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0001318148-05-000598.txt : 20051028
0001318148-05-000598.hdr.sgml : 20051028
20051028103244
ACCESSION NUMBER: 0001318148-05-000598
CONFORMED SUBMISSION TYPE: N-CSR
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20050831
FILED AS OF DATE: 20051028
DATE AS OF CHANGE: 20051028
EFFECTIVENESS DATE: 20051028
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Federated Municipal High Yield Advantage Fund, Inc.
CENTRAL INDEX KEY: 0000807607
IRS NUMBER: 251542736
STATE OF INCORPORATION: MD
FISCAL YEAR END: 0831
FILING VALUES:
FORM TYPE: N-CSR
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-04533
FILM NUMBER: 051161758
BUSINESS ADDRESS:
STREET 1: 5800 CORPORATE DRIVE
CITY: PITTSBURGH
STATE: PA
ZIP: 15237-7000
BUSINESS PHONE: 8003417400
MAIL ADDRESS:
STREET 1: 5800 CORPORATE DRIVE
CITY: PITTSBURGH
STATE: PA
ZIP: 15237-7000
FORMER COMPANY:
FORMER CONFORMED NAME: FEDERATED MUNICIPAL OPPORTUNITIES FUND INC
DATE OF NAME CHANGE: 19960307
FORMER COMPANY:
FORMER CONFORMED NAME: FORTRESS MUNICIPAL INCOME FUND INC
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: FORTRESS HIGH YIELD MUNICIPAL FUND INC
DATE OF NAME CHANGE: 19900814
N-CSR
1
fmhyafform.htm
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-4533
(Investment Company Act File Number)
Federated Municipal High Yield Advantage Fund, Inc.
---------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 8/31/05
Date of Reporting Period: Fiscal year ended 8/31/05
-------------------------
Item 1. Reports to Stockholders
Federated
World-Class Investment Manager
Federated Municipal High Yield Advantage Fund, Inc.
Established 1987
19TH ANNUAL SHAREHOLDER REPORT
August 31, 2005
Class A Shares
Class B Shares
Class C Shares
Class F Shares
FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
PORTFOLIO OF INVESTMENTS
STATEMENT OF ASSETS AND LIABILITIES
STATEMENT OF OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BOARD OF DIRECTORS AND FUND OFFICERS
BOARD REVIEW OF ADVISORY CONTRACT
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE
Not FDIC Insured * May Lose Value * No Bank Guarantee
Financial Highlights - Class A Shares
(For a Share Outstanding Throughout Each Period)
Year Ended August 31
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
2001
|
|
Net Asset Value, Beginning of Period
| |
$9.71 | | |
$9.55 | | |
$9.73 | | |
$9.91 | | |
$9.78 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | |
Net investment income
| |
0.51 | | |
0.55 | | |
0.56 | | |
0.55 |
1 | |
0.55 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts
|
|
0.37
|
|
|
0.17
|
|
|
(0.18
|
)
|
|
(0.19
|
)
1
|
|
0.15
|
|
TOTAL FROM INVESTMENT OPERATIONS
|
|
0.88
|
|
|
0.72
|
|
|
0.38
|
|
|
0.36
|
|
|
0.70
|
|
Less Distributions:
| | | | | | | | | | | | | | | |
Distributions from net investment income
|
|
(0.54
|
)
|
|
(0.56
|
)
|
|
(0.56
|
)
|
|
(0.54
|
)
|
|
(0.57
|
)
|
Net Asset Value, End of Period
|
|
$10.05
|
|
|
$9.71
|
|
|
$9.55
|
|
|
$9.73
|
|
|
$9.91
|
|
Total Return
2
|
|
9.34
|
%
|
|
7.77
|
%
|
|
4.06
|
%
|
|
3.79
|
%
|
|
7.48
|
%
|
| | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.07
|
%
|
|
1.06
|
%
|
|
1.07
|
%
|
|
1.08
|
%
|
|
1.09
|
%
|
Net investment income
|
|
5.20
|
%
|
|
5.71
|
%
|
|
5.87
|
%
|
|
5.68
|
%
1
|
|
5.69
|
%
|
Expense waiver/reimbursement
3
|
|
0.00
|
%
4
|
|
0.00
|
%
4
|
|
- --
|
|
|
- --
|
|
|
0.01
|
%
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$193,899
|
|
|
$136,812
|
|
|
$117,435
|
|
|
$111,642
|
|
|
$106,555
|
|
Portfolio turnover
|
|
18
|
%
|
|
22
|
%
|
|
25
|
%
|
|
35
|
%
|
|
30
|
%
|
1
Effective September 1, 2001, the Fund adopted the provisions of the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide for Investment Companies and began accreting discount on debt securities. For the year ended August 31, 2002, this change had no effect on the net investment income per share, or the net realized and unrealized gain (loss) on investments per share, but increased the ratio of net investment income to average net assets from 5.67% to 5.68%. Per share, ratios and supplemental data for the periods prior to August 31, 2002 have not been restated to reflect this change in presentation.
2
Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3
This voluntary expense decrease is reflected in both the net expense and the net investment income ratios shown above.
4
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Financial Highlights - Class B Shares
(For a Share Outstanding Throughout Each Period)
Year Ended August 31
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
2001
|
|
Net Asset Value, Beginning of Period
| |
$9.71 | | |
$9.54 | | |
$9.73 | | |
$9.90 | | |
$9.77 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | |
Net investment income
| |
0.44 | | |
0.48 | | |
0.49 | | |
0.47 |
1 | |
0.47 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts
|
|
0.37
|
|
|
0.18
|
|
|
(0.19
|
)
|
|
(0.17
|
)
1
|
|
0.16
|
|
TOTAL FROM INVESTMENT OPERATIONS
|
|
0.81
|
|
|
0.66
|
|
|
0.30
|
|
|
0.30
|
|
|
0.63
|
|
Less Distributions:
| | | | | | | | | | | | | | | |
Total distributions from net investment income
|
|
(0.47
|
)
|
|
(0.49
|
)
|
|
(0.49
|
)
|
|
(0.47
|
)
|
|
(0.50
|
)
|
Net Asset Value, End of Period
|
|
$10.05
|
|
|
$9.71
|
|
|
$9.54
|
|
|
$9.73
|
|
|
$9.90
|
|
Total Return
2
|
|
8.53
|
%
|
|
7.07
|
%
|
|
3.18
|
%
|
|
3.11
|
%
|
|
6.67
|
%
|
| | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.82
|
%
|
|
1.81
|
%
|
|
1.82
|
%
|
|
1.83
|
%
|
|
1.84
|
%
|
Net investment income
|
|
4.46
|
%
|
|
4.96
|
%
|
|
5.12
|
%
|
|
4.94
|
%
1
|
|
4.94
|
%
|
Expense waiver/reimbursement
3
|
|
0.00
|
%
4
|
|
0.00
|
%
4
|
|
- --
|
|
|
- --
|
|
|
0.01
|
%
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$120,901
|
|
|
$120,205
|
|
|
$124,736
|
|
|
$107,348
|
|
|
$91,074
|
|
Portfolio turnover
|
|
18
|
%
|
|
22
|
%
|
|
25
|
%
|
|
35
|
%
|
|
30
|
%
|
1
Effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount on debt securities. For the year ended August 31, 2002, this change had no effect on the net investment income per share, or the net realized and unrealized gain (loss) on investments per share, but increased the ratio of net investment income to average net assets from 4.93% to 4.94%. Per share, ratios and supplemental data for the periods prior to August 31, 2002 have not been restated to reflect this change in presentation.
2
Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3
This voluntary expense decrease is reflected in both the net expense and the net investment income ratios shown above.
4
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Financial Highlights - Class C Shares
(For a Share Outstanding Throughout Each Period)
Year Ended August 31
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
2001
|
|
Net Asset Value, Beginning of Period
| |
$9.71 | | |
$9.54 | | |
$9.73 | | |
$9.90 | | |
$9.77 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | |
Net investment income
| |
0.44 | | |
0.47 | | |
0.48 | | |
0.48 |
1 | |
0.47 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts
|
|
0.37
|
|
|
0.19
|
|
|
(0.18
|
)
|
|
(0.18
|
)
1
|
|
0.16
|
|
TOTAL FROM INVESTMENT OPERATIONS
|
|
0.81
|
|
|
0.66
|
|
|
0.30
|
|
|
0.30
|
|
|
0.63
|
|
Less Distributions:
| | | | | | | | | | | | | | | |
Distributions from net investment income
|
|
(0.47
|
)
|
|
(0.49
|
)
|
|
(0.49
|
)
|
|
(0.47
|
)
|
|
(0.50
|
)
|
Net Asset Value, End of Period
|
|
$10.05
|
|
|
$9.71
|
|
|
$9.54
|
|
|
$9.73
|
|
|
$9.90
|
|
Total Return
2
|
|
8.52
|
%
|
|
7.07
|
%
|
|
3.17
|
%
|
|
3.13
|
%
|
|
6.66
|
%
|
| | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.82
|
%
|
|
1.81
|
%
|
|
1.82
|
%
|
|
1.83
|
%
|
|
1.84
|
%
|
Net investment income
|
|
4.45
|
%
|
|
4.96
|
%
|
|
5.12
|
%
|
|
4.93
|
%
1
|
|
4.94
|
%
|
Expense waiver/reimbursement
3
|
|
0.00
|
%
4
|
|
0.00
|
%
4
|
|
- --
|
|
|
- --
|
|
|
0.01
|
%
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$42,419
|
|
|
$25,646
|
|
|
$14,083
|
|
|
$10,220
|
|
|
$10,953
|
|
Portfolio turnover
|
|
18
|
%
|
|
22
|
%
|
|
25
|
%
|
|
35
|
%
|
|
30
|
%
|
1
Effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount on debt securities. For the year ended August 31, 2002, this change had no effect on the net investment income per share, or the net realized and unrealized gain (loss) on investments per share, but increased the ratio of net investment income to average net assets from 4.92% to 4.93%. Per share, ratios and supplemental data for the periods prior to August 31, 2002 have not been restated to reflect this change in presentation.
2
Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3
This voluntary expense decrease is reflected in both the net expense and the net investment income ratios shown above.
4
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Financial Highlights - Class F Shares
(For a Share Outstanding Throughout Each Period)
Year Ended August 31
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
2001
|
|
Net Asset Value, Beginning of Period
| |
$9.71 | | |
$9.55 | | |
$9.73 | | |
$9.91 | | |
$9.78 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | |
Net investment income
| |
0.52 | | |
0.55 | | |
0.57 | | |
0.55 |
1 | |
0.55 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts
|
|
0.36
|
|
|
0.17
|
|
|
(0.19
|
)
|
|
(0.19
|
)
1
|
|
0.15
|
|
TOTAL FROM INVESTMENT OPERATIONS
|
|
0.88
|
|
|
0.72
|
|
|
0.38
|
|
|
0.36
|
|
|
0.70
|
|
Less Distributions:
| | | | | | | | | | | | | | | |
Distributions from net investment income
|
|
(0.54
|
)
|
|
(0.56
|
)
|
|
(0.56
|
)
|
|
(0.54
|
)
|
|
(0.57
|
)
|
Net Asset Value, End of Period
|
|
$10.05
|
|
|
$9.71
|
|
|
$9.55
|
|
|
$9.73
|
|
|
$9.91
|
|
Total Return
2
|
|
9.34
|
%
|
|
7.77
|
%
|
|
4.06
|
%
|
|
3.79
|
%
|
|
7.48
|
%
|
| | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.07
|
%
|
|
1.06
|
%
|
|
1.07
|
%
|
|
1.08
|
%
|
|
1.09
|
%
|
Net investment income
|
|
5.21
|
%
|
|
5.71
|
%
|
|
5.87
|
%
|
|
5.68
|
%
1
|
|
5.69
|
%
|
Expense waiver/reimbursement
3
|
|
0.00
|
%
4
|
|
0.00
|
%
4
|
|
- --
|
|
|
- --
|
|
|
0.01
|
%
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$177,351
|
|
|
$160,088
|
|
|
$167,097
|
|
|
$183,467
|
|
|
$197,154
|
|
Portfolio turnover
|
|
18
|
%
|
|
22
|
%
|
|
25
|
%
|
|
35
|
%
|
|
30
|
%
|
1
Effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount on debt securities. For the year ended August 31, 2002, this change had no effect on the net investment income per share, or the net realized and unrealized gain (loss) on investments per share, but increased the ratio of net investment income to average net assets from 5.67% to 5.68%. Per share, ratios and supplemental data for the periods prior to August 31, 2002 have not been restated to reflect this change in presentation.
2
Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3
This voluntary expense decrease is reflected in both the net expense and the net investment income ratios shown above.
4
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption payments; and (2) ongoing costs, including management fees; to the extent applicable, distribution (12b-1) fees and/or shareholder services fees; and other Fund expenses. This Example is intended to help you to 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. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2005 to August 31, 2005.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to
estimate
the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed
rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should
not
use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are provided to enable you to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative
total
costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
|
|
Beginning Account Value 3/1/2005
|
|
Ending Account Value 8/31/2005
|
|
Expenses Paid During Period
1
|
Actual:
|
|
|
|
|
|
|
Class A Shares
|
|
$1,000
|
|
$1,042.40
|
|
$5.56
|
Class B Shares
|
|
$1,000
|
|
$1,038.50
|
|
$9.40
|
Class C Shares
|
|
$1,000
|
|
$1,038.40
|
|
$9.40
|
Class F Shares
|
|
$1,000
|
|
$1,042.40
|
|
$5.51
|
Hypothetical (assuming a 5% return before expenses):
|
|
|
|
|
|
|
Class A Shares
|
|
$1,000
|
|
$1,019.76
|
|
$5.50
|
Class B Shares
|
|
$1,000
|
|
$1,015.98
|
|
$9.30
|
Class C Shares
|
|
$1,000
|
|
$1,015.98
|
|
$9.30
|
Class F Shares
|
|
$1,000
|
|
$1,019.81
|
|
$5.45
|
1
Expenses are equal to the Fund's annualized expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). The annualized expense ratios are as follows:
Class A Shares
|
|
1.08%
|
Class B Shares
|
|
1.83%
|
Class C Shares
|
|
1.83%
|
Class F Shares
|
|
1.07%
|
Management's Discussion of Fund Performance
The fund's total returns, based on net asset value, for the 12-month reporting period were 9.34% for Class A Shares, 8.53% for Class B Shares, 8.52% for Class C Shares and 9.34% for Class F Shares. The total return of the Lehman Brothers Municipal Bond Index (LBMB),
1
the fund's benchmark index, was 5.31% during the 12-month reporting period. The fund (Class A, Class B, Class C, and Class F Shares) outperformed the LBMB in both total return and income.
The average total return of the Lipper High Yield Municipal Debt Fund's Average (Average),
2
a performance benchmark for the fund, was 8.71% during the 12-month reporting period. The dividend yield of the Class A and Class F Shares also remained above the Lipper peer group average. However, a portion of the dividend yield was attributable to the prior year's undistributed earnings.
1
The LBMB is the broad-based securities market index for the fund. To be included in the LBMB, bonds must have a minimum credit rating of Baa, have an outstanding par value of at least $3 million and be issued as part of a transaction of at least $50 million. The LBMB includes both zero coupon bonds and bonds subject to the federal alternative minimum tax. Effective October 1, 2005, the fund elected to add the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI) as another market benchmark for the fund. The total return of the LBNIGMBI was 13.24% during the 12-month reporting period. To be included in the LBNIGMBI, bonds must be non-rated or be rated Ba1 or below, have been issued as part of a transaction of at least $20 million, have an outstanding par value of at least $3 million, and have a remaining maturity of at least one year. Indexes are unmanaged, and it is not possible to invest directly in an index. The fund's total returns for the most recently completed fiscal year
reflected actual cash flows, transaction costs and other expenses which were not reflected in the total returns of the LBMB and LBNIGMBI.
2
Lipper figures represent the average of the total returns reports by all the mutual funds designated by Lipper, Inc. as falling into the respective categories indicated. They do not reflect sales charges. It is not possible to invest directly in an average.
The fund's investment strategy focused on: (a) the selection of lower-quality investment grade and non-investment grade securities; these securities typically have higher yields than high-quality investment grade securities available in the market;
3
(b) the selection of intermediate to long maturity bonds that typically yield more than short-term bonds due to the upward sloping yield curve (the yield curve shows the relative yield of similar securities with different maturities); and (c) the allocation of the portfolio among securities of similar issuers (referred to as sectors) and to inverse floaters; inverse floaters typically have higher yields due to the leverage structure of these securities. The fund's strategy also focused on the effective duration of the fund's portfolio (which indicates the portfolio's sensitivity to changes in interest rates). These were the most significant factors affecting the fund's performance.
The following discussion focuses on the performance of the fund's Class A Shares. The 9.34% total return of the Class A Shares for the reporting period consisted of 5.84% of tax-exempt dividends and 3.50% appreciation in the net asset value of the shares.
MARKET OVERVIEW
During the reporting period, long-term interest rates remained low but showed some volatility, as the bond market appeared to attempt to determine the extent of the strength of the U.S. economy and the Fed intentions concerning short-term interest rates. The ten-year Treasury note began the reporting period at 4.12%, reached a high of 4.64% on March 22, 2005, and then declined to 4.01% at the end of the reporting period. The continuation of the low interest rate environment resulted in investors pursuing lower rated credits because of the additional yield they offered. As a result, certain revenue bond sectors outperformed the LBMB, such as hospital, industrial development and pollution control project bonds. High-yield, tax-exempt municipal debt (non-investment grade bonds rated "BB" and lower or unrated bonds of comparable quality) provided strong total returns, as investors were attracted to the significantly higher yield provided by these issues.
The Fed raised short-term interest rates eight times during the reporting period bringing the Federal Funds Target Rate to 3.50% by the end of the reporting period. This resulted in a significant flattening of the municipal yield curve with short-term interest rates rising and long-term interest rates declining (that is, while securities provided higher incremental income or yield as maturities became longer, the amount of the increase in incremental income was less or flattened).
3
Investment grade securities are securities that are rated at least "BBB" or unrated securities of a comparable quality. Non-investment grade securities are securities that are not rated at least "BBB" or unrated securities of a comparable quality. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
CREDIT QUALITY
Credit spreads, or the yield difference between the "AAA" municipal bonds and bonds of lower credit quality and similar maturity, decreased during the reporting period. Credit spreads became tighter to a greater extent for "BBB" rated (or comparable quality) debt than for other investment grade rated ("AAA," "AA," "A" or comparable quality) debt. Non-investment grade (or high-yield) tax-exempt municipal debt also performed well during the reporting period, as the demand for non-investment grade, tax-exempt municipal debt was great. The tightening of credit spreads between lower-quality bonds and high-quality bonds benefited the fund's performance because of the fund's sizable positions in lower-quality, investment-grade, tax-exempt municipal bonds and non-investment grade, tax-exempt municipal bonds.
