INVESTMENT ADVISER
Pacific Century Trust
a division of
Bank of Hawaii
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, Senior 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
PFPC Inc.
400 Bellevue Parkway * Wilmington, Delaware 19809
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, 1998
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
PACIFIC CAPITAL CASH ASSETS TRUST
PACIFIC CAPITAL TAX-FREE
CASH ASSETS TRUST
PACIFIC CAPITAL U.S. GOVERNMENT
SECURITIES CASH ASSETS TRUST
[Logo of The Pacific Capital Funds of Cash Assets Trust: Side view of a
standing lion above a thick rope]
A CASH MANAGEMENT
INVESTMENT
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
ANNUAL REPORT
May 15, 1998
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, 1998.
The enclosed Annual Report includes the three portfolios of
Cash Assets Trust: Pacific Capital Cash Assets Trust, Pacific Capital
Tax-Free Cash Assets Trust and Pacific Capital U.S. Treasuries Cash Assets
Trust and its two classes of shares: Original Shares and Service Shares.
Each of the three portfolios were specifically created to meet the short-term
investment needs of Hawaii investors and others.
* * * * * * *
The current report period was marked by increasing volatility
in the world financial markets. Most significant was the impact of the Asian
financial crisis, which caused currency values to plunge and sent financial
markets into turmoil. It is hard to believe the magnitude of the currency
depreciation that has taken place in various countries versus the U.S.
dollar. The currency deterioration against the U.S. dollar have ranged from
10% to well over 70% with various countries around the world. The impact of
the Asian crisis on the U.S. economy and its continued expansion remains a
factor that can not be ignored. Thirty percent of U.S. exports go to Asia.
Now, after the currency devaluations, consumers in that region have
significantly less in terms of purchasing power. As a result, some U.S.
firms could find demand for their exports weakening while at the same time
cheaper goods coming from Asia should force U.S. competitors to lower their
prices. With fewer U.S. exports and greater imports, the Federal Reserve is
hoping the U.S. economy will slow on its own from its torrid pace and that
the current low level of inflation we have experienced over the past several
years will continue.
The lack of monetary action policy by the Fed during the Asian
financial crisis kept short-term interest relatively stable during the
Trust's most recent fiscal year. As mentioned in previous report letters,
yields on money market funds, like the Trust, move in concert with rate
policies pursued by the Federal Reserve. Each of the Pacific Capital Funds
of Cash Assets Trust continues to provide competitive returns to alternative
short-term investment opportunities without wavering from their conservative
investment guidelines.
<PAGE>
Since the Trust's inception, the Trust's Investment Adviser,
Pacific Century Trust (formerly known as Hawaiian Trust Company, Ltd.) has
acted 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 are chosen on the basis of possessing
high quality and minimal credit risk. This is to ensure maximum safety for
investors' cash reserves.
* * * * * * *
On behalf of the Board of Trustees, the Investment Adviser and
the Administrator of the Trust, we are pleased to announce the name change
and expanded investment capabilities of Pacific Capital U.S. Treasuries Cash
Assets Trust. Effective April 1, 1998, the portfolio is now called Pacific
Capital U.S. Government Securities Cash Assets Trust. In addition to
investing in direct obligations of the U.S. Treasury, the portfolio will
invest in other obligations issued or guaranteed by agencies or
instrumentalities of the United States Government (with remaining maturities
of one year or less) and certain repurchase agreements secured by U.S.
Government securities. The Trust's management intends to replace a
significant portion of its U.S. Government repurchase agreements with U.S.
Government agency notes in order to seek a higher yield while continuing to
pass along income that is free from state income taxes for shareholders.
Your use of The Pacific Capital Funds of Cash Assets Trust is
greatly appreciated. You can be assured that every effort will be expended
by all associated with the Trust to merit your continued confidence.
