INVESTMENT ADVISER
Hawaiian Trust Company, Limited
Financial Plaza of the Pacific * P.O. Box 3170
Honolulu, Hawaii 96802
ADMINISTRATOR
Aquila Management Corporation
380 Madison Avenue, Suite 2300 * New York, New York 10017
BOARD OF TRUSTEES
Lacy B. Herrmann, Chairman
Vernon R. Alden
Arthur K. Carlson
William M. Cole
Thomas W. Courtney
Richard W. Gushman, II
Stanley W. Hong
Theodore T. Mason
Russell K. Okata
Douglas Philpotts
Oswald K. Stender
OFFICERS
Lacy B. Herrmann, President
Diana P. Herrmann, Vice President
Charles E. Childs, III, Vice President
Sherri Foster, Assistant Vice President
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300 * New York, New York 10017
TRANSFER AND SHAREHOLDER SERVICING AGENT
Administrative Data Management Corp.
581 Main Street * Woodbridge, New Jersey 07095-1198
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street * Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue * New York, New York 10154
Further information is contained in the Prospectus,
which must precede or accompany this report.
ANNUAL
REPORT
MARCH 31, 1996
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
PACIFIC CAPITAL CASH ASSETS TRUST
PACIFIC CAPITAL TAX-FREE
CASH ASSETS TRUST
PACIFIC CAPITAL U.S. TREASURIES
CASH ASSETS TRUST
[Logo of The Pacific Capital Funds of Cash Assets Trust: Lion Standing on
Rope]
A CASH MANAGEMENT
INVESTMENT
<PAGE>
[Logo of The Pacific Capital Funds of Cash Assets Trust: Lion Standing on
Rope]
LETTER FROM THE CHAIRMAN
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
ANNUAL REPORT
May 14, 1996
Dear Investor:
We are pleased to provide you with the Annual Report for The Pacific
Capital Funds of Cash Assets Trust (the "Trust") for the fiscal year ended
March 31, 1996.
ECONOMIC REVIEW
Of most importance, we note that the economic climate and the Federal
Reserve's monetary policy continued to play a vital role in the short-term
debt markets during the Trust's current report period.
Looking back over the last three months of 1995, we witnessed a
stagnant U.S. economy which grew less than 1%. During this period, consumers
were hesitant to spend, heavily laden with personal debt and ever mindful of
uncertainty in the job market as businesses continued to trim payrolls. In
an effort to keep the economy from falling into a recession, the Federal
Reserve eased short-term interest rates during the final quarter of 1995.
And, as most recent as January, the Fed took out a monetary insurance policy
in the form of an additional cut in rates and implied at the time that it was
prepared to do more if needed.
However, the economic climate appears to have changed during the
first three months of 1996 as the economy has shown signs of renewed vigor.
As such, the financial markets have become roiled, fearful that a stronger
economy will give way to yet higher levels of inflation down the road. As a
result, both short and long-term interest rates have increased to higher
levels at the end of this current report period while the Fed has withheld
from initiating further interest rate cuts.
MANAGEMENT DISCUSSION
The three separate portfolios of the Trust - Pacific Capital Cash
Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital
U.S. Treasuries Cash Assets Trust - continue to provide competitive returns
to alternative short-term investment opportunities without wavering from
their conservative investment approach.
We should emphasize that this investment approach entails
considerable vigilance exercised by the Trust's Investment Adviser, Hawaiian
Trust Company, Limited, in the selection and determination of all obligations in
each separate portfolio. You, as a shareholder, can take great comfort in
knowing that investments in each portfolio are placed in securities having
the highest quality standards and minimal credit risks as the Adviser strives
to achieve maximum safety for your cash reserves.
We are great believers in this investment management approach in
protection of your cash reserves.
All associated with The Pacific Capital Funds of Cash Assets Trust
wish to thank you for your continued support and confidence.
Sincerely,
/s/ Lacy B. Herrmann
Lacy B. Herrmann
President and Chairman
of the Board of Trustees
<PAGE>
COMMENTS BY THE INVESTMENT ADVISER
PACIFIC CAPITAL CASH ASSETS TRUST
Throughout fiscal year 1996, Pacific Capital Cash Assets Trust (the
"Cash Fund") remained true to its investment objective -- achieving a high
level of current income, stability and liquidity -- by investing in a
diversified portfolio of short-term money market securities which meet
specific high quality standards. Efforts to attain the most competitive
rates were bolstered by increasingly aggressive yields offered by
corporations willing to deal directly with the Cash Fund. The eagerness for
capturing the most competitive rates available was, however, equally matched
by it's dedication for investing principally in "First Tier" money market
securities which present minimal credit risk.
PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST
The Investment Adviser actively sought to extend the weighted average
maturity of Pacific Capital Tax-Free Cash Assets Trust (the "Tax-Free Fund"),
thereby locking in higher yields in anticipation of further possible interest
rate cuts by the Federal Reserve. This strategy enabled the Tax-Free Fund to
maintain a positive yield spread over comparable tax-free money market funds.
Since safety of shareholders' principal is paramount, the Adviser will
continue to emphasize strict adherence to using only tax-exempt money-market
securities possessing high-quality standards and minimal credit risks. In
addition, as many investors in the Tax-Free Fund are Hawaii residents, the
Adviser will strive to maintain, to the maximum extent possible, as high a
percentage of Hawaii municipal issues in the investment portfolio in order to
provide those investors with income that is double tax-free. At March 31,
1996, the percentage of Hawaii holdings had increased to 44.4% from 38.2% at
September 30, 1995.
PACIFIC CAPITAL U.S. TREASURIES CASH ASSETS TRUST
Pacific Capital U.S. Treasuries Cash Assets Trust (the "Treasuries
Fund") continues to provide safety-conscious investors with a high degree of
security of their cash reserves by investing exclusively in direct
obligations of the U.S. Treasury and repurchase agreements collateralized by
U.S. Treasury securities. In addition, the Treasuries Fund was able to
provide to shareholders a highly competitive return commensurate to other
conservative money market investments. The Investment Adviser was able to
achieve this by favorably positioning the average maturity of the investment
portfolio during the fiscal year, to take advantage of several interest rate
cuts by the Federal Reserve.
