/AA-/NR		3,289,474
		Colorado Educational & Cultural
		Facility Authority, University of
		Denver Project, Series B Refunding
	3,620,000	5.250%, 03/01/23 NPFG Insured	A1/A+/AA		3,825,544
		Colorado School of Mines Enterprise
		Refunding & Improvement
	1,455,000	5.000%, 12/01/24	Aa2/AA-/NR		1,623,474
		Colorado State Board of Governors
		University Enterprise System, Series A
	2,300,000	5.000%, 03/01/25	Aa2/AA-/NR		2,714,000
	930,000	5.000%, 03/01/28 AGMC Insured	Aa3/AA/NR		1,020,247
		Colorado State COP University of
		Colorado at Denver Health Sciences
		Center Fitzsimons Academic Projects
		Series B
	3,135,000	5.250%, 11/01/25 NPFG (pre-refunded)	A3/AA-/NR		3,306,046
		Mesa State College, Colorado
		Auxiliary Facilities Enterprise
	1,000,000	5.000%, 05/15/20 Syncora Guarantee,
		Inc. Insured (pre-refunded)	A2/NR/NR		1,029,750
	2,000,000	5.700%, 05/15/26 (pre-refunded)	NR/AA-/NR		2,314,460
		University of Colorado Enterprise
		System
	1,270,000	5.000%, 06/01/25 Series A	Aa2/NR/AA+		1,549,502
	2,000,000	5.000%, 06/01/27	Aa2/NR/AA+		2,271,440
	2,000,000	4.750%, 06/01/27 Series A	Aa2/NR/AA+		2,238,000

5 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Higher Education (continued)
		University of Colorado Enterprise
		System, Refunding, Series B
$	1,680,000	4.000%, 06/01/23	Aa2/NR/AA+	$	1,828,882
		University of Colorado Enterprise
		System, Refunding & Improvement
	50,000	5.000%, 06/01/24 NPFG/ FGIC Insured	Aa2/NR/NR		51,409
		University of Northern Colorado
		Greeley Institutional Enterprise
		Refunding, SHEIP, Series A
	1,000,000	5.000%, 06/01/25	Aa2/AA-/NR		1,208,590
	2,810,000	5.000%, 06/01/26	Aa2/AA-/NR		3,207,025
	2,940,000	5.000%, 06/01/28	Aa2/AA-/NR		3,286,861
		University of Northern Colorado
		Refunding
	1,000,000	5.000%, 06/01/24 AGMC Insured
		(pre-refunded)	A1/AA/NR		1,031,830
		Western State College, Colorado
		Institutional Enterprise, SHEIP, Series A
	1,160,000	5.000%, 05/15/24	Aa2/AA-/NR		1,274,028
		Western State College, Colorado, SHEIP
	1,020,000	5.000%, 05/15/27	Aa2/AA-/NR		1,095,011
		Total Higher Education			51,446,178
		Hospital (11.0%)
		Colorado Health Facility Authority
		Hospital Revenue, Adventist
		Health/Sunbelt, Refunding
	2,500,000	5.125%, 11/15/29	Aa2/AA-/AA		2,676,700
		Colorado Health Facility Authority
		Hospital Revenue, Catholic Health
	1,000,000	4.750%, 09/01/25 AGMC Insured	A1/AA/A+		1,097,020
		Colorado Health Facility Authority
		Hospital Revenue, Evangelical
		Lutheran Project Refunding
	1,575,000	5.250%, 06/01/19	A3/A-/NR		1,673,123
	1,000,000	5.250%, 06/01/21	A3/A-/NR		1,060,590
	2,000,000	5.250%, 06/01/24	A3/A-/NR		2,121,860
		Colorado Health Facility Authority
		Hospital Revenue, NCMC, Inc. Project
	2,000,000	5.250%, 05/15/26 Series A AGMC
		Insured	NR/AA/A+		2,228,180

6 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO SCHEDULE OF INVESTMENTS (continued) SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Hospital (continued)
		Colorado Health Facility Authority
		Hospital Revenue, Poudre Valley
		Health Care Series F Refunding
$	4,760,000	5.000%, 03/01/25	A1/A+/AA-	$	4,834,113
		Colorado Health Facility Authority
		Hospital Revenue Refunding,
		Catholic Health, Series A
	2,000,000	5.250%, 07/01/24	A1/A+/A+		2,252,180
		Colorado Health Facility Authority
		Hospital Revenue, Valley View
		Hospital Association, Refunding
	1,500,000	5.500%, 05/15/28	NR/A-/NR		1,646,460
		Colorado Health Facility Authority,
		Catholic Health Initiatives, Series D
	2,000,000	5.000%, 10/01/16	A1/A+/A+		2,170,040
	1,000,000	6.000%, 10/01/23	A1/A+/A+		1,167,070
		Colorado Health Facility Authority,
		Sisters Leavenworth, Refunding
	3,000,000	5.250%, 01/01/25	Aa3/AA-/AA-		3,483,060
		Denver, Colorado Health & Hospital
		Authority Healthcare, Series A
		Refunding
	2,000,000	5.000%, 12/01/18	NR/BBB/BBB+		2,193,200
	1,500,000	5.000%, 12/01/19	NR/BBB/BBB+		1,641,150
		Park Hospital District Larimer County,
		Colorado Limited Tax
	1,010,000	4.500%, 01/01/21 AGC Insured	A3/AA/NR		1,037,704
		Total Hospital			31,282,450
		Housing (1.3%)
		Colorado Housing & Finance Authority,
		Single Family Mortgage Class II
	585,000	5.500%, 11/01/29	Aaa/AAA/NR		610,758
		Colorado Housing Finance Authority,
		Single Family Mortgage Class III
		Series A-5
	2,490,000	5.000%, 11/01/34	A2/A/NR		2,515,174
		Colorado Housing and Finance
		Authority, Multi-Family Project C1-II
		Series A-2
	435,000	5.400%, 10/01/29	Aa2/AA/NR		463,136
		Total Housing			3,589,068

7 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Lease (16.0%)
		Adams 12 Five Star Schools,
		Colorado COP
$	1,770,000	4.625%, 12/01/24	Aa3/A+/NR	$	1,938,256
	500,000	5.000%, 12/01/25	Aa3/A+/NR		560,230
		Adams County, Colorado Corrections
		Facility COP, Series B
	1,600,000	5.000%, 12/01/26	Aa2/AA/NR		1,760,416
	1,200,000	5.125%, 12/01/27	Aa2/AA/NR		1,321,716
		Aurora, Colorado COP, Refunding
		Series A
	1,500,000	5.000%, 12/01/26	Aa2/AA-/NR		1,700,670
		Brighton, Colorado COP Refunding
		Series A
	1,865,000	5.000%, 12/01/24 AGMC Insured	A1/AA/NR		2,031,694
		Broomfield, Colorado COP
	2,000,000	4.500%, 12/01/28	Aa3/NR/NR		2,144,260
		Colorado Educational & Cultural
		Facilities Authority, Ave Maria School
		Project Refunding
	1,000,000	4.850%, 12/01/25 Radian Insured	NR/NR/NR*		1,012,500
		Colorado Educational & Cultural
		Facilities Authority, Charter School -
		James, Refunding & Improvement
	3,000,000	5.000%, 08/01/27 AGC Insured	NR/AA/NR		3,115,980
		Colorado State BEST COP Series G
	3,000,000	4.250%, 03/15/23	Aa2/AA-/NR		3,286,560
		Colorado State BEST COP Series H
	3,490,000	4.000%, 03/15/26	Aa2/AA-/NR		3,733,427
		Colorado State Higher Education
		Capital Construction Lease
	3,000,000	5.250%, 11/01/23	Aa2/AA-/NR		3,398,820
	1,690,000	5.000%, 11/01/26	Aa2/AA-/NR		2,013,280
		Denver, Colorado City and County
		COP (Botanical Gardens)
	2,015,000	5.250%, 12/01/22	Aa2/AA+/AA+		2,329,259
		Douglas County, Colorado School
		District No. RE-1 Douglas & Elbert
		Counties COP
	3,075,000	5.000%, 01/15/29	Aa2/NR/NR		3,353,933

8 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Lease (continued)
		El Paso County, Colorado COP (Judicial
		Complex Project) Series A
$	1,820,000	4.500%, 12/01/26 AMBAC Insured	NR/AA-/NR	$	1,960,395
		Garfield County, Colorado COP Public
		Library District
	1,000,000	5.375%, 12/01/27	NR/A/NR		1,081,400
		Gypsum, Colorado COP
	1,050,000	5.000%, 12/01/28	NR/A+/NR		1,094,142
		Pueblo, Colorado COP (Police
		Complex Project)
	2,170,000	5.500%, 08/15/22 AGC Insured	Aa3/AA/NR		2,465,077
		Rangeview Library District Project,
		Colorado COP
	2,210,000	5.000%, 12/15/26 AGC Insured	Aa3/AA/NR		2,462,515
	1,000,000	5.000%, 12/15/28 AGC Insured	Aa3/AA/NR		1,102,410
		Westminster, Colorado COP
	1,480,000	4.250%, 12/01/22 AGMC Insured	A2/AA/NR		1,631,448
		Total Lease			45,498,388
		Sales Tax (7.5%)
		Boulder, Colorado General Fund
		Capital Improvement Projects
	2,235,000	4.000%, 10/01/25	Aa1/AA+/NR		2,500,630
		Boulder County, Colorado Open Space
		Capital Improvement Series A
	1,500,000	5.000%, 01/01/24 AGMC Insured
		(pre-refunded)	A2/AA/NR		1,517,700
		Castle Rock, Colorado Sales & Use Tax
	1,015,000	4.000%, 06/01/25	Aa3/AA-/NR		1,099,945
		Commerce City, Colorado Sales &
		Use Tax
	1,000,000	5.000%, 08/01/21 AMBAC Insured	NR/A+/NR		1,071,500
		Denver, Colorado City & County Excise
		Tax Refunding Series A
	4,000,000	5.250%, 09/01/19 AGMC Insured	A1/AA/AA-		4,656,040
		Grand Junction, Colorado General Fund
	1,900,000	5.000%, 03/01/23	NR/AA/NR		2,203,658
		Greeley, Colorado Sales & Use Tax
		Refunding
	2,170,000	4.000%, 10/01/22	Aa3/AA/NR		2,441,706

9 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Sales Tax (continued)
		Gypsum County, Colorado Sales Tax
		& General Fund
$	1,690,000	5.250%, 06/01/30 AGC Insured	NR/AA/NR $		1,719,102
		Park Meadows Business Implementation
		District, Colorado Shared Sales Tax
	1,500,000	5.300%, 12/01/27	NR/NR/NR*		1,586,055
		Pueblo, Colorado Urban Renewal
		Authority, Refunding & Improvement,
		Series B
	1,250,000	5.250%, 12/01/28	A2/A/NR		1,384,938
		Westminster, Colorado Economic
		Development Authority, Mandalay
		Gardens Urban Renewal Project
	1,090,000	4.000%, 12/01/22	NR/A/NR		1,139,399
		Total Sales Tax			21,320,673
		Transportation (1.3%)
		Regional Transportation District,
		Colorado COP, Series A
	3,500,000	5.000%, 06/01/25 AMBAC Insured
		(pre-refunded)	Aa3/A/A		3,611,405
		Water & Sewer (9.1%)
		Aurora, Colorado Water Improvement
		First Lien, Series A
	1,250,000	5.000%, 08/01/25 AMBAC Insured	Aa2/NR/AA+		1,377,250
		Broomfield, Colorado Sewer and
		Waste Water
	1,975,000	4.000%, 12/01/21 AGMC Insured	A2/NR/NR		2,203,764
	1,550,000	5.000%, 12/01/24 AGMC Insured	A2/AA/NR		1,800,868
		Broomfield, Colorado Water Activity
		Enterprise
	3,385,000	5.000%, 12/01/21	A1/NR/NR		4,051,811
		Colorado Water Resource & Power
		Development Authority
	2,675,000	5.000%, 09/01/16 NPFG Insured	A3/AA-/NR		2,681,313
	1,855,000	5.000%, 09/01/17 NPFG Insured	A3/AA-/NR		1,859,025
		Denver, Colorado City and County
		Board Water Commissioners Master
		Resolution, Refunding, Series B
	1,000,000	4.000%, 12/15/22	Aaa/AAA/AAA		1,104,490

10 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Water & Sewer (continued)
		Erie, Colorado Water Enterprise
		Revenue, Series A
$	1,000,000	5.000%, 12/01/25 AGMC Insured	A1/NR/NR	$	1,078,030
		Greeley, Colorado Water Revenue
	1,920,000	4.200%, 08/01/24 NPFG Insured	NR/AA/NR		1,991,174
		North Weld County, Colorado Water
		District Enterprise Revenue Refunding
	1,465,000	4.000%, 11/01/22 AGMC Insured	NR/AA/NR		1,648,770
		Parker, Colorado Water & Sanitation
		District Water & Sewer Enterprise
		Refunding
	1,000,000	5.000%, 11/01/22 AGMC Insured	A2/AA/NR		1,187,530
		Thorton, Colorado Water Enterprise
		Revenue, Series 2013
	1,970,000	4.000%, 12/01/24	Aa2/AA/NR		2,188,394
		Woodmoor, Colorado Water &
		Sanitation District #1 Enterprise
	2,570,000	4.500%, 12/01/26	NR/AA-/NR		2,823,633
		Total Water & Sewer			25,996,052
		Miscellaneous Revenue (1.1%)
		Colorado Educational & Cultural Facility
		Authority, Independent School
		Revenue Refunding, Kent Denver
		School Project
	1,000,000	5.000%, 10/01/30	NR/A/NR		1,051,800
		Colorado Educational & Cultural
		Facility Authority, Independent
		School Revenue Refunding, Vail
		Mountain School Project
	1,820,000	6.000%, 05/01/30	NR/BBB-/NR		1,988,896
		Total Miscellaneous Revenue			3,040,696
		Total Revenue Bonds			208,148,150
		Total Investments (cost $263,458,483
		– note 4)	98.1%		278,782,675
		Other assets less liabilities	1.9		5,286,497
		Net Assets	100.0%	$	284,069,172

11 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

	Percent of
Portfolio Distribution by Quality Rating	Investments†
Aaa of Moody’s or AAA of S&P or Fitch		0.6	%
Pre-Refunded bonds††/Escrowed to Maturity bonds		9.7
Aa of Moody’s or AA of S&P or Fitch		66.3
A of Moody’s or S&P or Fitch		18.8
Baa of Moody’s or BBB of S&P		3.3
Not Rated*		1.3
		100.0	%

PORTFOLIO ABBREVIATIONS:

ACA - American Capital Assurance Financial Guaranty Corp.