YIELD CURVE AND MATURITY
Tax-exempt municipal bonds with longer maturities provided better returns during the reporting period as the yield curve flattened and the yields on bonds with longer maturities declined while the yield on bonds with shorter maturities increased. The declining long-term interest rates, and flattening of the yield curve, benefited the fund's performance because of the fund's high concentration in tax-exempt municipal bonds with long maturities (20 to 30 years).
SECTORS AND SECURITY SELECTION
During the reporting period, the fund allocated more of its portfolio to transportation (tolls roads and secured airline bonds), tobacco, education, and hospital bonds. These sectors performed well and benefited fund performance. A number of holdings were upgraded in both the hospital and education sectors, which resulted in these holdings gaining in price. This benefited the fund's performance. The increased income and price appreciation derived from the fund's holdings of inverse floaters also benefited the fund's performance.
DURATION
4
As determined at the end of the reporting period, the fund's dollar-weighted average duration was 5.96 years. Duration management is a significant component of the fund's investment strategy. The fund's hedging strategy negatively affected the fund's performance. During most of the reporting period, in anticipation of rising interest rates, the fund hedged the portfolio (adjusted the duration shorter) using Treasury future contracts. The fund's use of these instruments, however, negatively affected the fund's performance since these instruments did not perform well because longer-term and intermediate-term municipal interest rates declined during the reporting period.
4
Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.
GROWTH OF A $10,000 INVESTMENT - CLASS A SHARES
The graph below illustrates the hypothetical investment of $10,000
1
in the Federated Municipal High Yield Advantage Fund, Inc. (Class A Shares) (the "Fund") from August 5, 1996 (start of performance) to August 31, 2005, compared to the Lehman Brothers Municipal Bond Index (LBMB),
2
the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI),
2
a custom blend index consisting of 50% of the LBMB and 50% of the LBNIGMBI (Blend Index),
2
and the Lipper High Yield Municipal Debt Funds Average (LHMDFA).
2
Average Annual Total Return
3
for the Period Ended 8/31/2005
|
|
|
1 Year
|
|
4.40%
|
5 Years
|
|
5.49%
|
Start of Performance (8/5/1996)
|
|
4.71%
|
![](fmhyafg0109101edg1.gif)
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. Total returns shown include the maximum sales charge of 4.50%.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund's performance assumes the reinvestment of all dividends and distributions. The LBMB, LBNIGMBI, and LHMDFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and the average.
2
Effective October 1, 2005, the Fund elected to add the Lehman Brothers
Non-Investment Grade Municipal Bond Index (LBNIGMBI) as another market benchmark for the Fund. To be included in the LBNIGMBI, bonds must be non-rated or be rated Ba1 or below, have been issued as part of a transaction of at least $20 million, have an outstanding par value of at least $3 million, and have a remaining maturity of at least one year. The LBMB and LBNIGMBI are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The LHMDFA represents the average of the total returns reported by all of the mutual funds designated by Lipper, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the SEC requires to be reflected in
a fund's performance. The indexes are unmanaged, and, unlike the Fund, are not
affected by cashflows. It is not possible to invest directly in an index or average.
3
Total return quoted reflects all applicable sales charges.
GROWTH OF A $10,000 INVESTMENT - CLASS B SHARES
The graph below illustrates the hypothetical investment of $10,000
1
in the Federated Municipal High Yield Advantage Fund, Inc. (Class B Shares) (the "Fund") from August 5, 1996 (start of performance) to August 31, 2005, compared to the Lehman Brothers Municipal Bond Index (LBMB),
2
the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI),
2
a custom blend index consisting of 50% of the LBMB and 50% of the LBNIGMBI (Blend Index),
2
and the Lipper High Yield Municipal Debt Funds Average (LHMDFA).
2
Average Annual Total Return
3
for the Period Ended 8/31/2005
|
|
|
1 Year
|
|
3.03%
|
5 Years
|
|
5.37%
|
Start of Performance (8/5/1996)
|
|
4.53%
|
![](fmhyafg0109101edg2.gif)
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. Total returns shown include the maximum contingent deferred sales charge of 5.50% as applicable.
1
Represents a hypothetical investment of $10,000 in the Fund. The maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The LBMB, LBNIGMBI, and the LHMDFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and the average.
2
Effective October 1, 2005, the Fund elected to add the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI) as another market benchmark for the Fund. To be included in the LBNIGMBI, bonds must be non-rated or be rated Ba1 or below, have been issued as part of a transaction of at least $20 million, have an outstanding par value of at least $3 million, and have a remaining maturity of at least one year. The LBMB and LBNIGMBI are not adjusted to reflect sales charges, expenses, or other fees that the SEC requires to be reflected in the Fund's performance. The LHMDFA represents the average of the total returns reported by all of the mutual funds designated by Lipper, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the SEC requires to be reflected in a fund's performance. The indexes are unmanaged, and, unlike the Fund, are not affected by cashflows. It is not possible
to invest directly in an index or average.
3
Total return quoted reflects all applicable contingent deferred sales charges.
GROWTH OF A $10,000 INVESTMENT - CLASS C SHARES
The graph below illustrates the hypothetical investment of $10,000
1
in the Federated Municipal High Yield Advantage Fund, Inc. (Class C Shares) (the "Fund") from August 5, 1996 (start of performance) to August 31, 2005, compared to the Lehman Brothers Municipal Bond Index (LBMB),
2
the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI),
2
a custom blend index consisting of 50% of the LBMB and 50% of the LBNIGMBI (Blend Index),
2
and the Lipper High Yield Municipal Debt Funds Average (LHMDFA).
2
Average Annual Total Return
3
for the Period Ended 8/31/2005
|
|
|
1 Year
|
|
6.42%
|
5 Years
|
|
5.47%
|
Start of Performance (8/5/1996)
|
|
4.34%
|
![](fmhyafg0109101edg3.gif)
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. Total returns shown include the maximum sales charge of 1.00% and the 1.00% contingent deferred sales charge as applicable.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900). A 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The LBMB, LBNIGMBI, and the LHMDFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and the average.
2
Effective October 1, 2005, the Fund elected to add the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI) as another market benchmark for the Fund. To be included in the LBNIGMBI, bonds must be non-rated or be rated Ba1 or below, have been issued as part of a transaction of at least $20 million, have an outstanding par value of at least $3 million, and have a remaining maturity of at least one year. The LBMB and LBNIGMBI are not adjusted to reflect sales charges, expenses, or other fees that the SEC requires to be reflected in the Fund's performance. The LHMDFA represents the average of the total returns reported by all of the mutual funds designated by Lipper, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the SEC requires to be reflected in a fund's performance. The indexes are unmanaged, and, unlike the Fund, are not affected by cashflows. It is not
possible to invest directly in an index or average.
3
Total return quoted reflects all applicable sales charges and contingent deferred sales charges.
GROWTH OF A $10,000 INVESTMENT - CLASS F SHARES
The graph below illustrates the hypothetical investment of $10,000
1
in the Federated Municipal High Yield Advantage Fund, Inc. (Class F Shares) (the "Fund") from August 31, 1995 to August 31, 2005, compared to the Lehman Brothers Municipal Bond Index (LBMB),
2
the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI),
2
a custom blend index consisting of 50% of the LBMB and 50% of the LBNIGMBI (Blend Index),
2
and the Lipper High Yield Municipal Debt Funds Average (LHMDA).
2
Average Annual Total Return
3
for the Period Ended 8/31/2005
|
|
|
1 Year
|
|
7.24%
|
5 Years
|
|
6.25%
|
10 Years
|
|
4.99%
|
![](fmhyafg0109101edg4.gif)
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. Total returns shown include the maximum sales charge of 1.00% and the 1.00% contingent deferred sales charge as applicable.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900). The maximum contingent deferred sales charge is 1.00% on any redemption less than four years from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The LBMB, LBNIGMBI, and LHMDFA have been adjusted to reflect reinvestment of dividends on securities in the index and the average.
2
Effective October 1, 2005, the Fund elected to add the Lehman Brothers Non-Investment Grade Municipal Bond Index (LBNIGMBI) as another market benchmark for the Fund. To be included in the LBNIGMBI, bonds must be non-rated or be rated Ba1 or below, have been issued as part of a transaction of at least $20 million, have an outstanding par value of at least $3 million, and have a remaining maturity of at least one year. The LBMB and LBNIGMBI are not adjusted to reflect sales charges, expenses, or other fees that the SEC requires to be reflected in the Fund's performance. The LHMDFA represents the average of the total returns reported by all of the mutual funds designated by Lipper, Inc. as falling in the category indicated, and is not adjusted to reflect any sales charges. However, these total returns are reported net of expenses or other fees that the SEC requires to be reflected in a fund's performance. The indexes are unmanaged, and, unlike the Fund, are not affected by cashflows. It is not possible
to invest directly in an index or average.
3
Total return quoted reflects all applicable sales charges and contingent deferred sales charges.
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance, visit FederatedInvestors.com or call 1-800-341-7400.
Portfolio of Investments Summary Tables
At August 31, 2005, the Fund's credit-quality ratings composition
1
was as follows:
S&P Long-Term Ratings as Percentage of Total Investments
2
| |
Moody's Long-Term Ratings as Percentage of Total Investments
2
|
AAA
|
|
11.5%
| |
Aaa
|
|
10.6%
|
AA
|
|
3.8%
| |
Aa
|
|
2.9%
|
A
|
|
7.1%
| |
A
|
|
5.9%
|
BBB
|
|
14.7%
| |
Baa
|
|
14.0%
|
BB
|
|
6.6%
| |
Ba
|
|
4.4%
|
B
|
|
2.7%
| |
B
|
|
1.3%
|
CCC
|
|
0.4%
| |
Caa
|
|
1.5%
|
CC
|
|
0.2%
| |
Ca
|
|
0.4%
|
C
|
|
0.4%
| |
C
|
|
0.0%
|
D
|
|
0.0%
| |
D
|
|
0.0%
|
Not Rated by S&P
|
|
52.6%
| |
Not Rated by Moody's
|
|
59.0%
|
TOTAL
|
|
100.0%
| |
TOTAL
|
|
100.0%
|
1
These tables depict the long-term, credit-quality ratings assigned to the Fund's portfolio holdings by Standard & Poor's (S&P) and Moody's Investors Service (Moody's), each of which is a nationally recognized statistical rating organization (NRSRO). These credit-quality ratings are shown without regard to gradations within a given rating category. For example, securities rated "A-" have been included in the "A" rated category. Rated securities that have been prerefunded, but not rated again by the NRSRO, have been included in the "Not rated by..." category.
Rated securities include a security with an obligor and/or credit enhancer that has received a rating from an NRSRO with respect to a class of debt obligations that is comparable in priority and security with the security held by the Fund. Credit-quality ratings are an assessment of the risk that a security will default in payment and do not address other risks presented by the security. Please see the descriptions of credit-quality ratings in the Fund's Statement of Additional Information.
Holdings that are rated only by a different NRSRO than the one identified have been included in the "Not rated by..." category. Of the portfolio's total investments, 46.0% do not have long-term ratings by either of these NRSROs.
2
Percentages are based on total investments, which may differ from the Fund's total net assets used in computing the percentages in the Portfolio of Investments which follows.
Portfolio of Investments
August 31, 2005
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--96.2% | | | | | |
| | |
Alabama--0.4% | | | | | |
$ |
2,000,000 | |
Courtland, AL IDB, Solid Waste Disposal Revenue Refunding Bonds (Series 2005B), 5.20% (International Paper Co.), 6/1/2025
|
|
BBB/Baa2
|
|
$
|
2,016,420
|
| | |
Alaska--0.3% | | | | | |
|
1,440,000 | |
Alaska Industrial Development and Export Authority, Power Revenue Bonds, 5.875% (Upper Lynn Canal Regional Power Supply System)/(Original Issue Yield: 6.00%), 1/1/2032
|
|
NR
|
|
|
1,365,926
|
| | |
Arizona--0.1% | | | | | |
|
500,000 | |
Arizona Health Facilities Authority, Hospital System Revenue Bonds, 6.375% (John C. Lincoln Health Network), 12/1/2037
|
|
BBB/NR
|
|
|
556,270
|
| | |
Arkansas--0.4% | | | | | |
|
2,000,000 | |
Arkansas Development Finance Authority, Hospital Revenue Bonds (Series 2000), 7.375% (Washington Regional Medical Center)/(Original Issue Yield: 7.50%), 2/1/2029
|
|
BBB/Baa2
|
|
|
2,321,440
|
| | |
California--6.9% | | | | | |
|
1,000,000 | |
California PCFA, Solid Waste Disposal Revenue Bonds (Series 2002B), 5.00% (Waste Management, Inc.), 7/1/2027
| |
BBB/NR | | |
1,017,950 |
|
1,000,000 | |
California PCFA, Solid Waste Disposal Revenue Bonds (Series 2005A-2), 5.40% (Waste Management, Inc.), 4/1/2025
| |
BBB/NR | | |
1,047,600 |
|
3,000,000 |
2,3 |
California State, Economic Recovery Revenue Bonds Trust Program (Series 929) RITES, 7.80% (California State Fiscal Recovery Fund), 7/1/2013
| |
NR/Aa3 | | |
3,728,970 |
|
4,595,000 | |
California State, UT GO Bonds, 5.00% (MBIA Insurance Corp. INS), 6/1/2012
| |
AAA/Aaa | | |
4,985,805 |
|
1,405,000 | |
California State, UT GO Bonds, 5.00% (U.S. Treasury PRF 6/1/2011 @ 100), 6/1/2012
| |
AAA/Aaa | | |
1,540,821 |
|
4,250,000 | |
California State, UT GO Bonds, 5.75% (Original Issue Yield: 5.75%), 5/1/2030
| |
A/A2 | | |
4,690,470 |
|
1,285,000 |
2,3 |
California Statewide Communities Development Authority, MFH Revenue Bonds (Series 1999X), 6.65% (Magnolia City Lights Project), 7/1/2029
| |
NR | | |
1,327,058 |
|
1,000,000 |
2,3 |
California Statewide Communities Development Authority, Revenue Bonds, 6.625% (Tehiyah Day School), 11/1/2031
| |
NR | | |
1,063,390 |
|
2,000,000 | |
Golden State Tobacco Securitization Corp., CA, Enhanced Tobacco Settlement Asset-Backed Bonds (Series 2005A), 5.00% (California State), 6/1/2045
| |
A-/A3 | | |
2,086,920 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
California--continued | | | | | |
$ |
4,000,000 | |
Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Bonds (Series 2003A-3), 7.875%, 6/1/2042
| |
BBB/Baa3 | |
$ |
5,031,400 |
|
2,825,000 | |
Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2003A-1), 6.75% (Original Issue Yield: 7.00%), 6/1/2039