<PAGE>
KPMG Peat Marwick LLP
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
Cash Assets Trust:
We have audited the accompanying statements of assets and liabilities of
The Pacific Capital Funds of Cash Assets Trust (the "Trust") (comprised of
Cash Fund, Tax-Free Fund and Treasuries Fund), including the statements of
investments, as of March 31, 1996, the related statements of operations for
the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 1996, by correspondence with the custodian.
An audit also includes assessing the accounting principles used, and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Trust as of March 31, 1996, the results of its operations for
the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
periods presented, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
New York, New York
May 10, 1996
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1996
<CAPTION>
FACE
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER (50.4%)
Automotive (8.8%)
$15,000,000 Ford Motor Credit, 5.44%, 04/15/96 $14,968,675
15,000,000 Toyota Motor Credit, 5.25%,04/23/96 14,952,517
29,921,192
Commercial Services (2.9%)
5,000,000 Stanford University, 5.39%, 04/10/96 4,993,350
5,000,000 Stanford University, 5.25%, 07/10/96 4,928,056
9,921,406
Electrical & Electronic (4.3%)
15,000,000 Siemens, 5.35%, 05/21/96 14,890,000
Finance (8.5%)
14,000,000 General Electric Capital Corp.,
5.06%, 05/15/96 13,914,616
15,000,000 Safeco Credit Company, 5.32%, 04/05/96 14,991,250
28,905,866
Financial Banks (5.8%)
10,000,000 Banamex Export Funding, 5.46%, 04/10/96 9,986,525
10,000,000 Dresdner Bank AG, 4.95%, 08/26/96 9,800,733
19,787,258
Food (8.7%)
15,000,000 McDonalds Corp., 5.33%, 04/01/96 15,000,000
15,000,000 Nestle Capital Corp., 4.97%, 07/02/96 14,812,167
29,812,167
Gas (2.7%)
9,318,000 Northern Illinois Gas Company, 5.53%,
04/03/96 9,315,179
Insurance (4.4%)
15,000,000 Prudential Funding Corp., 5.29%, 04/09/96 14,982,600
Telecommunications (4.3%)
15,000,000 Alcatel Alsthom Inc., 4.97%, 07/05/96 14,806,041
Total Commercial Paper (cost $172,341,709) 172,341,709
U.S. TREASURY BILLS (14.6%)
25,000,000 5.27%, due 04/18/96 24,938,611
25,000,000 5.25%, due 05/02/96 24,888,486
Total U.S. Treasury Bills (cost $49,827,097) 49,827,097
NOTES (10.3%)
U.S. Government Agencies (5.9%)
100,000 Student Loan Mortgage Association, Variable
Rate Note
5.50%, 11/01/96 (Resets Weekly-Next
Reset 04/02/96) 100,000
10,000,000 Federal Home Loan Mortgage Corp., 5.33%,
04/11/96 9,985,389
10,000,000 Federal National Mortgage Association, 5.34%,
04/04/96 9,995,608
20,080,997
Insurance (4.4%)
15,000,000 Providian Life and Health Insurance Company
Variable Rate Note, 5.82%, 06/28/96(1) 15,000,000
Total Notes (cost $35,080,997) 35,080,997
REPURCHASE AGREEMENTS (25.1%)
30,000,000 Dresdner Bank A.G., 5.07%, due 04/01/96 30,000,000
(Proceeds of $30,012,500 to be received
at maturity)
Collateral: $30,689,000 U.S. Treasury
Bills due 04/18/96
Collateral Market Value $30,600,000
55,684,000 Swiss Bank Corp., 5.58%, due 04/01/96 55,684,000
(Proceeds of $55,709,522 to be received
at maturity)
Collateral: $54,549,000 U.S. Treasury
Note 6.625% due 03/31/97
Collateral Market Value $56,920,667
Total Repurchase Agreements (cost
$85,684,000) 85,684,000
Total Investments - 100.4% (cost
$342,933,803*) 342,933,803
Liabilities in excess of other assets -
(0.4%) (1,410,910)
Net Assets - 100% $341,522,893
<FN>
(*) Cost for Federal tax purposes is identical.
