<PAGE>
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
Diana P. Herrmann, President
Charles E. Childs, III, Senior 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 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, 1999
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: a lion standing on a
twisted rope]
A CASH MANAGEMENT
INVESTMENT
</PAGE>
<PAGE>
[Logo of the Pacific Capital Funds of Cash Assets Trust: a lion standing on a
twisted rope]
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
SEMI-ANNUAL REPORT
November 19, 1999
Dear Investor:
We are pleased to provide you with the Semi-Annual Report for The
Pacific Capital Funds of Cash Assets Trust for the six-month period ended
September 30, 1999.
The enclosed Semi-Annual Report includes the three series of Cash
Assets Trust (the "Trust"): Pacific Capital Cash Assets Trust, Pacific Capital
Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash
Assets Trust and its two classes of shares: Original Shares and Service Shares.
The economic climate and the Federal Reserve's monetary policy once
again had an impact on the short-term debt markets during the Trust's current
report period.
After a three-stage interest rate reduction last fall, the Federal
Reserve became concerned this spring that the U.S. economy might instead be
growing too rapidly. Such rate of growth, coupled with low unemployment, could
lead to higher levels of inflation. This primarily would result in increased
stress on labor markets and would potentially put additional upward pressure on
wages and ultimately prices. In testimony before the Joint Economic Committee of
Congress, Federal Reserve Chairman Alan Greenspan, noted that the financial
markets had recovered from last fall's near paralysis that caused the Fed to cut
the federal fund's rate by 0.75 of 1%. He further testified that unless
something slows down the economy, a rise in inflation is nearly inevitable.
Indeed, on two occasions during the summer of 1999, the Fed voted each time to
raise short-term interest rates 0.25 of 1%. Then finally on November 16th, the
Fed voted again to raise rates for the third time this year. The current target
on the Federal Fund's rate is now 5.50% and the discount rate is 5.00%.
In slightly over a 12-month period, we have witnessed a complete
market interest rate cycle. First, three rate cuts last fall and then a
subsequent increase in rates this 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 funds in The Pacific Capital Funds
of Cash Assets Trust continues to provide competitive returns to alternative
short-term investment opportunities without wavering fr om their conservative
investment guidelines.
Your use of The Pacific Capital Funds of Cash Assets Trust is greatly
appreciated. You can be assured that all those associated with the management of
the Trust will consistently work in the interest of your investment.
Sincerely,
/s/ Diana P. Herrmann
- ----------------------
Diana P. Herrmann
President
/s/ Lacy B. Herrmann
- ----------------------
Lacy B. Herrmann
Chairman,
Board of Trustees
</PAGE>
<PAGE>
PACIFIC CAPITAL
CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT U.S. TREASURY BILLS (9.9%) VALUE
</CAPTION>
<S> <C> <C>
$ 57,214,000 4.40%, due 1/06/00 $ 56,548,288
U.S. GOVERNMENT AGENCY DISCOUNT NOTES (21.8%)
124,573,000 Federal Home Loan Bank, 5.17%, 10/01/99 124,573,000
COMMERCIAL PAPER (66.1%)
AUTOMOTIVE (4.3%)
25,000,000 Ford Motor Credit Co., 5.68%, 1/12/00 24,593,722