| |
BBB/Baa3 | | |
3,259,739 |
|
750,000 | |
Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Revenue Bonds (Series 2003A-2), 7.90%, 6/1/2042
| |
BBB/Baa3 | | |
944,625 |
|
1,000,000 | |
Los Angeles, CA, Regional Airport Improvement Corp., Facilities Sublease Refunding Revenue Bonds (Series 2002B), 7.50% (American Airlines, Inc.)/(Original Issue Yield: 7.929%), 12/1/2024
| |
B-/Caa2 | | |
1,067,480 |
|
2,000,000 | |
Los Angeles, CA, Regional Airport Improvement Corp., Lease Revenue Bonds, (Series C), 7.50% (American Airlines, Inc.)/ (Original Issue Yield: 7.929%), 12/1/2024
| |
B-/Caa2 | | |
2,134,960 |
|
350,000 | |
San Bernardino County, CA, Housing Authority, Subordinated Revenue Bonds, 7.25% (Glen Aire Park & Pacific Palms), 4/15/2042
| |
NR | | |
332,213 |
|
1,500,000 | |
Southern California Logistics Airport Authority, Tax Allocation Bonds, 5.00% (Radian Asset Assurance INS), 12/1/2035
| |
AA/NR | | |
1,562,175 |
|
1,000,000 | |
Western Hills Water District, CA, Special Tax Revenue Bonds, 6.875% (Diablo Grande Community Facilities No. 1)/(Original Issue Yield: 6.954%), 9/1/2031
|
|
NR
|
|
|
1,072,590
|
| | |
TOTAL
|
|
|
|
|
36,894,166
|
| | |
Colorado--5.6% | | | | | |
|
1,500,000 | |
Aspen Grove, CO, Business Improvement District, LT GO Bonds (Series 2001), 7.625%, 12/1/2025
| |
NR | | |
1,581,510 |
|
2,000,000 | |
Beacon Point, CO, Metropolitan District, Revenue Bonds (Series 2005A), 6.25% (Original Issue Yield: 6.375%), 12/1/2035
| |
NR | | |
2,007,260 |
|
1,500,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds (Series 2001), 7.625% (Peak to Peak Charter School Project)/(U.S. Treasury PRF 8/15/2011 @ 100)/ (Original Issue Yield: 8.00%), 8/15/2031
| |
AAA/Ba2 | | |
1,839,495 |
|
970,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds (Series 2005), 6.50% (Knowledge Quest Academy)/(Original Issue Yield: 6.50%), 5/1/2036
| |
NR | | |
996,704 |
|
1,000,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds, 7.25% (Platte River Academy)/ (U.S. Treasury PRF 3/1/2012 @ 100)/(Original Issue Yield: 7.40%), 3/1/2022
| |
AAA/Ba2 | | |
1,130,750 |
|
500,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds, 7.25% (Platte River Academy)/ (U.S. Treasury PRF 3/1/2012 @ 100)/(Original Issue Yield: 7.50%), 3/1/2032
| |
AAA/Ba2 | | |
584,515 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Colorado--continued | | | | | |
$ |
1,000,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds, 7.375% (Frontier Academy)/(Original Issue Yield: 7.50%), 6/1/2031
| |
NR/Ba1 | |
$ |
1,040,790 |
|
760,000 | |
Colorado Educational & Cultural Facilities Authority, Charter School Revenue Bonds, 7.50% (Excel Academy)/(Original Issue Yield: 7.75%), 12/1/2033
| |
NR | | |
917,654 |
|
800,000 | |
Colorado Educational & Cultural Facilities Authority, Revenue Refunding Bonds (Series A), 7.125% (Denver Academy)/ (Original Issue Yield: 7.375%), 11/1/2028
| |
BB+/NR | | |
891,480 |
|
4,250,000 | |
Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 5.00% (Covenant Retirement Communities, Inc.)/(Original Issue Yield: 5.05%), 12/1/2035
| |
BBB/NR | | |
4,273,375 |
|
1,000,000 | |
Conservatory Metropolitan District, CO, LT GO Bonds, 6.75%, 12/1/2034
| |
NR | | |
1,031,570 |
|
1,000,000 | |
Conservatory Metropolitan District, CO, LT GO Bonds, 7.55%, 12/1/2032
| |
NR | | |
1,089,630 |
|
600,000 | |
Deer Creek Metropolitan District, CO, UT GO Bonds, 7.625% (U.S. Treasury PRF 12/1/2010 @ 101), 12/1/2019
| |
AAA/NR | | |
723,738 |
|
2,250,000 | |
Denver, CO, City & County Airport Authority, Revenue Bonds, 5.00% (XL Capital Assurance Inc. INS), 11/15/2021
| |
AAA/Aaa | | |
2,430,022 |
|
2,000,000 | |
Denver, CO, City & County Airport Authority, Revenue Bonds, 5.00% (XL Capital Assurance Inc. INS), 11/15/2022
| |
AAA/Aaa | | |
2,153,080 |
|
500,000 | |
Denver, CO, Health & Hospital Authority, Healthcare Revenue Bonds (Series 2001A), 6.00% (Original Issue Yield: 6.05%), 12/1/2031
| |
BBB/Baa3 | | |
532,440 |
|
1,500,000 | |
High Plains, CO, Metropolitan District, Revenue Bonds (Series 2005A), 6.25% (Original Issue Yield: 6.375%), 12/1/2035
| |
NR | | |
1,533,765 |
|
1,000,000 | |
Maher Ranch, CO, Metropolitan District No. 4, LT GO Bonds, 7.875%, 12/1/2033
| |
NR | | |
1,115,750 |
|
1,500,000 | |
Southlands, CO, Metropolitan District No. 1, LT GO Bonds (Series 2004), 7.125% (Original Issue Yield: 7.18%), 12/1/2034
| |
NR | | |
1,658,205 |
|
2,000,000 | |
Sterling Hills West Metropolitan District, LT GO Bonds (Series 2110B), 8.00%, 12/1/2021
|
|
NR
|
|
|
2,170,000
|
| | |
TOTAL
|
|
|
|
|
29,701,733
|
| | |
Connecticut--0.2% | | | | | |
|
1,000,000 | |
Connecticut Development Authority, Airport Facility Revenue Bonds, 7.95% (Bombardier, Inc.), 4/1/2026
|
|
NR/Ba2
|
|
|
1,209,780
|
| | |
District of Columbia--2.7% | | | | | |
|
14,000,000 | |
District of Columbia, Revenue Bonds, 5.625% (American University)/(AMBAC INS)/(Original Issue Yield: 5.90%), 10/1/2026
|
|
AAA/Aaa
|
|
|
14,477,260
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Florida--7.5% | | | | | |
$ |
1,500,000 | |
Arborwood, FL, Community Development District, Capital Improvement Revenue Bonds (Series 2005A), 5.35%, 5/1/2036
| |
NR | |
$ |
1,522,635 |
|
2,000,000 | |
Capital Projects Finance Authority, FL, Continuing Care Retirement Community Revenue Bonds, 8.00% (Glenridge on Palmer Ranch)/(Original Issue Yield: 8.125%), 6/1/2032
| |
NR | | |
2,230,540 |
|
6,000,000 |
2,3 |
Capital Trust Agency, FL, Revenue Bonds (Series 2001), 10.00% (Seminole Tribe of Florida Convention and Resort Hotel Facilities), 10/1/2033
| |
NR | | |
6,613,560 |
|
1,000,000 |
2,3 |
Capital Trust Agency, FL, Revenue Bonds (Series 2003A), 8.95% (Seminole Tribe of Florida Convention and Resort Hotel Facilities), 10/1/2033
| |
NR | | |
1,094,890 |
|
825,000 | |
East Homestead, FL, Community Development District, Special Assessment Revenue Bonds (Series 2005), 5.45%, 5/1/2036
| |
NR | | |
841,995 |
|
1,200,000 | |
Fishhawk Community Development District II, Special Assessment Revenue Bonds (Series 2004B), 5.125% (Original Issue Yield: 5.20%), 11/1/2009
| |
NR | | |
1,222,056 |
|
5,375,000 |
2,3 |
Florida State Department of Environmental Protection, RITES (PA-967), 7.33562% (FSA INS), 7/1/2013
| |
NR | | |
6,078,749 |
|
1,320,000 | |
Harbor Bay, FL, Community Development District, Special Assessment Capital Improvement Revenue Bonds (Series 2001B), 6.35%, 5/1/2010
| |
NR | | |
1,350,373 |
|
1,000,000 | |
Highlands County, FL, Health Facilities Authority, Hospital Revenue Bonds (Series 2001A), 6.00% (Adventist Health System)/(Original Issue Yield: 6.026%), 11/15/2031
| |
A+/A2 | | |
1,095,620 |
|
1,000,000 | |
Lakes by the Bay South Community Development District, FL, Special Assessment Revenue Bonds (Series 2004A), 6.25% (Original Issue Yield: 6.277%), 5/1/2034
| |
NR | | |
1,086,420 |
|
295,000 | |
Lee County, FL, HFA, SFM Step Coupon Revenue Bonds, 6.85% (GNMA Collateralized Home Mortgage Program COL), 3/1/2029
| |
NR/Aaa | | |
298,227 |
|
2,000,000 | |
Lee County, FL, IDA, Health Care Facilities Revenue Bond (Series A), 6.75% (Cypress Cove at Healthpark)/(Original Issue Yield: 6.98%), 10/1/2032
| |
NR | | |
2,109,240 |
|
1,080,000 | |
Live Oak, FL Community Development District No. 002, Special Assessment Revenue Bonds (Series 2004B), 5.00% (Original Issue Yield: 5.028%), 11/1/2009
| |
NR | | |
1,092,550 |
|
940,000 | |
Mediterra North Community Development District, FL, Capital Improvement Revenue Bonds (Series A), 6.80%, 5/1/2031
| |
NR | | |
1,018,734 |
|
1,000,000 | |
Miami Beach, FL, Health Facilities Authority, Hospital Revenue Bonds (Series 2001A), 6.70% (Mt. Sinai Medical Center, FL)/(Original Issue Yield: 6.80%), 11/15/2019
| |
BB+/Ba2 | | |
1,111,180 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Florida--continued | | | | | |
$ |
700,000 |
2,3 |
Miami Beach, FL, Health Facilities Authority, Refunding Revenue Bonds, 6.75% (Mt. Sinai Medical Center, FL)/ (Original Issue Yield: 7.05%), 11/15/2029
| |
BB+/Ba2 | |
$ |
793,023 |
|
500,000 | |
Miami, FL Health Facilities Authority, Health System Revenue Bonds (Series 2003C), 5.125% (Catholic Health East)/ (Original Issue Yield: 5.30%), 11/15/2024
| |
A/A1 | | |
523,830 |
|
1,000,000 | |
Midtown Miami, FL Community Development District, Special Assessment Bonds (Series 2004A), 6.25% (Original Issue Yield: 6.30%), 5/1/2037
| |
NR | | |
1,067,750 |
|
980,000 | |
Orlando, FL, Urban Community Development District, Capital Improvement Revenue Bonds (Series 2001A), 6.95% (Original Issue Yield: 7.00%), 5/1/2033
| |
NR | | |
1,063,202 |
|
600,000 | |
Orlando, FL, Urban Community Development District, Capital Improvement Revenue Bonds, 6.25%, 5/1/2034
| |
NR | | |
641,928 |
|
1,000,000 | |
Reunion East Community Development District, FL, Special Assessment Bonds (Series 2002A), 7.375%, 5/1/2033
| |
NR | | |
1,129,120 |
|
1,200,000 | |
South Lake County, FL, Hospital District, Revenue Bonds, 6.625% (South Lake Hospital, Inc.), 10/1/2023
| |
NR/Baa3 | | |
1,343,952 |
|
2,000,000 | |
St. Johns County, FL, IDA, Health Care Revenue Bonds (Series 1999), 8.00% (Glenmoor at St. Johns Project)/ (Original Issue Yield: 8.10%), 1/1/2030
| |
NR | | |
2,166,220 |
|
880,000 | |
Verandah West, FL, Community Development District, Capital Improvement Revenue Bonds (Series 2003A), 6.625% (Original Issue Yield: 6.75%), 5/1/2033
| |
NR | | |
937,138 |
|
1,630,000 | |
Volusia County, FL, Education Facility Authority, Educational Facilities Refunding Revenue Bonds (Series 2005), 5.00% (Embry-Riddle Aeronautical University, Inc.)/(Radian Asset Assurance INS), 10/15/2025
|
|
AA/Aa3
|
|
|
1,722,763
|
| | |
TOTAL
|
|
|
|
|
40,155,695
|
| | |
Georgia--2.8% | | | | | |
|
5,000,000 | |
Atlanta, GA, Airport Passenger Facilities Charge Revenue, Passenger Facilities Charge Revenue Bonds, 5.00% (FSA INS), 1/1/2034
| |
AAA/Aaa | | |
5,315,900 |
|
2,000,000 | |
Atlanta, GA, Tax Allocation Bonds (Series 2001), 7.75% (Atlantic Station Project)/(Original Issue Yield: 7.90%), 12/1/2014
| |
NR | | |
2,193,740 |
|
770,000 | |
Atlanta, GA, Tax Allocation Bonds (Series 2005B), 5.60% (Eastside Tax Allocation District)/(Original Issue Yield: 5.65%), 1/1/2030
| |
NR | | |
785,038 |
|
1,000,000 | |
Augusta, GA Airport, General Passenger Facilities Charge Revenue Bonds, (Series A), 5.15%, 1/1/2035
| |
NR/Baa3 | | |
1,029,050 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Georgia--continued | | | | | |
$ |
750,000 | |
Augusta, GA Airport, General Passenger Facilities Charge Revenue Bonds, (Series B), 5.35%, 1/1/2028
| |
NR/Baa3 | |
$ |
769,897 |
|
1,985,000 | |
Augusta, GA, HFA, MFH Refunding Revenue Bonds, 6.55% (Forest Brook Apartments), 12/1/2030
| |
NR | | |
2,025,951 |
|
1,640,000 | |
Forsyth County, GA, Hospital Authority, Revenue Anticipation Certificates (Series 1998), 6.375% (Georgia Baptist Health Care System)/(Escrowed In U.S. Treasuries COL)/(Original Issue Yield: 6.45%), 10/1/2028
| |
AAA/NR | | |
2,150,762 |
|
750,000 | |
Fulton County, GA, Residential Care Facilities, Revenue Bonds (Series 2004A), 6.00% (Canterbury Court), 2/15/2022
|
|
NR
|
|
|
765,885
|
| | |
TOTAL
|
|
|
|
|
15,036,223
|
| | |
Hawaii--0.5% | | | | | |
|
1,000,000 | |
Hawaii State Department of Budget & Finance, Special Purpose Revenue Bonds (Series A), 7.00% (Kahala Nui)/ (Original Issue Yield: 7.00%), 11/15/2012
| |
NR | | |
1,098,800 |
|
1,000,000 | |
Hawaii State Department of Budget & Finance, Special Purpose Revenue Bonds (Series A), 8.00% (Kahala Nui)/ (Original Issue Yield: 8.175%), 11/15/2033
| |
NR | | |
1,160,120 |
|
455,000 | |
Hawaii State Department of Transportation, Special Facility Refunding Revenue Bonds (Series 2000), 7.00% (Continental Airlines, Inc.)/(Original Issue Yield: 7.20%), 6/1/2020
|
|
B/Caa2
|
|
|
440,536
|
| | |
TOTAL
|
|
|
|
|
2,699,456
|
| | |
Idaho--0.4% | | | | | |
|
2,000,000 | |
Idaho Health Facilities Authority, Refunding Revenue Bonds (Series 1999A), 7.875% (Valley Vista Care Corp. Obligated Group)/(Original Issue Yield: 8.10%), 11/15/2029
| |
NR | | |
2,015,280 |
|
200,000 | |
Idaho Housing Agency, SFM Revenue Bonds (Series F-2), 7.80% (FHA GTD), 1/1/2023
|
|
AA/NR
|
|
|
200,422
|
| | |
TOTAL
|
|
|
|
|
2,215,702
|
| | |
Illinois--1.4% | | | | | |
|
55,000 | |
Chicago, IL, Collateralized SFM Revenue Bonds (Series A), 7.25% (GNMA COL), 9/1/2028
| |
NR/Aaa | | |
55,954 |
|
4,680,000 |
2,3 |
Illinois Finance Authority, RITES (Series PA-1286), 7.68821% (SwedishAmerican Hospital)/(AMBAC INS), 11/15/2023
| |
AAA/NR | | |
5,452,294 |
|
1,000,000 | |
Illinois Finance Authority, Revenue Bonds (Series 2005A), 5.625% (Friendship Village of Schaumburg)/(Original Issue Yield: 5.70%), 2/15/2037
| |
NR | | |
1,018,680 |
|
1,000,000 | |
Illinois Finance Authority, Solid Waste Disposal Revenue Bonds, 5.05% (Waste Management, Inc.), 8/1/2029
|
|
BBB/NR
|
|
|
1,018,810
|
| | |
TOTAL
|
|
|
|
|
7,545,738
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Indiana--2.0% | | | | | |
$ |
1,000,000 | |
Goshen, IN, Revenue Bonds (Series 1998), 5.75% (Greencroft Obligated Group)/(Original Issue Yield: 5.87%), 8/15/2028
| |
NR | |
$ |
1,004,240 |
|
3,000,000 | |
Indiana Health Facility Financing Authority, Hospital Revenue Bonds (Series 2001A), 6.375% (Community Foundation of Northwest Indiana)/(Original Issue Yield: 6.68%), 8/1/2031
| |
BBB-/NR | | |
3,241,680 |
|
2,000,000 | |
Indiana Health Facility Financing Authority, Revenue Refunding Bonds (Series 1998), 5.625% (Greenwood Village South Project)/(Original Issue Yield: 5.802%), 5/15/2028
| |
NR | | |
2,043,680 |
|
2,000,000 | |
Indianapolis, IN Airport Authority, Special Facilities Revenue Refunding Bonds (Series 2004A), 5.10% (FedEx Corp.), 1/15/2017
| |
BBB/Baa2 | | |
2,120,260 |
|
1,000,000 | |
South Bend, IN, Economic Development Revenue Bonds (Series 1999A), 6.25% (Southfield Village)/(Original Issue Yield: 6.375%), 11/15/2029
| |
NR | | |
1,016,870 |
|
1,355,000 | |
St. Joseph County, IN, Hospital Authority, Health Facilities Revenue Bonds (Series 2005), 5.375% (Madison Center Obligated Group), 2/15/2034
|
|
BBB/NR
|
|
|
1,404,146
|
| | |
TOTAL
|
|
|
|
|
10,830,876
|
| | |
Iowa--0.4% | | | | | |
|
1,785,000 | |
Wapello County, IA, Revenue Bonds, 6.25% (Ottumwa Regional Health Center)/(Original Issue Yield: 6.40%), 10/1/2022
|
|
BBB/NR
|
|
|
1,938,224
|
| | |
Kansas--0.7% | | | | | |
|
50,000 | |
Manhattan, KS, IDRB, Industrial Revenue Bonds (Series 1999), 6.25% (Farrar Corp. Project), 8/1/2006
| |
NR | | |
49,921 |
|
1,625,000 | |
Manhattan, KS, IDRB, Industrial Revenue Bonds (Series 1999), 7.00% (Farrar Corp. Project), 8/1/2014
| |
NR | | |
1,628,218 |
|
1,000,000 | |
Olathe, KS, Senior Living Facility Revenue Bonds (Series 2000A), 8.00% (Aberdeen Village, Inc.)/ (U.S. Treasury PRF 5/15/2010 @ 102)/(Original Issue Yield: 8.25%), 5/15/2030
| |
NR | | |
1,202,340 |
|
590,000 | |
Sedgwick & Shawnee Counties, KS, SFM Revenue Bonds (Series 1997A-1), 6.95% (GNMA Collateralized Home Mortgage Program COL), 6/1/2029
|
|
NR/Aaa
|
|
|
595,888
|
| | |
TOTAL
|
|
|
|
|
3,476,367
|
| | |
Kentucky--1.1% | | | | | |
|
2,000,000 | |
Kenton County, KY Airport Board, Special Facilities Revenue Bonds (Series A), 7.50% (Delta Air Lines, Inc.)/(Original Issue Yield: 7.60%), 2/1/2020
| |
C/Ca | | |
1,757,220 |
|
2,000,000 | |
Kentucky Economic Development Finance Authority, Hospital System Refunding Revenue Bonds, 5.875% (Appalachian Regional Health Center)/(Original Issue Yield: 5.92%), 10/1/2022