</FN>
<FN>
(1) Illiquid security. The security is considered illiquid because it
may not be sold, and may be redeemed only upon at least ninety
days' notice to the issuer.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1996
RATING
FACE MOODY'S/
AMOUNT BONDS AND NOTES (99.6%) S&P VALUE
<C> <S> <C> <C>
ARIZONA (0.7%)
Maricopa County, AZ General
Obligation United High School
District No. 210, Series A,
$1,000,000 3.75%, 07/01/96 Aa/AA $1,000,000
FLORIDA (5.4%)
Jacksonville, FL Electric
Authority Revenue Bonds,
2,755,000 5.00%, 10/01/96 Aa1/AA 2,769,672
Jacksonville, FL Electric
Authority System Tax-
Exempt Commercial Paper
Notes, Series D-1,
2,000,000 3.25%, 06/05/96 Aa1/AA 2,000,000
Miami, FL Tax Anticipation
Notes,
1,000,000 4.50%, 9/27/96 MIG1/SP1+ 1,003,296
Orange County , FL School
District Tax Anticipation
Notes,
2,000,000 4.50%, 10/16/96 NR/SP1+ 2,007,291
Total Florida 7,780,259
GEORGIA (2.5%)
Gwinnett County, GA School
District, General Obligation,
Series A,
3,560,000 5.10%, 2/1/97 Aa1/AA 3,606,814
HAWAII (44.2%)
City and County of Honolulu, HI
General Obligation Bond
Anticipation Notes Tax Exempt
Commercial Paper Series,
2,000,000 3.20%, 04/04/96 P-1/A1+ 2,000,000
1,450,000 3.40%, 04/04/96 1,450,000
1,000,000 3.20%, 04/08/96 1,000,000
2,000,000 3.20%, 05/03/96 2,000,000
2,810,000 3.15%, 05/13/96 2,810,000
500,000 3.25%, 05/14/96 500,000
1,000,000 3.25%, 05/14/96 1,000,000
1,350,000 3.05%, 05/15/96 1,350,000
City and County of Honolulu, HI
General Obligation Bonds Series
A, Escrowed to Maturity,
600,000 7.30%, 04/01/96 Aaa/AA 600,000
City and County of Honolulu, HI
General Obligation Bonds
Refunding & Improvement Series
A,
2,000,000 7.10%, 07/01/96 Aa/AA 2,015,719
City and County of Honolulu, HI
General Obligation Bonds Series
B, Prerefunded,
1,000,000 7.00%, 08/01/98, Pre-Refunded
08/01/96 @ 101.5 Aaa/AA 1,025,552
HawaiiI State, General Obligation
Bonds 1993 Series CF,
2,000,000 3.60%, 7/01/96 Aa/AA 1,997,022
Hawaii State, General Obligation
Bonds 1993 Series CI,
1,450,000 5.00%, 11/01/96 Aa/AA 1,460,631
HawaiiI State, General Obligation
Bonds 1987 Series BJ,
1,500,000 6.75%, 12/01/97, Pre-Refunded
12/01/96 Aaa/AA 1,551,084
Hawaii State, General Obligation
Bonds 1992 Series BW,
3,500,000 5.15%, 03/01/97 Aa/AA 3,559,821
Hawaii State Airports System
Revenue Bonds Second Series,
3,300,000 4.75%, 7/1/96 Aaa/AAA 3,306,275
Letter of Credit: Municipal
Bond Investors Assurance
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Revenue Bonds (Kaiser
Medical Care Program),
Adjustable Rate Series A,
5,800,000 3.30%, 03/01/15, Putable
04/03/96* Aa3/AA 5,800,000
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage Revenue Bonds
(Citizens Utility Project),
(Tax Exempt Commercial Paper
Series),
1,000,000 3.30%, 04/08/96 NR/AA+ 1,000,000
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Revenue Bonds
(Citizens Utility Project),
Series B, (Tax Exempt
Commercial Paper Series),
2,190,000 3.35%, 05/10/96 NR/AA+ 2,190,000
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Revenue Bonds (Kapiolani
Medical Center for
Women/Children),
2,000,000 7.70%, 7/1/98, Pre-Refunded
07/01/96 Aaa/AAA 2,058,584
Hawaii State Department Of Budget
& Finance Special Purpose
Mortgage Revenue Bonds (Kaiser
Pemanente), Series A,
7,540,000 3.20%, 09/03/96, Putable
04/03/96 Aa3/AA 7,540,000
Hawaii State Housing Finance &
Development Corp. Revenue Bonds
(Rental Housing System), Series
89 A,
200,000 3.40%, 07/01/24, Putable
04/03/96* VMIG1/NR 200,000
Letter of Credit: Banque
National De Paris
Hawaii State Housing Finance &
Development Corp. Revenue Bonds
(Affordable Rental Housing
Program), Series A,
8,300,000 3.50%, 07/01/27, Putable
04/03/96* VMIG1/NR 8,300,000
Letter of Credit: Banque
National De Paris
Maui County, HI General
Obligation Bonds, Series A,
Financial Guaranty Insurance
Company Insured,
520,000 3.60%, 6/1/96 Aaa/AAA 520,000
Maui County, HI Water Supply,
Water Revenue Bonds, Financial
Guaranty Insurance Corporation
Insured,
1,000,000 5.25%, 12/1/96 Aaa/AAA 1,009,450
Secondary Market Services
Corporation Hawaii Student Loan
Revenue, Senior Series II,
6,900,000 3.35%, 09/01/10, Putable
04/03/96* VMIG1/A-1+ 6,900,000
Letter of Credit: National
Westminster, Guaranteed
Student Loans
Total Hawaii 63,144,138
IDAHO (3.0%)
Idaho Health Facilities
Authorized Revenue Bonds (St
Lukes Regional Medical Center
Project),
4,315,000 3.80%, 05/01/22, Putable
04/01/96* VMIG1/NR 4,315,000
Letter of Credit: Credit
Suisse
INDIANA (6.9%)
Gary, IN Environmental Improvement
Revenue Bonds (US Steel
Corporation Project),
3,100,000 3.40%, 07/15/02, Putable
04/15/96* Aa3/AA- 3,100,000
Letter of Credit: Bank of Nova
Scotia
Indianapolis, IN Economic
Development Revenue Bonds
(Jewish Federation Campus),
6,080,000 3.35%, 04/01/05, Putable 04/03/96* VMIG1/NR 6,080,000
Letter of Credit: NBD Bank
Purdue University, IN University
Revenue Bonds (Student Fee),
