LION LOGO
The Pacific Capital Funds
of
Cash Assets Trust
SEMI-ANNUAL REPORT
November 7, 1996
Dear Investor:
We are pleased to provide you with the Semi-Annual Report for The Pacific
Capital Funds of Cash Assets Trust (the "Trust") for the six-month period
ended September 30, 1996.
The Pacific Capital Funds of Cash Assets Trust were designed to offer
opportunities for income and stability of principal for Hawaii investors and
others. The Trust is comprised of three portfolios - Pacific Capital Cash
Assets Trust, Pacific Capital U.S. Treasuries Cash Assets Trust and Pacific
Capital Tax-Free Cash Assets Trust - which strive to meet their investment
objective by investing in short-term high-quality "money-market" securities
which meet minimal credit risks. We are most proud of the fact that, over
the years, each fund has been able to meet their stated objective while never
compromising from their high-quality standards.
Management Discussion
The Trust's Investment Adviser, Hawaiian Trust Co., Ltd., continuous to
act with a high level of prudence in examining the creditworthiness and
marketability of all issuers of securities utilized in each of the Trust's
investment portfolios. Investors in the Trust can take comfort in knowing
that those securities in each portfolio will be chosen on the basis of
possessing high quality and minimal credit risk in order to ensure maximum
safety for investors' cash reserves. While the funds will always strive for
a high level of return upon the cash reserves placed with it by investors,
you can rest assured that no undue risk will be taken just to achieve some
additional measure of yield.
Economic Review
The U.S. economy grew in excess of a 3.0% annual rate over the first half
of this year, however, recently-released government statistics suggest that
final demand for goods and services decelerated sharply during the summer
months. There was sufficient evidence of the economy's slowdown in
conjunction with excellent behavior of prices and well-contained increases in
wages prior to the Federal Reserve Board meeting in September that allowed
the Federal Reserve to hold short-term interest rates unchanged. The Fed last
changed interest rates in January, easing the Federal Fund's rate 25 basis
points to 5.25%. With a slowing economy and only modest increase in
inflationary pressures, we expect monetary policy to remain on hold for the
foreseeable future.
All those associated with The Pacific Capital Funds of Cash Assets Trust are
grateful for the confidence you have shown through your investment in the
funds.
You can be assured that we will do everything possible to continue to merit
this trust and confidence.
Sincerely,
/s/ Lacy B. Herrmann
Lacy B. Herrmann
President and Chairman
of the Board of Trustees
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1996 (Unaudited)
Face
Amount Commercial Paper (65.6%) Value
<C> <S> <C>
Automotive (7.7%)
$ 15,000,000 Ford Motor Credit, 5.46%,10/11/96 $ 14,884,733
15,000,000 Toyota Motor Credit, 5.29%, 11/22/96 14,978,000
29,862,733
Banking (3.9%)
15,000,000 Republic New York Corp., 5.31%, 10/21/96 14,955,750
Brokerage (3.9%)
15,000,000 Merrill Lynch & Company, Inc., 5.33%, 10/01/96 15,000,000
Diversified (3.9%)
15,000,000 Cargill Incorporated, 5.28%, 10/15/96 14,969,200
Education (5.2%)