BANKING/CREDIT UNION (7.4%)
17,500,000 Formosa Plastics, 5.30%, 10/19/99, 17,453,625
25,000,000 UBS Finance, 5.30%, 11/22/99 24,808,611
Letter of Credit - ABN Amro Bank NV
Total Banking/Credit Union 42,262,236
BROKERAGE (17.1%)
25,000,000 Bear Stearns, 5.44%, 1/28/00 24,550,444
25,000,000 Goldman Sachs, 5.38%, 1/18/00 24,592,764
25,000,000 Morgan Stanley Dean Witter, 5.75%, 1/26/00 24,532,813
25,000,000 Salomon Smith Barney, 5.72%, 2/01/00 24,511,417
Total Brokerage 98,187,438
DIVERSIFIED (0.8%)
5,000,000 Cargill Global, 5.44%, 1/25/00 4,912,356
EDUCATION (12.9%)
16,500,000 Duke University, 5.05%, 11/29/99 16,363,440
25,000,000 Harvard University, 5.31%, 12/03/99 24,767,687
17,000,000 Stanford University, 5.04%, 11/29/99 16,859,465
15,800,000 Yale University, 5.32%, 11/03/99 15,722,949
Total Education 73,713,541
ELECTRIC UTILITY (0.2%)
1,000,000 Duke Energy, 5.48%, 1/14/00 984,017
FINANCE (16.2%)
20,000,000 American Express Credit Corp., 4.80%, 12/24/99 19,776,000
20,000,000 American General, 5.26%, 11/10/99 19,883,111
25,000,000 Associates First Capital, 5.72%, 1/13/00 24,586,889
29,000,000 General Electric Capital Corp., 5.38%, 3/02/00 28,336,915
Total Finance 92,582,915
FOOD & BEVERAGE (2.6%)
15,000,000 Coca-Cola, 5.25%, 2/10/00 14,730,937
HEALTH CARE (0.3%)
1,900,000 Merck & Co., 5.35%, 2/07/00 1,863,575
INSURANCE (4.3%)
25,000,000 Prudential, 4.80%, 10/08/99 24,976,667
Total Commercial Paper 378,807,404
CORPORATE NOTES (2.6%)
15,000,000 Peoples Benefit Life, Variable Rate Note, 5.61%, 12/29/99 (1) 15,000,000
Total Investments (cost $$574,928,692*) 100.4% 574,928,692
Liabilities in excess of other assets (0.4) (2,314,986)
Net Assets 100.0% $ 572,613,706
(*) Cost for Federal tax purposes is identical.
(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.
</TABLE>
See accompanying notes to financial statements.
</PAGE>
<PAGE>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
FACE MOODY'S/
AMOUNT BONDS AND NOTES (100.38%) S&P VALUE
</CAPTION>
<S> <C> <C> <C>
CONNECTICUT (0.79%)
Connecticut State, General Obligation Bonds, Series C
$ 1,000,000 5.70%, 11/15/99 Aa3/AA $ 1,003,315
GEORGIA (0.79%)
Columbus, Georgia Water and Sewer Service
1,000,000 5.75%, 5/01/00 Aaa/AAA 1,012,752
HAWAII (41.08%)
Hawaii County
500,000 7.00%, 6/01/00 Aaa/AAA 511,527
Hawaii County
2,000,000 4.25%, 5/15/00 Aaa/AAA 2,005,638
Hawaii State, General Obligation Bonds 1991
Series BV,
1,000,000 5.70%, 11/01/99 A1/A+ 1,002,236
Hawaii State, General Obligation Bonds 1993
Series CC,
1,200,000 4.60%, 2/01/00 A1/A+ 1,206,008
Hawaii State, General Obligation Bonds 1993
Series CD,
1,000,000 6.90%, 6/01/02 Aaa/A+ 1,023,667
Hawaii State, General Obligation Bonds 1993
Series CG,
2,000,000 4.25%, 10/01/99 Aaa/AAA 2,000,000
Hawaii State, General Obligation Bonds
2,000,000 7.0%, 6/01/09 Aaa/A+ 2,046,234
Hawaii State, General Obligation Bonds
1,000,000 4.375%,3/01/00 Aaa/A+ 1,004,961
Hawaii State, General Obligation Bonds
1,005,000 4.5%, 9/01/00 Aaa/AAA 1,012,587
Hawaii State Department of Budget & Finance ADJ-
Queens Health System - Series A 1998
Revenue Bonds
17,560,000 3.75%, 07/01/26, Weekly Reset* VMIG1/A-1+ 17,560,000
Stand-by Purchase Agreement: Morgan
Guaranty Trust
Hawaii State Housing Finance & Development Corp.
Revenue Bonds (Rental Housing System) Series 89 A,
1,800,000 3.85%, 07/01/24, Weekly Reset* VMIG1/NR 1,800,000
Letter of Credit: Banque Nationale de Paris
Hawaii State Housing Finance & Development Corp.