Series E,
735,000 3.15%, 07/01/11, Putable 04/03/96* VMIG1/NR 735,000
Total Indiana 9,915,000
KENTUCKY (1.7%)
Warsaw, KY Industrial Building
Revenue Bonds (Operating
Partnership),
2,450,000 3.55%, 08/01/09, Putable 04/05/96* NR/A-1+ 2,450,000
Letter of Credit: Fifth Third
Bank, Ohio
LOUISIANA (5.9%)
DeSoto Parish, LA Pollution
Control Revenue Bonds (Central
Louisiana Electric Company),
Series A,
4,500,000 3.30%, 07/01/18, Putable
04/03/96* VMIG1/A-1 4,500,000
Letter of Credit: Swiss Bank
Louisiana Public Facilities
Authority Revenue Bonds (College
& University Equipment &
Capital), Series A,
3,950,000 3.35%, 09/01/10, Putable 04/03/96* VMIG1/A-1 3,950,000
Letter of Credit: Financial
Guaranty Insurance Corporation
Total Louisiana 8,450,000
MICHIGAN (1.4%)
Michigan State Notes, General
Obligation Bonds,
2,000,000 4.00%, 09/30/96 MIG1/A-1+ 2,009,794
NEW HAMPSHIRE (1.9%)
New Hampshire State Industrial
Development Authority Revenue
Bonds Pollution Control
(Connecticut Light & Power
Company),
2,700,000 3.45%, 08/01/18, Putable 04/03/96* NR/A-1+ 2,700,000
Letter of Credit: Union Bank of
Switzerland
NEW MEXICO (1.4%)
New Mexico State Highway Community
Revenue Bonds (State Highway
Debentures),
2,000,000 3.80%, 6/15/96 Aa1/AAA 2,000,266
NEVADA (1.4%)
Clark County, Nevada School
District General Obligation
Bonds, Series A,
2,000,000 6.00%, 6/1/96 Aaa/AAA 2,006,812
Letter of Credit: Municipal Bond
Investors Assurance
NEW YORK (2.6%)
New York, NY General Obligation
Bonds, Series B,
2,100,000 3.25%, 10/01/22, Putable 04/01/96* VMIG1/A-1+ 2,100,000
Letter of Credit: Financial
Guaranty Insurance Corporation
New York, NY Municipal Water Finance
Authority Water & Sewer System
Revenue Bonds, Series A,
1,600,000 3.75%, 06/15/25, Putable
04/01/96* VMIG1/A-1+ 1,600,000
Letter of Credit: Financial
Guaranty Insurance Corporation
Total New York 3,700,000
OHIO (0.8%)
Ohio State University Revenue Bonds,
General Receipts, Series B,
1,060,000 3.25%, 12/01/06, Putable 04/04/96* VMIG1/A-1+ 1,060,000
Letter of Credit: National
Westminster
OKLAHOMA (1.3%)
Oklahoma State Water Reserve
State Land Program Revenue
Bonds,
1,800,000 3.10%, 09/03/96 NR/A-1+ 1,800,000
Letter of Credit: Bayerische
Landesbank
PENNSYLVANIA (0.7%)
Delaware County, PA Industrial
Development Authority Solid
Waste Revenue (Scott Paper
Company), Series E,
1,000,000 3.35%, 12/01/18, Putable 04/05/96* Aa2/AA 1,000,000
TENNESSEE (0.6%)
Memphis, TN General Obligation
Bonds,
820,000 3.65%, 08/01/96 Aa/AA 819,458
TEXAS (4.4%)
Lower Neches Valley Authority
of Texas Revenue Bonds (Chevron
USA Income Project),
2,500,000 3.10%, 02/15/17, Putable 08/15/96* P-1/A-1+ 2,500,000
Texas Higher Education Authority
Revenue Bonds, Series B,
1,755,000 3.35%, 12/01/25, Putable 04/03/96* VMIG1/A-1+ 1,755,000
Texas State Tax & Revenue
Anticipation Notes, Series A,
2,000,000 4.75%, 08/30/96 MIG1/Sp1+ 2,005,559
Total Texas 6,260,559
VIRGINIA (2.1%)
Arlington County, VA General
Obligation Bonds,
1,000,000 5.00%, 8/1/96 Aaa/AAA 1,003,873
Richmond, VA Revenue
Anticipation Notes, Series A,
2,000,000 4.00%, 6/28/96 MIG1/Sp1+ 2,003,468
Total Virginia 3,007,341
VERMONT (1.9%)
Vermont State Student Assistance
Corp. Revenue Bonds (Student
Loan Revenue),
2,700,000 3.40%, 01/01/04, Putable 04/05/96* VMIG1/NR 2,700,000
Letter of Credit: National
Westminster
WASHINGTON (3.4%)
King County, WA General Obligation
Bonds, Series A,
1,000,000 6.60%, 12/01/96 Aa1/AA+ 1,017,455
King County, WA School District No.
408 Auburn, General Obligation
Bonds,
1,000,000 3.70%, 12/01/96 Aaa/AAA 1,002,580
Letter of Credit: AMBAC
Insurance Co.
Washington State Health Care
Facility Authority Variable Rate
Demand (Fred Hutchinson Cancer
Research Center, Seattle) Series
1991 A&C,
2,090,000 3.85%, 01/01/18, Putable 04/01/96* VMIG1/NR 2,090,000
675,000 2.30%, 01/01/18, Putable 04/01/96* 675,000
Total Washington 4,785,035
WISCONSIN (4.7%)
Wisconsin State Health & Education
Facilities Authority Revenue
Bonds (Waukesha Memorial
Hospital), SeriesfA,
1,225,000 4.50%, 08/15/96 Aaa/AAA 1,228,084
Letter of Credit: AMBAC
Insurance Co.
Wisconsin State Health Facilities
Authority Variable Rate Demand
Bonds (Franciscan Health Care),
1985 Series Ab1 & Ab2,
3,110,000 3.25%, 01/01/16, Putable 04/03/96* VMIG1/A-1+ 3,110,000
380,000 3.25%, 01/01/16, Putable 04/03/96* 380,000
Letter of Credit: Toronto
Dominion Bank
Wisconsin State Refunding Bonds,
Series 1,
2,000,000 4.50%, 06/17/96 MIG1/SP-1+ 2,003,370
Total Wisconsin 6,721,454
WYOMING (0.7%)
Sweetwater County, WY Pollution
Control Revenue Refunding Bonds
(Pacific Corp Project) Series
1990 A,
1,000,000 3.40%, 07/01/15, Putable 04/03/96* VMIG1/A-1+ 1,000,000
Letter of Credit: Credit Suisse
Total Investments - 99.6%
(cost $142,231,930**) 142,231,930
Other assets in excess of
liabilities - 0.4% 555,323
Net Assets - 100% $142,787,253
<FN>
(**) Cost for Federal tax purposes is identical.