15,000,000 Harvard University, 5.25%, 10/03/96 14,995,625
5,000,000 Stanford University, 5.40% , 01/14/97 4,921,250
19,916,875
Finance (23.2%)
15,000,000 A.I. Credit Corp., 5.25%, 10/21/96 14,956,208
15,000,000 American General Corp., 5.30%, 10/07/96 14,986,750
15,000,000 Associates Corporation of North America,
5.35%, 10/08/96 14,984,396
15,000,000 General Electric Capital Corp., 5.35%,
01/23/97 14,745,875
15,000,000 National Rural Utilities, 5.31%, 10/04/96 14,993,363
15,000,000 Norwest Financial Inc., 5.30%, 10/08/96 14,984,542
89,651,134
Food and Beverage (3.9%)
15,000,000 Nestle Capital Corp., 5.27% and 5.28%,
10/02/96 and 10/04/96 14,996,336
Healthcare (2.8%)
10,915,000 Abbott Laboratories, 5.33%, 10/11/96 10,898,840
Insurance (3.9%)
15,000,000 Prudential Funding Corp., 5.27%, 10/21/96 14,956,083
Natural Gas (7.2%)
15,000,000 Consolidated Natural Gas Co., 5.32%, 10/18/96 14,962,317
13,000,000 Northern Illinois Gas Co., 5.34%, 12/09/96 12,866,945
27,829,262
Total Commercial Paper (cost $253,036,213) 253,036,213
<PAGE>
Notes (19.4%)
U.S. Government Agencies (15.5%)
$100,000 Student Loan Mortgage Association, Variable
Rate Note 5.72%, 11/01/96 (Resets
Weekly-Next Reset 10/07/96) $ 100,000
20,000,000 Federal Home Loan Mortgage Corp., 5.175%,
10/10/96 19,974,125
20,000,000 Federal National Mortgage Association,
5.35%, 10/11/96 19,852,383
20,000,000 Federal Home Loan Bank, 5.20%, 11/21/96 19,971,111
59,897,619
Insurance (3.9%)
15,000,000 Providian Life and Health Insurance Company
Variable Rate Note, 5.62%, 12/28/96(1) 15,000,000
Total Notes (cost $74,897,619) 74,897,619
Repurchase Agreements (15.4%)d
10,000,000 Dresdner Bank A.G., 5.78%, due 10/01/96 10,000,000
(Proceeds of $10,001,583 to be received at
maturity)
Collateral: $9,667,000 U.S. Treasury Note
7.75% due 01/31/00
Collateral Market Value $10,202,034
24,190,000 Swiss Bank Corp., 5.52%, due 10/01/96 24,190,000
(Proceeds of $24,193,662 to be received
at maturity)
Collateral: $20,350,000 U.S. Treasury Note
8.875% due 02/15/19
Collateral Market Value $24,683,914
25,000,000 UBS Securities, 5.63%, due 10/01/96 25,000,000
(Proceeds of $25,003,854 to be received at
maturity)
Collateral: $17,911,000 U.S. Treasury Note
12.00% due 08/15/13
Collateral Market Value $25,500,786
Total Repurchase Agreements
(cost $59,190,000) 59,190,000
Total Investments - 100.4%
(cost $387,123,832*) 387,123,832
Liabilities in excess of other
assets - (0.4%) (1,660,216)
Net Assets - 100% $ 385,463,616
<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
SEPTEMBER 30, 1996 (Unaudited)
Rating
Face Moody's/
Amount Bonds and Notes (100.5%) S&P Value
<C> <S> <CS> <C>
California (1.5%)
San Mateo, CA Tax and Revenue
Anticipation Note,
$ 2,400,000 4.50%, 07/1/97 MIG1/SP1+ $ 2,409,496
Florida (4.8%)
Jacksonville, FL Electric Authority
Revenue Bonds,
2,755,000 5.00%, 10/01/96 Aa1/AA 2,755,000
Jacksonville, FL Electric Authority
Revenue Bonds St. Johns River,
1,000,000 5.00%, 10/01/97 Aa1/AA 1,010,970
Jacksonville, FL Electric Authority
System Tax-Exempt Commercial Paper
Notes, Series D-1,
2,000,000 3.45%, 11/08/96 P-1/A-1+ 2,000,000
Orange County , FL School District
Tax Anticipation Notes,
2,000,000 4.50%, 10/16/96 NR/SP1+ 2,000,552
Total Florida 7,766,522
Georgia (2.2%)
Gwinnett County, GA School District,
General Obligation, Series A,