| |
BB-/NR | | |
1,990,280 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Kentucky--continued | | | | | |
$ |
2,000,000 | |
Kentucky Economic Development Finance Authority, Revenue Bonds (Series 2000A), 6.625% (Norton Healthcare, Inc.)/ (Original Issue Yield: 6.97%), 10/1/2028
|
|
NR
|
|
$
|
2,214,260
|
| | |
TOTAL
|
|
|
|
|
5,961,760
|
| | |
Louisiana--1.7% | | | | | |
|
1,000,000 | |
De Soto Parish, LA, Environmental Improvement Authority, Revenue Bonds, (Series A), 5.00% (International Paper Co.), 11/1/2018
| |
BBB/Baa2 | | |
1,008,720 |
|
2,000,000 | |
Louisiana Local Government Environmental Facilities Community Development Authority, Housing Bond Anticipation Notes, 6.25% (Kingston Point), 9/1/2005
| |
NR | | |
1,900,000 |
|
1,980,000 |
2,3 |
Louisiana Public Facilities Authority Hospital Revenue, Revenue Bonds, 8.625% (Lake Charles Memorial Hospital)/ (Original Issue Yield: 8.75%), 12/1/2030
| |
NR | | |
2,120,778 |
|
2,000,000 | |
St. James Parish, LA, Solid Waste Disposal Revenue Bonds, 7.70% (IMC Phosphates Co.)/(Original Issue Yield: 7.75%), 10/1/2022
| |
NR | | |
2,003,660 |
|
2,000,000 | |
West Feliciana Parish, LA, PCR Refunding Bonds (Series 1999B), 6.60% (Entergy Gulf States, Inc.), 9/1/2028
|
|
BBB-/Ba1
|
|
|
2,022,200
|
| | |
TOTAL
|
|
|
|
|
9,055,358
|
| | |
Maine--0.4% | | | | | |
|
1,000,000 | |
Maine Health & Higher Educational Facilities Authority, Health Facilities Revenue Bond, (Series A), 7.50% (Piper Shores)/(U.S. Treasury PRF 1/1/2009 @ 100), 1/1/2019
| |
NR | | |
1,126,600 |
|
1,000,000 | |
Maine Health & Higher Educational Facilities Authority, Health Facilities Revenue Bonds, (Series A), 7.55% (Piper Shores)/(U.S. Treasury PRF 1/1/2009 @ 100), 1/1/2029
|
|
NR
|
|
|
1,128,160
|
| | |
TOTAL
|
|
|
|
|
2,254,760
|
| | |
Maryland--1.3% | | | | | |
|
2,000,000 | |
Maryland State Economic Development Corp., Senior Lien Revenue Bonds (Series 1999B), 7.75% (Chesapeake Bay Conference Center Project), 12/1/2031
| |
NR | | |
2,142,940 |
|
4,115,000 | |
Maryland State Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2005), 5.00% (Civista Medical Center)/(Radian Asset Assurance INS), 7/1/2037
| |
AA/Aa3 | | |
4,246,680 |
|
500,000 |
2,3 |
Maryland State IDFA, Economic Development Revenue Bonds (Series 2005A), 6.00% (Our Lady of Good Counsel High School), 5/1/2035
|
|
NR
|
|
|
520,330
|
| | |
TOTAL
|
|
|
|
|
6,909,950
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Massachusetts--2.7% | | | | | |
$ |
2,000,000 | |
Massachusetts HEFA, Revenue Bonds (Series 2004A), 6.375% (Northern Berkshire Health System)/(Original Issue Yield: 6.60%), 7/1/2034
| |
BB-/NR | |
$ |
2,126,000 |
|
2,000,000 | |
Massachusetts HEFA, Revenue Bonds (Series 1999A), 5.75% (Caritas Christi Obligated Group)/(Original Issue Yield: 5.80%), 7/1/2028
| |
BBB/Baa3 | | |
2,055,840 |
|
2,000,000 | |
Massachusetts HEFA, Revenue Bonds (Series 2002B), 9.20% (Civic Investments), 12/15/2031
| |
NR | | |
2,436,880 |
|
1,000,000 | |
Massachusetts HEFA, Revenue Bonds (Series 2003E), 6.75% (Jordan Hospital)/(Original Issue Yield: 7.00%), 10/1/2033
| |
BBB-/NR | | |
1,111,280 |
|
1,305,000 |
2,3 |
Massachusetts Water Resources Authority, RITES (PA-999-R-A), 7.82192%, 8/1/2014
| |
NR | | |
1,624,086 |
|
500,000 |
2,3 |
Massachusetts Water Resources Authority, RITES (PA 999-R-B), 7.82192%, 8/1/2015
| |
NR | | |
622,255 |
|
1,715,000 |
2,3 |
Massachusetts Water Resources Authority, RITES (Series 999-R-C), 7.82192%, 8/1/2019
| |
NR | | |
2,134,335 |
|
1,805,000 |
2,3 |
Massachusetts Water Resources Authority, RITES (Series 999-R-D), 7.82192%, 8/1/2020
|
|
NR
|
|
|
2,246,341
|
| | |
TOTAL
|
|
|
|
|
14,357,017
|
| | |
Michigan--0.7% | | | | | |
|
1,000,000 | |
Delta County, MI, Economic Development Corp., Environmental Improvement Refunding Revenue Bonds (Series 2002B), 6.45% (MeadWestvaco Corp.)/(U.S. Treasury PRF 4/15/2012 @ 100), 4/15/2023
| |
AAA/Baa2 | | |
1,148,950 |
|
550,000 | |
Gaylord, MI, Hospital Finance Authority, Hospital Revenue Refunding Bonds (Series 2004), 6.50% (Otsego Memorial Hospital Obligated Group)/(Original Issue Yield: 6.70%), 1/1/2037
| |
NR | | |
573,688 |
|
1,500,000 | |
Kent Hospital Finance Authority, MI, Revenue Bonds (Series 2005A), 6.25% (Metropolitan Hospital), 7/1/2040
| |
BBB/NR | | |
1,675,140 |
|
500,000 | |
Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Series 2005), 5.00% (Chelsea Community Hospital)/ (Original Issue Yield: 5.07%), 5/15/2037
|
|
BBB/NR
|
|
|
504,945
|
| | |
TOTAL
|
|
|
|
|
3,902,723
|
| | |
Minnesota--4.9% | | | | | |
|
4,000,000 | |
Becker, MN, PCR Bonds (Series 2000-A), 8.50% (Northern States Power Co., MN), 4/1/2030
| |
A-/A2 | | |
4,693,000 |
|
5,000 | |
Dakota County, MN, Housing & Redevelopment Authority, SFM Revenue Bonds, 7.20% (GNMA GTD), 12/1/2009
| |
AAA/NR | | |
5,011 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Minnesota--continued | | | | | |
$ |
3,000,000 | |
Duluth, MN, EDA, Health Care Facilities Revenue Bonds (Series 2004), 5.25% (Benedictine Health System-St. Mary's Duluth Clinic Health System Obligated Group), 2/15/2028
| |
A-/NR | |
$ |
3,166,440 |
|
550,000 | |
Glencoe, MN, Health Care Facilities, Revenue Bonds (Series 2005), 5.00% (Glencoe Regional Health Services), 4/1/2031
| |
BBB/NR | | |
556,451 |
|
2,000,000 | |
Minneapolis, MN, Health Care System, Revenue Bonds (Series 2002A), 5.75% (Allina Health System, MN), 11/15/2014
| |
A-/A2 | | |
2,212,220 |
|
1,000,000 | |
Minneapolis/St. Paul, MN, Airport Commission, Special Facilities Revenue Refunding Bonds (Series 2005A), 7.375% (Northwest Airlines, Inc.)/(Original Issue Yield: 7.75%), 4/1/2025
| |
NR | | |
950,880 |
|
500,000 | |
Ramsey, MN, Lease Revenue Bonds (Series 2004A), 6.75% (Pact Charter School), 12/1/2033
| |
NR | | |
512,410 |
|
4,000,000 | |
St. Paul, MN, Housing & Redevelopment Authority, Hospital Facility Revenue Bonds (Series 2005), 6.00% (Health East, Inc.), 11/15/2035
| |
BB+/Baa3 | | |
4,358,440 |
|
5,280,000 | |
St. Paul, MN, Housing & Redevelopment Authority, Hospital Revenue Refunding Bonds (Series A), 6.625% (Healtheast, MN)/(Original Issue Yield: 6.687%), 11/1/2017
| |
BB+/NR | | |
5,312,261 |
|
1,000,000 | |
St. Paul, MN, Housing & Redevelopment Authority, Refunding Revenue Bonds (Series 2003A), 7.00% (Achieve Language Academy), 12/1/2032
| |
NR | | |
1,036,240 |
|
2,000,000 | |
St. Paul, MN, Housing & Redevelopment Authority, Revenue Bonds (Series 2002B), 7.00% (Upper Landing Project)/ (Original Issue Yield: 7.05%), 3/1/2029
| |
NR | | |
2,017,020 |
|
1,500,000 | |
St. Paul, MN, Port Authority, Hotel Facility Revenue Bonds (Series 2), 7.375% (Radisson Kellogg Project)/(Original Issue Yield: 7.50%), 8/1/2029
|
|
NR
|
|
|
1,581,150
|
| | |
TOTAL
|
|
|
|
|
26,401,523
|
| | |
Mississippi--0.5% | | | | | |
|
2,500,000 | |
Mississippi Business Finance Corp., PCR Bonds, 5.875% (System Energy Resources, Inc.)/(Original Issue Yield: 5.934%), 4/1/2022
|
|
BBB-/Ba1
|
|
|
2,569,625
|
| | |
Missouri--0.9% | | | | | |
|
2,445,000 |
2 |
Kansas City, MO, IDA, MFH Revenue Bonds, 6.90% (Woodbridge Apartments Project), 8/1/2030
| |
NR | | |
2,307,126 |
|
670,000 | |
Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds (Series 2005A), 5.00% (Branson, MO), 6/1/2035
| |
BBB+/Baa1 | | |
687,112 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Missouri--continued | | | | | |
$ |
1,000,000 | |
St. Joseph, MO, IDA, Healthcare Revenue Bonds, 7.00% (Living Community St. Joseph Project), 8/15/2032
| |
NR | |
$ |
1,079,490 |
|
500,000 | |
West Plains, MO IDA, Hospital Revenue Bonds, 6.75% (Ozarks Medical Center)/(Original Issue Yield: 6.78%), 11/15/2024
|
|
BB+/NR
|
|
|
526,725
|
| | |
TOTAL
|
|
|
|
|
4,600,453
|
| | |
Multi State--1.7% | | | | | |
|
8,240,000 |
2,3 |
Merrill Lynch Puttable FLOATs/RITES Trust, Tax Exempt Receipts (Series PPT-33), 11.1541%, 1/1/2032
|
|
NR
|
|
|
9,349,681
|
| | |
Nevada--1.3% | | | | | |
|
1,000,000 | |
Clark County, NV, Improvement District, Limited Obligation Improvement Bonds (Series 2003), 6.375% (Special Improvement District No. 142 (Mountain's Edge))/(Original Issue Yield: 6.40%), 8/1/2023
| |
NR | | |
1,035,100 |
|
975,000 | |
Clark County, NV, Improvement District, Local Improvement Bonds (Series 2001), 6.875% (Special Improvement District No. 132 (Summerlin South Area))/(Original Issue Yield: 6.92%), 2/1/2021
| |
NR | | |
1,008,306 |
|
1,800,000 | |
Director of the State of Nevada Department of Business and Industry, 2nd Tier Revenue Bonds (Series 2000), 7.375% (Las Vegas Monorail Project)/(Original Issue Yield: 7.75%), 1/1/2040
| |
NR | | |
1,892,088 |
|
1,300,000 |
2,3 |
Director of the State of Nevada Department of Business and Industry, Revenue Bonds (Series 2004A), 7.00% (Las Ventanas Retirement Community)/(Original Issue Yield: 7.125%), 11/15/2034
| |
NR | | |
1,360,814 |
|
1,000,000 |
2,3 |
Director of the State of Nevada Department of Business and Industry, Revenue Bonds (Series 2004B), 6.75% (Las Ventanas Retirement Community)/(Original Issue Yield: 6.875%), 11/15/2023
| |
NR | | |
1,040,860 |
|
500,000 | |
Las Vegas, NV, Special Improvement District No. 607, Local Improvement Special Assessment Bonds (Series 2004), 6.00%, 6/1/2019
|
|
NR
|
|
|
516,365
|
| | |
TOTAL
|
|
|
|
|
6,853,533
|
| | |
New Jersey--3.6% | | | | | |
|
2,000,000 | |
New Jersey EDA, Retirement Community Revenue Bonds (Series 2001A), 7.25% (Cedar Crest Village, Inc.)/(Original Issue Yield: 7.625%), 11/15/2031
| |
NR | | |
2,191,320 |
|
1,250,000 | |
New Jersey EDA, Retirement Community Revenue Bonds (Series A), 8.25% (Seabrook Village)/(Original Issue Yield: 8.50%), 11/15/2030
| |
NR | | |
1,426,125 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
New Jersey--continued | | | | | |
$ |
1,550,000 | |
New Jersey EDA, Revenue Bonds (Series 1997A), 5.875% (Host Marriott Corp.), 12/1/2027
| |
NR | |
$ |
1,555,022 |
|
3,000,000 | |
New Jersey EDA, Revenue Bonds, (Series 2004), 5.50% (NJ Dedicated Cigarette Excise Tax), 6/15/2016
| |
BBB/Baa2 | | |
3,339,480 |
|
1,000,000 | |
New Jersey EDA, Revenue Bonds, (Series 2004), 5.75% (NJ Dedicated Cigarette Excise Tax)/(Original Issue Yield: 5.93%), 6/15/2034
| |
BBB/Baa2 | | |
1,075,930 |
|
1,000,000 | |
New Jersey EDA, Special Facilities Revenue Bonds (Series 2000), 7.20% (Continental Airlines, Inc.)/(Original Issue Yield: 7.25%), 11/15/2030
| |
B/Caa2 | | |
1,002,320 |
|
400,000 | |
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 6.50% (Pascack Valley Hospital Association)/ (Original Issue Yield: 6.72%), 7/1/2023
| |
B+/NR | | |
415,604 |
|
2,000,000 | |
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 6.625% (Palisades Medical Center)/(Original Issue Yield: 6.67%), 7/1/2031
| |
BBB-/Baa3 | | |
2,211,880 |
|
5,000,000 | |
Tobacco Settlement Financing Corp., NJ, Revenue Bonds, 6.75% (Original Issue Yield: 7.05%), 6/1/2039
|
|
BBB/Baa3
|
|
|
5,837,400
|
| | |
TOTAL
|
|
|
|
|
19,055,081
|
| | |
New Mexico--1.2% | | | | | |
|
850,000 | |
Bernalillo County, NM Multifamily, Refunding Housing Revenue Bonds (Series 2001C), 7.50% (Valencia Retirement)/ (SunAmerica, Inc. GTD), 12/1/2021
| |
NR | | |
894,064 |
|
2,535,000 | |
Dona Ana County, NM, MFH Revenue Bonds (Series 2001A), 7.00% (Montana Meadows Apartments), 12/1/2030
| |
NR | | |
2,618,959 |
|
2,000,000 | |
Farmington, NM, PCR Refunding Bonds (Series 1997), 6.375% (Public Service Co., NM), 4/1/2022
| |
BBB/Baa2 | | |
2,142,300 |
|
940,000 |
2,3 |
Sandoval County, NM, Revenue Bonds, 7.75% (Santa Ana Pueblo Project), 7/1/2015
|
|
NR
|
|
|
983,870
|
| | |
TOTAL
|
|
|
|
|
6,639,193
|
| | |
New York--9.5% | | | | | |
|
2,500,000 | |
Brookhaven, NY, IDA, Senior Residential Housing Revenue Bonds, 6.25% (Woodcrest Estates), 12/1/2023
| |
NR | | |
2,581,375 |
|
115,000 | |
Dutchess County, NY, IDA, Civic Facility Revenue Bonds (Series 2004B), 7.50% (St. Francis Hospital and Health Centers), 3/1/2029
| |
NR | | |
126,833 |
|
990,000 | |
Dutchess County, NY, IDA, Refunding Revenue Bonds (Series 2004A), 7.50% (St. Francis Hospital and Health Centers), 3/1/2029
| |
NR | | |
1,091,871 |
|
5,000,000 |
2,3 |
Metropolitan Transportation Authority, NY, RITES (PA-1042R), 7.8126% (MBIA Insurance Corp. INS), 1/1/2010
| |
NR | | |
6,228,300 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
New York--continued | | | | | |
$ |
570,000 | |
Nassau County, NY, IDA, Civic Facility Refunding Revenue Bonds (Series 2001B), 5.875% (North Shore-Long Island Jewish Obligated Group)/(Original Issue Yield: 5.92%), 11/1/2011
| |
NR/A3 | |
$ |
625,250 |
|
8,000,000 |
2,3 |
New York City, NY, IDA, Liberty Revenue Bonds (Series A), 6.50% (7 World Trade Center LLC), 3/1/2035
| |
NR | | |
8,612,400 |
|
2,000,000 |
2,3 |
New York City, NY, IDA, Liberty Revenue Bonds (Series B), 6.75% (7 World Trade Center LLC), 3/1/2015
| |
NR | | |
2,162,260 |
|
1,500,000 | |
New York City, NY, IDA, Special Facility Revenue Bonds (Series 2002), 7.625% (British Airways)/(Original Issue Yield: 7.976%), 12/1/2032
| |
BB-/Ba2 | | |
1,670,430 |
|
2,000,000 | |
New York City, NY, UT GO Bonds (Series 2002B), 5.375% (Original Issue Yield: 5.48%), 12/1/2020
| |
A+/A1 | | |
2,174,240 |
|
2,800,000 |
2,3 |
New York City, NY, RITES (PA-1075), 9.2113%, 6/1/2018
| |
A+/NR | | |
3,595,816 |
|
5,000,000 | |
New York City, NY, UT GO Bonds (Fiscal 2004 Series A), 5.50%, 8/1/2022
| |
A+/A1 | | |
5,513,400 |
|
1,000,000 | |
New York City, NY, UT GO Bonds (Fiscal 2004 Series I), 5.00%, 8/1/2022
| |
A+/A1 | | |
1,063,160 |
|
4,000,000 | |
New York City, NY, UT GO Bonds (Fiscal 2005 Series J), 5.00%, 3/1/2025
| |
A+/A1 | | |
4,243,720 |
|
300,000 | |
New York State Dormitory Authority, Revenue Bonds (Series 2005), 5.00% (Rochester General Hospital)/(Radian Asset Assurance INS), 12/1/2035
| |
AA/Aa3 | | |
316,731 |
|
1,075,000 | |
New York State Dormitory Authority, Revenue Bonds (Series 2005C), 5.50% (Mt. Sinai NYU Health Obligated Group), 7/1/2026
| |
BB/Ba1 | | |
1,097,919 |
|
869,921 | |
Schenectady, NY, Bond Anticipation Renewal Notes (Series 2005), 5.25% BANs, 5/26/2006
| |
NR | | |
868,747 |
|
750,000 | |
Schenectady, NY, Tax Anticipation Notes (Series 2004), 5.90% TANs, 12/30/2005
| |
NR | | |
749,227 |
|
5,250,000 |
2,3 |
Tobacco Settlement Financing Corp., NY, RITES (PA-1230), 7.36614% (New York State), 6/1/2016
| |
AA-/NR | | |
6,383,633 |
|
1,500,000 | |
Triborough Bridge & Tunnel Authority, NY, General Purpose Revenue Refunding Bonds (Series 2002B), 5.00%, 11/15/2022
|
|
AA-/Aa2
|
|
|
1,611,570
|
| | |
TOTAL
|
|
|
|
|
50,716,882
|
| | |
North Carolina--1.2% | | | | | |
|
2,500,000 | |
Gaston County, NC, Industrial Facilities and Pollution Control Financing Authority, Exempt Facilities Revenue Bonds, 5.75% (National Gypsum Co.), 8/1/2035
| |
NR | | |
2,618,875 |
|
500,000 | |
North Carolina Medical Care Commission, Health Care Facilities First Mortgage Revenue Bonds, 6.375% (Arbor Acres Community)/(Original Issue Yield: 6.55%), 3/1/2032
| |
NR | | |
532,650 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
North Carolina--continued | | | | | |
$ |
1,940,000 | |
North Carolina Medical Care Commission, Health Care Facilities First Mortgage Revenue Bonds, 7.625% (Depaul Community Facilities)/(Original Issue Yield: 7.625%), 11/1/2029
| |
NR | |
$ |
2,016,494 |
|
1,200,000 | |
North Carolina Medical Care Commission, Health Care Housing Revenue Bonds (Series 2004A), 5.80% (Arc of North Carolina Projects), 10/1/2034