Revenue Bonds (Affordable Rental Housing
Program) Series A,
6,050,000 3.80%, 07/01/27, Weekly Reset* VMIG1/NR 6,050,000
Letter of Credit: Banque Nationale de Paris
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
1,700,000 3.25%, 10/15/99 NR/A-1+ 1,700,000
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
1,500,000 3.30%, 11/05/99 NR/A-1+ 1,500,000
Hawaii State Department of Budget & Finance
Citizens Utility - Revenue Bonds Series (Tax-
Exempt Commercial Paper Series),
2,810,000 3.45%, 11/05/99 NR/A-1+ 2,810,000
Honolulu City & County, General Obligation Bonds,
Series A,
2,000,000 6.00%, 4/01/00 Aaa/AA- 2,026,070
Honolulu City & County, General Obligation Bonds,
Series A,
550,000 5.0%, 11/101/99 Aaa/AAA 550,755
Honolulu City & County, General Obligation Bonds,
Series C,
1,000,000 7.15%, 6/01/09 Aaa/AA- 1,034,624
Maui County, General Obligation Bonds, Series A
620,000 5.35%, 6/01/00 Aaa/A+ 627,255
Insurance: Financial Guaranty Insurance Co.
Secondary Market Services Corporation Hawaii
Student Loan Revenue, Senior Series II,
5,000,000 3.90%, 09/01/10, Weekly Reset* VMIG1/A-1+ 5,000,000
Letter of Credit: National Westminster,
Guaranteed Student Loans
Total Hawaii 52,471,562
IDAHO (2.92%)
Idaho Health Facilities Authority Revenue Bonds
(St. Lukes Regional Medical Center Project),
3,735,000 3.95%, 05/01/22, Daily Reset* VMIG1/NR 3,735,000
Letter of Credit: Bayerische Landesbank
ILLINOIS (6.01%)
Illinois Health Facilities Authority Revenue Bonds
(Central Dupage Health Corp. Project),
5,635,000 4.00%, 11/01/20, Daily Reset* VMIG1/NR 5,635,000
Letter of Credit: Rabobank Nederland
Illinois State, General Obligation
1,000,000 6.70%, 6/01/00 Aa2/AAA 1,038,276
Chicago,
1,000,000 2.85%, 1/31/00 VMIG1/A-1+ 1,000,000
Total Illinois 7,673,276
INDIANA (7.08%)
Indianapolis, IN Economic Development Revenue
Bonds (Jewish Federation Campus),
3,970,000 3.75%, 04/01/05, Weekly Reset* Aa/AA 3,970,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series L,
1,015,000 3.65%, 07/01/20, Weekly Reset* VMIG1/A-1+ 1,015,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series K,
1,130,000 3.65%, 07/01/20, Weekly Reset* VMIG1/A-1+ 1,130,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series E,
1,205,000 3.65%, 07/01/11, Weekly Reset* VMIG1/A-1+ 1,205,000
Purdue University, IN University Revenue Bonds
(Student Fee) Series L,
1,720,000 3.65%, 07/01/17, Weekly Reset* VMIG1/A-1+ 1,720,000
Total Indiana 9,040,000
KANSAS (0.79%)
Johnson County
1,000,000 4.25%, 3/01/00 Aa1/AA 1,003,432
KENTUCKY (1.38%)
Warsaw, KY Industrial Building Revenue Bonds
(Operating Partnership),
1,760,000 3.95%, 08/01/09, Weekly Reset* NR/A-1+ 1,760,000
Letter of Credit: Fifth Third Bank
LOUISIANA (3.92%)
St. Charles Parish, LA Pollution Control Revenue
Bonds (Shell Oil Co-Norco Project),
2,900,000 3.85%, 10/01/22, Daily Reset* Aa2/AAA 2,900,000
St. Charles Parish, LA Pollution Control Revenue
Bonds (Shell Oil Co-Norco Project),
2,100,000 3.95%, 09/01/23, Daily Reset* Aa2/AAA 2,100,000
Total Louisiana 5,000,000
MASSACHUSETTS (0.79%)
Massachusetts Transportation Authority
1,000,000 5.0%, 3/01/00 Aa-/AA3 1,007,298
NEW HAMPSHIRE (0.91%)
New Hampshire, General Obligation
1,165,000 4.0%, 1/15/00 Aaa/AAA 1,168,306
NEW MEXICO (1.17%)
Albuquerque, NM Airport Revenue Bonds
Series A,