AGC - Assured Guaranty Corp.

AGMC - Assured Guaranty Municipal Corp.

AMBAC - American Municipal Bond Assurance Corp.

BEST - Building Excellent Schools Today

COP - Certificates of Participation

FGIC - Financial Guaranty Insurance Co.

NCMC - Northern Colorado Medical Center

NPFG - National Public Finance Guarantee

NR - Not Rated

SHEIP - State Higher Education Intercept Program

* Any security not rated (“NR”) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO”) has been determined by the Investment Sub-Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO.

† Where applicable, calculated using the highest rating of the three NRSROs.

†† Pre-refunded bonds are bonds for which U.S. Govenment Obligations usually have been placed in escrow to retire the bonds at their earliest call date.

See accompanying notes to financial statements.

12 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 2014 (unaudited)

ASSETS
Investments at value (cost $263,458,483)	$	278,782,675
Cash		2,055,892
Interest receivable		3,690,980
Receivable for Fund shares sold		32,868
Other assets		23,583
Total assets		284,585,998
LIABILITIES
Dividends payable		225,468
Management fee payable		112,178
Payable for Fund shares redeemed		85,884
Distribution and service fees payable		4,052
Accrued expenses payable		89,244
Total liabilities		516,826
NET ASSETS	$	284,069,172
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share	$	266,608
Additional paid-in capital		270,324,285
Net unrealized appreciation on investments (note 4)		15,324,192
Accumulated net realized loss on investments		(1,919,693	)
Undistributed net investment income		73,780
	$	284,069,172
CLASS A
Net Assets	$	204,007,281
Capital shares outstanding		19,151,372
Net asset value and redemption price per share	$	10.65
Maximum offering price per share (100/96 of $10.65)	$	11.09
CLASS C
Net Assets	$	26,792,279
Capital shares outstanding		2,520,076
Net asset value and offering price per share	$	10.63
Redemption price per share (*a charge of 1% is imposed on the
redemption proceeds, or on the original price, whichever is
lower, if redeemed during the first 12 months after purchase)	$	10.63	*
CLASS Y
Net Assets	$	53,269,612
Capital shares outstanding		4,989,392
Net asset value, offering and redemption price per share	$	10.68

See accompanying notes to financial statements.

13 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

STATEMENT OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2014 (unaudited)

Investment Income:

Interest income				$	5,425,075
Expenses:
Management fees (note 3)	$	713,299
Distribution and service fees (note 3)		191,235
Transfer and shareholder servicing agent fees		88,648
Legal fees		76,260
Trustees’ fees and expenses (note 8)		61,728
Shareholders’ reports		22,196
Registration fees and dues		16,530
Auditing and tax fees		10,463
Custodian fees (note 6)		10,380
Insurance		7,929
Chief compliance officer services (note 3)		2,771
Miscellaneous		21,026
Total expenses		1,222,465
Management fees waived (note 3)		(28,529	)
Net expenses					1,193,936
Net investment income					4,231,139
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from securities
transactions		(139,607	)
Change in unrealized appreciation on
investments		5,702,682
Net realized and unrealized gain (loss) on
investments					5,563,075
Net change in net assets resulting from
operations				$	9,794,214

See accompanying notes to financial statements.

14 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30, 2014			Year Ended
	(unaudited)			March 31, 2014
OPERATIONS:
Net investment income	$	4,231,139		$	8,927,518
Net realized gain (loss) from
securities transactions		(139,607	)		(1,667,569	)
Change in unrealized
appreciation on investments		5,702,682			(9,568,329	)
Change in net assets from
operations		9,794,214			(2,308,380	)
DISTRIBUTIONS TO SHAREHOLDERS (note 10):
Class A Shares:
Net investment income		(3,179,108	)		(6,672,870	)
Class C Shares:
Net investment income		(291,427	)		(681,024	)
Class Y Shares:
Net investment income		(753,431	)		(1,563,325	)
Change in net assets from
distributions		(4,223,966	)		(8,917,219	)
CAPITAL SHARE TRANSACTIONS (note 7):
Proceeds from shares sold		16,176,244			31,045,738
Reinvested dividends and
distributions		2,973,174			5,996,454
Cost of shares redeemed		(22,963,529	)		(70,455,959	)
Change in net assets from
capital share transactions		(3,814,111	)		(33,413,767	)
Change in net assets		1,756,137			(44,639,366	)
NET ASSETS:
Beginning of period		282,313,035			326,952,401
End of period*	$	284,069,172		$	282,313,035
*Includes undistributed net investment income of:	$	73,780		$	66,607

See accompanying notes to financial statements.

15 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2014 (unaudited)

1. Organization

     Aquila Tax-Free Fund of Colorado (the “Fund”), a series of Aquila Municipal Trust (from inception until the close of business on October 11, 2013, the Fund operated under the name Tax-Free Fund of Colorado), a non-diversified, open-end investment company, was organized in February, 1987 as a Massachusetts business trust and commenced operations on May 21, 1987. The Fund is authorized to issue an unlimited number of shares. Class A Shares are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through authorized financial institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. Class I Shares are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares carry a distribution and a service fee. As of the report date, there were no Class I Shares outstanding. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.

2. Significant Accounting Policies

     The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.

a) Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are generally valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days.

16 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

b) Fair value measurements: The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s investments and are summarized in the following fair value hierarchy: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.   Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.   Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.   The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.   The following is a summary of the valuation inputs, representing 100% of the Fund’s investments, used to value the Fund’s net assets as of September 30, 2014:

Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	—
Level 2 – Other Significant Observable
Inputs — Municipal Bonds*		278,782,675
Level 3 – Significant Unobservable Inputs		—
Total	$	278,782,675

* See schedule of investments for a detailed listing of securities.

c) Subsequent events: In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued.

d) 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 premium and accretion of original issue and market discount.

e) Federal income taxes: It is the policy of the 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. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.

17 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO NOTES TO FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2014 (unaudited)

Federal income taxes: It is the policy of the 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. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.

Management has reviewed the tax positions for each of the open tax years (2011-2013) or expected to be taken in the Fund’s 2014 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements.

f) Multiple class allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis.

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. On March 31, 2014, the Fund decreased undistributed net investment income by $6,732, decreased realized losses by $11,272 and decreased additional paid-in capital by $4,540 due primarily to differing book/tax treatment of distributions and bond amortization. These reclassifications had no effect on net assets or net asset value per share.

3. Fees and Related Party Transactions

a) Management Arrangements:

     Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Fund’s founder and sponsor, serves as the Manager for the Fund under an Advisory and Administration Agreement with the Fund. The portfolio management of the Fund has been delegated to a Sub-Adviser as described below. Under the Advisory and Administration Agreement, the Manager provides all administrative services to the Fund, other than those relating to the day-to-day portfolio management. The Manager’s services include providing the office of the Fund and all related services as well as overseeing the activities of the Sub-Adviser and managing relationships with all the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, auditors and distributor and additionally maintaining the Fund’s accounting books and records. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.50% of net assets of the Fund. The Manager has contractually agreed to waive fees through September 30, 2015 to the extent necessary in order to pass savings through to the shareholders with respect to the Sub-Advisory Agreement such that its fees are as follows: the annual rate shall be equivalent to 0.48% of net assets of the Fund up to $400 million; 0.46% of the Fund’s net assets above that amount to $1 billion and 0.44% of the Fund’s net assets above $1 billion. For the six months ended September 30, 2014, the Fund incurred management fees of $713,299 of which $28,529 was waived under the contractual fee waiver.

18 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     Kirkpatrick Pettis Capital Management (the “Sub-Adviser”) serves as the Investment Sub-Adviser for the Fund under a Sub-Advisory Agreement between the Manager and the Sub-Adviser. Under this agreement, the Sub-Adviser continuously provides, subject to oversight of the Manager and the Board of Trustees of the Fund, the investment program of the Fund and the composition of its portfolio, arranges for the purchases and sales of portfolio securities, and provides for daily pricing of the Fund’s portfolio. For its services, the Sub-Adviser is entitled to receive a fee from the Manager which is payable monthly and computed as of the close of business each day at the annual rate of 0.20%. The Sub-Adviser has contractually agreed to waive its fee through September 30, 2015 such that its annual rate of fees is at 0.18% of net assets of the Fund up to $400 million; 0.16% of net assets above $400 million up to $1 billion; and 0.14% of net assets above $1 billion.

     Under a Compliance Agreement with the Manager, the Manager is compensated by the Fund for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940.

     Specific details as to the nature and extent of the services provided by the Manager and the Sub-Adviser are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

b) Distribution and Service Fees:

     The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (the “Distributor”), including, but not limited to, any principal underwriter of the Fund, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund’s shares or servicing of shareholder accounts. While the Board of Trustees and shareholders approved an amendment to the Fund’s Distribution Plan applicable to Class A Shares which permits the Fund to make distribution fee payments at the rate of up to 0.15% on the entire net assets represented by Class A Shares, the Fund currently makes payment of this distribution fee at the annual rate of 0.05%. For the six months ended September 30, 2014, distribution fees on Class A Shares amounted to $52,202 of which the Distributor retained $2,107.

     Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund’s Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $104,275. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $34,758. The total of these payments with respect to Class C Shares amounted to $139,033 of which the Distributor retained $34,608.

19 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     Specific details about the Plans are more fully defined in the Fund’s Prospectus and Statement of Additional Information.

     Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund’s shares. Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Fund’s shares are sold primarily through the facilities of these intermediaries having offices within Colorado, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended September 30, 2014, total commissions on sales of Class A Shares amounted to $84,370 of which the Distributor received $16,422.

4. Purchases and Sales of Securities

     During the six months ended September 30, 2014, purchases of securities and proceeds from the sales of securities aggregated $8,833,112 and $11,985,840, respectively.

     At September 30, 2014, the aggregate tax cost for all securities was $263,384,703. At September 30, 2014, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $15,811,498 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $413,526 for a net unrealized appreciation of $15,397,972.

5. Portfolio Orientation

     Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Colorado, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Colorado and whatever effects these may have upon Colorado issuers’ ability to meet their obligations.

6. Expenses

     The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.

20 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

7. Capital Share Transactions

Transactions in Capital Shares of the Fund were as follows:

	Six Months Ended
	September 30, 2014						Year Ended
	(unaudited)						March 31, 2014
	Shares			Amount			Shares			Amount
Class A Shares:
Proceeds from shares sold		445,895		$	4,727,543			1,687,894		$	17,638,317
Reinvested distributions		226,158			2,400,357			439,343			4,576,321
Cost of shares redeemed		(1,513,333	)		(16,068,221	)		(3,706,185	)		(38,463,843	)
Net change		(841,280	)		(8,940,321	)		(1,578,948	)		(16,249,205	)
Class C Shares:
Proceeds from shares sold		172,332			1,825,767			323,041			3,425,784
Reinvested distributions		21,994			233,064			51,500			535,583
Cost of shares redeemed		(391,313	)		(4,143,513	)		(1,122,061	)		(11,704,673	)
Net change		(196,987	)		(2,084,682	)		(747,520	)		(7,743,306	)
Class Y Shares:
Proceeds from shares sold		904,163			9,622,934			950,783			9,981,637
Reinvested distributions		31,926			339,753			84,565			884,550
Cost of shares redeemed		(258,782	)		(2,751,795	)		(1,948,383	)		(20,287,443	)
Net change		677,307			7,210,892			(913,035	)		(9,421,256	)
Total transactions in Fund
shares		(360,960	)	$	(3,814,111	)		(3,239,503	)	$	(33,413,767	)

21 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

8. Trustees’ Fees and Expenses

     At September 30, 2014 there were 12 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended September 30, 2014 was $46,334. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations and meals incurred in connection with attendance at Board Meetings and the Annual Meeting of Shareholders. For the six months ended September 30, 2014, such meeting-related expenses amounted to $15,394.

9. Securities Traded on a When-Issued Basis

     The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

10. Income Tax Information and Distributions

     The Fund declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. Dividends and capital gains distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.

     The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Colorado income taxes. Due to the distribution levels maintained by the Fund and the differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund’s net investment income, and/or net realized securities gains. As a result of the passage of the Regulated Investment Company Act of 2010 (the “Act”), losses incurred in this fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act. At March 31, 2014, the Fund had capital loss carry forwards of $1,613,810 of which $55,212 expires in 2017 and $1,558,598 has no expiration and retains its character of short-term. At March 31, 2014, there was a post October capital loss deferral of $166,275. This carryover is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code.

22 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     The tax character of distributions was as follows:

	Year		Three Months		Year
	Ended		Ended		Ended
	March 31, 2014		March 31, 2013		Dec. 31, 2012
Net tax-exempt income	$	8,917,219	$	2,330,161	$	9,687,040
Ordinary Income		–		709		1,327
	$	8,917,219	$	2,330,870	$	9,688,367

     As of March 31, 2014 the components of distributable earnings on a tax basis were as follows:

Undistributed tax-exempt income	$	135,740
Unrealized appreciation		9,688,117
Accumulated net loss on investments		(1,613,811	)
Other temporary differences		(302,015	)
	$	7,908,031

     The difference between book basis and tax basis undistributed income is due to the timing difference in recognizing dividends paid and the tax treatment of market discount amortization.