|
|
NR/Baa1
|
|
|
1,250,724
|
| | |
TOTAL
|
|
|
|
|
6,418,743
|
| | |
Ohio--2.3% | | | | | |
|
1,500,000 | |
Cleveland-Cuyahoga County, OH, Port Authority, Special Assessment Tax-Increment Revenue Bonds, 7.35% (University Heights, OH Public Parking Garage), 12/1/2031
| |
NR | | |
1,637,190 |
|
500,000 | |
Franklin County, OH, Health Care Facilities, Revenue Bonds (Series 2001A), 7.125% (Ohio Presbyterian Retirement Services)/(Original Issue Yield: 7.35%), 7/1/2029
| |
BBB/NR | | |
563,670 |
|
2,500,000 |
2,3 |
Lorain County, OH, RITES (PA-894R-A), 8.0626% (Catholic Healthcare Partners), 10/1/2012
| |
NR | | |
3,058,425 |
|
2,500,000 |
2,3 |
Lorain County, OH, RITES (PA-894R-B), 8.0626% (Catholic Healthcare Partners), 10/1/2013
| |
NR | | |
3,028,175 |
|
1,500,000 | |
Ohio State Air Quality Development Authority, PCR Refunding Revenue Bonds (Series 1997A), 6.10% (Cleveland Electric Illuminating Co.), 8/1/2020
| |
BBB-/Baa2 | | |
1,553,055 |
|
1,500,000 | |
Port Authority for Columbiana County, OH, Solid Waste Facility Revenue Bonds (Series 2004A), 7.25% (Apex Environmental LLC)/(Original Issue Yield: 7.30%), 8/1/2034
| |
NR | | |
1,531,485 |
|
450,000 |
2,3 |
Port of Greater Cincinnati, OH, Development Authority, Special Assessment Revenue Bonds, 6.40% (Cincinnati Mills), 2/15/2034
| |
NR | | |
482,418 |
|
375,000 | |
Toledo-Lucas County, OH, Port Authority, Revenue Bonds (Series 2004C), 6.375% (Northwest Ohio Bond Fund), 11/15/2032
|
|
NR
|
|
|
396,334
|
| | |
TOTAL
|
|
|
|
|
12,250,752
|
| | |
Oklahoma--0.8% | | | | | |
|
4,300,000 | |
Jackson County, OK, Hospital Authority, Hospital Revenue Refunding Bonds, 7.30% (Jackson County Memorial Hospital, OK)/(Original Issue Yield: 7.40%), 8/1/2015
|
|
BB/NR
|
|
|
4,369,230
|
| | |
Oregon--1.5% | | | | | |
|
1,000,000 | |
Clackamas County, OR, Hospital Facilities Authority, Refunding Gross Revenue Bonds (Series 2005), 5.125% (Willamette Falls Hospital), 4/1/2026
| |
NR/Baa3 | | |
1,012,040 |
|
2,960,000 |
2,3 |
Multnomah County, OR, Hospital Facilities Authority, RITES (PA-1267A), 7.28959% (Providence Health System), 4/1/2012
| |
NR | | |
3,561,413 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Oregon--continued | | | | | |
$ |
2,040,000 |
2,3 |
Multnomah County, OR, Hospital Facilities Authority, RITES (PA-1267B), 7.78959% (Providence Health System), 4/1/2012
| |
NR | |
$ |
2,531,824 |
|
1,000,000 | |
Yamhill County, OR, Hospital Authority, Revenue Bonds, 7.00% (Friendsview Retirement Community)/(Original Issue Yield: 7.125%), 12/1/2034
|
|
NR
|
|
|
1,035,620
|
| | |
TOTAL
|
|
|
|
|
8,140,897
|
| | |
Pennsylvania--8.5% | | | | | |
|
1,330,000 | |
Allegheny County, PA, HDA, Health Care Facilities Revenue Bonds (Series 1998), 5.875% (Villa St. Joseph of Baden, Inc.)/ (Original Issue Yield: 6.02%), 8/15/2018
| |
NR | | |
1,338,179 |
|
4,500,000 | |
Allegheny County, PA, HDA, Health System Revenue Bonds (Series 2000B), 9.25% (West Penn Allegheny Health System)/ (Original Issue Yield: 9.70%), 11/15/2030
| |
B/B1 | | |
5,412,825 |
|
620,000 | |
Allegheny County, PA, HDA, Revenue Bonds, (Series A), 8.75% (Covenant at South Hills)/(Original Issue Yield: 8.80%), 2/1/2031
| |
NR | | |
407,334 |
|
2,000,000 |
2,3 |
Allegheny County, PA, IDA, Cargo Facilities Lease Revenue Bonds (Series 1999), 6.625% (AFCO Cargo PIT LLC Project)/ (Original Issue Yield: 6.75%), 9/1/2024
| |
NR | | |
1,942,460 |
|
1,120,000 | |
Allegheny County, PA, IDA, Charter School Revenue Bonds (Series 2004A), 7.50% (Propel Schools)/(Original Issue Yield: 7.75%), 12/15/2029
| |
NR | | |
1,168,082 |
|
1,400,000 | |
Allegheny County, PA IDA, Lease Revenue Bonds (Series 2001), 6.60% (Residential Resources Inc. Project)/ (Original Issue Yield: 6.75%), 9/1/2031
| |
NR | | |
1,497,174 |
|
1,000,000 | |
Bucks County, PA, IDA, First Mortgage Health Care Facilities Revenue Bonds (Series 1999), 6.30% (Chandler Hall Health Services Obligated Group)/(Original Issue Yield: 6.40%), 5/1/2029
| |
NR | | |
1,031,070 |
|
1,500,000 | |
Chartiers Valley, PA, Industrial & Commercial Development Authority, First Mortgage Revenue Refunding Bonds (Series 1999), 6.375% (Asbury Health Center)/(Original Issue Yield: 6.52%), 12/1/2024
| |
NR | | |
1,567,560 |
|
2,000,000 | |
Commonwealth of Pennsylvania, UT GO Bonds (Second Series 2001), 5.00%, 9/15/2018
| |
AA/Aa2 | | |
2,174,800 |
|
2,000,000 | |
Cumberland County, PA, Municipal Authority, Retirement Community Revenue Bonds (Series 2002A), 7.25% (Wesley Affiliated Services, Inc. Obligated Group)/(Original Issue Yield: 7.50%), 1/1/2035
| |
NR | | |
2,212,920 |
|
1,000,000 | |
Lancaster, PA, IDA, Revenue Bonds (Series 2000A), 7.625% (Garden Spot Villiage Project)/(Original Issue Yield: 7.84%), 5/1/2031
| |
NR | | |
1,103,130 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Pennsylvania--continued | | | | | |
$ |
1,000,000 | |
Lawrence County, PA, IDA, Senior Health and Housing Facilities Revenue Bonds, 7.50% (Shenango Presbyterian SeniorCare Obligated Group)/(Original Issue Yield: 7.75%), 11/15/2031
| |
NR | |
$ |
1,037,910 |
|
2,000,000 | |
Montgomery County, PA, Higher Education & Health Authority Hospital, Revenue Bonds, 7.375% (Philadelphia Geriatric Center)/(Original Issue Yield: 7.50%), 12/1/2030
| |
NR | | |
2,146,000 |
|
1,000,000 | |
Montgomery County, PA, IDA, Fixed Rate Mortgage Revenue Bonds (Series 2005), 6.25% (Whitemarsh Continuing Care Retirement Community)/(Original Issue Yield: 6.375%), 2/1/2035
| |
NR | | |
1,060,530 |
|
500,000 | |
Pennsylvania EDFA, Exempt Facilities Revenue Bonds (Series 1997B), 6.125% (National Gypsum Co.), 11/1/2027
| |
NR | | |
532,630 |
|
1,000,000 | |
Pennsylvania EDFA, Exempt Facilities Revenue Bonds (Series 2003A), 6.75% (Reliant Energy, Inc.), 12/1/2036
| |
NR/B1 | | |
1,079,480 |
|
2,000,000 | |
Pennsylvania EDFA, Exempt Facilities Revenue Bonds, 6.25% (National Gypsum Co.), 11/1/2027
| |
NR | | |
2,149,680 |
|
1,500,000 | |
Pennsylvania EDFA, Resource Recovery Revenue Bonds (Series A), 6.40% (Northampton Generating), 1/1/2009
| |
BB/NR | | |
1,510,080 |
|
900,000 |
4 |
Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 1996), 7.15% (Thiel College)/ (U.S. Treasury PRF 5/15/2006 @ 102), 5/15/2015
| |
NR | | |
943,515 |
|
900,000 | |
Philadelphia Authority for Industrial Development, Senior Living Revenue Bonds (Series 2005A), 5.625% (PresbyHomes Germantown/Morrisville), 7/1/2035
| |
NR/Baa2 | | |
922,230 |
|
1,000,000 | |
Philadelphia, PA, Airport System, Revenue Bonds (Series 2005A), 5.00% (MBIA Insurance Corp. INS), 6/15/2024
| |
AAA/Aaa | | |
1,058,250 |
|
10,995,000 | |
Philadelphia, PA, Gas Works, Revenue Bonds (Series A-1), 5.00% (FSA INS), 9/1/2033
| |
AAA/Aaa | | |
11,576,965 |
|
1,500,000 | |
Scranton, PA, UT GO Bonds (Series 2001C), 7.10% (U.S. Treasury PRF 9/1/2011 @ 100)/(Original Issue Yield: 7.35%), 9/1/2031
|
|
NR
|
|
|
1,783,890
|
| | |
TOTAL
|
|
|
|
|
45,656,694
|
| | |
Puerto Rico--0.4% | | | | | |
|
9,000,000 |
2,3 |
Children's Trust, PR, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2005A) (Original Issue Yield: 6.50%), 5/15/2050
| |
NR | | |
579,960 |
|
1,000,000 |
2,3 |
Puerto Rico Highway and Transportation Authority, RITES (Series PA 331B), 7.78959% (AMBAC INS), 1/1/2011
|
|
NR
|
|
|
1,310,630
|
| | |
TOTAL
|
|
|
|
|
1,890,590
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Rhode Island--0.2% | | | | | |
$ |
1,000,000 | |
Rhode Island State Health and Educational Building Corp., Hospital Financing Revenue Bonds (Series 2002), 6.50% (Lifespan Obligated Group)/(Original Issue Yield: 6.70%), 8/15/2032
|
|
BBB+/Baa1
|
|
$
|
1,119,870
|
| | |
South Carolina--1.3% | | | | | |
|
6,000,000 | |
Connector 2000 Association, Inc., SC, Capital Appreciation Senior Revenue Bonds (Series 1998B) (Original Issue Yield: 5.80%), 1/1/2025
| |
B-/NR | | |
1,151,040 |
|
15,550,000 | |
Connector 2000 Association, Inc., SC, Toll Road Capital Appreciation Revenue Bonds (Series 1998A) (Original Issue Yield: 5.85%), 1/1/2034
| |
B-/NR | | |
1,563,086 |
|
1,500,000 | |
South Carolina Jobs-EDA, First Mortgage Health Facilities Revenue Refunding Bonds (Series 1998), 5.70% (The Lutheran Homes of South Carolina, Inc.)/(Original Issue Yield: 5.80%), 5/1/2026
| |
NR | | |
1,433,295 |
|
1,500,000 | |
South Carolina Jobs-EDA, Hospital Facilities Improvement Revenue Bonds, (Series 2000A), 7.375% (Palmetto Health Alliance)/(U.S. Treasury PRF 12/15/2010 @ 102)/(Original Issue Yield: 7.55%), 12/15/2021
| |
NR | | |
1,819,470 |
|
1,000,000 | |
Tobacco Settlement Revenue Management Authority, SC, Tobacco Settlement Asset-Backed Bonds (Series 2001B), 6.375% (Original Issue Yield: 6.532%), 5/15/2028
|
|
BBB/Baa3
|
|
|
1,079,360
|
| | |
TOTAL
|
|
|
|
|
7,046,251
|
| | |
South Dakota--0.4% | | | | | |
|
2,000,000 | |
Minnehaha County, SD, Health Facilities, Revenue Bonds (Series 2002A), 7.00% (Bethany Lutheran Home)/(Original Issue Yield: 7.198%), 12/1/2035
|
|
NR
|
|
|
2,006,680
|
| | |
Tennessee--2.7% | | | | | |
|
3,000,000 | |
Elizabethton, TN, Health & Educational Facilities Board, First Mortgage Hospital Revenue Refunding & Improvement Bonds (Series 2000B), 8.00% (Mountain States Health Alliance), 7/1/2033
| |
NR/Baa2 | | |
3,627,300 |
|
1,000,000 | |
Johnson City, TN, Health & Education Facilities Board, Retirement Facility Revenue Bonds (Series 2004A), 6.25% (Appalachian Christian Village)/(Original Issue Yield: 6.43%), 2/15/2032
| |
NR | | |
1,033,750 |
|
1,000,000 | |
Knox County, TN, Health Education & Housing Facilities Board, Revenue Bonds, 6.375% (Baptist Health System of East Tennessee)/(Original Issue Yield: 6.50%), 4/15/2022
| |
NR/Baa3 | | |
1,075,360 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Tennessee--continued | | | | | |
$ |
2,100,000 | |
Springfield, TN, Health & Educational Facilities Board, Hospital Revenue Bonds, 8.25% (NorthCrest Medical Center)/ (U.S. Treasury PRF 4/1/2006 @ 102)/(Original Issue Yield: 8.50%), 4/1/2012
| |
NR/#Aaa | |
$ |
2,162,832 |
|
5,000,000 | |
Springfield, TN, Health & Educational Facilities Board, Hospital Revenue Bonds, 8.50% (NorthCrest Medical Center)/ (U.S. Treasury PRF 4/1/2006 @ 102)/(Original Issue Yield: 8.875%), 4/1/2024
| |
NR/#Aaa | | |
5,260,900 |
|
1,000,000 | |
Sullivan County, TN, Health Educational & Housing Facilities Board, Hospital Revenue Bonds, 6.25% (Wellmont Health System)/(Original Issue Yield: 6.45%), 9/1/2022
|
|
BBB+/NR
|
|
|
1,111,730
|
| | |
TOTAL
|
|
|
|
|
14,271,872
|
| | |
Texas--5.9% | | | | | |
|
2,000,000 | |
ABIA Development Corp., TX, Airport Facilities Revenue Bonds (Series 1999), 7.25% (Aero Austin LP)/(Original Issue Yield: 7.50%), 1/1/2025
| |
NR | | |
2,034,240 |
|
800,000 | |
Abilene, TX Health Facilities Development Corp., Retirement Facilities Revenue Bonds (Series 2003A), 7.00% (Sears Methodist Retirement)/(Original Issue Yield: 7.25%), 11/15/2033
| |
NR | | |
877,320 |
|
1,000,000 | |
Austin, TX Convention Center Enterprises, Inc., First Tier Hotel Revenue Bonds (Series 2001A), 6.70% (Original Issue Yield: 6.75%), 1/1/2032
| |
BBB-/Baa3 | | |
1,067,080 |
|
1,000,000 | |
Brazos River Authority, TX, PCR Refunding Bonds (Series 2003A), 6.75% TOBs (TXU Energy), Mandatory Tender 4/1/2013
| |
BBB-/Baa2 | | |
1,146,270 |
|
715,000 | |
Brazos River Authority, TX, PCR Refunding Bonds (Series 2003C), 6.75% (TXU Energy)/(Original Issue Yield: 6.77%), 10/1/2038
| |
BBB-/Baa2 | | |
801,365 |
|
1,000,000 | |
Brazos River Authority, TX, PCR Refunding Bonds, 7.70% (TXU Energy), 4/1/2033
| |
BBB-/Baa2 | | |
1,205,170 |
|
2,380,000 | |
Brazos River Authority, TX, Refunding PCR Bonds (Series 2001C), 5.75% TOBs (TXU Energy), Mandatory Tender 11/1/2011
| |
BBB-/Baa2 | | |
2,546,410 |
|
1,000,000 | |
Brazos River Authority, TX, Revenue Refunding Bonds (Series 1999C), 7.75% (Centerpoint Energy Houston Electric), 12/1/2018
| |
BBB-/NR | | |
1,110,200 |
|
2,000,000 | |
Dallas-Fort Worth, TX, International Airport Facility Improvement Corp., Refunding Revenue Bonds (Series 2000A), 9.00% TOBs (American Airlines, Inc.), Mandatory Tender 5/1/2015
| |
CCC/Caa2 | | |
2,071,400 |
|
2,000,000 | |
Dallas-Fort Worth, TX, International Airport Facility Improvement Corp., Revenue Bonds, 7.625% (Delta Air Lines, Inc.)/(Original Issue Yield: 7.65%), 11/1/2021
| |
C/Ca | | |
320,000 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Texas--continued | | | | | |
$ |
4,000,000 | |
Decatur, TX, Hospital Authority, Hospital Revenue Bonds (Series 2004A), 7.125% (Wise Regional Health System), 9/1/2034
| |
NR | |
$ |
4,436,800 |
|
1,500,000 | |
El Paso, TX, HFDC, Senior Care Facilities Revenue Bonds, 7.75% (Bienvivir Senior Health Services), 8/15/2031
| |
NR | | |
1,654,995 |
|
500,000 | |
Gulf Coast, TX, Waste Disposal Authority, Waste Disposal Revenue Bonds (Series 2001), 6.65% (Valero Energy Corp.), 4/1/2032
| |
BBB-/Baa3 | | |
544,830 |
|
1,000,000 | |
Houston, TX, Airport System, Special Facilities Revenue Bonds (Series 2001), 7.00% (Continental Airlines, Inc.), 7/1/2029
| |
B-/Caa2 | | |
990,150 |
|
1,000,000 | |
Houston, TX, HFDC, Retirement Facilities Revenue Bonds (Series 2004A), 7.125% (Buckingham Senior Living Community)/(Original Issue Yield: 7.20%), 2/15/2034
| |
NR | | |
1,110,260 |
|
1,000,000 | |
Mesquite, TX, Health Facilities Development Corp., Retirement Facility Revenue Bonds, 7.625% (Christian Care Centers, Inc.- Greenway Village)/(Original Issue Yield: 7.75%), 2/15/2028
| |
BBB-/NR | | |
1,093,100 |
|
2,000,000 | |
North Central Texas HFDC, Retirement Facility Revenue Bonds (Series 1999), 7.50% (Northwest Senior Housing Corp. Edgemere Project)/(Original Issue Yield: 7.75%), 11/15/2029
| |
NR | | |
2,167,400 |
|
250,000 | |
Port of Corpus Christi, TX, IDC, Revenue Refunding Bonds (Series C), 5.40% (Valero Energy Corp.), 4/1/2018
| |
BBB-/Baa3 | | |
260,975 |
|
1,000,000 | |
Tarrant County, TX, HFDC, Revenue Bonds (Series 1998C), 5.75% (Bethesda Living Center)/(Original Issue Yield: 5.89%), 8/15/2018
| |
NR | | |
1,011,550 |
|
1,000,000 | |
Tarrant County, TX, HFDC, Revenue Bonds (Series 1998C), 5.75% (Bethesda Living Center)/(Original Issue Yield: 5.97%), 8/15/2028
| |
NR | | |
970,240 |
|
2,000,000 | |
Tarrant County, TX, Housing Finance Corp., MFH Revenue Bonds (Series 2002A), 6.25% (Quail Ridge Apartments Project), 4/1/2007
| |
NR | | |
1,901,040 |
|
2,000,000 | |
Texas State Affordable Housing Corp., MFH Revenue Bonds (Junior Series 2002B), 8.00% (American Housing Foundation)/(Original Issue Yield: 8.365%), 3/1/2032
| |
CC/NR | | |
842,840 |
|
1,485,000 |
5 |
Texas State Affordable Housing Corp., MFH Revenue Bonds (Series 2001B), 7.25% (NHT/GTEX Project), 10/1/2031
| |
D/NR | | |
149,376 |
|
1,000,000 | |
Tom Green County, TX, HFDC, Hospital Revenue Bonds, 6.75% (Shannon Health System)/(Original Issue Yield: 6.85%), 5/15/2021
|
|
NR/Baa3
|
|
|
1,092,090
|
| | |
TOTAL
|
|
|
|
|
31,405,101
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Virginia--3.1% | | | | | |
$ |
675,000 | |
Broad Street Community Development Authority, VA, Revenue Bonds, 7.10% (Original Issue Yield: 7.15%), 6/1/2016
| |
NR | |
$ |
761,846 |
|
1,000,000 | |
Broad Street Community Development Authority, VA, Revenue Bonds, 7.50% (Original Issue Yield: 7.625%), 6/1/2033
| |
NR | | |
1,127,340 |
|
2,000,000 | |
Henrico County, VA, EDA, Residential Care Facility Revenue Refunding Bonds, 6.70% (Virginia United Methodist Homes, Inc.)/(Original Issue Yield: 6.80%), 6/1/2027