Sincerely,
/s/ Lacy B. Herrmann
Lacy B. Herrmann
President and Chairman
of the Board of Trustees
<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 statement 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, 1998, 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 years in the five-year period then ended. 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, 1998, 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, 1998, 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
years in the five-year period then ended, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
May 8, 1998
<PAGE>
PACIFIC CAPITAL
CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1998
<TABLE>
<C> <S> <C>
FACE
AMOUNT COMMERCIAL PAPER (56.6%) VALUE
Automotive (3.7%)
$20,000,000 Ford Motor Credit Co., 5.46%, 5/29/98 $ 19,822,778
Banking/Credit Union (9.3%)
10,000,000 Banc-Corp Andina Deforments, 5.43%, 5/08/98 9,943,061
Letter of Credit-Barclay's Bank PLC
20,000,000 Byver-Demir Funding, 5.07%, 4/13/98 19,963,467
Letter of Credit-Bayerishe Vereinsbank
20,000,000 J.P. Morgan &Co. Inc., 4.82%, 4/08/98 19,978,611
49,885,139
Borrowing Conduit (3.8%)
20,000,000 Abbey National North American Corp., 4.89%, 4/09/98 19,975,556
Brokerage (7.5%)
20,000,000 Goldman Sachs, 5.25%, 4/20/98 19,941,839
20,000,000 Merrill Lynch &Company, Inc., 5.19%, 4/17/98 19,951,111
39,892,950
Chemicals (3.7%)
20,000,000 DuPont (E.I.) de Nemours &Co., 5.24%, 4/29/98 19,916,000
Finance (21.0%)
20,000,000 A.I. Credit Corp., 5.07%, 4/15/98 19,957,844
20,000,000 American General Corp., 5.46%, 5/27/98 19,828,578
20,000,000 Associates First Capital, 5.53%, 4/02/98 19,996,928
20,000,000 General Electric Capital Corp., 5.28%, 5/01/98 19,909,500
15,000,000 National Rural Utilities, 5.47%, 6/11/98 14,837,588
17,223,000 Transamerica Finance, 5.42%, 5/06/98 17,130,235
111,660,673
Food & Beverage (3.8%)
20,000,000 Coca-Cola Company, 4.79%, 4/08/98 19,978,728
Oil &Gas (3.8%)
20,000,000 Texaco Inc., 3.69%, 4/03/98 19,993,844
Total Commercial Paper (Cost $301,125,668) 301,125,668
U.S. TREASURY BILLS (9.3%)
30,000,000 5.23%, due 4/23/98 29,903,734
20,000,000 5.11%, due 7/23/98 19,684,856
Total U.S. Treasury Bills (Cost $49,588,590) 49,588,590
<PAGE>
NOTES (19.7%)
U.S. Government Agencies (16.9%)
20,000,000 Federal Home Loan Bank, 5.30%, 5/06/98 19,879,278
20,000,000 Federal Home Loan Bank, 5.21%, 5/12/98 19,894,610
30,000,000 Farmer Mac, 4.97%, 4/10/98 29,959,575
20,000,000 Federal National Mortgage Association, 5.31%, 6/12/98 19,786,800
89,520,263
Insurance (2.8%)
15,000,000 Providian Life and Health Insurance Company,
Variable Rate Note, 5.80%, 6/30/98(1) 15,000,000
Total Notes (Cost $104,520,263) 104,520,263
REPURCHASE AGREEMENTS (14.9%)
29,456,000 SBC Warburg, Dillon, Read, Inc., 5.80%, due 4/01/98 29,456,000
(Proceeds of $29,460,745 to be received at maturity)
Collateral: $29,529,000 U.S. Treasury Notes 5.625%
due 11/30/98
Collateral Market Value $30,045,120
25,000,000 BZW Securities, Inc., 5.75%, due 4/01/98 25,000,000
(Proceeds of $25,003,993 to be received at maturity)
Collateral: $24,800,000 U.S. Treasury Notes 5.875%
due 11/15/05
Collateral Market Value $25,500,000
25,000,000 Merrill Lynch Government Securities Inc., 5.75%,
due 4/01/98 25,000,000
(Proceeds of $25,003,993 to be received at maturity)
Collateral $25,310,000 U.S. Treasury Notes 5.875%
due 02/28/99
Collateral Market Value $25,500,000
Total Repurchase Agreements (cost $79,456,000) 79,456,000
Total Investments (cost $534,690,521*) 100.5% 534,690,521
Liabilities in excess of other assets (0.5) (2,492,727)
Net Assets 100.0% $532,197,794
<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>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1998
<TABLE>
<C> <S> <C> <C>
RATING
FACE MOODY'S/
AMOUNT BONDS AND NOTES (99.5%) S&P VALUE
ARIZONA (0.9%)
Arizona State Transportation Board Highway
Revenue Bonds, Refunding Bonds,
$1,000,000 4.25%, 07/01/98 Aa/AAA $ 1,001,081
CALIFORNIA (0.9%)
County of San Mateo, Tax and Revenue
Anticipation Notes, General Obligation,
1,000,000 4.50%, 07/01/98 NR/Sp1+ 1,001,680
GEORGIA (0.9%)
Polk County, GA School District, General
Obligation,
1,000,000 4.25%, 02/01/99 NR/AA- 1,005,704
HAWAII (39.9%)
Hawaii State, General Obligation Bonds 1990
Series BS,
1,000,000 6.80%, 09/01/98 A1/A+ 1,013,540
Hawaii State, General Obligation Bonds 1993
Series CC,
1,550,000 4.40%, 02/01/99 A1/A+ 1,559,875
Hawaii State, General Obligation Bonds 1993
Series CD,
2,750,000 4.40%, 02/01/99 A1/A+ 2,769,285
Hawaii State, General Obligation Bonds 1997
Series CQ,
3,000,000 4.25%, 10/01/98 Aaa/AAA 3,006,974
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
1,800,000 3.55%, 07/15/98 NR/A-1+ 1,800,000
<PAGE>
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
1,000,000 3.20%, 05/08/98 NR/A-1+ 1,000,000
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
2,810,000 3.55%, 08/14/98 NR/A-1+ 2,810,000
Hawaii State Airports System Revenue Bonds, First
Series, Refunding Bonds,
500,000 4.90%, 07/01/98 Aaa/AAA 501,370
Insurance: Municipal Bond Investors Assurance
Hawaii State Department of Budget & Finance
Special Purpose Mortgage Revenue Bonds (Kaiser
Pemanente), Series A,
2,500,000 3.75%, 03/01/14, 6 month Put, next putable date
09/01/98 NR/A-1+ 2,500,000
Hawaii State Department of Budget & Finance
Special Purpose Mortgage Revenue Bonds
(Queens Medical Center Project), Refunding
Bonds,
1,135,000 6.90%, 07/01/04, Prerefunded 07/01/98 Aaa/AAA 1,166,125
Insurance: Financial Guaranty Insurance Co.