3,560,000 5.10%, 2/1/97 Aa1/AA 3,578,817
Hawaii (37.1%)
City and County of Honolulu, HI
General Obligation
Bond Anticipation Notes Tax Exempt
Commercial Paper Series,
1,100,000 3.50%, 10/10/96 P-1/A1+ 1,100,000
1,000,000 3.50%, 10/10/96 1,000,000
2,350,000 3.60%, 12/06/96 2,350,000
1,350,000 3.75%, 01/15/97 1,350,000
Hawaii State, General Obligation
Bonds 1993 Series CD,
1,000,000 4.10%, 02/01/97 Aa/AA 1,001,448
Hawaii State, General Obligation
Bonds 1993 Series CI,
1,450,000 5.00%, 11/01/96 Aa/AA 1,451,540
Hawaii State, General Obligation
Bonds 1988 Series BK,
2,195,000 7.40%, 04/01/06, Pre-Refunded
04/01/97 Aaa/AA 2,267,874
Hawaii State, General Obligation
Bonds 1987 Series BJ,
1,500,000 6.75%, 12/01/97, Pre-Refunded
12/01/96 Aaa/AA 1,529,646
Hawaii State, General Obligation
Bonds 1989 Series BN,
1,450,000 7.00%, 06/01/97 Aa/AA 1,480,279
Hawaii State, General Obligation
Bonds 1992 Series BW,
3,500,000 5.15%, 03/01/97 Aa/AA 3,527,045
<PAGE>
Hawaii State, General Obligation
Bonds 1992 Series BZ,
3,500,000 5.50%, 10/01/97 Aa/AA 3,556,091
Hawaii State Department of Budget
& Finance Special Purpose Mortgage
Revenue Bonds, (Kaiser Medical Care
Program), Adjustable Rate Series A,
5,800,000 3.90%, 03/01/15, Putable 10/02/96* VMIG1/A-1+ 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 3.85%, 01/15/97 NR/A-1+ 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 3.70%, 10/04/96 NR/A-1+ 2,190,000
Hawaii State Department of Budget &
Finance Special Purpose Mortgage
Revenue Bonds (Citizens Utility
Project), Series B (Tax Exempt
Commercial Paper Series),
2,810,000 3.55%, 11/08/96 NR/A-1+ 2,810,000
Hawaii State Department Of Budget &
Finance Special Purpose Mortgage
Revenue Bonds (Kaiser Pemanente),
Series A,
6,540,000 3.65%, 03/01/14, 6 month Put, next
putable date 03/03/97 NR/A-1+ 6,540,000
Hawaii State Department Of Budget &
Finance Special Purpose Mortgage
Revenue Bonds (The Queens Health
System) Series A,
1,250,000 4.00%, 07/01/97 Aa/AA 1,250,000
Hawaii State Housing Finance &
Development Corp. Revenue Bonds
(Rental Housing System) Series 89 A,
200,000 3.90%, 07/01/24, Putable 10/02/96* VMIG1/NR 200,000
Letter of Credit: Banque National
De Paris
Hawaii State Highway Improvement
Revenue Bonds,
1,500,000 3.80%, 07/01/97 Aa/AA 1,500,000
Hawaii State Housing Finance &
Development Corp. Revenue Bonds
(Affordable Rental Housing Program)
Series A,
8,300,000 3.95%, 07/01/27, Putable 10/02/96* VMIG1/NR 8,300,000
Letter of Credit: Banque National
De Paris
Maui County, HI General Obligation
Bonds, Series A,
450,000 4.00%, 06/1/97 Aaa/AAA 450,000
<PAGE>
Insurance: Municipal Bond Investors
Assurance
Maui County, HI Water Supply, Water
Revenue Bonds,
1,000,000 5.25%, 12/1/96 Aaa/AAA 1,002,362
Insurance: Financial Guaranty
Insurance Corporation
Secondary Market Services Corporation
Hawaii Student
Loan Revenue, Senior Series II,
7,900,000 3.90%, 09/01/10, Putable 10/02/96* VMIG1/A-1+ 7,900,000
Letter of Credit: National
Westminster, Guaranteed Student
Loans
Total Hawaii 59,556,285
Idaho(0.8%)
Idaho Health Facilities Authorized
Revenue Bonds (St Lukes Regional
Medical Center Project),
1,325,000 3.95%, 05/01/22, Putable 10/01/96* VMIG1/NR 1,325,000
Letter of Credit: Credit Suisse
Illinois(1.9%)
Illinois Health Facilities Authority
Revenue Bonds
(Central Dupage Health Corp.