| |
NR | | |
2,149,200 |
|
1,500,000 | |
Peninsula Port Authority, VA, Residential Care Facility Revenue Bonds (Series 2003A), 7.375% (Virginia Baptist Homes Obligated Group)/(Original Issue Yield: 7.625%), 12/1/2032
| |
NR | | |
1,679,490 |
|
7,500,000 | |
Pocahontas Parkway Association, VA, Toll Road Capital Appreciation Revenue Bonds (Series B) (Original Issue Yield: 5.75%), 8/15/2017
| |
BB-/Ba3 | | |
3,894,525 |
|
16,000,000 | |
Pocahontas Parkway Association, VA, Toll Road Revenue Bonds (Series 1998B) (Original Issue Yield: 5.90%), 8/15/2029
| |
BB-/Ba3 | | |
4,095,040 |
|
2,850,000 | |
Tobacco Settlement Financing Corp., VA, Revenue Bonds, 5.625% (Original Issue Yield: 5.78%), 6/1/2037
|
|
BBB/Baa3
|
|
|
2,962,461
|
| | |
TOTAL
|
|
|
|
|
16,669,902
|
| | |
Washington--1.0% | | | | | |
|
1,000,000 | |
Port of Seattle, WA, IDC, Special Facilities Revenue Bonds (Series 2001), 7.25% (Northwest Airlines, Inc.)/(Original Issue Yield: 7.50%), 4/1/2030
| |
NR | | |
934,980 |
|
1,000,000 | |
Skagit County, WA, Public Hospital District No. 1, Refunding Revenue Bonds, 6.00% (Skagit Valley Hospital)/(Original Issue Yield: 6.25%), 12/1/2023
| |
NR/Baa3 | | |
1,096,210 |
|
250,000 | |
Skagit County, WA, Public Hospital District No. 1, Revenue Bonds (Series 2005), 5.50% (Skagit Valley Hospital), 12/1/2030
| |
NR/Baa3 | | |
261,850 |
|
2,475,000 |
2,3 |
Washington State, Drivers (Series 1073), 12.72% (FSA INS), 7/1/2028
|
|
AAA/Aaa
|
|
|
3,185,548
|
| | |
TOTAL
|
|
|
|
|
5,478,588
|
| | |
Wisconsin--2.8% | | | | | |
|
750,000 | |
Milwaukee, WI, Redevelopment Authority, Redevelopment Education Revenue Bonds (Series 2005A), 5.75% (Milwaukee Science Education Consortium, Inc.)/(Original Issue Yield: 5.93%), 8/1/2035
| |
BB+/NR | | |
744,135 |
|
1,000,000 | |
Racine, WI, Solid Waste Disposal, Revenue Bonds, 3.25% TOBs (Republic Services, Inc.), Mandatory Tender 4/1/2009
| |
BBB+/NR | | |
984,680 |
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
MUNICIPAL BONDS--continued | | | | | |
| | |
Wisconsin--continued | | | | | |
$ |
1,250,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 1998), 5.70% (United Lutheran Program For The Aging, Inc.)/(Original Issue Yield: 5.778%), 3/1/2028
| |
NR | |
$ |
1,203,875 |
|
1,000,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 2002A), 7.375% (Divine Savior Healthcare), 5/1/2026
| |
NR | | |
1,052,120 |
|
880,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 2002A), 7.50% (Divine Savior Healthcare), 5/1/2032
| |
NR | | |
929,315 |
|
1,400,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 2004), 6.125% (Eastcastle Place, Inc.)/(Original Issue Yield: 6.25%), 12/1/2034
| |
NR | | |
1,426,348 |
|
750,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 2004A), 6.25% (Southwest Health Center)/(Original Issue Yield: 6.32%), 4/1/2034
| |
NR | | |
770,483 |
|
1,000,000 | |
Wisconsin State HEFA, Revenue Bonds (Series 2004A), 6.75% (Beaver Dam Community Hospitals, Inc.)/(Original Issue Yield: 6.95%), 8/15/2034
| |
NR | | |
1,074,260 |
|
2,000,000 | |
Wisconsin State HEFA, Revenue Bonds (Series B), 6.75% (Grant Regional Health Center, Inc.)/(Original Issue Yield: 6.90%), 10/1/2022
| |
NR | | |
2,000,360 |
|
1,250,000 | |
Wisconsin State HEFA, Revenue Bonds, 5.80% (Beaver Dam Community Hospitals, Inc.), 8/15/2028
| |
NR | | |
1,249,963 |
|
500,000 | |
Wisconsin State HEFA, Revenue Bonds, 6.625% (Tomah Memorial Hospital, Inc.)/(Original Issue Yield: 6.875%), 7/1/2028
| |
NR | | |
528,685 |
|
1,630,000 | |
Wisconsin State HEFA, Revenue Bonds, 6.00% (Agnesian Healthcare, Inc.)/(Original Issue Yield: 6.15%), 7/1/2030
| |
A-/A3 | | |
1,741,606 |
|
1,000,000 | |
Wisconsin State HEFA, Revenue Bonds, (Series 1998), 5.75% (Attic Angel Obligated Group)/(Original Issue Yield: 6.00%), 11/15/2027
|
|
NR
|
|
|
1,003,020
|
| | |
TOTAL
|
|
|
|
|
14,708,850
|
| | |
Wyoming--0.3% | | | | | |
|
1,500,000 | |
Teton County, WY, Hospital District, Hospital Revenue Bonds, 6.75% (St. John's Medical Center)/(Original Issue Yield: 7.00%), 12/1/2027
|
|
NR
|
|
|
1,570,620
|
| | |
TOTAL MUNICIPAL BONDS (IDENTIFIED COST $485,685,918)
|
|
|
|
|
514,073,455
|
Principal Amount
|
|
|
|
Credit Rating
1
|
|
|
Value
|
| | |
SHORT-TERM MUNICIPALS--0.3% | | | | | |
| | |
Alaska--0.3% | | | | | |
$ |
300,000 | |
Valdez, AK, Marine Terminal, (Series 2003A) Daily VRDNs (BP Pipelines (Alaska) Inc.)/(BP PLC GTD)
| |
A-1+/VMIG1 | |
$ |
300,000 |
|
1,100,000 | |
Valdez, AK, Marine Terminal, (Series 2003B) Daily VRDNs (BP Pipelines (Alaska) Inc.)/(BP PLC GTD)
|
|
A-1+/VMIG1
|
|
|
1,100,000
|
| | |
TOTAL SHORT-TERM MUNICIPALS (IDENTIFIED COST $1,400,000)
|
|
|
|
|
1,400,000
|
| | |
OTHER--0.9% | | | | | |
|
1,500,000 |
2,3 |
Charter Mac Equity Issuer Trust, Pfd., 7.60%, 11/30/2010
| |
NR/Baa1 | | |
1,713,645 |
|
1,000,000 |
2,3 |
GMAC Municipal Mortgage Trust, Pfd., (Series B-2), 5.50%, 10/31/2040
| |
NR/Baa1 | | |
1,013,140 |
|
2,000,000 |
2,3 |
Muni Mae TE Bond Subsidiary LLC, Pfd., 7.75%, 6/30/2050
|
|
NR/Baa1
|
|
|
2,293,740
|
| | |
TOTAL OTHER (IDENTIFIED COST $4,500,000)
|
|
|
|
|
5,020,525
|
| | |
TOTAL MUNICIPAL INVESTMENTS--97.4% (IDENTIFIED COST $491,585,918)
6
|
|
|
|
|
520,493,980
|
| | |
OTHER ASSETS AND LIABILITIES - NET--2.6%
|
|
|
|
|
14,075,974
|
| | |
TOTAL NET ASSETS--100%
|
|
|
|
$
|
534,569,954
|
Securities that are subject to the federal alternative minimum tax (AMT) represent 14.5% of the Fund's portfolio as calculated based upon total portfolio market value (percentage is unaudited).
1
Current ratings are unaudited.
2
Denotes a restricted security, including securities purchased under Rule 144A of the Securities Act of 1933. These securities, unless registered under the Act or exempted from registration, may only be sold to qualified institutional investors. At August 31, 2005, these securities amounted to $102,146,197 which represents 19.1% of total net assets.
3
Denotes a restricted security, including securities purchased under Rule 144A that have been deemed liquid by criteria approved by the Fund's Board of Directors. At August 31, 2005, these securities amounted to $99,839,071 which represents 18.7% of total net assets.
4
Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding short futures contracts.
5
Security is in default of principal and interest.
6
The cost of investments for federal tax purposes amounts to $491,382,646.
Note: The categories of investments are shown as a percentage of total net assets at August 31, 2005.
The following acronyms are used throughout this portfolio:
AMBAC |
- --American Municipal Bond Assurance Corporation |
BANs |
- --Bond Anticipation Notes |
COL |
- --Collateralized |
EDA |
- --Economic Development Authority |
EDFA |
- --Economic Development Financing Authority |
FHA |
- --Federal Housing Administration |
FLOATs |
- --Puttable Floating Option Tax-Exempt Receipts |
FSA |
- --Financial Security Assurance |
GNMA |
- --Government National Mortgage Association |
GO |
- --General Obligation |
GTD |
- --Guaranteed |
HDA |
- --Hospital Development Authority |
HEFA |
- --Health and Education Facilities Authority |
HFA |
- --Housing Finance Authority |
HFDC |
- --Health Facility Development Corporation |
IDA |
- --Industrial Development Authority |
IDB |
- --Industrial Development Bond |
IDC |
- --Industrial Development Corporation |
IDFA |
- --Industrial Development Finance Authority |
IDRB |
- --Industrial Development Revenue Bond |
INS |
- --Insured |
LT |
- --Limited Tax |
MFH |
- --Multifamily Housing |
PCR |
- --Pollution Control Revenue |
PCFA |
- --Pollution Control Finance Authority |
PRF |
- --Prerefunded |
RITES |
- --Residual Interest Tax-Exempt Securities Receipts |
SFM |
- --Single Family Mortgage |
TANs |
- --Tax Anticipation Notes |
TOBs |
- --Tender Option Bonds |
UT |
- --Unlimited Tax |
VRDNs |
- --Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
August 31, 2005
Assets:
| | | | | | | | |
Total investments in securities, at value (identified cost $491,585,918)
| | | | | |
$ |
520,493,980 | |
Cash
| | | | | | |
51,273 | |
Income receivable
| | | | | | |
8,737,954 | |
Receivable for investments sold
| | | | | | |
10,195,000 | |
Receivable for shares sold
|
|
|
|
|
|
|
1,995,721
|
|
TOTAL ASSETS
|
|
|
|
|
|
|
541,473,928
|
|
Liabilities:
| | | | | | | | |
Payable for investments purchased
| |
$ |
5,861,913 | | | | | |
Payable for shares redeemed
| | |
643,256 | | | | | |
Payable for daily variation margin
| | |
75,000 | | | | | |
Payable for distribution services fee (Note 5)
| | |
103,095 | | | | | |
Payable for shareholder services fee (Note 5)
| | |
111,975 | | | | | |
Accrued expenses
|
|
|
108,735
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
|
6,903,974
|
|
Net assets for 53,176,479 shares outstanding
|
|
|
|
|
|
$
|
534,569,954
|
|
Net Assets Consist of:
| | | | | | | | |
Paid-in capital
| | | | | |
$ |
554,829,398 | |
Net unrealized appreciation of investments and futures contracts
| | | | | | |
28,759,806 | |
Accumulated net realized loss on investments, futures contracts and swap contracts
| | | | | | |
(49,203,633 |
) |
Undistributed net investment income
|
|
|
|
|
|
|
184,383
|
|
TOTAL NET ASSETS
|
|
|
|
|
|
$
|
534,569,954
|
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share
| | | | | | | | |
Class A Shares:
| | | | | | | | |
Net asset value per share ($193,898,633 ÷ 19,285,322 shares outstanding), $0.001 par value, 500,000,000 shares authorized
|
|
|
|
|
|
|
$10.05
|
|
Offering price per share (100/95.50 of $10.05)
1
|
|
|
|
|
|
|
$10.52
|
|
Redemption proceeds per share
|
|
|
|
|
|
|
$10.05
|
|
Class B Shares:
| | | | | | | | |
Net asset value per share ($120,901,155 ÷ 12,031,124 shares outstanding), $0.001 par value, 500,000,000 shares authorized
|
|
|
|
|
|
|
$10.05
|
|
Offering price per share
|
|
|
|
|
|
|
$10.05
|
|
Redemption proceeds per share (94.50/100 of $10.05)
1
|
|
|
|
|
|
|
$9.50
|
|
Class C Shares:
| | | | | | | | |
Net asset value per share ($42,418,957 ÷ 4,220,752 shares outstanding), $0.001 par value, 500,000,000 shares authorized
|
|
|
|
|
|
|
$10.05
|
|
Offering price per share (100/99.00 of $10.05)
1
|
|
|
|
|
|
|
$10.15
|
|
Redemption proceeds per share (99.00/100 of $10.05)
1
|
|
|
|
|
|
|
$9.95
|
|
Class F Shares:
| | | | | | | | |
Net asset value per share ($177,351,209 ÷ 17,639,281 shares outstanding), $0.001 par value, 500,000,000 shares authorized
|
|
|
|
|
|
|
$10.05
|
|
Offering price per share (100/99.00 of $10.05)
1
|
|
|
|
|
|
|
$10.15
|
|
Redemption proceeds per share (99.00/100 of $10.05)
1
|
|
|
|
|
|
|
$9.95
|
|
1
See "What Do Shares Cost?" in the Prospectus.
See Notes which are an integral part of the Financial Statements
Statement of Operations
Year Ended August 31, 2005
Investment Income:
| | | | | | | | | | | | |
Interest
|
|
|
|
|
|
|
|
|
|
$
|
30,284,423
|
|
Expenses:
| | | | | | | | | | | | |
Investment adviser fee (Note 5)
| | | | | |
$ |
2,893,055 | | | | | |
Administrative personnel and services fee (Note 5)
| | | | | | |
386,781 | | | | | |
Custodian fees
| | | | | | |
24,249 | | | | | |
Transfer and dividend disbursing agent fees and expenses
| | | | | | |
288,505 | | | | | |
Directors'/Trustees' fees
| | | | | | |
13,802 | | | | | |
Auditing fees
| | | | | | |
17,016 | | | | | |
Legal fees
| | | | | | |
10,672 | | | | | |
Portfolio accounting fees
| | | | | | |
159,046 | | | | | |
Distribution services fee--Class B Shares (Note 5)
| | | | | | |
897,424 | | | | | |
Distribution services fee--Class C Shares (Note 5)
| | | | | | |
254,100 | | | | | |
Shareholder services fee--Class A Shares (Note 5)
| | | | | | |
402,407 | | | | | |
Shareholder services fee--Class B Shares (Note 5)
| | | | | | |
299,141 | | | | | |
Shareholder services fee--Class C Shares (Note 5)
| | | | | | |
84,682 | | | | | |
Shareholder services fee--Class F Shares (Note 5)
| | | | | | |
415,396 | | | | | |
Share registration costs
| | | | | | |
85,983 | | | | | |
Printing and postage
| | | | | | |
51,678 | | | | | |
Insurance premiums
| | | | | | |
10,993 | | | | | |
Taxes
| | | | | | |
35,181 | | | | | |
Miscellaneous
|
|
|
|
|
|
|
12,963
|
|
|
|
|
|
TOTAL EXPENSES
|
|
|
|
|
|
|
6,343,074
|
|
|
|
|
|
Waivers (Note 5):
| | | | | | | | | | | | |
Waiver of administrative personnel and services fee
| |
$ |
(19,363 |
) | | | | | | | | |
Waiver of shareholder services fee--Class F Shares
|
|
|
(430
|
)
|
|
|
|
|
|
|
|
|
TOTAL WAIVERS
|
|
|
|
|
|
|
(19,793
|
)
|
|
|
|
|
Net expenses
|
|
|
|
|
|
|
|
|
|
|
6,323,281
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
23,961,142
|
|
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:
| | | | | | | | | | | | |
Net realized gain on investments
| | | | | | | | | | |
605,441 | |
Net realized loss on futures contracts
| | | | | | | | | | |
(1,069,671 |
) |
Net change in unrealized appreciation of investments
| | | | | | | | | | |
18,615,903 | |
Net change in unrealized appreciation of futures contracts
|
|
|
|
|
|
|
|
|
|
|
(190,785
|
)
|
Net realized and unrealized gain on investments and futures contracts
|
|
|
|
|
|
|
|
|
|
|
17,960,888
|
|
Change in net assets resulting from operations
|
|
|
|
|
|
|
|
|
|
$
|
41,922,030
|
|
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
Year Ended August 31
|
|
|
2005
|
|
|
|
2004
|
|
Increase (Decrease) in Net Assets
| | | | | | | | |
Operations:
| | | | | | | | |
Net investment income
| |
$ |
23,961,142 | | |
$ |
23,940,920 | |
Net realized loss on investments and future contracts
| | |
(464,230 |
) | | |
(9,093,138 |
) |
Net change in unrealized appreciation/depreciation of investments and futures contracts
|
|
|
18,425,118
|
|
|
|
16,458,890
|
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
|
|
|
41,922,030
|
|
|
|
31,306,672
|
|
Distributions to Shareholders:
| | | | | | | | |
Distributions from net investment income
| | | | | | | | |
Class A Shares
| | |
(8,741,402 |
) | | |
(7,406,905 |
) |
Class B Shares
| | |
(5,660,776 |
) | | |
(6,353,710 |
) |
Class C Shares
| | |
(1,575,388 |
) | | |
(1,013,997 |
) |
Class F Shares
|
|
|
(9,124,639
|
)
|
|
|
(9,586,790
|
)
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS
|
|
|
(25,102,205
|
)
|
|
|
(24,361,402
|
)
|
Share Transactions:
| | | | | | | | |
Proceeds from sale of shares
| | |
133,745,722 | | | |
80,033,469 | |
Net asset value of shares issued to shareholders in payment of distributions declared
| | |
14,991,894 | | | |
14,045,160 | |
Cost of shares redeemed
|
|
|
(73,737,960
|
)
|
|
|
(81,624,180
|
)
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS
|
|
|
74,999,656
|
|
|
|
12,454,449
|
|
Change in net assets
|
|
|
91,819,481
|
|
|
|
19,399,719
|
|
Net Assets:
| | | | | | | | |
Beginning of period
|
|
|
442,750,473
|
|
|
|
423,350,754
|
|
End of period (including undistributed net investment income of $184,383 and $1,273,254, respectively)
|
|
$
|
534,569,954
|
|
|
$
|
442,750,473
|
|
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
August 31, 2005
1. ORGANIZATION
Federated Municipal High Yield Advantage Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a non-diversified open-end management investment company. The investment objective is to provide a high level of current income which is generally exempt from federal regular income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations and state and local taxes. The Fund offers four classes of shares: Class A, Class B, Class C, and Class F Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.