Hawaii State Department of Budget & Finance
Special Purpose Mortgage Revenue Bonds
(Queens Medical Center Project), Refunding
Bonds,
1,345,000 7.00%, 07/01/08, Prerefunded 07/01/98 Aaa/AAA 1,382,238
Insurance: Financial Guaranty Insurance Co.
Hawaii State Department of Budget & Finance
Special Purpose Mortgage Revenue Bonds
(Queens Medical Center Project), Refunding
Bonds,
2,000,000 6.50%, 07/01/12, Prerefunded 07/01/98 Aaa/AAA 2,013,711
Insurance: Financial Guaranty Insurance Co.
<PAGE>
Hawaii State Department of Budget & Finance
Special Purpose Mortgage Revenue Bonds
(Kaiser Permanente) Series A,
4,900,000 3.85%, 03/01/15, Putable on 04/01/98* VMIG1/A-1+ 4,900,000
Hawaii State Housing Finance & Development
Corp. Revenue Bonds (Rental Housing System)
Series 89 A,
1,900,000 3.70%, 07/01/24, Putable 04/01/98* VMIG1/NR 1,900,000
Letter of Credit: Banque Nationale de Paris
Hawaii State Housing Finance & Development Corp.
Revenue Bonds (Affordable Rental Housing
Program) Series A,
5,300,000 3.80%, 07/01/27, Putable 04/01/98* VMIG1/NR 5,300,000
Letter of Credit: Banque Nationale de Paris
Honolulu County, HI General Obligation Bonds,
Series A,
1,000,000 7.30%, 04/01/98 Aa2/AA 1,000,000
230,000 7.30%, 04/01/04, Prerefunded 04/01/98 Aaa/AA 233,450
1,000,000 6.00%, 04/01/98 Aa2/AA 1,000,000
500,000 5.50%, 03/01/99 Aaa/AAA 508,595
Honolulu County,HI General Obligation Bonds,
Series B,
1,400,000 7.00%, 10/01/07, Prerefunded 10/01/98 Aaa/AA 1,442,876
1,750,000 4.50%, 10/01/98 Aa2/AA 1,755,607
Honolulu County,HI General Obligation Bonds,
Series C,
250,000 6.70%, 06/01/98, Escrowed to Maturity Aaa/AA 251,189
Kauai County, HI General Obligation Bonds,
Series A,
100,000 4.90%, 02/01/99 Aaa/AAA 100,934
450,000 4.00%, 08/01/98 Aaa/AAA 450,292
Insurance: Municipal Bond Investors Assurance
Maui County, HI General Obligation Bonds,
200,000 4.20%, 09/01/98 Aaa/AAA 200,240
Insurance: Financial Guaranty Insurance Co.