</FN>
<FN>
(*) Variable rate obligation payable at par on
demand at any time on no more than seven days notice.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
U.S. TREASURIES CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1996
FACE
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY BILLS (82.3%)
$6,000,000 5.32%, due 04/04/96 $5,997,375
8,000,000 4.98%, due 07/11/96 7,889,798
8,000,000 4.87%, due 06/06/96 7,929,600
9,000,000 5.07%, due 05/30/96 8,926,250
8,000,000 5.06%, due 05/09/96 7,957,881
8,000,000 5.03%, due 05/02/96 7,965,831
8,000,000 5.17%, due 04/25/96 7,972,827
8,000,000 5.08%, due 04/18/96 7,981,073
8,000,000 5.22%, due 04/11/96 7,988,556
Total U.S. Treasury Bills
(cost $70,609,191) 70,609,191
REPURCHASE AGREEMENTS (18.2%)
7,000,000 Dresdner Bank A.G., 5.07%, due 04/01/96 7,000,000
(Proceeds of $7,002,917 to be received
at maturity)
Collateral: $7,161,000 U.S. Treasury
Bills due 04/18/96
Collateral Market Value $7,140,233
8,647,000 Swiss Bank Corp., 5.58%, due 04/01/96 8,647,000
(Proceeds of $8,650,963 to be received
at maturity)
Collateral: $8,101,000 U.S. Treasury
Bond 7.50% due 11/15/16
Collateral Market Value $8,647,818
Total Repurchase Agreements
(cost $15,647,000) 15,647,000
Total Investments - 100.5%
(cost $86,256,191*) 86,256,191
Liabilities in excess of other
assets - (0.5%) (413,917)
Net Assets - 100% $85,842,274
<FN>
(*) Cost for Federal tax purposes is identical.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
CASH TAX-FREE TREASURIES
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at value $ 342,933,803 $ 142,231,930 $ 86,256,191
(cost: $342,933,803,
$142,231,930, and
$86,256,191, respectively)
Cash 162 3,883 962
Interest receivable 113,054 988,693 6,880
Due from Adviser and
Administrator 5,765 1,800 935
Prepaid expenses and other
assets 81,761 22,029 11,471
Total Assets 343,134,545 143,248,335 86,276,439
LIABILITIES:
Dividends payable 1,383,789 337,750 350,324
Adviser and Administrator
fees payable 147,329 49,408 30,171
Distribution fees payable 15,815 10,642 6,284
Accrued expenses 64,719 63,282 47,386
Total Liabilities 1,611,652 461,082 434,165
NET ASSETS $ 341,522,893 $ 142,787,253 $ 85,842,274
NET ASSETS CONSIST OF:
Capital Stock - Authorized an
unlimited number of shares,
par value $.01 per share $ 3,422,856 $ 1,427,880 $ 858,372
Additional paid-in capital 338,868,017 141,360,099 84,978,823
Accumulated net realized
gain (loss) on investments (767,980) (726) 5,079
$ 341,522,893 $ 142,787,253 $ 85,842,274
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets $308,666,941 $ 125,178,220 $ 74,035,962
Shares outstanding 309,435,696 125,179,215 74,031,245
Net asset value per share $1.00 $1.00 $1.00
Service Shares Class:
Net Assets $ 32,855,952 $ 17,609,033 $ 11,806,312
Shares outstanding 32,849,912 17,608,764 11,805,950
Net asset value per share $1.00 $1.00 $1.00
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
CASH TAX-FREE TREASURIES
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 22,799,047 $ 5,274,515 $ 4,192,605
EXPENSES:
Investment Adviser fees
(note C) 1,353,593 394,009 210,982
Administrator fees (note C) 597,533 152,543 88,287
Trustees' fees and expenses 102,486 44,880 28,696
Legal fees 87,452 33,926 29,980
Registration fees and dues 57,671 24,439 17,762
Distribution fees (note C) 42,078 27,786 13,511
Shareholders' reports and
proxy statements 36,884 10,301 6,535
Custodian fees (note F) 25,632 22,684 15,568
Audit and accounting fees 21,679 21,779 19,056
Transfer and shareholder
servicing agent fees 17,368 15,357 14,443
Fund accounting fees 16,857 16,283 17,000
Insurance 14,539 2,999 1,387
Miscellaneous 39,401 5,711 19,805
Total expenses 2,413,173 772,697 483,012
Investment Advisory fees
waived (note C) _ _ (44,372)
Administration fees
waived (note C) _ _ (14,790)
Expenses paid indirectly
(note F) (12,432) (1,347) (5,989)
Net expenses 2,400,741 771,350 417,861
Net investment income 20,398,306 4,503,165 3,774,744
Net realized gain from
securities transactions 123,536 2,817 5,079
Net increase in net assets
resulting from operations $20,521,842 $ 4,505,982 $ 3,779,823
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
CASH FUND TAX-FREE FUND
YEAR ENDED MARCH 31, YEAR ENDED MARCH 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
OPERATIONS:
Net investment income $20,398,306 $18,849,202 $4,503,165 $3,895,789
Net realized gain (loss)
from securities
transactions 123,536 (886,200) 2,817 _
Net increase in net
assets resulting
from operations 20,521,842 17,963,002 4,505,982 3,895,789
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT
INCOME:
Original Shares (19,582,910) (18,837,970) (4,171,075) (3,893,392)
Service Shares* (815,396) (11,232) (332,090) (2,397)
Total dividends to
shareholders from net
investment income (20,398,306) (18,849,202) (4,503,165) (3,895,789)
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares
sold:
Original Shares 1,151,381,874 1,449,062,869 317,952,322 522,439,235
Service Shares* 155,686,423 5,517,939 33,774,004 1,729,095
1,307,068,297 1,454,580,808 351,726,326 524,168,330
Net asset value of
shares issued in
reinvestment of
dividends:
Original Shares 202,235 99,733 149,023 140,087
Service Shares* 703,688 2,049 281,888 177
905,923 101,782 430,911 140,264
Cost of shares
redeemed:
Original Shares (1,329,689,125)(1,368,709,646)(331,260,352)(498,137,324)
Service Shares* (127,041,609) (2,018,578) (17,825,199) (351,202)
(1,456,730,734)(1,370,728,224)(349,085,551)(498,488,526)
Net increase
(decrease) in net
assets from capital
share transactions (148,756,514) 83,954,366 3,071,686 25,820,068
Total increase
(decrease) in net
assets (148,632,978) 83,068,166 3,074,503 25,820,068
NET ASSETS:
Beginning of year 490,155,871 407,087,705 139,712,750 113,892,682
End of year $341,522,893 $490,155,871 $142,787,253 $139,712,750
<CAPTION>
TREASURIES FUND
YEAR ENDED
MARCH 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $3,774,744 $3,076,562
Net realized gain (loss) from
securities transactions 5,079 _
Net increase in net assets
resulting from operations 3,779,823 3,076,562
DIVIDENDS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Original Shares (3,521,108) (3,075,242)
Service Shares* (253,636) (1,320)
Total dividends to shareholders