Investment Valuation
Municipal Bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue, and any other factors or market data the pricing service deems relevant. The Fund generally values short-term securities according to prices furnished by an independent pricing service, except that short-term securities with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost. Prices furnished by an independent pricing service are intended to be indicative of the mean between the bid and asked prices currently offered to institutional investors for the securities. Securities for which no quotations are readily available are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors (the "Directors").
Investment Income, Gains and Losses, Expenses, and Distributions
Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that each class bears certain expenses unique to that class such as distribution and shareholder services fees. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Premium and Discount Amortization
All premiums and discounts on fixed-income securities are amortized/accreted for financial statement purposes.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary.
Other Taxes
As an open-end management investment company incorporated in the state of Maryland but domiciled in Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax year.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Swap Contracts
The Fund may enter into swap contracts. A swap is an exchange of cash payments between the Fund and another party, which is based on a specific financial index. The value of the swap is adjusted daily and the change in value is recorded as unrealized appreciation or depreciation. When a swap contract is closed, the Fund recognizes a realized gain or loss. The swap contracts entered into by the Fund are on a forward-settling basis. For the year ended August 31, 2005, the Fund had no realized gain (loss) on swap contracts.
Risks may arise upon entering into these agreements from the potential inability of the counterparties to meet the terms of their contract and from unanticipated changes in the value of the financial index on which the swap agreement is based. The Fund uses swaps for hedging purposes to reduce its exposure to interest rate fluctuations.
At August 31, 2005, the Fund had no open swap contracts.
Futures Contracts
The Fund periodically may sell bond interest rate futures contracts to manage duration and to potentially reduce transaction costs. Upon entering into a bond interest rate futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities. For the year ended August 31, 2005, the Fund had realized losses on futures contracts of $1,069,671.
At August 31, 2005, the Fund had the following outstanding futures contracts:
Expiration Date
|
|
Contracts to Receive
|
|
Position
|
|
Unrealized Depreciation
|
December 2005
|
|
150 U.S. Treasury Note 10-Year Futures
|
|
Short
|
|
$(148,256)
|
Restricted Securities
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in accordance with procedures established by and under general supervision of the Directors.
Additional information on restricted securities, excluding securities purchased under Rule 144A that have been deemed liquid by the Directors, held at August 31, 2005, is as follows:
Security
|
|
Acquisition Date
|
|
|
Acquisition Cost
|
|
Allegheny County, PA, IDA, Cargo Facilities Lease Revenue Bonds (Series 1999), 6.625% (AFCO Cargo PIT LLC Project)/(Original Issue Yield: 6.75%), 9/1/2024
|
|
9/23/1999
|
|
$
|
1,969,900
|
California Statewide Communities Development Authority, MFH Revenue Bonds (Series 1999X), 6.65% (Magnolia City Lights Project), 7/1/2029
|
|
6/7/1999
|
|
$
|
1,285,000
|
California Statewide Communities Development Authority, Revenue Bonds, 6.625% (Tehiyah Day School), 11/1/2031
|
|
7/13/2001
|
|
$
|
1,000,000
|
Capital Trust Agency, FL, Revenue Bonds (Series 2001), 10.00% (Seminole Tribe of Florida Convention and Resort Hotel Facilities), 10/1/2033
|
|
4/23/2002-10/7/2002
|
|
$
|
6,060,232
|
Capital Trust Agency, FL, Revenue Bonds (Series 2003A), 8.95% (Seminole Tribe of Florida Convention and Resort Hotel Facilities), 10/1/2033
|
|
5/9/2003
|
|
$
|
1,000,000
|
Children's Trust, PR, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2005A) (Original Issue Yield: 6.50%), 5/15/2050
|
|
7/15/2005
|
|
$
|
541,890
|
Director of the State of Nevada Department of Business and Industry, Revenue Bonds (Series 2004A), 7.00% (Las Ventanas Retirement Community)/(Original Issue Yield: 7.125%), 11/15/2034
|
|
12/23/2004
|
|
$
|
1,279,850
|
Security
|
|
Acquisition Date
|
|
|
Acquisition Cost
|
|
Director of the State of Nevada Department of Business and Industry, Revenue Bonds (Series 2004B), 6.75% (Las Ventanas Retirement Community)/(Original Issue Yield: 6.875%), 11/15/2023
|
|
12/9/2004
|
|
$
|
986,780
|
Kansas City, MO, IDA, MFH Revenue Bonds, 6.90% (Woodbridge Apartments Project), 8/1/2030
|
|
7/27/1999
|
|
$
|
2,445,000
|
Louisiana Public Facilities Authority Hospital Revenue, Revenue Bonds, 8.625% (Lake Charles Memorial Hospital)/(Original Issue Yield: 8.75%), 12/1/2030
|
|
8/30/2000
|
|
$
|
1,953,424
|
Maryland State IDFA, Economic Development Revenue Bonds (Series 2005A), 6.00% (Our Lady of Good Counsel High School), 5/1/2035
|
|
7/8/2005
|
|
$
|
500,000
|
Miami Beach, FL, Health Facilities Authority, Refunding Revenue Bonds, 6.75% (Mt. Sinai Medical Center, FL)/(Original Issue Yield: 7.05%), 11/15/2029
|
|
4/26/2004
|
|
$
|
675,248
|
New York City, NY, IDA, Liberty Revenue Bonds (Series A), 6.50% (7 World Trade Center LLC), 3/1/2035
|
|
3/15/2005
|
|
$
|
8,000,000
|
New York City, NY, IDA, Liberty Revenue Bonds (Series B), 6.75% (7 World Trade Center LLC), 3/1/2015
|
|
3/15/2005
|
|
$
|
2,000,000
|
Port of Greater Cincinnati, OH, Development Authority, Special Assessment Revenue Bonds, 6.40% (Cincinnati Mills), 2/15/2034
|
|
2/11/2004
|
|
$
|
450,000
|
Puerto Rico Highway and Transportation Authority, RITES (Series PA 331B), 7.78959% (AMBAC INS), 1/1/2011
|
|
3/3/1998
|
|
$
|
1,158,780
|
Sandoval County, NM, Revenue Bonds, 7.75% (Santa Ana Pueblo Project), 7/1/2015
|
|
6/29/2004
|
|
$
|
940,000
|
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.
3. CAPITAL STOCK
The following tables summarize capital stock activity:
Year Ended August 31
|
|
2005
|
|
2004
|
Class A Shares:
|
|
Shares
|
|
|
|
Amount
|
|
|
Shares
|
|
|
|
Amount
|
|
Shares sold
| |
6,822,549 | | |
$ |
67,441,835 | | |
3,647,879 | | |
$ |
35,444,755 | |
Shares issued to shareholders in payment of distributions declared
| |
650,139 | | | |
6,396,061 | | |
556,209 | | | |
5,377,893 | |
Shares redeemed
|
|
(2,273,605
|
)
|
|
|
(22,416,797
|
)
|
|
(2,415,498
|
)
|
|
|
(23,377,043
|
)
|
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS
|
|
5,199,083
|
|
|
$
|
51,421,099
|
|
|
1,788,590
|
|
|
$
|
17,445,605
|
|
| | | | | | | | | | | | | | |
Year Ended August 31
|
|
2005
|
|
2004
|
Class B Shares:
|
|
Shares
|
|
|
|
Amount
|
|
|
Shares
|
|
|
|
Amount
|
|
Shares sold
| |
2,062,859 | | |
$ |
20,380,095 | | |
1,938,395 | | |
$ |
18,820,868 | |
Shares issued to shareholders in payment of distributions declared
| |
299,211 | | | |
2,940,775 | | |
334,869 | | | |
3,237,939 | |
Shares redeemed
|
|
(2,714,177
|
)
|
|
|
(26,776,320
|
)
|
|
(2,958,378
|
)
|
|
|
(28,612,171
|
)
|
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS
|
|
(352,107
|
)
|
|
$
|
(3,455,450
|
)
|
|
(685,114
|
)
|
|
$
|
(6,553,364
|
)
|
| | | | | | | | | | | | | | |
Year Ended August 31
|
|
2005
|
|
2004
|
Class C Shares:
|
|
Shares
|
|
|
|
Amount
|
|
|
Shares
|
|
|
|
Amount
|
|
Shares sold
| |
1,981,610 | | |
$ |
19,566,807 | | |
1,712,878 | | |
$ |
16,695,062 | |
Shares issued to shareholders in payment of distributions declared
| |
102,826 | | | |
1,011,870 | | |
67,904 | | | |
656,448 | |
Shares redeemed
|
|
(505,502
|
)
|
|
|
(4,988,610
|
)
|
|
(614,379
|
)
|
|
|
(5,906,976
|
)
|
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS
|
|
1,578,934
|
|
|
$
|
15,590,067
|
|
|
1,166,403
|
|
|
$
|
11,444,534
|
|
| | | | | | | | | | | | | | |
Year Ended August 31
|
|
2005
|
|
2004
|
Class F Shares:
|
|
Shares
|
|
|
|
Amount
|
|
|
Shares
|
|
|
|
Amount
|
|
Shares sold
| |
2,668,509 | | |
$ |
26,356,985 | | |
938,640 | | |
$ |
9,072,784 | |
Shares issued to shareholders in payment of distributions declared
| |
472,187 | | | |
4,643,188 | | |
493,600 | | | |
4,772,880 | |
Shares redeemed
|
|
(1,984,471
|
)
|
|
|
(19,556,233
|
)
|
|
(2,446,617
|
)
|
|
|
(23,727,990
|
)
|
NET CHANGE RESULTING FROM CLASS F SHARE TRANSACTIONS
|
|
1,156,225
|
|
|
$
|
11,443,940
|
|
|
(1,014,377
|
)
|
|
$
|
(9,882,326
|
)
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS
|
|
7,582,135
|
|
|
$
|
74,999,656
|
|
|
1,255,502
|
|
|
$
|
12,454,449
|
|
4. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due in part to differing treatments for defaulted security interest and discount accretion/premium amortization on debt securities.
For the year ended August 31, 2005, permanent differences identified and reclassified among the components of net assets were as follows:
Increase (Decrease)
|
Paid-In Capital
|
|
Undistributed Net Investment Income (Loss)
|
|
Accumulated Net Realized Gains (Losses)
|
$(87,954)
|
|
$52,192
|
|
$35,762
|
Net investment income, net realized gains (losses), and net assets were not affected by this reclassification.
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended August 31, 2005 and 2004, was as follows:
|
|
2005
|
|
2004
|
Tax-exempt income
|
|
$25,102,205
|
|
$24,361,402
|
As of August 31, 2005, the components of distributable earnings on a tax basis were as follows:
Undistributed tax-exempt income
|
|
$
|
184,382
|
Net unrealized appreciation
|
|
$
|
29,111,334
|
Capital loss carryforward
|
|
$
|
49,555,161
|
At August 31, 2005, the cost of investments for federal tax purposes was $491,382,646. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation from futures contracts was $29,111,334. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $36,307,575 and net unrealized depreciation from investments for those securities having an excess of cost over value of $7,196,241.
The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable primarily to differing treatments for the deferral of losses on wash sales and discount accretion/premium amortization on debt securities.
At August 31, 2005, the Fund had a capital loss carryforward of $49,555,161 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
Expiration Year
|
|
Expiration Amount
|
2008
|
|
$24,259,223
|
2009
|
|
$ 4,968,940
|
2010
|
|
$ 3,907,651
|
2011
|
|
$ 5,101,855
|
2012
|
|
$ 3,341,471
|
2013
|
|
$ 7,976,021
|
The Fund received a copy of a proposed adverse determination letter issued by the Internal Revenue Service to the issuer of the following security. In the event that this determination is not reversed or otherwise resolved by the issuer, the Fund may need to report the income from this security as taxable income.
Security
|
|
Market Value
|
Capital Trust Agency, FL, Revenue Bonds (Series 2001), 10.00% (Seminole Tribe of Florida Convention and Resort Hotel Facilities), 10/1/2033
|
|
$6,613,560
|
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.60% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:
Maximum Administrative Fee
|
|
Average Aggregate Daily Net Assets of the Federated Funds
|
0.150%
|
|
on the first $5 billion
|
0.125%
|
|
on the next $5 billion
|
0.100%
|
|
on the next $10 billion
|
0.075%
|
|
on assets in excess of $20 billion
|
The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended August 31, 2005, the net fee paid to FAS was 0.076% of average daily net assets of the Fund.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class A Shares, Class B Shares, Class C Shares, and Class F Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.
Share Class Name
|
|
Percentage of Average Daily Net Assets of Class
|
Class A Shares
|
|
0.25%
|
Class B Shares
|
|
0.75%
|
Class C Shares
|
|
0.75%
|
Class F Shares
|
|
0.25%
|
FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. Rather than paying financial intermediaries directly, the Fund may pay fees to FSC and FSC will use the fees to compensate financial intermediaries. For the year ended August 31, 2005, FSC retained $124,232 of fees paid by the Fund.
Sales Charges
For the year ended August 31, 2005, FSC retained $199,665 in sales charges from the sale of Class A Shares. FSC also retained $13,497 of contingent deferred sales charges relating to redemptions of Class A Shares, $6,811 relating to redemptions of Class C Shares, and $1,346 relating to redemption of Class F Shares. See "What Do Shares Cost?" in the Prospectus.
Shareholder Services Fee
The Fund will pay fees (Services Fees) up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares, Class C Shares, and Class F Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC), a subsidiary of Federated Investors, Inc., for providing services to shareholders and maintaining shareholder accounts. Under certain agreements, rather than paying financial intermediaries directly, the Fund may pay Service Fees to FSSC and FSSC will use the fees to compensate financial intermediaries. FSSC or these financial intermediaries may voluntarily choose to waive any portion of their fee. This voluntary waiver can be modified or terminated at any time. For the year ended August 31, 2005, FSSC voluntarily waived $430 of its fee. For the year ended August 31, 2005, FSSC retained $12,631 of fees paid by the Fund.
Interfund Transactions
During the year ended August 31, 2005, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $250,663,755 and $168,505,000, respectively.
General
Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.
6. INVESTMENT RISK
The Fund has 52.3% of its portfolio invested in lower rated and comparable quality unrated high-yield securities. Investments in higher-yield securities may be subject to a greater degree of credit risk and the risk tends to be more sensitive to economic conditions than higher rated securities. The risk of loss due to default by the issuer may be significantly greater for the holders of high-yielding securities because such securities are generally unsecured and often subordinated to other creditors of the issuer.
7. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended August 31, 2005, were as follows:
Purchases
|
|
$
|
151,299,264
|
Sales
|
|
$
|
84,496,719
|
8. LEGAL PROCEEDINGS
Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated (Funds) were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District
Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.
9. FEDERAL TAX INFORMATION (UNAUDITED)
At August 31, 2005, 100% of the distributions from net investment income are exempt from federal income tax, other than the federal alternative minimum tax.
Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FEDERATED MUNICIPAL HIGH YIELD ADVANTAGE FUND, INC.:
We have audited the accompanying statement of assets and liabilities of Federated Municipal High Yield Advantage Fund, Inc. (the "Fund"), including the portfolio of investments, as of August 31, 2005, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Federated Municipal High Yield Advantage Fund, Inc. at August 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Ernst & Young LLP
Boston, Massachusetts
October 10, 2005
Board of Directors and Fund Officers
The Board is responsible for managing the Fund's business affairs and for exercising all the Fund's powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Fund. Where required, the tables separately list Board members who are "interested persons" of the Fund (i.e., "Interested" Board members) and those who are not (i.e., "Independent" Board members). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA. As of December 31, 2004, the Federated Fund Complex consisted of 44 investment companies (comprising 133 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about Fund Directors and is available, without charge and upon
request, by calling 1-800-341-7400.
INTERESTED DIRECTORS BACKGROUND
|
|
|
Name Birth Date Address Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
|
John F. Donahue*
Birth Date: July 28, 1924 CHAIRMAN AND DIRECTOR Began serving: November 1986 | |
Principal Occupations
: Chairman and Director or Trustee of the Federated Fund Complex; Chairman and Director, Federated Investors, Inc.
Previous Positions
: Trustee, Federated Investment Management Company and Chairman and Director, Federated Investment Counseling. |
|
|
|
J. Christopher Donahue*
Birth Date: April 11, 1949 PRESIDENT AND DIRECTOR Began serving: November 1998 | |
Principal Occupations
: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Passport Research, Ltd.; Trustee, Federated Shareholder Services Company; Director, Federated Services Company.
Previous Positions
: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd. |
|
|
|
|
|
|
Name Birth Date Address Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
|
Lawrence D. Ellis, M.D.*
Birth Date: October 11, 1932 3471 Fifth Avenue Suite 1111 Pittsburgh, PA DIRECTOR Began serving: August 1987 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; Professor of Medicine, University of Pittsburgh; Medical Director, University of Pittsburgh Medical Center Downtown; Hematologist, Oncologist and Internist, University of Pittsburgh Medical Center.
Other Directorships Held
: Member, National Board of Trustees, Leukemia Society of America.