23 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period

	Class A
	Six Months						Three
	Ended			Year			Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.45		$	10.80		$	10.89		$	10.63		$	10.14		$	10.39		$	9.88
Income (loss) from investment operations:
Net investment income(1)		0.16			0.32			0.08			0.35			0.39			0.40			0.40
Net gain (loss) on securities (both
realized and unrealized)		0.21			(0.35	)		(0.09	)		0.26			0.49			(0.25	)		0.52
Total from investment operations		0.37			(0.03	)		(0.01	)		0.61			0.88			0.15			0.92
Less distributions (note 10):
Dividends from net investment income		(0.17	)		(0.32	)		(0.08	)		(0.35	)		(0.39	)		(0.40	)		(0.41	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.17	)		(0.32	)		(0.08	)		(0.35	)		(0.39	)		(0.40	)		(0.41	)
Net asset value, end of period	$	10.65		$	10.45		$	10.80		$	10.89		$	10.63		$	10.14		$	10.39
Total return(not reflecting sales charge)		3.48	%(2)		(0.20	)%		(0.10	)%(2)		5.85	%		8.81	%		1.38	%		9.42	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	204		$	209		$	233		$	240		$	221		$	213		$	213
Ratio of expenses to average net assets		0.75	%(3)		0.74	%(4)		0.70	%(3)		0.71	%		0.75	%		0.73	%		0.77	%
Ratio of net investment income to
average net assets		3.05	%(3)		3.09	%(4)		2.98	%(3)		3.27	%		3.75	%		3.81	%		3.94	%
Portfolio turnover rate		3	%(2)		4	%		2	%(2)		15	%		13	%		14	%		12	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.77	%(3)		0.76	%(4)(5)		0.72	%(3)		0.73	%		–			–			–
Ratio of net investment income to
average net assets		3.03	%(3)		3.07	%(4)(5)		2.96	%(3)		3.26	%		–			–			–
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.75	%(3)		0.74	%(4)		0.70	%(3)		0.71	%		0.75	%		0.73	%		0.77	%

________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.72% and 3.11%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

24 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class C
	Six Months						Three
	Ended			Year			Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.43		$	10.78		$	10.87		$	10.61		$	10.12		$	10.37		$	9.86
Income (loss) from investment operations:
Net investment income(1)		0.11			0.22			0.05			0.25			0.29			0.30			0.30
Net gain (loss) on securities (both
realized and unrealized)		0.20			(0.35	)		(0.09	)		0.26			0.49			(0.25	)		0.52
Total from investment operations		0.31			(0.13	)		(0.04	)		0.51			0.78			0.05			0.82
Less distributions (note 10):
Dividends from net investment income		(0.11	)		(0.22	)		(0.05	)		(0.25	)		(0.29	)		(0.30	)		(0.31	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.11	)		(0.22	)		(0.05	)		(0.25	)		(0.29	)		(0.30	)		(0.31	)
Net asset value, end of period	$	10.63		$	10.43		$	10.78		$	10.87		$	10.61		$	10.12		$	10.37
Total return(not reflecting CDSC)		2.99	%(2)		(1.15	)%		(0.33	)%(2)		4.86	%		7.80	%		0.42	%		8.40	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	27		$	28		$	37		$	38		$	29		$	26		$	14
Ratio of expenses to average net assets		1.70	%(3)		1.68	%(4)		1.65	%(3)		1.66	%		1.70	%		1.67	%		1.71	%
Ratio of net investment income to
average net assets		2.10	%(3)		2.14	%(4)		2.03	%(3)		2.31	%		2.79	%		2.83	%		2.95	%
Portfolio turnover rate		3	%(2)		4	%		2	%(2)		15	%		13	%		14	%		12	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		1.72	%(3)		1.70	%(4)(5)		1.67	%(3)		1.68	%		–			–			–
Ratio of net investment income to
average net assets		2.08	%(3)		2.12	%(4)(5)		2.01	%(3)		2.30	%		–			–			–
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		1.70	%(3 )		1.68	%(4)		1.65	%(3)		1.66	%		1.70	%		1.67	%		1.71	%

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 1.67% and 2.16%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

25 | Aquila Tax-Free Fund of Colorado

AQUILA TAX-FREE FUND OF COLORADO

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class Y
	Six Months						Three
	Ended			Year			Months
	9/30/14			Ended			Ended			Year Ended December 31,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.47		$	10.83		$	10.92		$	10.66		$	10.16		$	10.41		$	9.90
Income (loss) from investment operations:
Net investment income(1)		0.17			0.33			0.08			0.36			0.39			0.40			0.41
Net gain (loss) on securities (both
realized and unrealized)		0.20			(0.36	)		(0.09	)		0.26			0.50			(0.25	)		0.51
Total from investment operations		0.37			(0.03	)		(0.01	)		0.62			0.89			0.15			0.92
Less distributions (note 10):
Dividends from net investment income		(0.16	)		(0.33	)		(0.08	)		(0.36	)		(0.39	)		(0.40	)		(0.41	)
Distributions from capital gains		–			–			–			–			–			–			–
Total distributions		(0.16	)		(0.33	)		(0.08	)		(0.36	)		(0.39	)		(0.40	)		(0.41	)
Net asset value, end of period	$	10.68		$	10.47		$	10.83		$	10.92		$	10.66		$	10.16		$	10.41
Total return		3.59	%(2)		(0.24	)%		(0.08	)%(2)		5.89	%		8.96	%		1.44	%		9.47	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	53		$	45		$	57		$	50		$	37		$	34		$	24
Ratio of expenses to average net assets		0.70	%(3)		0.68	%(4)		0.65	%(3)		0.66	%		0.70	%		0.67	%		0.72	%
Ratio of net investment income to
average net assets		3.10	%(3)		3.14	%(4)		3.03	%(3)		3.31	%		3.80	%		3.85	%		3.97	%
Portfolio turnover rate		3	%(2)		4	%		2	%(2)		15	%		13	%		14	%		12	%
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3):
Ratio of expenses to average net assets		0.72	%(3)		0.70	%(4)(5)		0.67	%(3)		0.68	%		–			–			–
Ratio of net investment income to
average net assets		3.08	%(3)		3.12	%(4)(5)		3.01	%(3)		3.30	%		–			–			–
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.70	%(3)		0.68	%(4)		0.65	%(3)		0.66	%		0.70	%		0.67	%		0.72	%

(1) Per share amounts have been calculated using the daily average shares method.

(2) Not annualized.

(3) Annualized.

(4) Includes expenses incurred in connection with the reorganization of the Fund into a series of Aquila Municipal Trust.

(5) Without these expenses, the expense ratio and the net investment income ratio would have been 0.66% and 3.16%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31. The information presented is for the period January 1, 2013 to March 31, 2013.

See accompanying notes to financial statements.

26 | Aquila Tax-Free Fund of Colorado

Additional Information (unaudited)

Renewal of the Advisory and Administration Agreement and the Sub-Advisory Agreement

     Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Fund pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). The Manager has retained Davidson Fixed Income Management, Inc., doing business as Kirkpatrick Pettis Capital Management (the “Sub-Adviser”), to serve as the sub-adviser to the Fund pursuant to a Sub-Advisory Agreement between the Manager and the Sub-Adviser (the “Sub-Advisory Agreement”). In order for the Manager and the Sub-Adviser to continue to serve in their respective roles, the Trustees of the Fund must determine annually whether to renew the Advisory Agreement and the Sub-Advisory Agreement for the Fund.

     In considering whether to approve the renewal of the Advisory Agreement and the Sub-Advisory Agreement, the Trustees requested and obtained such information as they deemed reasonably necessary. Contract review materials were provided to the Trustees in August, 2014. The independent Trustees met telephonically in August, 2014 and in person in September, 2014 to review and discuss the contract review materials. The Trustees considered, among other things, information presented by the Manager and the Sub-Adviser. They also considered information presented in a report prepared by an independent consultant with respect to the Fund’s fees, expenses and investment performance, which included comparisons of the Fund’s investment performance against peers and the Fund’s benchmark and comparisons of the advisory fee payable by the Fund under the Advisory Agreement against the advisory fees paid by the Fund’s peers, as well as information regarding the operating margins of certain investment advisory firms (the “Consultant’s Report”). In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting. The Trustees considered the Advisory Agreement and the Sub-Advisory Agreement separately as well as in conjunction with each other to determine their combined effects on the Fund.

     At a meeting held in September, 2014, based on their evaluation of the information provided by the Manager, the Sub-Adviser and the independent consultant, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of each of the Advisory Agreement and the Sub-Advisory Agreement until September 30, 2015. In considering the renewal of the Advisory Agreement and the Sub-Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement or the Sub-Advisory Agreement.

The nature, extent, and quality of the services provided by the Manager and the Sub-Adviser.

     The Trustees considered the nature, extent and quality of the services that had been provided by the Manager and the Sub-Adviser to the Fund, taking into account the investment objectives and strategies of the Fund. The Trustees reviewed the terms of the Advisory Agreement and the Sub-Advisory Agreement.

     The Manager has retained the Sub-Adviser to provide investment management of the Fund’s portfolio. The Trustees reviewed the Sub-Adviser’s investment approach for the Fund. The Trustees considered the personnel of the Sub-Adviser who provide investment management services to the Fund. The Trustees noted the extensive experience of the Sub-Adviser’s portfolio manager, Mr. Christopher Johns. They considered that Mr. Johns is based in Denver, Colorado and that he has a comprehensive understanding regarding the economy of the State of Colorado and the securities in which the Fund invests, including those securities with less than the highest ratings from the rating agencies.

27 | Aquila Tax-Free Fund of Colorado

     The Trustees considered that the Manager supervised and monitored the performance of the Fund’s service providers (including the Sub-Adviser). The Manager has additionally provided all administrative services to the Fund and provided the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund’s business management and operations.

     The Trustees considered that the Manager and the Sub-Adviser had provided all administrative and advisory services to the Fund that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Fund, given that it seeks to provide shareholders with as high a level of current income exempt from Colorado state and regular Federal income taxes as is consistent with preservation of capital. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager and the Sub-Adviser to the Fund were satisfactory and consistent with the terms of the Advisory Agreement and Sub-Advisory Agreement, as applicable.

The investment performance of the Fund.

     The Trustees reviewed the Fund’s performance and compared its performance to the performance of:

• the funds in the Fund’s peer group (the “Peer Group”), as selected by the independent consultant (four municipal single-state intermediate and municipal single-state long funds, as classified by Morningstar, that are similar to the Fund in size and that charge a front-end sales charge);

• the funds in the Fund’s product category for performance (the “Product Category for Performance”) (all funds in the Peer Group and, without duplication, all funds (and all classes) included in the Morningstar Single-State Intermediate Municipal Bond Funds category); and

• the Fund’s benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index.

     The Trustees considered that the materials included in the Consultant’s Report indicated that the Fund’s average annual total return was lower than the average annual total return of the funds in the Peer Group for the one, three, five and ten year periods ended June 30, 2014. However, the Trustees considered that the Fund’s average annual total return was higher than the average annual total return of the funds in the Product Category for Performance for the one, three, five and ten year periods ended June 30, 2014 and higher than the average annual return of the benchmark index for the one and three year periods ended June 30, 2014. The Trustees considered that, as reflected in the Consultant’s Report, the Fund delivered satisfactory results on a risk-adjusted basis for the three and five year periods ended June 30, 2014 (as evidenced by its Sharpe ratio) when compared to the funds in the Product Category for Performance.

     The Trustees discussed the Fund’s performance record with the Manager and the Sub-Adviser and considered the Manager’s and Sub-Adviser’s view that the Fund’s performance, as compared to its peer group, was explained in part by the Fund’s somewhat higher-quality portfolio and its historical intermediate maturity structure.

28 | Aquila Tax-Free Fund of Colorado

     The Trustees noted that, unlike the Fund’s returns, the performance of the benchmark index did not reflect any fees, expenses or sales charges. The Trustees considered these results to be consistent with the investment objectives of the Fund. Evaluation of the investment performance of the Fund indicated to the Trustees that renewal of the Advisory Agreement and Sub-Advisory Agreement would be appropriate.

Advisory and Sub-Advisory Fees and Fund Expenses.

     The Trustees evaluated the fee payable under the Advisory Agreement. They noted that the Manager, and not the Fund, paid the Sub-Adviser under the Sub-Advisory Agreement. The Trustees evaluated both the fee under the Sub-Advisory Agreement and the portion of the advisory fee paid under the Advisory Agreement and retained by the Manager. The Trustees reviewed the Fund’s advisory fees and expenses and compared them to the advisory fee and expense data for: • the funds in the Peer Group (as defined above); and • the funds in the product category for expenses (the “Product Category for Expenses”) (Morningstar Single-State Intermediate Municipal Bond Funds and Morningstar Single State Long Municipal Bond Funds from states within which 4-7 mutual funds are operating, with similar operating expense structures).

     The Trustees considered that the Fund’s contractual advisory fee was lower than the average contractual advisory fee of the funds in the Peer Group (at the Fund’s current asset level). They also considered that the Fund’s contractual advisory fee was lower than the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at the Fund’s current asset level and lower than or about equal to the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses at various higher asset levels. They also noted that the Fund’s expenses were lower than the average actual expenses of the funds in both the Product Category for Expenses and the Peer Group.

     The Trustees reviewed management fees charged by each of the Manager and the Sub-Adviser to its other clients. It was noted that the Manager does not have any other clients except for other funds in the Aquila Group of Funds. The Trustees noted that, in most instances, the fee rates for those clients were comparable to the fees paid to the Manager by the Fund. With respect to the Sub-Adviser, the Trustees noted that the fee rates for its other clients were generally lower than the fees paid to the Sub-Adviser with respect to the Fund. In evaluating the fees associated with the client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and those client accounts.

     The Trustees concluded that the advisory and sub-advisory fees were reasonable in relation to the nature and quality of the services provided to the Fund by the Manager and the Sub-Adviser.

Profitability.

     The Trustees received materials from the Manager and the independent consultant related to profitability. The Manager provided information which showed the profitability to the Manager of its services to the Fund, as well as the profitability of Aquila Distributors, Inc. of distribution services provided to the Fund. The independent consultant provided publicly available data regarding the profitability of other asset managers in comparison to the overall profitability of the Manager.

29 | Aquila Tax-Free Fund of Colorado

     The Trustees considered the information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Fund, including the methodology used by the Manager in allocating certain of its costs to the management of the Fund. The Trustees also considered information regarding the profitability of the Manager provided to the Trustees by the independent consultant. The Trustees concluded that profitability to the Manager with respect to advisory services provided to the Fund did not argue against approval of the fees to be paid under the Advisory Agreement.