<PAGE>
Maui County, HI General Obligation Bonds,
Series A,
240,000 6.00%, 06/01/98 Aaa/AAA 240,823
Insurance: Municipal Bond Investors Assurance
Secondary Market Services Corporation Hawaii
Student Loan Revenue, Senior Series II,
4,500,000 3.80%, 09/01/2010, Putable 04/01/98* VMIG1/A-1+ 4,500,000
Letter of Credit: National Westminster,
Guaranteed Student Loans
Total Hawaii 45,307,124
ILLINOIS (2.3%)
Illinois Health Facilities Authority Revenue Bonds
(Central Dupage Health Corp. Project),
1,200,000 3.80%, 11/01/20, Putable 04/01/98* VMIG1/NR 1,200,000
Letter of Credit: Rabobank Nederland
Southwestern IL Development Authority
Environmental Improvement Revenue Bonds,
(Shell Oil Co Wood River Project),
1,375,000 3.85%, 11/01/25, Putable 04/01/98* VMIG1/A-1+ 1,375,000
Total Illinois 2,575,000
INDIANA (9.7%)
Gary, IN Environmental Improvement Revenue
Bonds (US Steel Corporation Project),
3,100,000 3.35%, 07/15/02, Putable 04/07/98* P-1/A-1+ 3,100,000
Letter of Credit: Bank of Nova Scotia
Indianapolis, IN Economic Development Revenue
Bonds (Jewish Federation Campus),
4,720,000 3.70%, 04/01/05, Putable 04/01/98* VMIG1/NR 4,720,000
Letter of Credit: NBD Bank
Purdue University, IN University Revenue Bonds
(Student Fee) Series E,
80,000 3.60%, 07/01/11, Putable 04/01/98* VMIG1/A-1+ 80,000
<PAGE>
Purdue University, IN University Revenue Bonds
(Student Fee) Series H,
735,000 3.60%, 07/01/17, Putable 04/01/98* VMIG1/A-1+ 735,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series K,
340,000 3.60%, 07/01/20, Putable 04/01/98* VMIG1/A-1+ 340,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series O,
2,000,000 3.60%, 07/01/19, Putable 04/01/98* VMIG1/A-1+ 2,000,000
Total Indiana 10,975,000
KENTUCKY (1.8%)
Warsaw, KY Industrial Building Revenue Bonds
(Operating Partnership),
2,100,000 3.85%, 08/01/09, Putable 04/01/98* NR/A-1+ 2,100,000
Letter of Credit: Fifth Third Bank
LOUISIANA (4.0%)
De Soto Parish, LA Pollution Control Revenue
Bonds (Central Louisiana Electric Company)
Series A,
2,500,000 3.65%, 07/01/18, Putable 04/01/98* VMIG1/A-1+ 2,500,000
Letter of Credit: Westdeutsche Landesbank
St. Charles Parish, LA Pollution Control Revenue
Bonds (Shell Oil Co. Project) Series B,
500,000 3.70%, 10/01/22, Putable 04/01/98* VMIG1/A-1+ 500,000
St. Charles Parish, LA Pollution Control Revenue
Bonds (Shell Oil Co.-Norco Project),
1,600,000 3.85%, 09/01/23, Putable 04/01/98* Aa2/AAA 1,600,000
Total Louisiana 4,600,000
MINNESOTA (0.9%)
Hennepin County MN Revenue Bonds, Refunding
Bonds,
1,000,000 4.90%, 10/01/98 Aaa/AAA 1,005,700
<PAGE>
Albuquerque, NM Airport Revenue Bonds Series A,
2,000,000 3.75%, 07/01/17, Putable 04/01/98* VMIG1/A-1+ 2,000,000
Letter of Credit: Bayerische Landesbank
NEW MEXICO (2.6%)
New Mexico State, Tax and Revenue Anticipation
Notes, Series A,
1,000,000 4.50%, 6/30/98 MIG1/Sp1+ 1,002,382
Total New Mexico 3,002,382
NEW YORK (8.0%)
New York, NY General Obligation Bonds, Series B,
1,700,000 3.80%, 10/01/22, Putable 04/01/98* VMIG1/A-1+ 1,700,000
Letter of Credit: Financial Guaranty Insurance
Corporation
New York, NY General Obligation Bonds, Series C,
1,100,000 3.80%, 10/01/23, Putable 04/01/98* VMIG1/A-1+ 1,100,000
Letter of Credit: Morgan Guaranty Trust
New York, NY Municipal Water Finance Authory
Water & Sewer System Revenue Bonds, Series A,
6,300,000 4.00%, 06/15/25. Putable 04/15/98* VMIG1/A-1+ 6,300,000
Letter of Credit: Financial Guaranty Insurance
Corporation
Total New York 9,100,000
NORTH CAROLINA (1.2%)
Durham County, NC General Obligation Bonds,
Public Improvement Project,
1,400,000 3.65%, 02/01/09, Putable 04/01/98* VMIG1/A-1+ 1,400,000
Letter of Credit: Wachovia Bank of NC
OHIO (8.1%)
Ohio State Air Quality Development Authority
Revenue Bonds, Series A,
2,800,000 4.00%, 12/01/15, Putable 04/01/98* NR/A-1+ 2,800,000
Letter of Credit: Union Bank of Switzerland
<PAGE>
Ohio State Air Quality Development Authority
Revenue Bonds, Series B,
4,000,000 4.00%, 12/01/15, Putable 04/01/98* NR/A-1+ 4,000,000
Letter of Credit: Morgan (J.P.)