Project),
3,000,000 3.95%, 11/01/20, Putable 10/01/96* VMIG1/NR 3,000,000
Letter of Credit: Rabobank
Nederland
Indiana (10.1%)
Gary, IN Environmental Improvement
Revenue Bonds
(US Steel Corporation Project),
3,100,000 3.75%, 07/15/02, Putable 10/15/96* P-1/A-1+ 3,100,000
Letter of Credit: Bank of Nova
Scotia
Indianapolis, IN Economic Development
Revenue Bonds
(Jewish Federation Campus),
4,200,000 3.85%, 04/01/05, Putable 10/02/96* VMIG1/NR 4,200,000
Letter of Credit: NBD Bank
Portage, IN Economic Development
Revenue Bonds Series A,
3,615,000 3.95%, 08/01/30, Putable 10/03/96* VMIG1/NR 3,615,000
Letter of Credit: Federal Home Loan
Purdue University, IN University
Revenue Bonds (Student Fee)
Series E,
5,295,000 3.70%, 07/01/11, Putable 10/02/96* VMIG1/A-1+ 5,295,000
Total Indiana 16,210,000
<PAGE>
Kentucky (1.4%)
Warsaw, KY Industrial Building
Revenue Bonds
(Operating Partnership),
2,300,000 4.10%, 08/01/09, Putable 10/02/96* NR/A-1+ 2,300,000
Letter of Credit: Fifth Third
Bank, Ohio
Louisiana (5.3%)
De Soto Parish, LA Pollution Control
Revenue Bonds (Central Louisiana
Electric Company) Series A,
4,500,000 3.70%, 07/01/18, Putable 10/02/96* VMIG1/A-1+ 4,500,000
Letter of Credit: Swiss Bank
Jefferson Parish, LA Hospital Services
Revenue Bonds (West Jefferson
Medical Center),
4,000,000 3.90%, 01/01/26, Putable 10/02/96* VMIG1/A-1+ 4,000,000
Letter of Credit: Rabobank
Nederland
Total Louisiana 8,500,000
New Hampshire (1.7%)
New Hampshire State Industrial
Development Authority
Revenue Bonds Pollution Control
(Connecticut Light & Power
Company),
2,700,000 3.95%, 08/01/18, Putable 10/02/96* NR/A-1+ 2,700,000
Letter of Credit: Union Bank of
Switzerland
New Jersey (2.5%)
Morris County, NJ General Obligation
Bonds Bond Anticipation Notes,
4,000,000 3.97%, 08/07/97 MIG1/SP1+ 4,002,282
New Mexico (3.4%)
Albuquerque, NM Airport Revenue
Bonds Series A,
5,500,000 3.90%, 07/01/17, Putable 10/02/96* VMIG1/A-1+ 5,500,000
Letter of Credit: Bayerische
Landesbank
New York (5.0%)
New York, NY General Obligation
Bonds, Series B,
1,300,000 3.95%, 10/01/20, Putable 10/01/96* VMIG1/A-1+ 1,300,000
Letter of Credit: Financial
Guaranty Insurance Corporation
New York, NY General Obligation
Bonds, Series B - 4,
3,600,000 4.00%, 08/15/21, Putable 10/01/96* VMIG1/A-1+ 3,600,000
Letter of Credit: Union Bank of
Switzerland
New York, NY Municipal Water Finance
Authority Water & Sewer System
Revenue Bonds Series A,
3,100,000 4.00%, 06/15/25, Putable 10/01/96* VMIG1/A-1+ 3,100,000
Letter of Credit: Financial
Guaranty Insurance Corporation
Total New York 8,000,000
<PAGE>
North Carolina (2.8%)
North Carolina, NC Education
Facilities Finance Agency
Revenue Bonds (Bowman Gray
School Project),
4,500,000 3.90%, 09/01/26, Putable 10/02/96* VMIG1/NR 4,500,000
Letter of Credit: Wachovia Bank
Ohio (2.4%)
Ohio State University Revenue Bonds,
General Receipts, Series B,
2,935,000 3.70%, 12/01/01, Putable 10/03/96* MIG1/A-1+ 2,935,000
Letter of Credit: National
Westminster
Ohio State Highway General Obligation
Bonds, Series T,
1,000,000 4.80%, 05/15/97 Aa1/AAA 1,006,916
Total Ohio 3,941,916
Tennessee (2.3%)
Memphis, TN General Obligation Bonds,
1,040,000 4.00%, 08/01/97 Aa/AA 1,041,258
Tennessee State General Obligation
Bonds Series B,
2,570,000 5.90%, 06/01/97 Aaa/AA+ 2,605,327
Total Tennessee 3,646,585
Texas (3.9%)
Lower Neches Valley Authority of
Texas Revenue Bonds
(Chevron USA Income Project),
2,500,000 3.65%, 02/15/17, 6 month Put, next
putable date 02/18/97 P-1/A-1+ 2,500,000
Texas Higher Education Authority
Revenue Bonds Series B,
1,755,000 3.90%, 12/01/25, Putable 10/02/96* VMIG1/A-1+ 1,755,000
Letter of Credit: Financial
Guaranty Insurance Co.