     The Trustees also considered information provided by the Sub-Adviser regarding the profitability of the Sub-Adviser with respect to the sub-advisory services provided by the Sub-Adviser to the Fund. The Trustees concluded that the profitability of the Sub-Adviser with respect to sub-advisory services provided to the Fund did not argue against approval of the fees to be paid under the Sub-Advisory Agreement.

The extent to which economies of scale would be realized as the Fund grows.

     The Trustees considered the extent to which the Manager and the Sub-Adviser may realize economies of scale or other efficiencies in managing the Fund. The Trustees noted that the Sub-Adviser has agreed to waive a portion of its sub-advisory fees and to introduce breakpoints in its fee which would be realized as the Fund grows. The Sub-Adviser has contractually agreed to waive its fees as noted below through September 30, 2015. The Manager, in turn, has contractually waived its fees through September 30, 2015 to the extent necessary in order to pass savings through to the shareholders with respect to the Sub-Advisory Agreement. The above arrangement may be amended only with approval of the Board of Trustees. Likewise, as long as the sub-advisory fee waiver arrangement is in effect, the Manager may not terminate its arrangement without the approval of the Board of Trustees. Under the fee waiver agreement, the Manager compensates the Sub-Adviser at the annual rate of 0.18 of 1% on the Fund’s net assets up to $400 million; 0.16% on assets above that amount to $1 billion in net assets and 0.14% on net assets thereafter, rather than the contractual sub-advisory fee at the annual rate of 0.20 of 1%. The Trustees considered that the Manager agreed to similarly waive its advisory fee so long as the Sub-Adviser waives its sub-advisory fees under the fee waiver. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund.

Benefits derived or to be derived by the Manager and the Sub-Adviser and their affiliates from their relationships with the Fund.

     The Trustees observed that, as is generally true of most fund complexes, the Manager and Sub-Adviser and their affiliates, by providing services to a number of funds or other investment clients including the Fund, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that could produce efficiencies and increased profitability for the Manager and Sub-Adviser and their affiliates, it also makes their services available to the Fund at favorable levels of quality and cost which are more advantageous to the Fund than would otherwise have been possible.

30 | Aquila Tax-Free Fund of Colorado

Analysis of Expenses (unaudited)

     As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution (12b-1) and/or service fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     The table below is based on an investment of $1,000 invested on April 1, 2014 and held for the six months ended September 30, 2014.

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 “Expenses Paid During the Period”.

Six months ended September 30, 2014

	Actual
	Total Return	Beginning	Ending	Expenses
	Without	Account	Account	Paid During
	Sales Charges(1)	Value	Value	the Period(2)
Class A	3.48%	$1,000.00	$1,034.80	$3.83
Class C	2.99%	$1,000.00	$1,029.90	$8.65
Class Y	3.59%	$1,000.00	$1,035.90	$3.57

(1) Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable CDSC with respect to Class C shares. Total return is not annualized; as such, it may not be representative of the total return for the year.

(2) Expenses are equal to the annualized expense ratio of 0.75%, 1.70% and 0.70% for the Fund’s Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

31 | Aquila Tax-Free Fund of Colorado

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 Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of CDSC with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.

Six months ended September 30, 2014

	Hypothetical
	Annualized	Beginning	Ending	Expenses
	Total	Account	Account	Paid During
	Return	Value	Value	the Period(1)
Class A	5.00%	$1,000.00	$1,021.31	$3.80
Class C	5.00%	$1,000.00	$1,016.55	$8.59
Class Y	5.00%	$1,000.00	$1,021.56	$3.55

(1) Expenses are equal to the annualized expense ratio of 0.75%, 1.70% and 0.70% for the Trust’s Class A, C and Y shares, respectively, multiplied by the average by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

32 | Aquila Tax-Free Fund of Colorado

Information Available (unaudited)

     Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Fund’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Fund policies, the Manager publicly discloses the complete schedule of the Fund’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available. You may obtain a copy of the Fund’s portfolio holdings schedule for the most recently completed period by visiting the Fund’s website at www.aquilafunds.com. The Fund may also disclose other portfolio holdings as of a specified date (currently the Fund discloses its five largest holdings and/or sector holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Fund’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.

     The Fund additionally files a complete list of its portfolio holdings with the SEC for the first and third quarter of each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC website at www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.

Proxy Voting Record (unaudited)

During the 12 month period ended June 30, 2014, the Fund did not hold any portfolio securities for which the Fund was entitled to participate in proxy voting. Applicable regulations require us to inform you that the Fund’s proxy voting information is available on the SEC website at www.sec.gov.

Federal Tax Status of Distributions (unaudited)

     This information is presented in order to comply with a requirement of the Internal Revenue Code. No action on the part of shareholders is required.

     For the fiscal year ended March 31, 2014, $8,917,219 of dividends paid by Aquila Tax-Free Fund of Colorado, constituting 100% of total dividends paid, were exempt-interest dividends.

     Prior to February 15, 2015, shareholders will be mailed the appropriate tax form(s) which will contain information on the status of distributions paid for the 2014 calendar year.

33 | Aquila Tax-Free Fund of Colorado

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Founders

     Lacy B. Herrmann (1929-2012)

Aquila Management Corporation, Sponsor

Manager

AQUILA INVESTMENT MANAGEMENT LLC

120 West 45th Street, Suite 3600

New York, New York 10036

Investment Sub-Adviser

KIRKPATRICK PETTIS CAPITAL MANAGEMENT

1600 Broadway, Suite 1100

Denver, Colorado 80202

Board of Trustees

     John C. Lucking, Chair

Diana P. Herrmann, Vice Chair

Ernest Calderón

Thomas A. Christopher

Gary C. Cornia

David A. Duffy

Grady Gammage, Jr.

     Lyle W. Hillyard

Glenn P. O’Flaherty

John J. Partridge

James R. Ramsey

Laureen L. White

Officers

Diana P. Herrmann, President

Charles E. Childs, III, Executive Vice President

and Secretary

Marie E. Aro, Senior Vice President

Paul G. O’Brien, Senior Vice President

Craig T. DiRuzzo, Vice President

Randall S. Fillmore, Chief Compliance Officer

Joseph P. DiMaggio, Chief Financial Officer

and Treasurer

Distributor

AQUILA DISTRIBUTORS, INC.

120 West 45th Street, Suite 3600

New York, New York 10036

Transfer and Shareholder Servicing Agent

     BNY MELLON

4400 Computer Drive

Westborough, Massachusetts 01581

Custodian

     JPMORGAN CHASE BANK, N.A.

14201 N. Dallas Parkway

Dallas, Texas 75254

Further information is contained in the Prospectus,

which must precede or accompany this report.

 

Semi-Annual

Report

September 30, 2014

 

Aquila Tax-Free Trust of Arizona   “Sooner Rather Than Later - The Miracle of Compound Interest”   Serving Arizona investors since 1986

November, 2014

Dear Fellow Shareholder:

     Type the words “compound interest” into any internet search engine and you’re bound to find literally hundreds of examples of the concept. Most examples would likely be fairly standard and show the effect that compound interest has on the growth of savings when the interest rate is applied to both the initial sum invested as well as to reinvested income.

     However, we’d like to share with you another example. The following table vividly demonstrates the power of both compounding and beginning to invest sooner rather than later.

• Example 1 assumes a hypothetical investment from age 19 through age 26.

• Example 2 assumes a hypothetical investment from age 27 through age 39.

     Both examples assume a $2,000 yearly investment, with no withdrawals and with no allowance for income taxes. In each case, income compounds at a hypothetical annual interest rate of 5%. These assumptions are for the sake of the illustration and do not represent past or future performance of any investment. The advantage of beginning a saving plan sooner, rather than later, applies whether you earn 3%, 5% or some other amount.

     As you can see, a person who begins to invest $2,000 per year at age 19 and continues to invest over a period of eight years (through age 26) will have more money at age 39 (through the “miracle of compound interest”) than will someone who begins to invest at a later age (27) and continues to invest through age 39.

     We encourage you to share these examples with your family and friends. Beginning a saving plan early can pay off over time, particularly with the assistance of the miracle of compound interest.

     You can take advantage of the powers of compounding when you set up an automatic investment plan in Aquila Tax-Free Trust of Arizona and reinvest your dividends. To do so, please contact your investment professional or the Trust’s Shareholder Servicing Agent at 1-800-437-1000.

     Before investing in the Trust, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Trust prospectus. The prospectus is available from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

NOT A PART OF THE SEMI-ANNUAL REPORT

	EXAMPLE 1		EXAMPLE 2
	5% Annual Interest Rate		5% Annual Interest Rate
	Annual		Annual
Age	Investment	Year-End Value	Investment	Year-End Value
19	$2,000	$2,100	0	0
20	2,000	4,305	0	0
21	2,000	6,620	0	0
22	2,000	9,051	0	0
23	2,000	11,604	0	0
24	2,000	14,284	0	0
25	2,000	17,098	0	0
26	2,000	20,053	0	0
27	0	21,056	$2,000	$2,100
28	0	22,109	2,000	4,305
29	0	23,214	2,000	6,620
30	0	24,375	2,000	9,051
31	0	25,593	2,000	11,604
32	0	26,873	2,000	14,284
33	0	28,217	2,000	17,098
34	0	29,628	2,000	20,053
35	0	31,109	2,000	23,156
36	0	32,664	2,000	26,414
37	0	34,298	2,000	29,834
38	0	36,013	2,000	33,426
39	0	37,813	2,000	37,197

This chart is for illustration purposes only;

it does not represent past or future performance of any investment

Sincerely,

Diana P. Herrmann, Vice Chair and President

Any information in this Semi-Annual Report regarding market or economic trends or the factors influencing the Trust’s historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that any market forecasts discussed will be realized.

NOT A PART OF THE SEMI-ANNUAL REPORT

Mutual fund investing involves risk and loss of principal is possible.

The market prices of the Trust’s securities may rise or decline in value due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment may go down.

The value of your investment may go down when interest rates rise. A rise in interest rates tends to have a greater impact on the prices of longer term securities. Conversely, when interest rates fall, the value of your investment may rise. Interest rates in the U.S. recently have been historically low and are expected to rise at some point in time.

Investments in the Trust are subject to possible loss due to the financial failure of the issuers of underlying securities and their inability to meet their debt obligations.

The value of municipal securities can be adversely a ected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory developments, legislative actions, and by uncertainties and public perceptions concerning these and other factors. The Trust may be a ected significantly by adverse economic, political or other events a ecting state and other municipal issuers in which it invests, and may be more volatile than a more geographically diverse fund.

If interest rates fall, an issuer may exercise its right to prepay its securities, and the Trust could be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security.

A portion of income may be subject to local, state, federal and/or alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

These risks may result in share price volatility.

NOT A PART OF THE SEMI-ANNUAL REPORT

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE SCHEDULE OF INVESTMENTS(continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (20.4%)	and Fitch	Value
		Buckeye Jackrabbit Trail Sanitary Sewer
		Improvement District
$	1,468,000	6.250%, 01/01/29	NR/A-/NR	$	1,544,688
		Coconino & Yavapai Counties Joint
		Unified School District No. 9 Sedona
	1,000,000	5.375%, 07/01/28	Aa2/A+/NR		1,147,120
		Flagstaff Improvement District (Aspen
		Place Sawmill)
	1,300,000	5.000%, 01/01/32	Aa3/NR/NR		1,301,924
		Gila Co. Unified School District No. 10
		(Payson)
	400,000	5.250%, 07/01/27 AMBAC Insured	Aa3/NR/NR		440,516
	1,000,000	5.750%, 07/01/28	Aa3/NR/NR		1,170,100
		Gilbert Improvement District No. 19
	235,000	5.200%, 01/01/23	Aa3/A+/NR		235,545
		Gilbert Improvement District No. 20
	700,000	5.100%, 01/01/29	Aa3/A+/NR		754,243
		Glendale Union High School District
		No. 205
	525,000	5.000%, 07/01/27 BAMAC Insured	NR/AA/NR		612,680
		Goodyear, Arizona Refunding
	1,000,000	5.000%, 07/01/29	Aa2/AA/NR		1,116,370
		Goodyear McDowell Road Commercial
		Corridor Improvement District
	3,000,000	5.250%, 01/01/32 AMBAC Insured	A1/A/NR		3,071,130
		Maricopa Co. Elementary School
		District No. 8 (Osborn)
	920,000	6.250%, 07/01/22	NR/A/NR		992,965
		Maricopa Co. Elementary School
		District No. 38 (Madison)
	730,000	5.000%, 07/01/22 NPFG Insured	A3/AA-/NR		751,980
		Maricopa Co. High School District
		No. 210 (Phoenix Union)
	250,000	4.000%, 07/01/26	Aa2/AA/NR		269,665
		Maricopa Co. School District No. 11
		(Peoria)
	1,500,000	4.000%, 07/01/25	Aa3/AA-/NR		1,647,510
		Maricopa Co. School District No. 28
		(Kyrene Elementary)
	250,000	1.000%, 07/01/30 (coupon converts
		to 5.50% 7/01/15)	Aa1/AA/NR		276,168

1 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		Maricopa Co. Unified School District
		No. 24 (Gila Bend)
$	430,000	5.500%, 07/01/22	NR/NR/NR*	$	433,978
		Maricopa Co. Unified School District
		No. 48 (Scottsdale)
	500,000	4.000%, 07/01/16	Aa1/AA/NR		531,255
	1,500,000	4.750%, 07/01/30	Aa1/AA/NR		1,659,135
		Maricopa Co. Unified School District
		No. 60 (Higley)
	1,615,000	5.000%, 07/01/29	Aa1/AA-/NR		1,893,539
		Maricopa Co. Unified School District
		No. 69 (Paradise Valley)
	1,000,000	4.500%, 07/01/30	Aa2/NR/AA		1,113,770
		Maricopa Co. Unified School District
		No. 89 (Dysart)
	2,185,000	5.500%, 07/01/22 NPFG/ FGIC Insured	A3/AA-/NR		2,640,420
	1,300,000	5.000%, 07/01/25 Syncora
		Guarantee, Inc. Insured	NR/A+/AA-		1,384,071
	1,500,000	6.000%, 07/01/28	NR/A+/AA-		1,725,915
		Maricopa Co. Unified School District
		No. 90 (Saddle Mountain)
	1,300,000	5.125%, 07/01/25 AGMC Insured	A2/AA/NR		1,450,670
		Maricopa Co. Unified School District
		No. 95 (Queen Creek)
	500,000	5.000%, 07/01/27 AGMC Insured	A1/NR/NR		550,990
		Mohave Co. Unified School District
		No. 20 (Kingman)
	1,175,000	5.250%, 07/01/24 AGMC Insured	Aa3/AA/NR		1,321,570
		Navajo Co. Unified School District
		No. 2 (Joseph City)
	1,250,000	5.000%, 07/01/18	A2/NR/NR		1,335,575
		Navajo Co. Unified School District
		No. 10 (Show Low)
	500,000	5.250%, 07/01/15 NPFG/ FGIC Insured	A3/NR/NR		513,210
		Phoenix, Arizona
	1,240,000	6.250%, 07/01/17	Aa1/AA+/NR		1,427,835
		Pima Co. Unified School District No. 1
		(Tucson)
	270,000	4.000%, 07/01/24	Aa2/NR/AA-		292,799
	1,500,000	5.000%, 07/01/27 AGMC Insured	Aa2/AA/NR		1,685,190