from net investment income (3,774,744) (3,076,562)
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares 297,398,080 330,815,501
Service Shares* 32,654,749 551,733
330,052,829 331,367,234
Net asset value of shares issued in
reinvestment of dividends:
Original Shares 76,296 27,199
Service Shares* 209,080 9
285,376 27,208
Cost of shares redeemed:
Original Shares (287,477,003) (358,550,736)
Service Shares* (21,563,607) (46,015)
(309,040,610) (358,596,751)
Net increase (decrease) in net
assets from capital share
transactions 21,297,595 (27,202,309)
Total increase (decrease)
in net assets 21,302,674 (27,202,309)
NET ASSETS:
Beginning of year 64,539,600 91,741,909
End of year $85,842,274 $64,539,600
<FN>
* New class of shares established on January 20, 1995 and commenced operations
on February 1, 1995.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION:
Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end investment company.
The Trust consists of the following three investment portfolios (referred
to individually as a "Fund" and collectively as the "Funds"): Pacific Capital
Cash Assets Trust (a diversified portfolio which commenced operations on
December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust (a
non-diversified portfolio which commenced operations on April 4, 1989), and
Pacific Capital U.S. Treasuries Cash Assets Trust (a diversified portfolio
which commenced operations on April 4, 1989). The Trust is authorized to
issue for each Fund an unlimited number of shares of $.01 par value in two
classes of shares; the Original Shares Class and the Service Shares Class.
The Original Shares Class includes all currently outstanding shares of each
Fund that were issued prior to January 20, 1995, the date on which the
Capital structure was changed to include two clases rather than one. The two
classes of shares are substantially identical, except that Service Shares
bear the fees that are payable under the Trust's Distribution Plan.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are
in conformity with generally accepted accounting principles for investment
companies.
(1) PORTFOLIO VALUATION: Each Fund's portfolio securities
are valued by the amortized cost method permitted in accordance with Rule 2a-7
under the Investment Company Act of 1940 (the "1940 Act"), which, after
considering accrued interest thereon, approximates market. Under this method,
a portfolio security is valued at cost adjusted for amortization of premiums
and accretion of discounts. Amortization of premiums and accretion of
discounts are included in interest income.
(2) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME:
Securities transactions are recorded on the trade date. Realized gains and
losses from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted for
amortization of premiums and accretion of discounts as discussed in the
preceding paragraph.
(3) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES:
The net asset value per share for each class of the Funds' shares is determined
as of 4:00 p.m. New York time on each day that the New York Stock Exchange is
open by dividing the value of the assets of the Fund allocable to that class
less Fund liabilities allocable to the class and any liabilities charged
directly to the class, exclusive of surplus, by the total number of shares of
the class outstanding. Investment income, realized and unrealized gains and
losses, if any, and expenses other than class specific expenses, are allocated
daily to each class of shares based upon the proportion of net assets of each
class. Class specific expenses are borne by the affected class. Service fee
payments under Rule 12b-1 are borne solely by and charged to the Service Shares
based on net assets of that class.
(4) FEDERAL INCOME TAXES: It is the policy of each Fund to
qualify as a regulated investment company by complying
with the provisions of the Internal Revenue Code applicable to certain
investment companies. Each Fund intends to make distributions of income and
securities profits sufficient to relieve it from all, or substantially all,
Federal income and excise taxes.
(5) REPURCHASE AGREEMENTS: It is each Fund's policy to monitor
closely the creditworthiness of all firms with
which it enters into repurchase agreements, and to take possession of, or
otherwise perfect its security interest in, securities purchased under
agreements to resell. The securities purchased under agreements to resell are
marked to market every business day so that the value of the "collateral" is
at least equal to the value of the "loan" (repurchase agreements being
defined as "loans" in the 1940 Act), including the accrued interest earned
thereon, plus sufficient additional market value as is considered necessary
to provide a margin of safety.
(6) USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
NOTE C - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Hawaiian Trust Company, Limited (the "Adviser") serves as Investment
Adviser to the Trust. In this role, under Investment Advisory Agreements, the
Adviser supervises the Funds' investments and provides various services. The
Funds also have Administration Agreements with Aquila Management Corporation
(the "Administrator", formerly Sub-Adviser and Administrator) to provide all
administrative services to the Funds other than those relating to the
investment portfolio and the maintenance of the accounting books and records.
Specific details as to the nature and extent of the services provided by the
Adviser and the Administrator are more fully defined in the Prospectus and
Statement of Additional Information of the Funds. For their services, the
Adviser and the Administrator each receive a fee which is payable monthly and
computed as of the close of business each day on the net assets of each Fund
at the following annual rates:
Pacific Capital Cash Assets Trust - On net assets up to $325 million, the
fee is paid to the Adviser and the Administrator at the annual rate of 0.33%
and 0.17%, respectively and on net assets above that amount at the annual
rate of 0.43% and 0.07%, respectively. For the year ended March 31, 1996, the
Fund incurred fees under the Advisory Agreement and the Administration
Agreement of $1,353,593 and $597,533, respectively.