1,500,000 3.75%, 07/01/17, Weekly Reset* VMIG1/A-1+ 1,500,000
Letter of Credit: Bayerische Landesbank
NEW YORK (2.35%)
New York, NY Municipal Water Finance Authory
Water & Sewer System Revenue Bonds, Series A,
3,000,000 4.20%, 06/15/25, Daily Reset* VMIG1/A-1+ 3,000,000
Letter of Credit: Financial Guaranty Insurance
Corporation
NORTH CAROLINA (1.10%)
Durham County, NC General Obligation Bonds,
Public Improvement Project
1,400,000 3.65%, 02/01/09, Weekly Reset* VMIG1/A-1+ 1,400,000
Letter of Credit: Wachovia Bank
OHIO (5.04%)
University of Cincinnati, Bond Anticipation Notes
1,000,000 3.14%, 3/01/00 VMIG1/SP1 999,517
Ohio State Public Facilities Revenue Bonds, Series A
1,000,000 4.50%, 6/01/01, Prerefunded Aaa/AAA 1,001,201
Letter of Credit: Municipal Bond Insurance Agency
Ohio State University Revenue Bonds, General
Receipts Series B,
835,000 3.65%, 12/01/01, Daily Reset* VMIG1/A-1+ 835,000
Ohio State University Revenue Bonds, General
Receipts Series B,
3,595,000 3.65%, 12/01/06, Daily Reset* VMIG1/A-1+ 3,595,000
Letter of Credit: National Westminster
Total Ohio 6,430,718
OREGON (0.78%)
Oregon State, General Obligation
1,000,000 3.45%, 6/29/00 Aa2/MIG1 1,000,000
PENNSYLVANIA (1.41%)
Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Bonds, Series B,
1,800,000 3.90%, 07/01/18, Weekly Reset* VMIG1/A-1+ 1,800,000
Letter of Credit: Student Loan Marketing
TENNESSEE (1.58%)
Tennessee State, General Obligation
1,000,000 4.0%, 5/01/00 Aaa/AAA 1,004,941
Shelby County
1,000,000 4.65%, 4/01/00 Aa3/AA+ 1,007,315
Total Tennessee 2,012,256
TEXAS (14.15%)
Dallas
1,790,000 4.75%, 2/15/00 Aaa/AAA 1,801,078
El Paso
1,800,000 4.75%, 2/15/00 Aaa/AAA 1,810,946
Gulf Coast Waste Disposal
1,600,000 4.00%, 1/01/26, Daily Reset* Aa1/AAA 1,600,000
Gulf Coast Waste Disposal
3,800,000 4.00%, 7/01/27, Daily Reset* Aa1/AAA 3,800,000
Texas State
2,000,000 6.00%, 8/01/00 Aaa/AAA 2,039,626
Texas State
1,000,000 6.80%, 10/01/09 NR/AA 1,000,000
Tyler Waterworks
1,000,000 4.25%, 9/01/00 Aaa/AAA 1,003,670
Lower Neches Valley Authority of Texas Revenue
Bonds (Chevron USA Income Project),
1,500,000 3.45%, 02/15/17 NR/A1+ 1,500,000
Texas State Tax Revenue
2,000,000 4.50%, 8/31/00 VMIG1/SP1+ 2,014,152
Westside Calhoun County, Sewer & Solid Waste
1,500,000 4.00%, 4/01/31, Daily Reset* Aa2/AA 1,500,000
Total Texas 18,069,472
UTAH (1.17%)
University of Utah Revenue Bonds, (Auxiliary &
Campus Facilities - A),
1,500,000 3.70%, 04/01/27, Weekly Reset* VMIG1/A-1+ 1,500,000
Letter of Credit: Bank of Nova Scotia
VERMONT (1.18%)
Vermont Municipal Bond, Revenue Bonds 1995
1,500,000 5.00%, 12/01/99 Aaa/AAA 1,505,120
WASHINGTON (3.99%)
Seattle, WA Water System Revenue Bonds,
1,000,000 3.77%, 09/01/25, Weekly Reset* VMIG1/A-1+ 1,000,000
Letter of Credit: Bayerische Landesbank
Spokane, GO Limited Notes 1999
Bond Anticipation Notes
1,000,000 3.0%, 12/01/99 MIG1/NR 1,000,000
Washington State Health Care Facility Authority
(Fred Hutchinson Cancer Research Center,
Seattle) Series 1991-A,
3,100,000 4.25, 01/01/29, Daily Reset* VMIG1/NR 3,100,000
Total Washington 5,100,000
Total Investments (cost $128,192,507**) 100.38% 128,192,507
Liabilities in excess of other assets (0.38) (479,983)
Net Assets 100.00% $127,712,524
(*) Variable rate obligation payable at par on demand at any
time on no more than seven days notice.