Ohio State University Revenue Bonds, General
Receipts Series B,
2,415,000 3.60%, 12/01/06, Putable 04/02/98* VMIG1/A-1+ 2,415,000
Letter of Credit: National Westminster
Total Ohio 9,215,000
OREGON (1.8%)
County of Multnomah, Tax and Revenue
Anticipation Notes, General Obligation,
2,000,000 4.50%, 06/30/98 MIG1/NR 2,003,168
PENNSYLVANIA (1.6%)
Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Bonds, Series B,
1,800,000 3.80%, 07/01/2018, Putable 04/01/98 VMIG1/A-1+ 1,800,000
Letter of Credit: Student Loan Marketing
TEXAS (6.1%)
Austin, TX Independent School District, General
Obligation Bonds,
500,000 5.00%, 08/01/98 Aaa/AAA 501,832
Letter of Credit: PSF-Guaranty
Brazos, TX Higher Education Authority Incorporated
Revenue Bonds, Series A-2,
1,415,000 5.45%, 06/01/98 Aaa/NR 1,418,463
Letter of Credit: GTD Student Loans
Lower Neches Valley Authority of Texas Revenue
Bonds (Chevron USA Income Project),
1,500,000 3.45%, 02/15/17, 6 month put, next putable date
08/15/98 P-1/A-1+ 1,500,000
<PAGE>
San Antonio, TX Electric and Gas Revenue Bonds,
Refunding Bonds,
1,500,000 5.00%, 02/01/99 Aa1/AA 1,517,061
Texas State Tax & Revenue Anticipation Notes
Series A,
2,000,000 4.75%, 08/31/98 MIG1/Sp1+ 2,007,294
Total Texas 6,944,650
VERMONT (0.9%)
Vermont State Student Assistance Corp. Revenue
Bonds (Student Loan Revenue),
1,000,000 3.40%, 01/01/04, Putable 04/01/98* VMIG1/NR 1,000,000
Letter of Credit: National Westminster
VIRGINIA (0.4%)
Virginia State Transportation Board Transportation
Contract Revenue Bonds, (RTE 28 Project),
500,000 5.40%, 04/01/98 Aa/AA 500,000
WASHINGTON (5.6%)
King County, WA General Obligation Bonds
Series C, Refunding Bonds,
2,000,000 5.25%, 01/01/99 Aa1/AA+ 2,022,701
Seattle, WA Water System Revenue Bonds,
1,000,000 3.65%, 09/01/25, Putable 04/01/98* VMIG1/A-1+ 1,000,000
Letter of Credit: Bayerische Landesbank
Washington State Health Care Facility Authority
Variable Rate Demand (Fred Hutchinson Cancer
Research Center, Seattle) Series 1996,
2,500,000 3.80%, 01/01/23, Putable 04/01/98* VMIG1/NR 2,500,000
Letter of Credit: Morgan Guaranty Trust
<PAGE>
Washington State Health Care Facility Authority
Variable Rate Demand (Fred Hutchinson Cancer
Research Center, Seattle) Series 1991-B,
840,000 3.80%, 01/01/18, Putable 04/01/98* VMIG1/NR 840,000
Letter of Credit: Morgan Guaranty Trust
Total Washington 6,362,701
WISCONSIN (1.9%)
Wisconsin State General Obligation, Series 1,
Refunding Bonds,
1,000,000 4.70%, 11/01/98 Aa2/AA 1,005,095
Wisconsin State General Obligation, Series 1,
Refunding Bonds,
1,200,000 4.40%, 05/01/98 Aa2/AA 1,200,312
Total Wisconsin 2,205,407
Total Investments (cost $113,104,597**) 99.5% 113,104,597
Other assets in excess of liabilities .5 569,776
Net Assets 100.0% $113,674,373
<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>
PACIFIC CAPITAL
U.S. TREASURIES CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 1998
<TABLE>
<C> <S> <C>
FACE
AMOUNT U.S. TREASURY BILLS (43.77%) VALUE
$ 15,000,000 5.17%, due 04/02/98 $ 14,997,867
10,000,000 5.11%, due 04/02/98 9,998,577
10,000,000 5.11%, due 04/02/98 9,998,577
10,000,000 5.05%, due 04/09/98 9,988,867
15,000,000 5.36%, due 04/16/98 14,966,719
15,000,000 5.58%, due 04/23/98 14,951,440
15,000,000 5.50%, due 04/23/98 14,951,440
10,000,000 5.57%, due 04/30/98 9,957,305
10,000,000 5.53%, due 05/28/98 9,916,875
Total U.S. Treasury Bills (cost $109,727,667) 109,727,667
U.S. TREASURY NOTES (19.98%)
10,000,000 7.875%, due 04/15/98 10,009,007
10,000,000 5.125%, due 04/30/98 9,998,362
10,000,000 6.25%, due 06/30/98 10,017,011
5,000,000 6.25%, due 07/31/98 5,014,180
5,000,000 6.125%, due 08/31/98 5,014,341
5,000,000 6.00%, due 09/30/98 5,016,158
5,000,000 5.875%, due 10/31/98 5,013,961
Total U.S. Treasury Notes (cost $50,083,020) 50,083,020
REPURCHASE AGREEMENTS (36.29%)
30,992,000 SBC Warburg, Dillon, Read Inc., 5.80%, due 04/01/98 30,992,000
(Proceeds of $30,996,993 to be received at maturity)
Collateral: $31,069,000 U.S. Treasury Notes 5.625%
due 11/30/98
Collateral Market Value $31,611,840
30,000,000 BZW Securities Inc., 5.75%, due 04/01/98 30,000,000
(Proceeds of $30,004,792 to be received at maturity)
Collateral: $29,760,000 U.S. Treasury Notes 5.875%
due 11/15/05
Collateral Market Value $30,600,000
30,000,000 Merrill Lynch Government Securities Inc., 5.75%,
due 04/01/98 30,000,000