2 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		General Obligation Bonds (continued)	and Fitch	Value
		Pima Co. Unified School District No. 6
		(Marana)
$	950,000	5.250%, 07/01/25 AGMC Insured	NR/AA/NR	$	1,103,102
	1,250,000	5.000%, 07/01/25	NR/A+/NR		1,404,813
		Pima Co. Unified School District No. 8
		(Flowing Wells)
	1,000,000	5.375%, 07/01/29	NR/A+/NR		1,091,310
		Pima Co. Unified School District No. 10
		(Amphitheater)
	700,000	5.000%, 07/01/27	Aa2/A+/NR		785,785
		Pima Co. Unified School District No. 12
		(Sunnyside)
	1,050,000	4.000%, 07/01/28 BAMAC Insured	NR/AA/NR		1,094,846
		Pinal Co. Elementary School District
		No. 4 (Casa Grande)
	925,000	4.250%, 07/01/18 AGMC Insured	A1/AA/NR		991,054
		Pinal Co. High School District No. 82
		(Casa Grande)
	640,000	5.000%, 07/01/24	NR/A+/NR		708,915
		Pinal Co. Unified School District No. 1
		(Florence)
	1,500,000	5.000%, 07/01/27 NPFG/ FGIC Insured	A3/AA-/NR		1,625,835
		Queen Creek Improvement District
		No. 1
	1,500,000	5.000%, 01/01/26	A3/A-/A-		1,502,850
	1,500,000	5.000%, 01/01/32	A3/A-/A-		1,501,635
		Tempe, Arizona
	2,245,000	4.000%, 07/01/22	Aa1/AAA/AAA		2,481,039
	1,000,000	4.500%, 07/01/24	Aa1/AAA/AAA		1,080,910
		Tempe High School District No. 213
	650,000	4.000%, 07/01/32	Aa2/AA/NR		680,264
		Tempe Improvement District
		(Pier Town Lake)
	2,000,000	5.000%, 01/01/29	Aa3/NR/NR		2,161,300
		Tubac Fire District
	760,000	5.500%, 07/01/28 AGC Insured	A1/NR/NR		826,568
		Western Maricopa Education Center
		District No. 402
	1,200,000	4.000%, 07/01/28	NR/AA-/NR		1,269,852
		Total General Obligation Bonds			55,602,604

3 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (78.4%)	and Fitch	Value
		Airports (2.3%)
		Phoenix Civic Improvement Corp.
		Airport Revenue Bonds
$	1,000,000	5.250%, 07/01/18 AMT	Aa3/AA-/NR	$	1,149,430
	1,000,000	5.250%, 07/01/19 AMT	Aa3/AA-/NR		1,147,840
	1,475,000	5.000%, 07/01/32 AMT	Aa3/AA-/NR		1,654,522
	1,000,000	5.250%, 07/01/33	A1/A+/NR		1,118,990
	1,200,000	5.000%, 07/01/33	Aa3/AA-/NR		1,313,760
		Total Airports			6,384,542
		Excise Tax (13.0%)
		Arizona Sports & Tourism Authority,
		Revenue Refunding, Multipurpose
		Stadium Facility Project
	2,000,000	5.000%, 07/01/32	A1/NR/A		2,156,820
		Casa Grande Excise Tax Revenue Bonds
	1,435,000	5.000%, 04/01/28	NR/AA/AA		1,609,324
		Gilbert Public Facilities Municipal
		Property Corp.
	850,000	5.000%, 07/01/23	Aa2/AA/NR		966,501
	1,250,000	5.000%, 07/01/24	Aa2/AA/NR		1,418,288
		Glendale Municipal Property Corp.
		Excise Tax Revenue Bonds
	1,000,000	5.000%, 07/01/31	Baa1/AA/NR		1,032,540
		Goodyear Public Improvement Corp.
	1,500,000	5.000%, 07/01/26	Aa3/AA-/NR		1,693,710
	1,310,000	6.000%, 07/01/31	Aa3/AA-/NR		1,464,894
		Marana Pledged Excise Tax Revenue
		Bonds
	275,000	4.000%, 07/01/30	NR/AA/NR		285,269
	1,400,000	5.000%, 07/01/33	NR/AA/NR		1,570,394
		Page, Arizona Pledged Revenue
		Refunding
	1,080,000	5.000%, 07/01/25	NR/AA-/NR		1,197,040
		Phoenix Civic Improvement Corp.
		(Civic Plaza)
	1,000,000	5.500%, 07/01/23 NPFG/ FGIC Insured	Aa3/AA/NR		1,227,240
	2,000,000	5.500%, 07/01/27 BHAC Insured	Aa1/AA+/NR		2,548,180
	2,000,000	5.500%, 07/01/30 BHAC Insured	Aa1/AA+/NR		2,588,480
	2,525,000	5.500%, 07/01/33 NPFG/ FGIC Insured	Aa3/AA/NR		3,259,523

4 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Excise Tax (continued)
		Phoenix Civic Improvement Corp.
		Transit Excise Tax (Light Rail)
$	2,000,000	4.000%, 07/01/20	Aa2/AA/NR $		2,265,920
		Pinal Co. Revenue Obligations
		Refunding Bonds
	1,755,000	4.000%, 08/01/17	NR/AA-/NR		1,893,750
		Scottsdale Municipal Property Corp.
	3,000,000	4.500, 07/01/20 AMBAC Insured	Aa1/AAA/AAA		3,268,980
		Scottsdale Municipal Property Corp.
		Water & Sewer Project
	2,000,000	5.000%, 07/01/28	Aa1/AAA/AAA		2,243,820
		Show Low Improvement District No. 6
	510,000	6.000%, 01/01/18 ACA Insured	NR/NR/NR*		511,438
		Sierra Vista Municipal Property Corp.
	1,000,000	4.000%, 01/01/21	A1/AA/AA-		1,045,630
		Tempe Excise Tax Revenue Bonds
	1,000,000	5.000%, 07/01/33	Aa2/AAA/NR		1,108,830
		Total Excise Tax			35,356,571
		Higher Education (5.2%)
		Arizona Board of Regents - Arizona
		State University System Revenue
	1,000,000	5.000%, 07/01/32	Aa3/AA/NR		1,141,710
		Arizona Board of Regents - Northern
		Arizona University System
	1,115,000	5.000%, 06/01/22 NPFG/ FGIC Insured	A1/AA-/NR		1,183,338
	575,000	5.000%, 06/01/32	A1/A+/NR		659,893
		Arizona Board of Regents - University
		of Arizona System
	400,000	5.000%, 06/01/29	Aa2/AA-/NR		472,908
	460,000	5.000%, 06/01/31	Aa2/AA-/NR		523,544
		Arizona State University Speed Stimulas
		Plan for Economic & Educational
		Development
	625,000	5.000%, 08/01/34	A1/AA-/NR		711,281
		Cochise Co. Community College District
	1,825,000	5.125%, 07/01/28 AGC Insured	A2/NR/NR		1,961,966
		Maricopa Co. Community College
		District
	2,000,000	4.000%, 07/01/21	Aaa/AAA/AAA		2,219,400
	500,000	4.750%, 07/01/24	Aaa/AAA/AAA		535,405

5 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Higher Education (continued)
		Northern Arizona University Speed
		Stimulus Plan for Economic &
		Educational Development
$	1,445,000	5.000%, 08/01/38	A2/A/NR	$	1,599,066
		Phoenix Industrial Development
		Authority (Rowan University Project)
	2,000,000	5.250%, 06/01/34	A3/A+/NR		2,186,920
		Yavapai Co. Community College District
	1,000,000	4.875%, 07/01/25 AGMC Insured	A2/AA/NR		1,104,030
		Total Higher Education			14,299,461
		Hospitals (18.4%)
		Arizona Health Facilities Authority
		(Banner Health)
	3,100,000	5.375%, 01/01/32	NR/AA-/AA-		3,350,790
	1,000,000	5.000%, 01/01/43	NR/AA-/AA-		1,069,430
		Arizona Health Facilities Authority
		(Catholic Healthcare West)
	1,500,000	5.000%, 07/01/28	A3/A/A		1,591,425
	2,000,000	5.250%, 03/01/39	A3/A/A		2,192,160
		Arizona Health Facilities Authority
		(Phoenix Children’s Hospital)
	2,200,000	5.000%, 02/01/34	NR/BBB+/NR		2,371,732
		Arizona Health Facilities Authority
		(Samaritan Health)
	755,000	5.625%, 12/01/15 NPFG Insured ETM	NR/AA-/NR		762,074
		Arizona Health Facilities Authority
		(Yavapai Regional Medical Center)
	1,500,000	5.375%, 12/01/30 AGMC Insured	A2/NR/NR		1,590,930
		Flagstaff Industrial Development
		Authority (Northern Arizona Senior
		Living Center)
	1,985,000	5.600%, 07/01/25	NR/NR/NR*		1,987,104
		Glendale Industrial Development
		Authority (John C. Lincoln Hospital)
	1,400,000	5.250%, 12/01/22	NR/A-/NR		1,447,824
	1,000,000	4.700%, 12/01/28	NR/A-/NR		1,006,680
		Maricopa Co. Hospital Revenue
		(Sun Health)
	2,345,000	5.000%, 04/01/17 (pre-refunded)	NR/NR/NR*		2,400,365
	1,500,000	5.000%, 04/01/25 (pre-refunded)	NR/NR/NR*		1,785,405
	2,125,000	5.000%, 04/01/35 (pre-refunded)	NR/NR/NR*		2,630,261

6 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Hospitals (continued)
		Maricopa Co. Industrial Development
		Authority (Catholic Healthcare West -
		St. Joseph’s Hospital)
$	3,500,000	5.375%, 07/01/23	A3/A/A	$	3,506,615
	3,000,000	5.250%, 07/01/32	A3/A/A		3,136,890
		Scottsdale Industrial Development
		Authority (Scottsdale Healthcare
		System)
	1,000,000	5.000%, 09/01/18	A2/A-/A		1,139,820
	5,000,000	5.250%, 09/01/30	A2/A-/A		5,062,400
	750,000	5.000%, 09/01/35 AGMC Insured	A2/AA/A		802,140
		University Medical Center Hospital
		Revenue Bonds
	4,880,000	5.000%, 07/01/35	Baa2/BBB/NR		4,956,518
	910,000	6.500%, 07/01/39	Baa2/BBB/NR		1,062,088
	500,000	6.000%, 07/01/39	Baa2/BBB/NR		570,935
		Yavapai Co. Industrial Development
		Authority (Northern Arizona
		Healthcare System)
	500,000	5.250%, 10/01/25	NR/AA/NR		582,500
	500,000	5.250%, 10/01/26	NR/AA/NR		579,390
		Yavapai Co. Industrial Development
		Authority (Yavapai Regional Medical
		Center)
	1,000,000	5.250%, 08/01/33	Baa1/NR/BBB+		1,100,740
	1,250,000	5.625%, 08/01/37	Baa1/NR/BBB+		1,338,762
		Yuma Industrial Development Authority
		(Yuma Regional Medical Center)
	1,635,000	5.000%, 08/01/23	NR/A-/NR		1,881,411
	200,000	5.000%, 08/01/32	NR/A-/NR		221,248
		Total Hospitals			50,127,637
		Lease (10.0%)
		Arizona Board of Regents - Northern
		Arizona University COP
	600,000	5.000%, 09/01/27	A2/A/NR		669,168
	500,000	5.000%, 09/01/28	A2/A/NR		553,970
	1,000,000	5.000%, 09/01/29	A2/A/NR		1,102,840

7 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Lease (continued)
		Arizona School Facilities Board COP
$	1,000,000	5.125%, 09/01/21 AGC Insured	A1/AA/NR	$	1,146,620
	3,000,000	5.500%, 09/01/23	A1/A+/NR		3,466,500
		Arizona State Lottery Revenue Bonds
	3,000,000	5.000%, 07/01/28 AGMC Insured	A1/AA/NR		3,369,510
		Cave Creek COP
	290,000	5.750%, 07/01/19	NR/AA/NR		291,810
		Mohave Co. Industrial Development
		Authority Correctional Facilities
	1,000,000	8.000%, 05/01/25	NR/BBB+/NR		1,165,770
		Nogales Municipal Development
		Authority
	1,000,000	5.000%, 06/01/27 AMBAC Insured
		(pre-refunded)	A1/AA/NR		1,031,830
		Phoenix Industrial Development
		Authority Government Office Lease
		Revenue Refunding Capitol Mall LLC
		Project
	2,040,000	5.000%, 09/15/21 AMBAC Insured	A1/A+/NR		2,122,906
		Pinal Co. COP
	3,230,000	5.250%, 12/01/21	NR/A+/A+		3,255,356
	1,000,000	5.000%, 12/01/29	NR/A+/A+		1,007,790
		Pinal Co. Correctional Facilities
	1,470,000	5.250%, 10/01/21 ACA Insured	NR/BBB/NR		1,506,338
		Pinetop Fire District COP
	1,000,000	7.500%, 12/15/23	A3/NR/NR		1,044,020
		Prescott Municipal Property Corp.
	500,000	5.000%, 07/01/34	Aa3/AA/NR		577,530
		State of Arizona COP Department
		Administration
	1,500,000	5.250%, 10/01/26 AGMC Insured	A1/AA/NR		1,714,500
	670,000	5.250%, 10/01/28 AGMC Insured	A1/AA/NR		741,730
		State of Arizona COP
	2,000,000	5.000%, 09/01/26 AGMC Insured	A1/AA/NR		2,210,800
		Willcox Municipal Property Corp.
	295,000	4.625%, 07/01/21	NR/A+/NR		309,868
		Total Lease			27,288,856