Texas State Tax & Revenue
Anticipation Notes Series A,
2,000,000 4.75%, 08/29/97 MIG1/Sp1+ 2,014,867
Total Texas 6,269,867
Virginia (0.6%)
Virginia Beach General Obligation
Bonds Series C,
1,000,000 6.10%, 8/1/97 Aa/AA 1,018,619
Vermont (1.7%)
Vermont State Student Assistance
Corp. Revenue Bonds
(Student Loan Revenue),
2,700,000 3.70%, 01/01/04, Putable 10/01/96* VMIG1/NR 2,700,000
Letter of Credit: National
Westminster
<PAGE>
Washington (5.6%)
King County, WA General Obligation
Bonds, Series A,
1,000,000 6.60%, 12/01/96 Aa1/AA+ 1,004,364
King County, WA School District No.
408 Auburn, General Obligation Bonds,
1,000,000 3.70%, 12/01/96 Aaa/AAA 1,000,645
Insurance: AMBAC Insurance Co.
Washington State Health Care Faciltiy
Authority Variable Rate Demand
(Fred Hutchinson Cancer Research
Center, Seattle) Series 1991 A&C,
2,405,000 3.95%, 01/01/18, Putable 10/01/96* VMIG1/NR 2,405,000
4,515,000 3.95%, 01/01/23, Putable 10/01/96* 4,515,000
Total Washington 8,925,009
Wisconsin (2.9%)
Wisconsin State Health Facilities
Authority
Variable Rate Demand Bonds
(Franciscan Health Care),
4,595,000 3.75%, 01/01/16, Putable 10/02/96* VMIG1/A-1+ 4,595,000
Letter of Credit: Toronto
Dominion Bank
Wyoming (0.6%)
Sweetwater County, WY Pollution
Control Revenue Refunding Bonds
(Pacific Corp Project) Series
1990 A,
1,000,000 3.80%, 07/01/15, Putable 10/02/96* VMIG1/A-1+ 1,000,000
Letter of Credit: Credit Suisse
Total Investments - 100.5%
(cost $161,445,398**) 161,445,398
Liabilities in excess of other
assets - (0.5%) (872,573)
Net Assets - 100% $ 160,572,825
<FN>
(*) Variable rate obligation payable at par on demand at any time on
no more than seven days notice.
</FN>
<FN>
(**) Cost for Federal tax purposes is identical.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
U.S. TREASURIES CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1996 (Unaudited)
Face
Amount U.S. Treasury Bills (72.5%) Value
<C> <S> <C>
$ 10,000,000 5.17%, due 10/03/96 $ 9,997,167
10,000,000 5.21%, due 10/17/96 9,977,178
10,000,000 5.22%, due 10/24/96 9,967,129
10,000,000 5.06%, due 11/14/96 9,939,011
10,000,000 5.19%, due 11/21/96 9,927,467
15,000,000 5.16%, due 11/29/96 14,874,871
10,000,000 5.06%, due 12/05/96 9,909,812
10,000,000 5.13%, due 12/12/96 9,898,900
10,000,000 5.24%, due 12/19/96 9,886,547
10,000,000 5.18%, due 01/09/97 9,858,194
Total U.S. Treasury Bills (cost
$104,236,276) 104,236,276
Repurchase Agreements (27.9%)
20,184,000 Swiss Bank Corp., 5.53%, due 10/01/96 20,184,000
(Proceeds of $20,187,056 to be received
at maturity)
Collateral: $16,980,000 U.S. Treasury
Note 8.875% due 02/15/19
Collateral Market Value $20,596,209
20,000,000 UBS Securities, 5.63%, due 10/01/96 20,000,000
(Proceeds of $20,003,083 to be received
at maturity)
Collateral: $14,329,000 U.S. Treasury
Note 12.00% due 08/15/13
Collateral Market Value $20,400,914
Total Repurchase Agreements
(cost $40,184,000) 40,184,000
Total Investments - 100.4%
(cost $144,420,276*) 144,420,276
Liabilities in excess of other
assets - (0.4%) (630,264)
Net Assets - 100% $ 143,790,012
<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
SEPTEMBER 30, 1996 (unaudited)
Cash Tax-Free Treasuries
Fund Fund Fund
<S> <C> <C> <C>
ASSETS
Investments, at value $ 387,123,832 $ 161,445,398 $ 144,420,276
(cost: $387,123,832,
$161,445,398, and
$144,420,276, respectively
Cash 35 18,780 512
Interest receivable 80,290 1,102,748 6,139
Prepaid expenses and other
assets 80,221 22,037 11,464
Total Assets 387,284,378 162,588,963 144,438,391
LIABILITIES:
Dividends payable 1,581,058 411,414 542,318
Payable for securities
purchased - 1,500,000 -
Adviser and Administrator
fees payable 167,111 53,638 40,801