(**) Cost for Federal tax purposes is identical.
</TABLE>
See accompanying notes to financial statements
</PAGE>
<PAGE>
<TABLE>
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<CAPTION>
FACE
AMOUNT U.S. TREASURY BILLS (1.4%) VALUE
</CAPTION>
<S> <C> <C> <C>
$ 4,959,000 4.32%, due 01/06/00 $ 4,901,358
U.S. GOVERNMENT AGENCIES (99.0%)
FEDERAL HOME LOAN BANK (69.0%)
100,384,000 5.17%, due 10/01/99 100,384,000
20,000,000 4.83%, due 10/08/99 19,981,217
45,000,000 5.17%, due 10/22/99 44,864,200
15,000,000 5.02%, due 10/28/99 14,943,525
40,000,000 5.25%, due 11/29/99 39,655,833
11,133,000 5.49%, due 2/01/00 10,924,173
2,250,000 5.15%, due 3/08/00 2,250,000
5,000,000 4.77%, due 4/10/00 4,872,800
Total Federal Home Loan Bank 237,875,748
FARM CREDIT BUREAU (30.0%)
2,883,000 4.57%, due 10/01/99 2,883,000
20,000,000 5.04%, due 10/05/99 19,988,800
20,000,000 5.22%, due 10/20/99 19,944,900
20,975,000 5.17%, due 11/08/99 20,860,535
14,634,000 5.22%, due 11/17/99 14,534,269
12,675,000 5.23%, due 11/23/99 12,577,406
13,221,000 4.98%, due 5/18/00 12,799,929
Total Farm Credit Bureau 103,588,839
Total U.S. Government Agencies 341,464,587
Total Investments (cost $346,365,945*) 100.4% 346,365,945
Liabilities in excess of other assets (0.4) (1,503,032)
Net Assets 100.0% $344,862,913
(*) Cost for Federal tax purposes is identical.
</TABLE>
See accompanying notes to financial statements.
</PAGE>
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
ASSETS:
Investments at value
(cost $574,928,692, $128,192,507 and $346,365,945,
respectively) $574,928,692 $128,192,507 $346,365,945
Cash 931 2,533 97
Interest receivable 69,243 915,951 7,537
Other assets 6,576 341 11,221
Total Assets 575,005,442 129,111,332 346,384,800
LIABILITIES:
Payable for investment securities purchased - 1,003,670 -
Dividends payable 2,112,298 297,896 1,340,878
Adviser and Administrator fees payable 228,911 43,128 118,018
Distribution fees payable 37,825 8,809 45,360
Accrued expenses 12,702 45,305 17,631
Total Liabilities 2,391,736 1,398,808 1,521,887
NET ASSETS $572,613,706 $127,712,524 $344,862,913
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share $ 5,730,053 $ 1,277,104 $ 3,448,456
Additional paid-in capital 567,280,537 126,435,461 341,424,182
Accumulated net realized loss on investments (396,884) (41) (9,725)
$572,613,706 $127,712,524 $344,862,913
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets $388,231,399 $ 86,746,420 $115,373,334
Shares outstanding 388,705,912 86,745,016 115,363,411
Net asset value per share $1.00 $1.00 $1.00
Service Shares Class:
Net Assets $184,382,307 $ 40,966,104 $229,489,579
Shares outstanding 184,299,412 40,965,420 229,482,181
Net asset value per share $1.00 $1.00 $1.00
</TABLE>
See accompanying notes to financial statements.