8 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Mortgage (4.7%)
		Agua Fria Ranch Community
		Facilities District
$	600,000	5.800%, 07/15/30 144A	NR/NR/NR* $		592,014
		Goodyear Community Facilities Utilities
		District No. 1
	500,000	4.000%, 07/15/28	A1/A-/NR		523,495
		Maricopa Co. Industrial Development
		Authority Multi-Family Mortgage
		Revenue Bonds (National Health
		Project)
	945,000	5.500%, 01/01/18 AGMC Insured ETM	A2/AA/NR		993,469
		Maricopa Co. Industrial Development
		Authority Single Family Mortgage
		Revenue Bonds
	3,180,000	zero coupon, 02/01/16 ETM	Aaa/AA+/NR		3,163,591
	3,715,000	zero coupon, 12/31/16 ETM	Aaa/AA+/NR		3,666,185
		Merrill Ranch Community Facilities
		District #2
	680,000	6.750%, 07/15/38	NR/BBB-/NR		751,475
		Scottsdale Waterfront Community
		Facilities District
	530,000	6.000%, 07/15/27 144A	NR/NR/NR*		523,433
	930,000	6.050%, 07/15/32 144A	NR/NR/NR*		912,051
		Sundance Community Facilities District
	655,000	5.125%, 07/15/30	A3/BBB/NR		657,220
	490,000	5.125%, 07/15/30 (pre-refunded)	NR/NR/NR*		508,757
		Verrado Community Facilities Utilities
		District No. 1
	500,000	6.000%, 07/15/33 144A	NR/NR/NR*		552,355
		Total Mortgage			12,844,045
		Pollution Control (1.7%)
		Apache Co. Industrial Development
		Authority, Pollution Control, Tucson
		Electric Power Co.
	2,400,000	4.500%, 03/01/30	Baa1/BBB/BBB+		2,540,952
		Maricopa Co. Pollution Control
		(Southern California Edison Co.)
	1,000,000	5.000%, 06/01/35	Aa3/A/NR		1,109,420

9 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Pollution Control (continued)
		Phoenix Industrial Development
		Authority Solid Waste Disposal
		(Vieste Project)
$	1,000,000	4.500%, 04/01/33 AMT	NR/A+/NR	$	996,270
		Total Pollution Control			4,646,642
		Transportation (3.3%)
		Arizona Transportation Board Revenue
		Bonds
	1,900,000	5.250%, 07/01/24	Aa2/AA/AA		2,219,979
	1,000,000	5.250%, 07/01/24 (pre-refunded)	Aa1/AAA/NR		1,062,210
	2,550,000	5.000%, 07/01/28	Aa1/AAA/NR		2,861,865
	550,000	5.250%, 07/01/32	Aa2/AA+/NR		638,501
	1,500,000	5.000%, 07/01/33	Aa1/AAA/NR		1,662,090
		Pima County Regional Transportation
		Authority Excise Tax
	500,000	5.000%, 06/01/26	NR/AA+/AA		598,510
		Total Transportation			9,043,155
		Utility (13.9%)
		Arizona Power Authority (Hoover Dam
		Project)
	1,500,000	5.250%, 10/01/15	Aa2/AA/NR		1,575,840
	3,500,000	5.250%, 10/01/16	Aa2/AA/NR		3,828,790
	1,220,000	5.250%, 10/01/17	Aa2/AA/NR		1,381,870
		Arizona Water Infrastructure Finance
		Authority
	650,000	5.000%, 10/01/22 (pre-refunded)	Aaa/AAA/AAA		650,000
	3,500,000	5.000%, 10/01/28	Aaa/AAA/AAA		3,955,805
		Greater Arizona Development
		Authority Revenue Bonds
	2,000,000	5.000%, 08/01/22 NPFG Insured	A1/AA-/NR		2,133,940
	700,000	5.000%, 08/01/24	NR/A/NR		740,362
	500,000	5.000%, 08/01/28 AGMC Insured	A1/AA/NR		575,110
	1,200,000	5.500%, 08/01/29	A1/A/NR		1,202,268
	1,200,000	5.000%, 08/01/29	A1/A/NR		1,268,328
		Mesa Utility System
	1,500,000	3.250%, 07/01/30**	Aa2/AA-/NR		1,465,530
	2,100,000	5.000%, 07/01/35	Aa2/AA-/NR		2,323,545

10 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Utility (continued)
		Pinal Co. Electrical District No. 3,
		Electrical System Revenue Refunding
$	250,000	5.250%, 07/01/36	NR/A/NR	$	277,175
		Rio Nuevo Facilities District (Tucson)
	1,500,000	6.500%, 07/15/24 AGC Insured	A1/AA/BBB		1,754,880
		Salt River Project Agricultural
		Improvement and Power Revenue
		Bonds
	1,000,000	5.000%, 12/01/28	Aa1/AA/NR		1,172,970
	2,000,000	5.000%, 12/01/31	Aa1/AA/NR		2,317,860
	1,975,000	5.000%, 01/01/33	Aa1/AA/NR		2,194,383
	5,205,000	5.000%, 01/01/37	Aa1/AA/NR		5,428,659
		Salt Verde Finance Corp. Gas Revenue
	3,000,000	5.250%, 12/01/28	Baa2/A-/NR		3,563,640
		Total Utility			37,810,955
		Water/Sewer (5.9%)
		Cottonwood Water Revenue System
	260,000	5.000%, 07/01/30 Syncora Guarantee,
		Inc. Insured	Baa2/BBB+/NR		267,597
		Gilbert Water Resource Municipal
		Property Corp.
	2,000,000	5.000%, 10/01/29 NPFG Insured	A3/AA-/AA		2,186,980
		Glendale Water & Sewer Revenue
	1,670,000	4.750%, 07/01/24 AGMC Insured	A1/AA/NR		1,792,812
	750,000	5.000%, 07/01/27	A1/AA/NR		851,273
	500,000	5.000%, 07/01/28	A1/AA/NR		563,840
		Goodyear Water and Sewer Revenue
	1,750,000	5.375%, 07/01/30	A2/AA-/NR		1,924,090
	635,000	5.250%, 07/01/31 AGMC Insured	A2/AA/NR		700,405
		Oro Valley Water Revenue
	560,000	4.000%, 07/01/23	NR/AA/AA-		615,894
		Phoenix Civic Improvement Corp.
		Wastewater Revenue Bonds
	1,500,000	5.500%, 07/01/24 NPFG/ FGIC
		Insured	Aa2/AAA/NR		1,907,820
	500,000	5.000%, 07/01/37 NPFG Insured	Aa2/AA+/NR		536,795
		Pima Co. Sewer Revenue System
	2,000,000	5.000%, 07/01/26	NR/AA-/AA-		2,285,800

11 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

			Rating
Principal			Moody’s, S&P
Amount		Revenue Bonds (continued)	and Fitch	Value
		Water/Sewer (continued)
		Yuma Municipal Property Corp. Utility
		System Revenue Bonds
$	700,000	5.000%, 07/01/21 Syncora Guarantee,
		Inc. Insured	A1/AA-/AA-	$	754,425
	500,000	5.000%, 07/01/22 Syncora Guarantee,
		Inc. Insured	A1/A+/AA-		541,385
	1,000,000	5.000%, 07/01/24 Syncora Guarantee,
		Inc. Insured	A1/A+/AA-		1,071,100
		Total Water/Sewer			16,000,216
		Total Revenue Bonds			213,802,080
		Total Investments (cost $250,015,984 –
		note 4)	98.8%		269,404,684
		Other assets less liabilities	1.2		3,163,179
		Net Assets	100.0%	$	272,567,863

	Percent of
Portfolio Distribution By Quality Rating	Investments†
Aaa of Moody’s or AAA of S&P or Fitch		8.7	%
Pre-refunded bonds ††/ETM Bonds		6.9
Aa of Moody’s or AA of S&P or Fitch		49.7
A of Moody’s or S&P or Fitch		26.1
Baa of Moody’s or BBB of S&P or Fitch		6.5
Not Rated*		2.1
		100.0	%

PORTFOLIO ABBREVIATIONS

ACA - American Capital Assurance Financial Guaranty Corp.

AGC - Assured Guaranty Corp.

AGMC - Assured Guaranty Municipal Corp.

AMBAC - American Municipal Bond Assurance Corp.

AMT - Alternative Minimum Tax

BAMAC - Build America Mutual Assurance Co.

BHAC - Berkshire Hathaway Assurance Corp.

COP - Certificates of Participation

ETM - Escrowed to Maturity

FGIC - Financial Guaranty Insurance Co.

NPFG - National Public Finance Guarantee

NR - Not Rated

12 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA SCHEDULE OF INVESTMENTS (continued) SEPTEMBER 30, 2014 (unaudited)

* Any security not rated (“NR”) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO”) has been determined by the Investment Adviser to have sufficient quality to be rankedin the top four credit ratings if a credit rating were to be assigned by a NRSRO.

** Security purchased on delayed delivery or when-issued basis.

† Where applicable, calculated using the highest rating of the three NRSROs.

†† Pre-refunded bonds are bonds for which U.S. Government Obligations usually have been placed in escrow to retire the bonds at their earliest call date.   Note: 144A – Private placement subject to SEC Rule 144A, which modifies a two-year holding period requirement to permit qualified institutional buyers to trade these securities among themselves, thereby significantly improving the liquidity of these securities.

See accompanying notes to financial statements.

13 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 2014 (unaudited)

ASSETS
Investments at value (cost $250,015,984)	$	269,404,684
Cash		1,594,985
Interest receivable		3,219,050
Receivable for Trust shares sold		319,197
Other assets		22,060
Total assets		274,559,976
LIABILITIES
Payable for investment securities purchased		1,451,385
Dividends payable		187,294
Payable for Trust shares redeemed		166,795
Management fee payable		89,479
Distribution and service fees payable		5,644
Accrued expenses		91,516
Total liabilities		1,992,113
NET ASSETS	$	272,567,863
Net Assets consist of:
Capital Stock - Authorized an unlimited number of
shares, par value $0.01 per share	$	250,867
Additional paid-in capital		252,286,196
Net unrealized appreciation on investments (note 4)		19,388,700
Accumulated net realized loss on investments		(86,695	)
Undistributed net investment income		728,795
	$	272,567,863
CLASS A
Net Assets	$	231,952,007
Capital shares outstanding		21,351,853
Net asset value and redemption price per share	$	10.86
Maximum offering price per share (100/96 of $10.86)	$	11.31
CLASS C
Net Assets	$	16,812,669
Capital shares outstanding		1,547,789
Net asset value and offering price per share	$	10.86
Redemption price per share (*a charge of 1% is imposed
on the redemption proceeds, or on the original price,
whichever is lower, if redeemed during the first 12
months after purchase)	$	10.86	*
CLASS Y
Net Assets	$	23,803,187
Capital shares outstanding		2,187,097
Net asset value, offering and redemption price per share	$	10.88

See accompanying notes to financial statements.

14 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

STATEMENT OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2014 (unaudited)

Investment Income:

Interest income			$	5,816,551
Expenses:
Management fee (note 3)	$	542,754
Distribution and service fees (note 3)		257,097
Transfer and shareholder servicing agent fees		66,170
Legal fees		54,815
Trustees’ fees and expenses (note 8)		53,378
Registration fees and dues		15,936
Custodian fees (note 6)		11,974
Shareholders’ reports		11,799
Auditing and tax fees		10,586
Insurance		7,298
Chief compliance officer services (note 3)		2,771
Miscellaneous		22,127
Total expenses				1,056,705
Net investment income				4,759,846
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from securities
transactions		399,490
Change in unrealized appreciation on
investments		5,390,445
Net realized and unrealized gain (loss) on
investments				5,789,935
Net change in net assets resulting from
operations			$	10,549,781

See accompanying notes to financial statements.

15 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30, 2014			Year Ended
	(unaudited)			March 31, 2014
OPERATIONS:
Net investment income	$	4,759,846		$	9,877,573
Net realized gain (loss) from
securities transactions		399,490			(486,185	)
Change in unrealized
appreciation on investments		5,390,445			(9,539,263	)
Change in net assets resulting
from operations		10,549,781			(147,875	)
DISTRIBUTIONS TO SHAREHOLDERS (note 10):
Class A Shares:
Net investment income		(4,092,565	)		(8,497,365	)
Net realized gain on investments		—			(180,368	)
Class C Shares:
Net investment income		(221,205	)		(516,530	)
Net realized gain on investments		—			(13,951	)
Class Y Shares:
Net investment income		(411,239	)		(766,393	)
Net realized gain on investments		—			(15,376	)
Change in net assets from
distributions		(4,725,009	)		(9,989,983	)
CAPITAL SHARE TRANSACTIONS (note 7):
Proceeds from shares sold		12,915,087			21,297,845
Reinvested dividends and
distributions		3,555,674			7,530,348
Cost of shares redeemed		(15,704,097	)		(64,680,498	)
Change in net assets from
capital share transactions		766,664			(35,852,305	)
Change in net assets		6,591,436			(45,990,163	)
NET ASSETS:
Beginning of period		265,976,427			311,966,590
End of period*	$	272,567,863		$	265,976,427
*Includes undistributed net investment income of:	$	728,795		$	693,958

See accompanying notes to financial statements.

16 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2014 (unaudited)

1. Organization

     Aquila Tax-Free Trust of Arizona (the “Trust”), a series of Aquila Municipal Trust (from inception until the close of business on October 11, 2013, the Trust operated under the name Tax-Free Trust of Arizona), a non-diversified, open-end investment company, was organized on October 17, 1985, as a Massachusetts business trust and commenced operations on March 13, 1986. The Trust is authorized to issue an unlimited number of shares. Class A Shares are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through authorized financial institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. Class I Shares are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares carry a distribution and a service fee. As of the report date, there were no Class I Shares outstanding. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.