(Proceeds of $30,004,792 to be received at maturity)
Collateral: $30,375,000 U.S. Treasury Notes 5.875%
due 02/28/99
Collateral Market Value $30,600,000
Total Repurchase Agreements (cost $90,992,000) 90,992,000
Total Investments (cost $250,802,687*) 100.04% 250,802,687
Liabilities in excess of other assets (0.04) (97,589)
Net Assets 100.0% $250,705,098
<FN> (*) Cost for Federal tax purposes is identical. </FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
<TABLE>
<CAPTION>
CASH TAX-FREE TREASURIES
FUND FUND FUND
<S> <C> <C> <C>
ASSETS:
Investments at value
(cost $455,234,521, $113,104,597 and
$159,810,687, respectively) $455,234,521 $113,104,597 $159,810,687
Repurchase agreements (cost $79,456,000,
$-0- and $90,992,000, respectively) 79,456,000 - 90,992,000
Cash 723 94,272 549
Interest receivable 87,649 1,084,885 953,290
Other assets 10,628 551 7,269
Total Assets 534,789,521 114,284,305 251,763,795
LIABILITIES:
Dividends payable 2,289,581 256,893 940,118
Payable for investment securities purchased - 245,623 -
Adviser and Administrator fees payable 231,762 37,017 78,837
Distribution fees payable 25,076 6,202 28,905
Accrued expenses 45,308 64,197 10,837
Total Liabilities 2,591,727 609,932 1,058,697
NET ASSETS $532,197,794 $113,674,373 $250,705,098
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number
of shares, par value $.01 per share $ 5,328,239 $ 1,136,724 $ 2,506,785
Additional paid-in capital 527,500,955 112,537,854 248,181,282
Accumulated net realized gain (loss) on
investments (631,400) (205) 17,031
$532,197,794 $113,674,373 $250,705,098
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets $418,765,636 $ 76,562,453 $100,817,935
Shares outstanding 419,420,910 76,561,158 100,804,315
Net asset value per share $1.00 $1.00 $1.00
Service Shares Class:
Net Assets $113,432,158 $ 37,111,920 $149,887,163
Shares outstanding 113,403,019 37,111,289 149,874,197
Net asset value per share $1.00 $1.00 $1.00
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
CASH TAX-FREE TREASURIES
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 27,620,689 $ 3,637,941 $ 10,159,402
EXPENSES:
Investment Adviser fees (note 3) 1,791,797 271,071 588,596
Administrator fees (note 3) 669,595 125,970 168,490
Distribution fees (note 3) 225,212 63,840 282,730
Trustees' fees and expenses 137,796 60,868 60,372
Legal fees 49,600 22,330 27,343
Shareholders' reports and proxy statements 47,403 14,876 16,266
Registration fees and dues 33,607 11,296 10,395
Fund accounting fees 29,564 28,867 29,749
Transfer and shareholder servicing agent fees 26,767 25,552 20,191
Audit and accounting fees 23,121 23,871 22,871
Custodian fees (note 6) 20,431 26,485 11,062
Insurance 8,858 3,121 1,712
Miscellaneous 10,565 10,916 23,141
Total expenses 3,074,316 689,063 1,262,918
Expenses paid indirectly (note 6) (20,431) (665) (840)
Net expenses 3,053,885 688,398 1,262,078
Net investment income 24,566,804 2,949,543 8,897,324
Net realized gain (loss) from securities
transactions 89,803 (205) 17,031
Net increase in net assets resulting from
operations $ 24,656,607 $ 2,949,338 $ 8,914,355
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH FUND TAX-FREE FUND TREASURIES FUND
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $24,566,804 $19,349,816 $2,949,543 $4,151,691 $8,897,324 $5,735,313
Net realized gain (loss)
from securities transactions 89,803 46,777 (205) 2,857 17,031 4,476
Net increase in net assets
resulting from operations 24,656,607 19,396,593 2,949,338 4,154,548 8,914,355 5,739,789
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares (20,260,825) (17,064,462) (2,237,687) (3,599,870) (3,695,429) (3,218,910)
Service Shares (4,305,979) (2,285,354) (711,856) (551,821) (5,201,895) (2,516,403)
Total dividends to
shareholders from net
investment income (24,566,804) (19,349,816) (2,949,543) (4,151,691) (8,897,324) (5,735,313)
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares 1,215,049,334 1,381,029,520 145,166,331 253,991,606 323,059,102 347,794,907
Service Share 287,984,097 363,384,239 66,068,395 57,483,211 858,192,771 614,489,280
1,503,033,431 1,744,413,759 211,234,726 311,474,817 1,181,251,873 962,284,187
Reinvested dividends and
distributions:
Original Shares 122,396 123,463 116,145 131,295 60,052 58,222
Service Shares 4,084,240 2,156,127 699,548 535,951 4,985,493 2,238,344