</PAGE>
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 14,417,353 $ 2,058,787 $ 8,843,615
EXPENSES:
Investment Adviser fees (note 3) 1,073,072 180,426 575,482
Administrator fees (note 3) 363,637 72,816 143,894
Distribution fees (note 3) 220,686 57,902 283,249
Trustees' fees and expenses 74,500 28,000 56,000
Legal fees 24,000 8,000 19,000
Shareholders' reports 18,500 4,000 13,000
Registration fees and dues 15,000 5,500 22,000
Fund accounting fees 14,750 14,000 14,800
Transfer and shareholder servicing agent fees 13,500 14,000 13,000
Insurance 12,350 2,800 8,500
Audit and accounting fees 9,000 7,625 9,000
Custodian fees 2,869 3,135 2,387
Miscellaneous 7,875 2,190 16,163
Total expenses 1,849,739 400,394 1,176,475
Expenses paid indirectly (note 6) (399) (2,325) -
Net expenses 1,849,340 398,069 1,176,475
Net investment income 12,568,013 1,660,718 7,667,140
Net realized gain (loss) from securities transactions 14,639 - (1,234)
Net increase in net assets resulting from operations $ 12,582,652 $ 1,660,718 $ 7,665,906
</TABLE>
See accompanying notes to financial statements.
</PAGE>
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
CASH FUND TAX-FREE FUND GOVERNMENT FUND
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 30, 1999 MARCH 31, 1999 SEPT. 30, 1999 MARCH 31, 1999 SEPT. 30, 1999 MARCH 31, 1999
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income 12,568,013 $ 26,323,450 1,660,718 $ 3,665,409 7,667,140 $ 14,942,868
Net realized gain (loss)
from securities transactions 14,639 219,878 - 164 (1,234) (8,032)
Net increase in net assets
resulting from operations 12,582,652 26,543,328 1,660,718 3,665,573 7,665,906 14,934,836
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares (8,856,672) (20,213,192) (1,089,830) (2,429,740) (2,935,497) (6,660,794)
Service Shares (3,711,341) (6,110,258) (570,888) (1,235,669) (4,731,643) (8,282,074)
Total dividends to shareholders
from net investment income (12,568,013) (26,323,450) (1,660,718) (3,665,409) (7,667,140) (14,942,868)
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares 541,508,311 1,391,409,673 82,726,649 179,018,803 147,070,265 507,780,125
Service Shares 176,604,772 393,617,033 28,559,475 115,791,206 489,467,704 1,014,867,768
718,113,083 1,785,026,706 111,286,124 294,810,009 636,537,969 1,522,647,893
Reinvested dividends and
distributions:
Original Shares 86,814 124,236 46,866 105,339 20,031 59,163
Service Shares 3,589,575 6,031,200 567,362 1,211,951 4,610,860 8,074,146
3,676,389 6,155,436 614,228 1,317,290 4,630,891 8,133,309
Cost of shares redeemed:
Original Shares (571,123,529) (1,392,720,503) (79,452,646) (172,261,157) (171,594,363) (468,776,126)
Service Shares (158,459,169) (350,487,018) (35,719,321) (106,556,540) (478,871,229) (958,541,263)
(729,582,698) (1,743,207,521) (115,171,967) (278,817,697) (650,465,592) (1,427,317,389)
Change in net assets
from capital share transactions (7,793,226) 47,974,621 (3,271,615) 17,309,602 (9,296,732) 103,463,813
Total increase (decrease)
in net assets (7,778,587) 48,194,499 (3,271,615) 17,309,766 (9,297,966) 103,455,781
NET ASSETS:
Beginning of period 580,392,293 532,197,794 130,984,139 113,674,373 354,160,879 250,705,098
End of period $ 572,613,706 $ 580,392,293 $ 127,712,524 $ 130,984,139 $ 344,862,913 $ 354,160,879
</TABLE>
See accompanying notes to financial statements.
</PAGE>
<PAGE>
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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.