Distribution fees payable 27,912 11,446 36,835
Accrued expenses 44,681 39,640 28,425
Total Liabilities 1,820,762 2,016,138 648,379
NET ASSETS $ 385,463,616 $ 160,572,825 $ 143,790,012
NET ASSETS CONSIST OF:
Capital Stock - Authorized
an unlimited number of
shares, par value $.01
per share $ 3,862,026 $ 1,605,736 $ 1,437,839
Additional paid-in capital 382,345,837 158,967,815 142,346,026
Accumulated net realized
gain (loss) on investments (744,247) (726) 6,147
$385,463,616 $160,572,825 $143,790,012
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets $339,044,166 $ 142,085,098 $ 73,126,502
Shares outstanding 339,791,661 142,086,093 73,121,044
Net asset value per share $1.00 $1.00 $1.00
Service Shares Class:
Net Assets $ 46,419,450 $ 18,487,727 $ 70,663,510
Shares outstanding 46,410,937 18,487,458 70,662,821
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 SIX MONTHS ENDED SEPTEMBER 30, 1996 (unaudited)
Cash Tax-Free Treasuries
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $ 10,233,735 $ 2,612,377 $ 2,942,479
Expenses:
Investment Adviser fees
(note C) 654,715 216,045 167,719
Administrator fees
(note C) 294,618 80,279 57,335
Legal fees 60,000 24,000 17,000
Trustees' fees and
expenses 55,000 26,000 19,000
Distribution fees
(note C) 50,794 23,217 48,649
Registration fees and
dues 15,000 7,000 5,000
Shareholders' reports
and proxy statements 15,000 5,000 3,000
Fund accounting fees 14,000 14,000 14,000
Audit and accounting fees 10,000 10,000 9,000
Transfer and shareholder
servicing agent fees 8,000 6,000 7,000
Custodian fees (note F) 5,755 6,086 3,960
Insurance 3,000 1,500 900
Miscellaneous 15,534 3,552 11,593
Total expenses 1,201,416 422,679 364,156
Expenses paid indirectly
(note F) (1,966) (416) (75)
Net expenses 1,199,450 422,263 364,081
Net investment income 9,034,285 2,190,114 2,578,398
Net realized gain from
securities transactions 23,732 - 1,068
Net increase in net assets
resulting from operations $9,058,017 $ 2,190,114 $ 2,579,466
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Cash Fund Tax-Free Fund Treasuries Fund
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
Sept.30, March 31, Sept.30, March 31, Sept.30, March 31,
1996 1996 1996 1996 1996 1996
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income
$9,034,285 $20,398,306 $2,190,114 $4,503,165 $2,578,398 $3,774,744
Net realized gain (loss)
from securities transactions
23,732 123,536 - 2,817 1,068 5,079
Net increase in net assets
resulting from operations
9,058,017 20,521,842 2,190,114 4,505,982 2,579,466 3,779,823
Dividends to shareholders
from net investment income:
Original Shares
(8,112,865) (19,582,9100) (1,936,434)(4,171,075) (1,714,963) (3,521,108)
Service Shares
(921,420) (815,396) (253,680) (332,090) (863,435) (253,636)
Total dividends to shareholders
from net investment income
(9,034,285) (20,398,306) (2,190,114)(4,503,165) (2,578,398) (3,774,744)
Capital Share Transactions
(at $1.00 per share):
Proceeds from shares sold:
Original Shares
718,209,203 1,151,381,874 155,019,434 317,952,322 209,942,786 297,398,080
Service Shares
133,782,766 155,686,423 21,057,778 33,774,004 293,980,685 32,654,749
851,991,969 1,307,068,297 176,077,212 351,726,326 503,923,471 330,052,829
Net asset value of shares issued in
reinvestment of dividends:
Original Shares
59,632 202,235 69,869 149,023 29,151 76,296
Service Shares
856,898 703,688 249,041 281,888 617,412 209,080
916,530 905,923 318,910 430,911 646,563 285,376
Cost of shares redeemed:
Original Shares
(687,912,870)(1,329,689,125)(138,182,426)(331,260,352)(210,882,139)(287,477,003)
Service Shares
(121,078,638) (127,041,609) (20,428,124) (17,825,199)(235,741,225)(21,563,607)