Pacific Capital Tax-Free Cash Assets Trust - On net assets up to $95
million, the fee is paid to the Adviser and the Administrator at the annual
rate of 0.27% and 0.13%, respectively and on net assets above that amount at
the annual rate of 0.33% and 0.07%, respectively. For the year ended March
31, 1996, the Fund incurred fees under the Advisory Agreement and the
Administration Agreement of $394,009 and $152,543, respectively.
Pacific Capital U.S. Treasuries Cash Assets Trust - On net assets up to
$60 million, the fee is paid to the Adviser and the Administrator at the
annual rate of 0.27% and 0.13%, respectively and on net assets above that
amount at the annual rate of 0.33% and 0.07%, respectively. For the year
ended March 31, 1996, the Fund incurred fees under the Advisory Agreement and
the Administration Agreement of $210,982 and $88,287, respectively, of which
the Adviser and the Administrator voluntarily waived $44,372 and $14,790,
respectively.
The Adviser and the Administrator each agrees that the above fees shall
be reduced, but not below zero, by an amount equal to its proportionate share
(determined on the basis of the respective fees computed as described above)
of the amount, if any, by which the total expenses of a Fund in any fiscal
year, exclusive of taxes, interest and brokerage fees, shall exceed the
lesser of (i) 2.5% of the first $30 million of average annual net assets of
the Fund plus 2% of the next $70 million of such assets and 1.5% of its
average annual net assets in excess of $100 million, or (ii) 25% of the
Fund's total annual investment income. The payment of the above fees at the
end of any month will be reduced or postponed so that at no time will there
be any accrued but unpaid liability under this expense limitation. No such
reduction in fees was required during the year ended March 31, 1996.
Under a Distribution Agreement, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of the Funds' shares. No
compensation or fees are paid to Aquila Distributors,
Inc. for such share distribution.
Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12bb1 under the 1940 Act. A part of the Plan authorizes payment of certain
distribution or service fees by the Service Shares class of the Fund. Such
payments are made to "Designated Payees"_broker-dealers, other financial
institutions and service providers who have entered into appropriate
agreements with the Distributor and which have rendered assistance in the
distribution and/or retention of the Funds' Service Shares or in the
servicing of Service Share accounts. The total payments under this part of a
Fund's Plan may not exceed 0.25 of 1% of its average annual assets
represented by Service Shares. No such payments will be made by the Original
Share class. Specific details about each Plan are more fully defined in the
Prospectus and Statement of Additional Information of the Funds.
NOTE D - DISTRIBUTIONS:
The Funds declare dividends daily from net investment income and make
payments monthly in additional shares at the net asset value per share or in
cash, at the shareholder's option.
At March 31, 1996, the Cash Fund had a capital loss carryover of
approximately $767,980 which expires at March 31, 2003 and is available to
offset future net realized gains on securities transactions to the extent
provided for in the Internal Revenue Code. To the extent that this loss is
used to offset future realized capital gains, it is probable the gains so
offset will not be distributed.
NOTE E - GUARANTEES OF CERTAIN COMMERCIAL PAPER:
Various banks and other institutions have issued irrevocable letters of
credit or guarantees for the benefit of the holders of certain commercial
paper. Payment at maturity of principal and interest of certain commercial
paper held by the Funds is supported by such letters of credit or guarantees.
NOTE F - CUSTODIAN FEES:
The Funds have negotiated an offset arrangement with their custodian
wherein they receive credit toward the reduction of custodian fees whenever
there are uninvested cash balances. During the year ended March 31, 1996, the
custodian fees of the Cash Fund, the Tax-Free Fund and the Treasuries Fund,
amounted to $25,632, $22,684 and $15,568, respectively. Of these amounts,
$12,432, $1,347 and $5,989, respectively, were offset by such credits. The
Funds could have invested their cash balances in an income-producing asset if
they had not agreed to a reduction in fees under the expense offset
arrangement with the custodian.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Year Period
Ended Ended Year Ended March 31,
March 31, March 31,
1996 1995** 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
Operations:
Net investment income 0.05 0.01 0.05 0.04 0.03 0.03 0.05
Less Distributions:
Dividends from net
investment income (0.05) (0.01) (0.05) (0.04) (0.03) (0.03) (0.05)
Net Asset Value, End
of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 5.06% 0.85%# 5.32% 4.40% 2.74% 3.15% 5.20%
Ratios/Supplemental
Data
Net Assets, End of
Period (in
millions) $32.9 $3.5 $308.7 $486.7 $407.1 $268.0 $275.7
Ratio of Expenses
to Average Net
Assets 0.86% 0.83%* 0.60% 0.59% 0.59% 0.61% 0.60%
Ratio of Net
Investment Income
to Average Net
Assets 4.84% 5.26%* 5.24% 4.40% 2.71% 3.13% 5.19%
<CAPTION>
For the year 1996, net investment income per share and the ratios of income
and expenses to average net assets without the expense offset in custodian
fees for uninvested cash balances would have been:
<S> <C> <C>
Net investment income $0.05 $0.05
Ratio of Expenses to
Average Net Assets 0.86% 0.61%
Ratio of Net Investment
Income to Average
Net Assets 4.84% 5.23%
<FN>
(1) New class of shares established on January 20, 1995.
</FN>
<FN>
(2) Designated as the "Original Shares" class of shares on January 20, 1995.
</FN>
<FN>
** For the period from February 1, 1995 (commencement of operations) to
March 31, 1995.