Government Securities 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 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,
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.
</PAGE>
<PAGE>
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 in order to compare the value of the collateral to the amount
of the "loan" (repurchase agreements being defined as "loans" in the 1940
Act), including the accrued interest earned thereon. If the value of the
collateral is less than 102% of the loan plus the accrued interest thereon,
additional collateral is required from the borrower.
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 and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
Pacific Century Trust (the "Adviser"), a division of Bank of Hawaii,
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") 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, 1999,
the Fund incurred fees under the Advisory Agreement and the Administration
Agreement of $1,073,072 and $363,637, respectively.
</PAGE>
<PAGE>
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, 1999, the Fund incurred fees under the Advisory Agreement and the
Administration Agreement of $180,426 and $72,816, respectively.
Pacific Capital U.S. Government Securities 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, 1999, the Fund incurred fees under the Advisory
Agreement and the Administration Agreement of $575,482 and $143,894,
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 six months ended September 30, 1999.
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.
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.
</PAGE>
<PAGE>
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, in cash,
or a combination of both, at the shareholder's option.
At September 30, 1999, the Cash Fund had a capital loss carryover of
approximately $396,800 which expires on March 31, 2003. This amount is available
to offset future net realized gains on securities transactions to the extent
provided for in the Internal Revenue Code and 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. EXPENSES
The Funds have negotiated an expense offset arrangement with their
custodian, wherein they receive credit toward the reduction of custodian fees
and other expenses whenever there are uninvested cash balances. The Statements
of Operations reflect the total expenses before any offset, the amount of offset
and the net expenses. It is general intention of the Funds to invest, to the
extent practicable, some or all of cash balances in income-producing assets
rather than leave cash on deposit.
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.
</PAGE>
<PAGE>
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
(UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31,
9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <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 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income 0.02 0.05 0.05 0.05 0.05 0.01 0.02 0.05 0.05 0.05 0.05 0.04
Less Distributions:
Dividends from net investment
income (0.02) (0.05) (0.05) (0.05) (0.05) (0.01) (0.02) (0.05) (0.05) (0.05) (0.05) (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 $1.00 $1.00 $1.00
Total Return (%) 2.12+ 4.64 4.88 4.62 5.06 0.85+ 2.25+ 4.90 5.15 4.88 5.32 4.40
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 184.4 162.6 113.4 65.8 32.9 3.5 388.2 417.7 418.8 421.4 308.7 486.7
Ratio of Expenses to Average Net
Assets (%) 0.82* 0.81 0.83 0.85 0.86 0.83* 0.57* 0.57 0.58 0.60 0.61 0.59
Ratio of Net Investment Income to
Average Net Assets (%) 4.20* 4.51 4.77 4.53 4.84 5.26* 4.45* 4.79 5.03 4.78 5.23 4.40
For periods after April 1, 1995, the expense ratios after giving effect to the
expense offset for uninvested cash balances were:
Ratio of Expenses to Average Net
Assets (%) 0.82* 0.81 0.82 0.85 0.86 0.57* 0.56 0.57 0.60 0.60
</TABLE>
(1)New class of shares established on January 20, 1995.
(2)Designated as the "Original Shares" class of shares on January 20, 1995.
** For the period from February 1, 1995 (commencement of operations) to
March 31, 1995.
+ Not annualized.
* Annualized.
See accompanying notes to financial statements.
</PAGE>
<PAGE>
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
(UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31,
9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <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 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income 0.01 0.03 0.03 0.03 0.03 0.01 0.01 0.03 0.03 0.03 0.03 0.03
Less Distributions:
Dividends from net investment
income (0.01) (0.03) (0.03) (0.03) (0.03) (0.01) (0.01) (0.03) (0.03) (0.03) (0.03) (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 $1.00 $1.00 $1.00
Total Return (%) 1.24+ 2.65 2.83 2.75 3.11 0.52+ 1.37+ 2.91 3.08 3.00 3.37 2.74
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 41.0 47.6 37.1 25.5 17.6 1.4 86.7 83.4 76.6 91.0 125.2 138.3
Ratio of Expenses to Average Net
Assets (%) 0.79* 0.79 0.88 0.80 0.80 0.77* 0.54* 0.54 0.63 0.55 0.54 0.55
Ratio of Net Investment Income to
Average Net Assets (%) 2.46* 2.64 2.79 2.70 2.97 3.22* 2.71* 2.85 3.04 2.97 3.32 2.74
For periods after April 1, 1995, the expense ratios after giving effect to the
expense offset for uninvested cash balances were:
Ratio of Expenses to Average Net
Assets (%) 0.79* 0.78 0.88 0.80 0.80 0.54* 0.53 0.63 0.55 0.54
</TABLE>
(1) New class of shares established on January 20, 1995.