4,206,636 2,279,590 815,693 667,246 5,045,545 2,296,566
Cost of shares redeemed:
Original Shares (1,217,844,005) (1,268,495,494) (159,715,064) (288,308,370) (288,014,215) (356,184,998)
Service Shares (244,416,529) (332,639,067) (55,172,286) (50,112,294) (796,725,850) (545,111,791)
(1,462,260,534) (1,601,134,561) (214,887,350) (338,420,664) (1,084,740,065) (901,296,789)
Change in net assets
from capital share
transactions 44,979,533 145,558,788 (2,836,931) (26,278,601) 101,557,353 63,283,964
Total increase (decrease)
in net assets 45,069,336 145,605,565 (2,837,136) (26,275,744) 101,574,384 63,288,440
NET ASSETS:
Beginning of period 487,128,458 341,522,893 116,511,509 142,787,253 149,130,714 85,842,274
End of period $532,197,794 $487,128,458 $113,674,373 $116,511,509 $250,705,098 $149,130,714
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end investment company.
The Trust consists of the following three investment portfolios
(referred to individually as a "Fund" and collectively as the "Funds"):
Pacific Capital Cash Assets Trust (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 classes rather than
one. The two classes of shares are substantially identical, except that
Service Shares bear the fees that are payable under the Trust's Distribution
Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a) 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.
b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and losses
from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted for
amortization of premiums and accretion of discounts as discussed in the
preceding paragraph.
c) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The
net asset value per share for each class of 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,
<PAGE>
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.
d) 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.
e) 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.
f) 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.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
On September 30, 1997, Pacific Century Trust (the "Adviser"), a
division of Bank of Hawaii, succeeded to the operations of Hawaiian Trust
Company, Limited, a subsidiary of Bank of Hawaii, which had served as
Investment Adviser to the Trust since its inception. 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
<PAGE>
assets above that amount at the annual rate of 0.43% and 0.07%, respectively.
For the year ended March 31, 1998, the Fund incurred fees under the Advisory
Agreement and the Administration Agreement of $1,791,797 and $669,595,
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, 1998, the Fund incurred fees under the Advisory Agreement and
the Administration Agreement of $271,071 and $125,970, 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, 1998, the Fund incurred fees under the Advisory Agreement and
the Administration Agreement of $588,596 and $168,490, 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, 1998.
b) DISTRIBUTION AND SERVICE FEES:
Each Fund has adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. A part of the Plan authorizes payment of
certain distribution or service fees by the Service Shares class of the 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.
<PAGE>
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 the Distributor for such share distribution.
4. 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, 1998, the Cash Fund had a capital loss carryover of
approximately $631,000 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.
5. 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.
6. 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. For the year ended March 31,
1998, the custodian fees of the Cash Fund, the Tax-Free Fund and the
Treasuries Fund, amounted to $20,431, $26,485 and $11,062, respectively. Of
these amounts, $20,431, $665 and $840, 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.
7. PORTFOLIO ORIENTATION
Since the Pacific Capital Tax-Free Cash Assets Trust has a
significant portion of its investments in obligations of issuers within
Hawaii, it is subject to possible risks associated with economic, political,
or legal developments or industrial or regional matters specifically
affecting Hawaii and whatever effects these may have upon Hawaii issuers
ability to meet their obligations.