2. Significant Accounting Policies

     The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.

a) Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are generally valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days.

b) Fair value measurements: The Trust follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Trust’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Trust’s investments and are summarized in the following fair value hierarchy: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.

17 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities The following is a summary of the valuation inputs, representing 100% of the Trust’s investments, used to value the Trust’s net assets as of September 30, 2014:

Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	—
Level 2 – Other Significant Observable
Inputs — Municipal Bonds*		269,404,684
Level 3 – Significant Unobservable Inputs		—
Total	$	269,404,684
* See schedule of investments for a detailed listing of securities.

c) Subsequent events: In preparing these financial statements, the Trust has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued.

d) 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 premium and accretion of original issue and market discount.

e) Federal income taxes: It is the policy of the Trust to continue to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. The Trust intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes.   Management has reviewed the tax positions for each of the open tax years (2011-2013) or expected to be taken in the Trust’s 2014 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements.

18 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

f) Multiple Class Allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis.

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. On March 31, 2014, the Trust decreased undistributed net investment income by $34,444, decreased accumulated net realized loss on investments by $129 and increased additional paid-in capital by $34,315. These reclassifications had no effect on net assets or net asset value per share.

3. Fees and Related Party Transactions

a) Management Arrangements:

     Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Trust’s founder and sponsor, serves as the Manager for the Trust under an Advisory and Administration Agreement with the Trust. Under the Advisory and Administration Agreement, the Manager provides all investment management and administrative services to the Trust. The Manager’s services include providing the office of the Trust and all related services as well as managing relationships with all the various support organizations to the Trust such as the shareholder servicing agent, custodian, legal counsel, auditors and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.40% on the Trust’s net assets.

     Under a Compliance Agreement with the Manager, the Manager is compensated by the Trust for Chief Compliance Officer related services provided to enable the Trust to comply with Rule 38a-1 of the Investment Company Act of 1940.

     Specific details as to the nature and extent of the services provided by the Manager are more fully defined in the Trust’s Prospectus and Statement of Additional Information.

19 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

b) Distribution and Service Fees:

     The Trust has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Trust is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (“the Distributor”) including, but not limited to, any principal underwriter of the Trust, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Trust’s shares or servicing of shareholder accounts. The Trust makes payment of this distribution fee at the annual rate of 0.15% of the Trust’s average net assets represented by Class A Shares. For the six months ended September 30, 2014, distribution fees on Class A Shares amounted to $174,294, of which the Distributor retained $10,909.

     Under another part of the Plan, the Trust is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/ or retention of the Trust’s Class C Shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Trust’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, amounted to $62,102. In addition, under a Shareholder Services Plan, the Trust is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Trust’s average net assets represented by Class C Shares and for the six months ended September 30, 2014, these payments amounted to $20,701. The total of these payments with respect to Class C Shares amounted to $82,803, of which the Distributor retained $19,756.

     Specific details about the Plans are more fully defined in the Trust’s Prospectus and Statement of Additional Information.

     Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Trust’s shares. Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Trust’s shares are sold primarily through the facilities of these intermediaries having offices within Arizona, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended September 30, 2014, total commissions on sales of Class A Shares amounted to $142,399, of which the Distributor received $26,772.

4. Purchases and Sales of Securities

     During the six months ended September 30, 2014, purchases of securities and proceeds from the sales of securities aggregated $14,733,751 and $10,868,832, respectively.

     At September 30, 2014, the aggregate tax cost for all securities was $249,356,403. At September 30, 2014, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $20,164,677 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $116,396 for a net unrealized appreciation of $20,048,281.

20 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

5. Portfolio Orientation

     Since the Trust invests principally and may invest entirely in double tax-free municipal obligations of issuers within Arizona, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Arizona and whatever effects these may have upon Arizona issuers’ ability to meet their obligations. The Trust is also permitted to invest in U.S. territorial municipal obligations meeting comparable quality standards and providing income which is exempt from both regular Federal and Arizona income taxes. The general policy of the Trust is to invest in such securities only when comparable securities of Arizona issuers are not available in the market. At September 30, 2014, the Trust had all of its assets invested in the securities of Arizona issuers.

6. Expenses

     The Trust has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Trust expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.

21 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

7. Capital Share Transactions

     Transactions in Capital Shares of the Fund were as follows:

	Six Months Ended
	September 30, 2014						Year Ended
	(unaudited)						March 31, 2014
	Shares			Amount			Shares			Amount
Class A Shares:
Proceeds from shares sold		590,612		$	6,373,896			1,331,489		$	14,103,649
Reinvested distributions		291,286			3,148,205			625,293			6,602,783
Cost of shares redeemed		(1,109,842	)		(11,987,236	)		(4,494,556	)		(47,362,203	)
Net change		(227,944	)		(2,465,135	)		(2,537,774	)		(26,655,771	)
Class C Shares:
Proceeds from shares sold		168,244			1,817,288			239,704			2,544,474
Reinvested distributions		18,688			201,946			46,068			486,425
Cost of shares redeemed		(181,004	)		(1,949,845	)		(915,847	)		(9,690,553	)
Net change		5,928			69,389			(630,075	)		(6,659,654	)
Class Y Shares:
Proceeds from shares sold		437,198			4,723,903			436,094			4,649,722
Reinvested distributions		18,968			205,523			41,614			441,140
Cost of shares redeemed		(163,165	)		(1,767,016	)		(722,592	)		(7,627,742	)
Net change		293,001			3,162,410			(244,884	)		(2,536,880	)
Total transactions in Fund
shares		70,985		$	766,664			(3,412,733	)	$	(35,852,305	)

22 | Aquila Tax-Free Trust of Arizona

     AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

8. Trustees’ Fees and Expenses

     At September 30, 2014 there were 12 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended September 30, 2014 was $42,113. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the Independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations and meals incurred in connection with attendance at Board Meetings and the Annual and Outreach Meetings of Shareholders. For the six months ended September 30, 2014, such meeting-related expenses amounted to $11,265.

9. Securities Traded on a When-Issued Basis

     The Trust may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Trust with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Trust at the time of entering into the transaction. Beginning on the date the Trust enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

10. Income Tax Information and Distributions

     The Trust declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. These distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.

     The Trust intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Arizona income taxes. Due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Trust may not be the same as the Trust’s net investment income, and/or net realized securities gains. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income rates. For certain shareholders, some dividend income may, under some circumstances, be subject to the alternative minimum tax. As a result of the passage of the Regulated Investment Company Act of 2010 (the “Act”), losses incurred in this fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act.

23 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS (continued)

SEPTEMBER 30, 2014 (unaudited)

     The tax character of distributions was as follows:

	Year		Nine Months		Year
	Ended		Ended		Ended
	March 31, 2014		March 31, 2013		June 30, 2012
Net tax-exempt income	$	9,752,435	$	8,011,285	$	10,971,115
Ordinary Income		27,853		18,962		39,616
Long-term capital gains		209,695		–		–
	$	9,989,983	$	8,030,247	$	11,010,731

     As of March 31, 2014, the components of distributable earnings on a tax basis were as follows:

Undistributed tax-exempt income	$	123,371
Accumulated net realized loss on investments		(486,185	)
Unrealized appreciation		14,692,213
Other temporary differences		(123,371	)
	$	14,206,028

     The difference between book basis and tax basis unrealized appreciation and undistributed income is due to the timing difference in recognizing dividends paid and the amortization of discount securities.

24 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period

	Class A
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13 †			2012			2011			2010			2009
Net asset value, beginning of period	$	10.63		$	10.97		$	10.92		$	10.37		$	10.50		$	10.14		$	10.19
Income from investment operations:
Net investment income(1)		0.19			0.38			0.29			0.41			0.42			0.43			0.43
Net gain (loss) on securities (both
realized and unrealized)		0.23			(0.34	)		0.05			0.54			(0.13	)		0.36			(0.05	)
Total from investment operations		0.42			0.04			0.34			0.95			0.29			0.79			0.38
Less distributions (note 10):
Dividends from net investment income		(0.19	)		(0.37	)		0.29			(0.40	)		(0.42	)		(0.43	)		(0.43	)
Distributions from capital gains		–			(0.01	)		–			–			–			–	(2)		–
Total distributions		(0.19	)		(0.38	)		(0.29	)		(0.40	)		(0.42	)		(0.43	)		(0.43	)
Net asset value, end of period	$	10.86		$	10.63		$	10.97		$	10.92		$	10.37		$	10.50		$	10.14
Total return(not reflecting sales charge)		3.98	%(3)		0.49	%		3.08	%(3)		9.29	%		2.80	%		7.87	%		3.86	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	232		$	229		$	265		$	274		$	260		$	295		$	289
Ratio of expenses to average net assets		0.74	%(4)		0.78	%(5)(6)		0.73	%(4)		0.73	%		0.73	%		0.74	%		0.75	%
Ratio of net investment income to
average net assets		3.55	%(4)		3.59	%(5)(6)		3.50	%(4)		3.78	%		4.07	%		4.08	%		4.26	%
Portfolio turnover rate		4	%(3)		10	%		8	%(3)		17	%		12	%		14	%		19	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.74	%(4)		0.78	%(5)		0.73	%(4)		0.73	%		0.73	%		0.74	%		0.74	%

________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Amount represents less than $0.01.

(3) Not Annualized.

(4) Annualized.

(5) Includes expenses incurred in connection with the reorganization of the Trust into a series of Aquila Municipal Trust.

(6) Without these expenses, the expense ratio and the net investment income ratio would have been 0.73% and 3.64%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

25 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class C
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13†			2012			2011			2010			2009
Net asset value, beginning of period	$	10.63		$	10.97		$	10.92		$	10.37		$	10.50		$	10.14		$	10.19
Income from investment operations:
Net investment income(1)		0.15			0.29			0.22			0.31			0.33			0.33			0.34
Net gain (loss) on securities (both
realized and unrealized)		0.23			(0.34	)		0.05			0.55			(0.13	)		0.37			(0.05	)
Total from investment operations		0.38			(0.05	)		0.27			0.86			0.20			0.70			0.29
Less distributions (note 10):
Dividends from net investment income		(0.15	)		(0.28	)		(0.22	)		(0.31	)		(0.33	)		(0.34	)		(0.34	)
Distributions from capital gains		–			(0.01	)		–			–			–			–	(2)		–
Total distributions		(0.15	)		(0.29	)		(0.22	)		(0.31	)		(0.33	)		(0.34	)		(0.34	)
Net asset value, end of period	$	10.86		$	10.63		$	10.97		$	10.92		$	10.37		$	10.50		$	10.14
Total return(not reflecting CDSC)		3.54	%(3)		(0.36	)%		2.43	%(3)		8.36	%		1.93	%		6.95	%		2.98	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	17		$	16		$	24		$	21		$	15		$	14		$	7
Ratio of expenses to average net assets		1.59	%(4)		1.63	%(5)(6)		1.57	%(4)		1.58	%		1.57	%		1.58	%		1.60	%
Ratio of net investment income to
average net assets		2.70	%(4)		2.74	%(5)(6)		2.64	%(4)		2.91	%		3.21	%		3.19	%		3.38	%
Portfolio turnover rate		4	%(3)		10	%		8	%(3)		17	%		12	%		14	%		19	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		1.59	%(4)		1.63	%(5)		1.57	%(4)		1.58	%		1.57	%		1.58	%		1.59	%

_________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Amount represents less than $0.01.

(3) Not Annualized.

(4) Annualized.

(5) Includes expenses incurred in connection with the reorganization of the Trust into a series of Aquila Municipal Trust.

(6) Without these expenses, the expense ratio and the net investment income ratio would have been 1.58% and 2.79%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

26 | Aquila Tax-Free Trust of Arizona

AQUILA TAX-FREE TRUST OF ARIZONA

FINANCIAL HIGHLIGHTS (continued)

For a share outstanding throughout each period

	Class Y
	Six Months
	Ended			Year			Nine Months
	9/30/14			Ended			Ended			Year Ended June 30,
	(unaudited)			3/31/14			3/31/13			2012			2011			2010			2009
Net asset value, beginning of period	$	10.65		$	10.99		$	10.94		$	10.39		$	10.52		$	10.16		$	10.21
Income from investment operations:
Net investment income(1)		0.20			0.40			0.30			0.42			0.44			0.44			0.44
Net gain (loss) on securities (both
realized and unrealized)		0.23			(0.34	)		0.05			0.55			(0.14	)		0.36			(0.05	)
Total from investment operations		0.43			0.06			0.35			0.97			0.30			0.80			0.39
Less distributions (note 10):
Dividends from net investment income		(0.20	)		(0.39	)		(0.30	)		(0.42	)		(0.43	)		(0.44	)		(0.44	)
Distributions from capital gains		–			(0.01	)		–			–			–			–	(2)		–
Total distributions		(0.20	)		(0.40	)		(0.30	)		(0.42	)		(0.43	)		(0.44	)		(0.44	)
Net asset value, end of period	$	10.88		$	10.65		$	10.99		$	10.94		$	10.39		$	10.52		$	10.16
Total return		4.05	%(3)		0.64	%		3.20	%(3)		9.44	%		2.95	%		8.02	%		4.02	%
Ratios/supplemental data
Net assets, end of period (in millions)	$	24		$	20		$	24		$	16		$	11		$	13		$	10
Ratio of expenses to average net assets		0.59	%(4)		0.63	%(5)(6)		0.58	%(4)		0.58	%		0.58	%		0.59	%		0.60	%
Ratio of net investment income to
average net assets		3.69	%(4)		3.74	%(5)(6)		3.64	%(4)		3.92	%		4.22	%		4.22	%		4.39	%
Portfolio turnover rate		4	%(3)		10	%		8	%(3)		17	%		12	%		14	%		19	%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets		0.59	%(4)		0.63	%(5)		0.58	%(4)		0.58	%		0.58	%		0.59	%		0.59	%

_________________________

(1) Per share amounts have been calculated using the daily average shares method.

(2) Amount represents less than $0.01.

(3) Not Annualized.

(4) Annualized.

(5) Includes expenses incurred in connection with the reorganization of the Trust into a series of Aquila Municipal Trust.