(808,991,508)(1,456,730,734)(158,610,550)(349,085,551)(446,623,364)(309,040,610)
Change in net assets from
capital share transactions
43,916,991 (148,756,514) 17,785,572 3,071,686 57,946,670 21,297,595
Total increase (decrease)
in net assets
43,940,723 (148,632,978) 17,785,572 3,074,503 57,947,738 21,302,674
NET ASSETS:
Beginning of period
341,522,893 490,155,871 142,787,253 139,712,750 85,842,274 64,539,600
End of period
$385,463,616 $341,522,893 $160,572,825 $142,787,253 $143,790,012 $85,842,274
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited)
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.
<PAGE>
(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 six months ended September 30,
1996, the Fund incurred fees under the Advisory Agreement and the
Administration Agreement of $654,715 and $294,618, 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 six months ended
September 30, 1996, the Fund incurred fees under the Advisory Agreement and
the Administration Agreement of $216,045 and $80,279, 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 six
months ended September 30, 1996, the Fund incurred fees under the Advisory
Agreement and the Administration Agreement of $167,719 and $57,335,
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
<PAGE>
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 six months ended September 30,
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
12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain
distribution or service fees by the Service Shares class of the Fund. Such
payments are made to "Designated Payees"_broker-dealers, other financial
institutions and service providers who have entered into appropriate
agreements with the Distributor and which have rendered assistance in the
distribution and/or retention of the Funds' Service Shares or in the
servicing of Service Share accounts. The total payments under this part of a
Fund's Plan may not exceed 0.25 of 1% of its average annual assets
represented by Service Shares. No such payments will be made by the Original
Share class. Specific details about each Plan are more fully defined in the
Prospectus and Statement of Additional Information of the Funds.
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 September 30, 1996, the Cash Fund had a capital loss carryover of
approximately $744,248 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 six months ended September 30,
1996, the custodian fees of the Cash Fund, the Tax-Free Fund and the
Treasuries Fund, amounted to $5,755, $6,086 and $3,960, respectively. Of
these amounts, $1,966, $416 and $75, 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>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
(unaudited)
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Six Months Year Period Six Months
Ended Ended Ended Ended
Sept. 30, Mar. 31, Mar. 31, Sept. 30, Year ended March 31,
1996 1996 1995** 1996 1996 1995 1994 1993 1992
<S> <C> <C> <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 $1.00 $1.00
Income from
Investment
Operations:
Net investment
income 0.02 0.05 0.01 0.02 0.05 0.04 0.03 0.03 0.05
Less
Distributions:
Dividends from
net investment
income (0.02) (0.05) (0.01) (0.02) (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 $1.00 $1.00
Total Return
(%) 2.28# 5.06 0.85# 2.41# 5.32 4.40 2.74 3.15 5.20
Ratios/
Supplemental
Data
Net Assets,
End of Period
($ millions) 46.4 32.9 3.5 339.0 308.7 486.7 407.1 268.0 275.7
Ratio of
Expenses to
Average Net
Assets (%) 0.85* 0.86 0.83* 0.60* 0.60 0.59 0.59 0.61 0.60
Ratio of Net
Investment
Income to
Average Net
Assets (%) 4.51* 4.84 5.26* 4.77* 5.24 4.40 2.71 3.13 5.19
<CAPTION>
For periods after April 1, 1995, net investment income per share and the