8. SUBSEQUENT EVENT
Effective April 1, 1998, the name of the series called Pacific
Capital U.S. Treasuries Cash Assets Trust was changed to Pacific Capital U.S.
Government Securities Cash Assets Trust and, in addition to investing in
direct obligations of the United States Treasury, it will invest in other
obligations issued or guaranteed by agencies or instrumentalities of the
United States Government (with remaining maturities of one year or less) and
certain repurchase agreements secured by U.S. Government securities.
<PAGE>
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
Period
Ended
Year Ended March 31, March 31, Year Ended March 31,
1998 1997 1996 1995** 1998 1997 1996 1995 1994
<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 0.05 0.05 0.05 0.01 0.05 0.05 0.05 0.04 0.03
Less Distributions:
Dividends from net
investment income (0.05) (0.05) (0.05) (0.01) (0.05) (0.05) (0.05) (0.04) (0.03)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00 $1.00
Total Return (%) 4.88 4.62 5.06 0.85+ 5.15 4.88 5.32 4.40 2.74
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 113.4 65.8 32.9 3.5 418.8 421.4 308.7 486.7 407.1
Ratio of Expenses to Average
Net Assets (%) 0.82 0.85 0.86 0.83* 0.57 0.60 0.60 0.59 0.59
Ratio of Net Investment
Income to Average Net
Assets (%) 4.78 4.53 4.84 5.26* 5.04 4.79 5.24 4.40 2.71
<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> <C> <C>
Net investment income ($) 0.05 0.05 0.05 0.05 0.05 0.05
Ratio of Expenses to Average
Net Assets (%) 0.83 0.85 0.86 0.58 0.60 0.61
Ratio of Net Investment
Income to Average Net
Assets (%) 4.77 4.53 4.84 5.03 4.78 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>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
Period
Ended
Year Ended March 31, March 31, Year Ended March 31,
1998 1997 1996 1995** 1998 1997 1996 1995 1994
<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 0.03 0.03 0.03 0.01 0.03 0.03 0.03 0.03 0.02
Less Distributions:
Dividends from net
investment income (0.03) (0.03) (0.03) (0.01) (0.03) (0.03) (0.03) (0.03) (0.02)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return (%) 2.83 2.75 3.11 0.52+ 3.08 3.00 3.37 2.74 2.02
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 37.1 25.5 17.6 1.4 76.6 91.0 125.2 138.3 113.9
Ratio of Expenses to
Average Net Assets (%) 0.88 0.80 0.80 0.77* 0.63 0.55 0.54 0.55 0.56
Ratio of Net Investment
Income to Average Net
Assets (%) 2.79 2.70 2.97 3.22* 3.04 2.97 3.32 2.74 1.99
<CAPTION>
For the year 1994, 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>
Net Investment Income ($) 0.03 0.03 0.03 0.03 0.03 0.03 0.02
Ratio of Expenses to
Average Net Assets (%) 0.88 0.80 0.80 0.63 0.55 0.54 0.58
Ratio of Net Investment
Income to Average Net
Assets (%) 2.79 2.70 2.97 3.04 2.97 3.32 1.97
<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>
PACIFIC CAPITAL
U.S. TREASURIES CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
Period
Ended
Year Ended March 31, March 31, Year Ended March 31,
1998 1997 1996 1995** 1998 1997 1996 1995 1994
<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 0.05 0.04 0.05 0.01 0.05 0.05 0.05 0.04 0.03
Less Distributions:
Dividends from net
investment income (0.05) (0.04) (0.05) (0.01) (0.05) (0.05) (0.05) (0.04) (0.03)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return (%) 4.69 4.50 4.94 0.94+ 4.95 4.76 5.20 4.20 2.59
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 149.9 83.4 11.8 0.5 100.8 65.7 74.0 64.0 91.7
Ratio of Expenses to
Average Net Assets (%) 0.77 0.79 0.79 0.85* 0.52 0.55 0.54 0.54 0.52
Ratio of Net Investment
Income to Average Net
Assets (%) 4.60 4.43 4.68 5.09* 4.85 4.66 5.07 4.04 2.58
<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 ($) 0.05 0.04 0.05 0.01 0.05 0.05 0.05 0.04 0.03
Ratio of Expenses to
Average Net Assets (%) 0.77 0.80 0.88 0.98* 0.52 0.56 0.63 0.59 0.52
Ratio of Net Investment
Income to Average Net
Assets (%) 4.60 4.42 4.60 4.96* 4.85 4.65 4.98 3.99 2.58
<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>
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, 1998, 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, 1998, shareholders were mailed IRS Form
1099-DIV which contained information on the status of distributions paid for
the 1997 CALENDAR YEAR.
<PAGE>