(6) Without these expenses, the expense ratio and the net investment income ratio would have been 0.58% and 3.79%, respectively, for the year ended March 31, 2014.

† Effective December 1, 2012, the Fund changed its fiscal year end from June 30 to March 31. The information presented is for the period July 1, 2012 to March 31, 2013.

See accompanying notes to financial statements.

27 | Aquila Tax-Free Trust of Arizona

Additional Information (unaudited)

Renewal of the Advisory and Administration Agreement

     Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Trust pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). In order for the Manager to remain the investment adviser of the Trust, the Trustees of the Trust must determine annually whether to renew the Advisory Agreement for the Trust.

     In considering whether to approve the renewal of the Advisory Agreement, the Trustees requested and obtained such information as they deemed reasonably necessary. Contract review materials were provided to the Trustees in August, 2014. The independent Trustees met telephonically in August, 2014 to review and discuss the contract review materials. The Trustees considered, among other things, information presented by the Manager. They also considered information presented in a report prepared by an independent consultant with respect to the Trust’s fees, expenses and investment performance, which included comparisons of the Trust’s investment performance against peers and the Trust’s benchmark and comparisons of the advisory fee payable under the Advisory Agreement against the advisory fees paid by the Trust’s peers, as well as information regarding the operating margins of certain investment advisory firms (the “Consultant’s Report”). In addition, the Trustees took into account the information related to the Trust provided to the Trustees at each regularly scheduled meeting.

     At a meeting held in September, 2014, based on their evaluation of the information provided by the Manager and the independent consultant, the Trustees of the Trust, including the independent Trustees voting separately, unanimously approved the renewal of the Advisory Agreement until September 30, 2015. In considering the renewal of the Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement.

The nature, extent, and quality of the services provided by the Manager.

     The Trustees considered the nature, extent and quality of the services that had been provided by the Manager to the Trust, taking into account the investment objectives and strategies of the Trust. The Trustees reviewed the terms of the Advisory Agreement.

     The Trustees reviewed the Manager’s investment approach for the Trust and its research process. The Trustees considered that the Manager had provided all advisory and administrative services to the Trust that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Trust, given that it seeks to provide shareholders with as high a level of current income exempt from Arizona state and regular Federal income taxes as is consistent with preservation of capital. The Trustees considered the personnel of the Manager who provide investment management services to the Trust. The Manager has employed Mr. Todd Curtis as portfolio manager for the Trust and has established facilities and capabilities for credit analysis of the Trust’s portfolio securities. The Trustees noted the extensive experience of the portfolio manager. They considered that Mr. Curtis is based in Phoenix, Arizona and that he has a comprehensive understanding regarding the economy of the State of Arizona and the securities in which the Trust invests, including those securities with less than the highest ratings from the rating agencies.

     The Manager has additionally provided all administrative services to the Trust and provided the Trust with personnel (including Trust officers) and other resources that are necessary for the Trust’s business management and operations. The Trustees considered the nature and extent of the Manager’s supervision of third-party service providers, including the Trust’s shareholder servicing agent and custodian.

28 | Aquila Tax-Free Trust of Arizona

     Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager to the Trust were satisfactory and consistent with the terms of the Advisory Agreement.

The investment performance of the Trust.

     The Trustees reviewed the Trust’s performance and compared its performance to the performance of:

• the funds in the Trust’s peer group (the “Peer Group”), as selected by the independent consultant (eight municipal single-state intermediate and municipal single-state long funds, as classified by Morningstar, that are similar to the Trust in size and that charge a front-end sales charge);

• the funds in the Trust’s product category for performance (the “Product Category for Performance”) (all funds in the Peer Group and, without duplication, all funds (and all classes) included in the Morningstar Single-State Intermediate Municipal Bond Funds category); and

• the Trust’s benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index.

     The Trustees considered that the materials included in the Consultant’s Report indicated that the Trust’s average annual total return was higher than the average annual total return of the funds in the Peer Group for the one and three year periods but lower than the average for the five and ten year periods ended June 30, 2014. However, the Trustees considered that, as reflected in the Consultant’s Report, the Trust’s average annual total return was higher than the average annual total return of the funds in the Product Category for Performance for the one, three, five and ten year periods ended June 30, 2014, as well as the benchmark index for each of the one, three and five year periods ended June 30, 2014. The Trustees considered that, as reflected in the Consultant’s Report, the Trust delivered above-average results on a risk-adjusted basis for the three and five year periods ended June 30, 2014 (as evidenced by its Sharpe ratio) when compared to the funds in the Product Category for Performance.

     The Trustees discussed the Trust’s performance record with the Manager and considered the Manager’s view that the Trust’s performance, as compared to its product category and peer group, was explained in part by the Trust’s somewhat higher-quality portfolio and its historical intermediate maturity structure.

     The Trustees noted that, unlike the Trust’s returns, the performance of the benchmark index did not reflect any fees or expenses. The Trustees considered the Trust’s investment performance to be consistent with the investment objectives of the Trust.

     The Trustees concluded that the performance of the Trust was acceptable, in light of market conditions, the length of its average maturities and its investment objectives. Evaluation of the investment performance of the Trust indicated to the Trustees that renewal of the Advisory Agreement would be appropriate.

Advisory Fees and Trust Expenses.

     The Trustees reviewed the Trust’s advisory fees and expenses and compared them to the advisory fee and expense data for:

• the funds in the Peer Group (as defined above); and

29 | Aquila Tax-Free Trust of Arizona

• the funds in the product category for expenses (the “Product Category for Expenses”) (Morningstar Single-State Intermediate Municipal Bond Funds and Morningstar Single State Long Municipal Bond Funds from states within which eight or more mutual funds are operating, with similar operating expense structures).

     The Trustees considered that the Trust’s contractual advisory fee was lower than the average contractual advisory fee of the funds in the Peer Group (at the Trust’s current asset level) and lower than the asset-weighted average contractual advisory fee of the funds in the Product Category for Expenses (at various asset levels). They also noted that the Trust’s expenses were less than the average actual expenses of the funds in both the Product Category for Expenses and the Peer Group.

     The Trustees reviewed management fees charged by the Manager to its other clients. It was noted that the Manager does not have any other clients except for other funds in the Aquila Group of Funds. The Trustees noted that, in most instances, the fee rates for those clients were comparable to the fees paid to the Manager with respect to the Trust. In evaluating the fees associated with the other funds, the Trustees took into account the respective demands, resources and complexity associated with the Trust and those funds.

     The Trustees concluded that the advisory fee and expenses of the Trust were reasonable in relation to the nature and quality of the services provided by the Manager to the Trust.

Profitability.

     The Trustees received materials from each of the Manager and the independent consultant related to profitability. The Manager provided information which showed the profitability to the Manager of its services to the Trust, as well as the profitability of Aquila Distributors, Inc. of distribution services provided to the Trust. The independent consultant provided publicly available data regarding the profitability of other asset managers in comparison to the overall profitability of the Manager.

     The Trustees considered the information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Trust, including the methodology used by the Manager in allocating certain of its costs to the management of the Trust. The Trustees also considered information regarding the profitability of the Manager provided to the Trustees by the independent consultant. The Trustees concluded that profitability to the Manager with respect to the advisory services provided to the Trust did not argue against approval of the fees to be paid under the Advisory Agreement.

The extent to which economies of scale would be realized as the Trust grows.

     The Trustees considered the extent to which the Manager may realize economies of scale or other efficiencies in managing the Trust. The Trustees considered that the materials indicated that the Trust’s fees are already generally lower than those of its peers, including those with breakpoints. The Trustees noted that the Manager’s profitability also may be an indicator of the availability of any economies of scale. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Trust.

Benefits derived or to be derived by the Manager and its affiliate from the relationship with the Trust.

     The Trustees observed that, as is generally true of most fund complexes, the Manager and its affiliate, by providing services to a number of funds including the Trust, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that produces efficiencies and increased profitability for the Manager and its affiliate, it also makes their services available to the Trust at favorable levels of quality and cost which are more advantageous to the Trust than would otherwise have been possible.

30 | Aquila Tax-Free Trust of Arizona

Analysis of Expenses (unaudited)

     As a shareholder of the Trust, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution (12b-1) and/or service fees; and other Trust expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Trust 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, 2014 and held for the six months ended September 30, 2014.

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 “Expenses Paid During the Period”.

Six months ended September 30, 2014

	Actual
	Total Return	Beginning	Ending	Expenses
	Without	Account	Account	Paid During
	Sales Charges(1)	Value	Value	the Period(2)
Class A	3.98%	$1,000.00	$1,039.80	$3.78
Class C	3.54%	$1,000.00	$1,035.40	$8.11
Class Y	4.05%	$1,000.00	$1,040.50	$3.02

(1) Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable CDSC with respect to Class C shares. Total return is not annualized; as such, it may not be representative of the total return for the year.

(2) Expenses are equal to the annualized expense ratio of 0.74%, 1.59% and 0.59% for the Trust’s Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

31 | Aquila Tax-Free Trust of Arizona

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 Trust’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Trust and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Trust with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of CDSC with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.

Six months ended September 30, 2014

	Hypothetical
	Annualized	Beginning	Ending	Expenses
	Total	Account	Account	Paid During
	Return	Value	Value	the Period(1)
Class A	5.00%	$1,000.00	$1,021.36	$3.75
Class C	5.00%	$1,000.00	$1,017.10	$8.04
Class Y	5.00%	$1,000.00	$1,022.11	$2.99

(1) Expenses are equal to the annualized expense ratio of 0.74%, 1.59% and 0.59% for the Trust’s Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

32 | Aquila Tax-Free Trust of Arizona

Information Available (unaudited)

     Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Trust’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Trust policies, the Trust publicly discloses the complete schedule of the Trust’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available. You may obtain a copy of the Trust’s portfolio holdings schedule for the most recently completed period by visiting the Trust’s website at www.aquilafunds.com. The Trust may also disclose other portfolio holdings as of a specified date (currently the Trust discloses its five largest holdings and/or sector holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Trust’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.

     The Trust additionally files a complete list of its portfolio holdings with the SEC for the first and third quarter ends of each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC website at www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.

Proxy Voting Record (unaudited)

     During the 12 month period ended June 30, 2014, the Trust did not hold any portfolio securities for which the Trust was entitled to participate in proxy voting. Applicable regulations require us to inform you that the Trust’s proxy voting information is available on the SEC website at www.sec.gov.

Federal Tax Status of Distributions (unaudited)

     This information is presented in order to comply with a requirement of the Internal Revenue Code. No action on the part of shareholders is required.

     For the fiscal year ended March 31, 2014, $9,752,435 of dividends paid by Aquila Tax-Free Trust of Arizona, constituting 97.62% of total dividends paid, were exempt-interest dividends; $209,695 of dividends paid by the Trust constituting 2.10% of total dividends paid were capital gains distributions; and the balance was ordinary dividend income.

     Prior to February 15, 2015, shareholders will be mailed the appropriate tax form(s) which will contain information on the status of distributions paid for the 2014 calendar year.

33 | Aquila Tax-Free Trust of Arizona

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Founders

Lacy B. Herrmann (1929-2012)

Aquila Management Corporation, Sponsor

Manager

AQUILA INVESTMENT MANAGEMENT LLC

120 West 45th Street, Suite 3600

New York, New York 10036

Board of Trustees

     John C. Lucking, Chair

Diana P. Herrmann, Vice Chair

Ernest Calderón

Thomas A. Christopher

Gary C. Cornia

David A. Duffy

Grady Gammage, Jr.

     Lyle W. Hillyard

Glenn P. O’Flaherty

John J. Partridge

James R. Ramsey

Laureen L. White

Officers

     Diana P. Herrmann, President

Charles E. Childs, III, Executive Vice President

and Secretary

Todd W. Curtis, Senior Vice President

and Portfolio Manager

Marie E. Aro, Senior Vice President

Paul G. O’Brien, Senior Vice President

Alan R. Stockman, Senior Vice President

Randall S. Fillmore, Chief Compliance

Officer Joseph P. DiMaggio, Chief Financial Officer

and Treasurer

Distributor

AQUILA DISTRIBUTORS, INC.

120 West 45th Street, Suite 3600

New York, New York 10036

Transfer and Shareholder Servicing Agent

     BNY MELLON

4400 Computer Drive

Westborough, Massachusetts 01581

Custodian

JPMORGAN CHASE BANK, N.A.

14201 N. Dallas Parkway

Dallas, Texas 75254

Further information is contained in the Prospectus,

which must precede or accompany this report.

ITEM 2.  CODE OF ETHICS.

Not applicable.

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 FORCLOSED-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 INVESTMENTAND 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 filing 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 that information required to be disclosed in the registrant's reports that are filed under the Securities Exchange Act of 1934 are accumulated and communicated to 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.

AQUILA MUNICIPAL TRUST

By:	/s/ Diana P. Herrmann
	Vice Chair, President and Trustee December    , 2014
By:	/s/ Joseph P. DiMaggio
	December    , 2014

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    , 2014
By:	/s/ Joseph P. DiMaggio
	Joseph P. DiMaggio Chief Financial Officer and Treasurer December    , 2014

  

AAUILA MUNICIPAL TRUST

(formerly, TAX-FREE TRUST OF ARIZONA)

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

CERTIFICATIONS

I, Diana P. Herrmann, certify that:

1. I have reviewed this report on Form N-CSRS of Aquila Municpal 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;

3. 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  December 8, 2014

/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-CSRS of Aquila Municpal 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;

3. 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  December 8, 2014

/s/ Joseph P. DiMaggio

Title: Chief Financial Officer and Treasurer

EX-99.906 CERT

CERTIFICATION

Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18,United States Code), each of the undersigned officers of Aquila Municipal Trust, do hereby certify to such officer's knowledge, that:

The report on Form N-CSRS of Aquila Municpal Trust for the period ended September 30, 2014, (the "Form N-CSRS") 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-CSRS fairly presents, in all material respects, the financial condition and results of operations of Aquila Municipal Trust.

Dated:  December 8, 2014	/s/ Diana P. Herrmann
	Vice Chair, President and Trustee Aquila Municipal Trust
Dated:  December 8, 2014	/s/ Joseph P. DiMaggio
	Chief Financial Officer and Treasurer Aquila Municipal 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 Aquila Municipal Trust and will be retained by the 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.