Previous Positions
: Trustee, University of Pittsburgh; Director, University of Pittsburgh Medical Center. |
|
|
|
* Family relationships and reasons for "interested" status: John F. Donahue is the father of J. Christopher Donahue; both are "interested" due to the positions they hold with Federated Investors, Inc. and its subsidiaries. Lawrence D. Ellis, M.D. is "interested" because his son-in-law is employed by the Fund's principal underwriter, Federated Securities Corp.
INDEPENDENT DIRECTORS BACKGROUND
|
|
|
Name Birth Date Address Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
|
Thomas G. Bigley
Birth Date: February 3, 1934 15 Old Timber Trail Pittsburgh, PA DIRECTOR Began serving: November 1994 | |
Principal Occupation
: Director or Trustee of the Federated Fund Complex.
Other Directorships Held
: Director, Member of Executive Committee, Children's Hospital of Pittsburgh; Director, University of Pittsburgh.
Previous Position
: Senior Partner, Ernst & Young LLP. |
|
|
|
John T. Conroy, Jr.
Birth Date: June 23, 1937 Investment Properties Corporation 3838 North Tamiami Trail Suite 402 Naples, FL DIRECTOR Began serving: August 1991 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida.
Previous Positions
: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation. |
|
|
|
|
|
|
Name Birth Date Address Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
|
Nicholas P. Constantakis
Birth Date: September 3, 1939 175 Woodshire Drive Pittsburgh, PA DIRECTOR Began serving: November 1998 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex.
Other Directorships Held
: Director and Member of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide).
Previous Position
: Partner, Andersen Worldwide SC. |
|
|
|
John F. Cunningham
Birth Date: March 5, 1943 353 El Brillo Way Palm Beach, FL DIRECTOR Began serving: November 1998 | |
Principal Occupation
: Director or Trustee of the Federated Fund Complex.
Other Directorships Held
: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College.
Previous Positions
: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc. |
|
|
|
Peter E. Madden
Birth Date: March 16, 1942 One Royal Palm Way 100 Royal Palm Way Palm Beach, FL DIRECTOR Began serving: November 1991 | |
Principal Occupation
: Director or Trustee of the Federated Fund Complex.
Other Directorships Held
: Board of Overseers, Babson College.
Previous Positions
: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. |
|
|
|
Charles F. Mansfield, Jr.
Birth Date: April 10, 1945 80 South Road Westhampton Beach, NY DIRECTOR Began serving: November 1998 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; Management Consultant; Executive Vice President, DVC Group, Inc. (marketing communications and technology) (prior to 9/1/00).
Previous Positions
: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University. |
|
|
|
|
|
|
Name Birth Date Address Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
|
John E. Murray, Jr., J.D., S.J.D.
Birth Date: December 20, 1932 Chancellor, Duquesne University Pittsburgh, PA DIRECTOR Began serving: February 1995 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University; Partner, Murray, Hogue and Lannis.
Other Directorships Held
: Director, Michael Baker Corp. (engineering, construction, operations and technical services).
Previous Positions
: President, Duquesne University; Dean and Professor of Law, University of Pittsburgh School of Law; Dean and Professor of Law, Villanova University School of Law. |
|
|
|
Marjorie P. Smuts
Birth Date: June 21, 1935 4905 Bayard Street Pittsburgh, PA DIRECTOR Began serving: November 1986 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; Public Relations/Marketing Consultant/Conference Coordinator.
Previous Positions
: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.; Owner, Scandia Bord. |
|
|
|
John S. Walsh
Birth Date: November 28, 1957 2604 William Drive Valparaiso, IN DIRECTOR Began serving: November 1998 | |
Principal Occupations
: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.
Previous Position
: Vice President, Walsh & Kelly, Inc. |
|
|
|
OFFICERS
|
|
|
Name Birth Date Positions Held with Fund Date Service Began
|
|
Principal Occupation(s) for Past Five Years and Previous Position(s)
|
John W. McGonigle
Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Began serving: January 1987 | |
Principal Occupations
: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc.
Previous Positions
: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
|
|
|
Richard J. Thomas
Birth Date: June 17, 1954 TREASURER Began serving: November 1998 | |
Principal Occupations
: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services.
Previous Positions
: Vice President, Federated Administrative Services; held various management positions within Funds Financial Services Division of Federated Investors, Inc. |
|
|
|
Richard B. Fisher
Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: August 2002 | |
Principal Occupations
: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp.
Previous Positions
: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated Securities Corp. |
|
|
|
Mary Jo Ochson
Birth Date: September 12, 1953 CHIEF INVESTMENT OFFICER AND VICE PRESIDENT Began serving: November 1998 | |
Principal Occupations
: Mary Jo Ochson has been the Fund's Portfolio Manager since May 1996. Ms. Ochson was named Chief Investment Officer of tax-exempt, fixed-income products in 2004 and is a Vice President of the Fund. She joined Federated in 1982 and has been a Senior Portfolio Manager and a Senior Vice President of the Fund's Adviser since 1996. Ms. Ochson is a Chartered Financial Analyst and received her M.B.A. in Finance from the University of Pittsburgh. |
|
|
|
Board Review of Advisory Contract
As required by the Act, the Fund's Board has reviewed the Fund's investment advisory contract. The Board's decision to approve the contract reflects the exercise of its business judgment on whether to continue the existing arrangements. During its review of the contract, the Board considers many factors, among the most material of which are: the Fund's investment objectives; the Adviser's management philosophy, personnel, processes, and investment and operating strategies; long-term performance; the preferences and expectations of Fund shareholders and their relative sophistication; the continuing state of competition in the mutual fund industry; the range of comparable fees for similar funds in the mutual fund industry; the range and quality of services provided to the Fund and its shareholders by the Federated organization in addition to investment advisory services; and the Fund's relationship to the Federated family of funds.
In its decision to appoint or renew the Adviser, the Board is mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognizes that most shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and in the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's "selection" or approval of the Adviser must reflect the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund. The Board also considers the compensation and benefits received by the Adviser. This includes fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute fund trades, as well as advisory
fees. In this regard, the Board is aware that various courts have interpreted provisions of the Act and have indicated in their decisions that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the Fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize "economies of scale" as the Fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with the Fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts bearing on the Adviser's service and fee. The Fund's Board is aware of these factors and is guided by them in its review of the Fund's advisory contract to the extent they are appropriate and relevant, as discussed further below.
The Board considers and weighs these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and is assisted in its deliberations by the advice of independent legal counsel. In this regard, the Board requests and receives substantial and detailed information about the Fund and the Federated organization. Federated provides much of this information at each regular meeting of the Board, and furnishes additional reports in connection with the particular meeting at which the Board's formal review of the advisory contract occurs. In between regularly scheduled meetings, the Board may receive information on particular matters as the need arises. Thus, the Board's evaluation of an advisory contract is informed by reports covering such matters as: the Adviser's investment philosophy, personnel, and processes; operating strategies; the Fund's short- and long-term performance (in absolute terms, both on a gross
basis and net of expenses, as well as in relationship to its particular investment program and certain competitor or "peer group" funds and/or other benchmarks, as appropriate), and comments on the reasons for performance; the Fund's expenses (including the advisory fee itself and the overall expense structure of the Fund, both in absolute terms and relative to similar and/or competing funds, with due regard for contractual or voluntary expense limitations); the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities; the nature and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to
them. The evaluation process is evolutionary, reflecting continually developing considerations. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.
With respect to the Fund's performance and expenses in particular, the Board has found the use of comparisons to other mutual funds with comparable investment programs to be particularly useful, given the high degree of competition in the mutual fund business. The Board focuses on comparisons with other similar mutual funds (rather than non-mutual fund products or services) because, simply put, they are more relevant. For example, other mutual funds are the products most like the Fund, they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle already chosen by the Fund's investors. The range of their fees and expenses therefore appears to be a generally reliable indication of what consumers have found to be reasonable in the precise marketplace in which the Fund competes. The Fund's ability to deliver competitive performance when compared to its peer group may be a useful indicator of how the Adviser is executing on the Fund's
investment program, which would in turn assist the Board in reaching a conclusion that the nature, extent, and quality of the Adviser's investment management services are such as to warrant continuation of the advisory contract.
The Board also receives financial information about Federated, including reports on the compensation and benefits Federated derives from its relationships with the Federated funds. These reports cover not only the fees under the advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The reports also discuss any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades as well as waivers of fees and/or reimbursements of expenses. In order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waive fees and/or reimburse expenses. Although the Board considers the profitability of the Federated organization as a whole, it does not evaluate, on a fund-by-fund basis, Federated's "profitability" and/or "costs" (which would include an assessment as to whether
"economies of scale" would be realized if the fund were to grow to some sufficient size). In the Board's view, the cost of performing advisory services on a fund-specific basis is both difficult to estimate satisfactorily and a relatively minor consideration in its overall evaluation. Analyzing isolated funds would require constructed allocations of the costs of shared resources and operations based on artificial assumptions that are inconsistent with the existing relationships within a large and diversified family of funds that receive advisory and other services from the same organization. Although the Board is always eager to discover any genuine "economies of scale," its experience has been that such "economies" are likely to arise only when a fund grows dramatically, and becomes and remains very large in size. Even in these instances, purchase and redemption activity, as well as the presence of expense limitations (if any), may offset any perceived economies. As suggested above, the Board
considers the information it receives about the Fund's performance and expenses as compared to an appropriate set of similar competing funds to be more relevant.
The Board bases its decision to approve an advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above are relevant to every Federated fund, nor does the Board consider any one of them to be determinative. With respect to the factors that are relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provide a satisfactory basis to support the decision to continue the existing arrangements.
Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on "Form N-PX" of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available through Federated's website. Go to FederatedInvestors.com, select "Products," select the "Prospectuses and Regulatory Reports" link, then select the Fund to access the link to Form N-PX. This information is also available from the EDGAR database on the SEC's website at www.sec.gov.
Quarterly Portfolio Schedule
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on "Form N-Q." These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the "Products" section of Federated's website at FederatedInvestors.com by clicking on "Portfolio Holdings" and selecting the name of the Fund, or by selecting the name of the Fund and clicking on "Portfolio Holdings." You must register on the website the first time you wish to access this information.
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.
Federated
World-Class Investment Manager
Federated Municipal High Yield Advantage Fund, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Cusip 313910200
Cusip 313910309
Cusip 313910408
Cusip 313910101
G01091-01 (10/05)
Federated is a registered mark of Federated Investors, Inc. 2005 (c)Federated Investors, Inc.
Item 2. Code of Ethics
(a) As of the end of the period covered by this report, the registrant has
adopted a code of ethics (the "Section 406 Standards for Investment Companies
- - Ethical Standards for Principal Executive and Financial Officers") that
applies to the registrant's Principal Executive Officer and Principal
Financial Officer; the registrant's Principal Financial Officer also serves
as the Principal Accounting Officer.
(c) Not Applicable
(d) Not Applicable
(e) Not Applicable
(f)(3) The registrant hereby undertakes to provide any person, without
charge, upon request, a copy of the code of ethics. To request a copy of the
code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy
of the Section 406 Standards for Investment Companies - Ethical Standards for
Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each member of the Board's Audit
Committee is an "audit committee financial expert," and that each such member
is "independent," for purposes of this Item. The Audit Committee consists of
the following Board members: Thomas G. Bigley, John T. Conroy, Jr., Nicholas
P. Constantakis and Charles F. Mansfield, Jr.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees billed to the registrant for the two most recent
fiscal years:
Fiscal year ended 2005 - $21,883
Fiscal year ended 2004 - $16,984
(b) Audit-Related Fees billed to the registrant for the two most
recent fiscal years:
Fiscal year ended 2005 - $81
Fiscal year ended 2004 - $0
Transfer agent testing.
Amount requiring approval of the registrant's audit committee pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $127,653 and $0
respectively. Fiscal year ended 2005 - Sarbanes Oxley sec. 302
procedures.
(c) Tax Fees billed to the registrant for the two most recent fiscal
years:
Fiscal year ended 2005 - $0
Fiscal year ended 2004 - $0
Amount requiring approval of the registrant's audit committee pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0
respectively.
(d) All Other Fees billed to the registrant for the two most recent
fiscal years:
Fiscal year ended 2005 - $0
Fiscal year ended 2004 - $0
Amount requiring approval of the registrant's audit committee pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0
respectively.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and
non-audit services performed by the independent auditor in order to assure
that the provision of such services do not impair the auditor's
independence. Unless a type of service to be provided by the independent
auditor has received general pre-approval, it will require specific
pre-approval by the Audit Committee. Any proposed services exceeding
pre-approved cost levels will require specific pre-approval by the Audit
Committee.
Certain services have the general pre-approval of the Audit
Committee. The term of the general pre-approval is 12 months from the date
of pre-approval, unless the Audit Committee specifically provides for a
different period. The Audit Committee will annually review the services that
may be provided by the independent auditor without obtaining specific
pre-approval from the Audit Committee and may grant general pre-approval for
such services. The Audit Committee will revise the list of general
pre-approved services from time to time, based on subsequent determinations.
The Audit Committee will not delegate its responsibilities to pre-approve
services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its
Chairman. The Chairman will report any pre-approval decisions to the Audit
Committee at its next scheduled meeting. The Committee will designate
another member with such pre-approval authority when the Chairman is
unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to
the specific pre-approval of the Audit Committee. The Audit Committee must
approve any changes in terms, conditions and fees resulting from changes in
audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically
approved by the Audit Committee, the Audit Committee may grant general
pre-approval for other Audit Services, which are those services that only the
independent auditor reasonably can provide. The Audit Committee has
pre-approved certain Audit services, all other Audit services must be
specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Company's
financial statements or that are traditionally performed by the independent
auditor. The Audit Committee believes that the provision of Audit-related
services does not impair the independence of the auditor, and has
pre-approved certain Audit-related services, all other Audit-related services
must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide
Tax services to the Company such as tax compliance, tax planning and tax
advice without impairing the auditor's independence. However, the Audit
Committee will not permit the retention of the independent auditor in
connection with a transaction initially recommended by the independent
auditor, the purpose of which may be tax avoidance and the tax treatment of
which may not be supported in the Internal Revenue Code and related
regulations. The Audit Committee has pre-approved certain Tax services, all
Tax services involving large and complex transactions must be specifically
pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or
attest services the pre-approval requirement is waived if:
(1) The aggregate amount of all such services provided constitutes no more
than five percent of the total amount of revenues paid by
the registrant, the registrant's adviser (not including any
sub-adviser whose role is primarily portfolio management
and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or
under common control with the investment adviser that
provides ongoing services to the registrant to its
accountant during the fiscal year in which the services are
provided;
(2) Such services were not recognized by the registrant, the registrant's
adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with
the investment adviser that provides ongoing services to
the registrant at the time of the engagement to be
non-audit services; and
(3) Such services are promptly brought to the attention of the Audit
Committee of the issuer and approved prior to the
completion of the audit by the Audit Committee or by one or
more members of the Audit Committee who are members of the
board of directors to whom authority to grant such
approvals has been delegated by the Audit Committee.
The Audit Committee may grant general pre-approval to those permissible
non-audit services classified as All Other services that it believes are
routine and recurring services, and would not impair the independence of the
auditor.
The SEC's rules and relevant guidance should be consulted to determine
the precise definitions of prohibited non-audit services and the
applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the
independent auditor will be established annually by the Audit Committee. Any
proposed services exceeding these levels will require specific pre-approval
by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific
approval by the Audit Committee will be submitted to the Audit Committee by
both the independent auditor and the Principal Accounting Officer and/or
Internal Auditor, and must include a joint statement as to whether, in their
view, the request or application is consistent with the SEC's rules on
auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that
were approved by the registrants audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2005 - 0%
Fiscal year ended 2004 - 0%
Percentage of services provided to the registrants investment
adviser and any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing
services to the registrant that were approved by the registrants
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X, 0% and 0% respectively.
4(c)
Fiscal year ended 2005 - 0%
Fiscal year ended 2004 - 0%
Percentage of services provided to the registrants investment
adviser and any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing
services to the registrant that were approved by the registrants
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X, 0% and 0% respectively.
4(d)
Fiscal year ended 2005 - 0%
Fiscal year ended 2004 - 0%
Percentage of services provided to the registrants investment
adviser and any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing
services to the registrant that were approved by the registrants
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X, 0% and 0% respectively.
(f) NA
(g) Non-Audit Fees billed to the registrant, the registrant's investment
adviser, and certain entities controlling, controlled by or under
common control with the investment adviser:
Fiscal year ended 2005 - $202,519
Fiscal year ended 2004 - $239,952
(h) The registrant's Audit Committee has considered that the
provision of non-audit services that were rendered to the registrant's
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant's
independence.
Item 5. Audit Committee of Listed Registrants
Not Applicable
Item 6. Schedule of Investments
Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not Applicable
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not Applicable
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers
Not Applicable
Item 10. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 11. Controls and Procedures
(a) The registrant's President and Treasurer have concluded that the
registrant's disclosure controls and procedures (as defined in rule 30a-3(c)
under the Act) are effective in design and operation and are sufficient to
form the basis of the certifications required by Rule 30a-(2) under the Act,
based on their evaluation of these disclosure controls and procedures within
90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in rule 30a-3(d) under the Act) during the last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 12. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Federated Municipal High Yield Advantage Fund, Inc.
By /S/ Richard J. Thomas
Richard J. Thomas, Principal Financial Officer
(insert name and title)
Date October 21, 2005
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/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
Date October 21, 2005
By /S/ Richard J. Thomas
Richard J. Thomas, Principal Financial Officer
Date October 21, 2005
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`
end
EX-99.CERT
6
fmhyaf302.txt
N-CSR Item 12(a)(2) - Exhibits: Certifications
I, J. Christopher Donahue, certify that:
1. I have reviewed this report on Form N-CSR of Federated Municipal High
Yield Advantage Fund, Inc. ("registrant");
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 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: October 21, 2005
/S/ J. Christopher Donahue
J. Christopher Donahue, President - Principal Executive Officer
N-CSR Item 12(a)(2) - Exhibits: Certifications
I, Richard J. Thomas, certify that:
1. I have reviewed this report on Form N-CSR of Federated Municipal High
Yield Advantage Fund, Inc. ("registrant");
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 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: October 21, 2005
/S/ Richard J. Thomas
Richard J. Thomas, Treasurer - Principal Financial Officer
EX-99.906CERT
7
fmhyaf906.txt
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C.ss. 1350, the undersigned officers of Federated Municipal
High Yield Advantage Fund, Inc. (the "Registrant"), hereby certify, to the
best of our knowledge, that the Registrant's Report on Form N-CSR for the
period ended August 31, 2005 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the Securities and
Exchange Act of 1934 and that the information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operations of the Registrant.
Dated: October 21, 2005
/s/ J. Christopher Donahue
Title: J. Christopher Donahue, President, Principal Executive Officer
Dated: October 21, 2005
/s/ Richard J. Thomas
Title: Richard J. Thomas, Treasurer, Principal Financial Officer
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.
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