(2) Designated as the "Original Shares" class of shares on January 20, 1995.
** For the period from February 1, 1995 (commencement of operations) to March
31, 1995.
+ Not annualized.
* Annualized.
See accompanying notes to financial statements.
</PAGE>
<PAGE>
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
(UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SERVICE SHARES(1) ORIGINAL SHARES(2)
SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31,
9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <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 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income 0.02 0.04 0.05 0.04 0.05 0.01 0.02 0.04 0.05 0.05 0.05 0.04
Less Distributions:
Dividends from net investment
income (0.02) (0.04) (0.05) (0.04) (0.05) (0.01) (0.02) (0.04) (0.05) (0.05) (0.05) (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 $1.00 $1.00 $1.00
Total Return (%) 2.10+ 4.54 4.69 4.50 4.94 0.94+ 2.23+ 4.80 4.95 4.76 5.20 4.20
Ratios/Supplemental Data
Net Assets, End of Period
($ millions) 229.5 214.2 149.9 83.4 11.8 0.5 115.4 139.9 100.8 65.7 74.0 64.0
Ratio of Expenses to Average Net
Assets (%) 0.75* 0.74 0.77 0.80 0.80 0.85* 0.50* 0.49 0.52 0.56 0.55 0.54
Ratio of Net Investment Income to
Average Net Assets (%) 4.18* 4.42 4.60 4.42 4.67 5.09* 4.41* 4.70 4.85 4.65 5.06 4.04
The expense and net investment income ratios without the effect of the
Adviser's and Administrator's voluntary waiver of fees for periods prior to
April 1, 1996 were:
Ratio of Expenses to Average Net
Assets (%) - - - - 0.88 0.98* - - - - 0.63 0.59
Ratio of Net Investment Income to
Average Net Assets (%) - - - - 4.59 4.96* - - - - 4.98 3.99
The expense ratios after giving effect to the waivers and the expense offset
for uninvested cash balances (for periods after April 1, 1995) were:
Ratio of Expenses to Average Net
Assets (%) 0.75* 0.74 0.77 0.79 0.79 0.50* 0.49 0.52 0.55 0.54
</TABLE>
(1) New class of shares established on January 20, 1995.
(2) Designated as the "Original Shares" class of shares on January 20, 1995.
** For the period from February 1, 1995 (commencement of operations) to March
31, 1995.
+ Not annualized.
* Annualized.
See accompanying notes to financial statements.
</PAGE>
<PAGE>
PREPARING FOR YEAR 2000 (UNAUDITED)
The Trustees and officers of the Trust have been monitoring issues
involving preparedness for the turn of the century for some time in an effort to
minimize or eliminate any potential impact upon the Trust and its shareholders.
Our officers have focussed significant time and effort in order that the various
computerized functions that could affect the Trust are ready by the beginning of
the year 2000.
The Trust is highly reliant on certain mission-critical suppliers'
services. Each supplier of these services has provided the Trust's officers with
assurances that it is actively addressing potential problems relating to the
year 2000. The officers, in turn, are monitoring and will continue to monitor
the progress of its suppliers.
The Trust has NOT incurred, nor is anticipated to incur, any costs
related to Y2K. All such costs are being incurred by the respective vendors.
As you can well understand, we cannot directly control our supplier
operations. We assure you, however, that we recognize a responsibility to inform
our shareholders if in the future we become aware of any developments which
would lead us to believe that the Trust will be significantly affected by year
2000 problems.
We will continue to keep you up-to-date through future
communications.
</PAGE>