ratios of income and expenses to average net assets without the expense
offset in custodian fees for uninvested cash balances would have been:
<S> <C> <C> <C> <C>
Net investment
income ($) 0.02 0.05 0.02 0.05
Ratio of
Expenses to
Average Net
Assets (%) 0.85* 0.86 0.60* 0.61
Ratio of Net
Investment
Income to
Average Net
Assets (%) 4.51* 4.84 4.77* 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.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
(unaudited)
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Six Months Year Period Six Months
Ended Ended Ended Ended
Sept. 30, Mar. 31, Mar. 31, Sept. 30, Year ended March 31,
1996 1996 1995** 1996 1996 1995 1994 1993 1992
<S> <C> <C> <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 $1.00 $1.00
Income from
Investment
Operations:
Net investment
income 0.01 0.03 0.01 0.01 0.03 0.03 0.02 0.02 0.04
Less
Distributions:
Dividends from
net investment
income (0.01) (0.03) (0.01) (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 $1.00 $1.00
Total Return
(%) 1.37# 3.11 0.52# 1.50# 3.37 2.74 2.02 2.52 3.91
Ratios/
Supplemental
Data
Net Assets,
End of Period
($ millions) 18.5 17.6 1.4 142.1 125.2 138.3 113.9 69.3 100.0
Ratio of
Expenses to
Average Net
Assets (%) 0.78* 0.80 0.77* 0.54* 0.54 0.55 0.56 0.54 0.42
Ratio of
Net Investment
Income to
Average
Net Assets (%) 2.72* 2.97 3.22* 2.97* 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 periods after April 1, 1995,
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 ($) 0.01 0.03 0.01 0.03 0.02 0.02 0.04
Ratio of
Expenses to
Average Net
Assets (%) 0.79* 0.80 0.54* 0.54 0.58 0.59 0.56
Ratio of Net
Investment
Income to
Average Net
Assets (%) 2.72* 2.97 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
(unaudited)
For a share outstanding throughout each period
SERVICE SHARES(1) ORIGINAL SHARES(2)
Six Months Year Period Six Months
Ended Ended Ended Ended
Sept. 30, Mar. 31, Mar. 31, Sept. 30, Year ended March 31,
1996 1996 1995** 1996 1996 1995 1994 1993 1992
<S> <C> <C> <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 $1.00 $1.00
Income from
Investment
Operations:
Net investment
income 0.02 0.05 0.01 0.02 0.05 0.04 0.03 0.03 0.05
Less
Distributions:
Dividends from
net investment
income (0.02) (0.05) (0.01) (0.02) (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 $1.00 $1.00
Total Return
(%) 2.22# 4.94 0.94# 2.35# 5.20 4.20 2.59 2.90 5.20
Ratios/
Supplemental
Data
Net Assets,
End of Period
($ millions) 70.7 11.8 0.5 73.1 74.0 64.0 91.7 26.1 40.3
Ratio of
Expenses to
Average Net
Assets (%) 0.80* 0.79 0.85* 0.56* 0.54 0.54 0.52 0.61 0.34
Ratio of Net
Investment
Income to
Average Net
Assets (%) 4.41 4.68 5.09* 4.63* 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 for periods prior to April 1, 1996, and for periods after April 1,
1995, without the expense offset in custodian fees for uninvested cash
balances, would have been:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Investment
Income ($) 0.02 0.05 0.01 0.02 0.05 0.04 0.03 0.03 0.05
Ratio of
Expenses to
Average Net
Assets (%) 0.80* 0.88 0.98* 0.56* 0.63 0.59 0.52 0.66 0.60
Ratio of Net
Investment
Income to
Average Net
Assets (%) 4.41* 4.60 4.96* 4.63* 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>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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, 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.
SEMI-ANNUAL
REPORT
September 30, 1996
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
PACIFIC CASH ASSETS TRUST
PACIFIC CAPITAL TAX-FREE
CASH ASSETS TRUST
PACIFIC CAPITAL U.S. TREASURIES
CASH ASSETS TRUST
LION LOGO
A CASH MANAGEMENT
INVESTMENT