</FN>
<FN>
# Not annualized.
</FN>
<FN>
* Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Year Period
Ended Ended Year Ended March 31,
March 31, March 31,
1996 1995** 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
Operations:
Net investment
income 0.03 0.01 0.03 0.03 0.02 0.02 0.04
Less Distributions:
Dividends from net
investment income (0.03) (0.01) (0.03) (0.03) (0.02) (0.02) (0.04)
Net Asset Value, End
of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 3.11% 0.52%# 3.37% 2.74% 2.02% 2.52% 3.91%
Ratios/Supplemental
Data
Net Assets, End of
Period (in
millions) $17.6 $1.4 $125.2 $138.3 $113.9 $69.3 $100.0
Ratio of Expenses
to Average Net
Assets 0.80% 0.77%* 0.54% 0.55% 0.56% 0.54% 0.42%
Ratio of Net
Investment Income
to Average Net
Assets 2.97% 3.22%* 3.32% 2.74% 1.99% 2.52% 3.89%
<CAPTION>
For the years 1994, 1993 and 1992, net investment income per share and the
ratios of income and expenses to average net assets without the Adviser's and
Administrator's voluntary waiver of fees and for the year 1996, without the
expense offset in custodian fees for uninvested cash balances, would have
been:
<S. <C> <C> <C> <C> <C> <C> <C>
Net Investment
Income $0.03 _ $0.03 _ $0.02 $0.02 $0.04
Ratio of Expenses
to Average Net
Assets 0.80% _ 0.54% _ 0.58% 0.59% 0.56%
Ratio of Net
Investment
Income to
Average Net Assets 2.97% _ 3.32% _ 1.97% 2.47% 3.75%
<FN>
(1) New class of shares established on January 20, 1995.
</FN>
<FN>
(2) Designated as the "Original Shares" class of shares on January 20, 1995.
</FN>
<FN>
** For the period from February 1, 1995 (commencement of operations) to
March 31, 1995.
</FN>
<FN>
# Not annualized.
</FN>
<FN>
* Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
U.S. TREASURIES CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Year Period
Ended Ended
March 31, March 31, Year Ended March 31,
1996 1995** 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
Operations:
Net investment income 0.05 0.01 0.05 0.04 0.03 0.03 0.05
Less Distributions:
Dividends from net
investment income (0.05) (0.01) (0.05) (0.04) (0.03) (0.03) (0.05)
Net Asset Value,
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 4.94% 0.94%# 5.20% 4.20% 2.59% 2.90% 5.20%
Ratios/Supplemental
Data
Net Assets, End of
Period (in
millions) $11.8 $0.5 $74.0 $64.0 $91.7 $26.1 $40.3
Ratio of Expenses
to Average Net
Assets 0.79% 0.85%* 0.54% 0.54% 0.52% 0.61% 0.34%
Ratio of Net
Investment Income
to Average Net
Assets 4.68% 5.09%* 5.07% 4.04% 2.58% 2.96% 5.28%
<CAPTION>
Net investment income per share and the ratios of income and expenses to
average net assets without the Adviser's and Administrator's voluntary waiver
of fees and for the year 1996, without the expense offset in custodian fees
for uninvested cash balances, would have been:
<S> <C> <C> <C> <C> <C> <C> <C>
Net Investment Income $0.05 $0.01 $0.05 $0.04 $0.03 $0.03 $0.05
Ratio of Expenses to
Average Net Assets 0.88% 0.98%* 0.63% 0.59% 0.52% 0.66% 0.60%
Ratio of Net
Investment Income
to Average Net
Assets 4.60% 4.96%* 4.98% 3.99% 2.58% 2.90% 5.01%
<FN>
(1) New class of shares established on January 20, 1995.
</FN>
<FN>
(2) Designated as the "Original Shares" class of shares on January 20, 1995.
</FN>
<FN>
** For the period from February 1, 1995 (commencement of operations) to
March 31, 1995.
</FN>
<FN>
# Not annualized.
</FN>
<FN>
* Annualized.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
This information is presented in order to comply with a requirement of
the Internal Revenue Code and NO CURRENT ACTION ON THE PART OF SHAREHOLDERS
IS REQUIRED.
For the fiscal year ended March 31, 1996, the Federal tax status of the
total amount of dividends paid by each of the investment portfolios
comprising Cash Assets Trust is as follows:
<TABLE>
<CAPTION>
Fund Federal Tax Status
<S> <C>
Pacific Capital Cash Assets Trust Ordinary dividend income
Pacific Capital Tax-Free Cash Assets Trust Exempt-interest dividends
Pacific Capital U.S. Treasuries Cash Assets Trust Ordinary dividend income
</TABLE>
Prior to January 31, 1996, shareholders were mailed IRS Form 1099-DIV
which contained information on the status of distributions paid for the 1995
CALENDAR YEAR.
REPORT OF THE ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
The Annual Meeting of Shareholders of Cash Assets Trust (the "Trust") was
held on March 22, 1996.* At the meeting, the following matters were
submitted to a shareholder vote and approved:
(i) the election of Lacy B. Herrmann, Vernon R. Alden, Arthur K.
Carlson, William M. Cole, Thomas W. Courtney, Richard W. Gushman,
II, Stanley W. Hong, Theodore T. Mason, Russell K. Okata, Douglas
Philpotts, and Oswald K. Stender as Trustees to hold office until
the next annual meeting of the Trust's shareholders or until his or
her successor is duly elected (each Trustee received at least
555,815,177 affirmative votes (99.96%); no more than 204,445 votes
were withheld for any Trustee (0.04%)),
(ii) the ratification of the selection of KPMG Peat Marwick LLP as
the Trust's independent auditors for the fiscal year ending March
31, 1996 (votes for: 555,842,376 (99.97%); votes against: 59,100
(0.01%); abstentions: 118,145 (0.02%); broker non-votes: 0.0
(0.0%)), and
(iii) the approval of a proposed Amended and Restated Investment
Advisory Agreement (votes for: 552,178,962 (99.31%); votes against:
2,495,241 (0.45%); abstentions: 1,345,416 (0.24%)).
___________
* On the record date for this meeting, 565,525,279 shares of the Trust were
outstanding and entitled to vote. The holders of 556,019,622 shares (98.32%)
entitled to vote were present in person or by proxy at the meeting.
