The Florida
TaxFree Funds
The Florida TaxFree ShortTerm Fund
The Florida TaxFree Money Market Fund
Distributor:
William R. Hough & Co.
100 Second Avenue South, Suite 800
St. Petersburg, Florida 33701
(800) 557-7555
Annual Report
This report must be preceded or accompanied by a current prospectus of The
Florida TaxFree Funds.
April 30, 1998
CONTENTS
President's Message 1
The Florida TaxFree Money Market Fund Statement of Investments
Variable Rate Demand Notes 3
Municipal Bonds 4
The Florida TaxFree ShortTerm Fund Statement of Investments
Variable Rate Demand Notes 10
Municipal Bonds 10
Statements of Assets and Liabilities 17
Statements of Operations 18
Statements of Changes in Net Assets 19
Notes to Financial Statements 20
Dear Shareholder:
We are pleased to present the Annual Report on The Florida TaxFree
Funds. We at The Hough Group of Funds continue to believe that either or both of
The Florida TaxFree Funds represent prudent investments for investors who seek
to reduce their federal income and Florida Intangible Tax liabilities.
The Florida TaxFree Money Market Fund
Total net assets of the Fund grew during the past year to $149.4 million as of
April 30, 1998. This compares with $136.5 million on April 30, 1997.
IBC Financial Data, Inc., a respected mutual fund performance and statistical
reporting company, ranks money market fund performance by category. We are
pleased to report that, for the calendar year ending December 31, 1997, The
Florida TaxFree Money Market Fund was ranked by IBC in the top 2% out of a total
of approximately 210 tax-free state-specific funds tracked by that firm. Had
certain fees and expenses not been reimbursed by the Adviser, the yield and
ranking would have been lower. Past performance, however, is no guarantee of
future results.
The 7 day average yield of the Fund was 3.62% as of April 30, 1998. For
investors in the 36% federal tax bracket who have Florida intangible assets of
$200,000 or more, the tax equivalent yield was 5.85%.
The Florida TaxFree ShortTerm Fund
As of April 30, 1998, total net assets for the Fund were $22.9 million. The
portfolio had a dollar-weighted average maturity of 2.54 years and a 30 day SEC
yield of 4.02% on April 30, 1998. This yield equates to a tax equivalent yield
of 6.48% for a Floridian in the 36% federal tax bracket with Florida intangible
assets of $200,000 or more.
The Florida TaxFree ShortTerm Fund is a variable net asset value mutual
fund, and therefore the value of shares fluctuates with the movements of the
short-term municipal bond market. The net asset value per share was $10.05 on
April 30, 1998, compared with $9.95 on April 30, 1997, contributing to a 5.23%
cumulative total return on the Fund for the year ended April 30, 1998. The
cumulative total return is based on changes in the net asset value per share
over a given period and adjusted for dividends paid during that same period.
The Fund paid dividends of 42 cents per share for the year ending April 30,
1998.
The cumulative total return on the Fund since its inception November 22, 1993
through April 30, 1998 was 21.04%. This represents a return of 4.74% on an
annualized basis. As shown on the accompanying chart, another way of
illustrating this return since inception would be that $10,000 invested on
November 22, 1993 would have grown to $12,104.20 on April 30, 1998
including reinvestment of all distributions.
Contained in this space is a line graph comparing a $10,000 investment
made on inception of the Fund (11/22/93) to the Lehman 3-Year Bond Index.
The vertical axis shows values starting at $10,000, in $200 increments, up to
$12,350 . The horizontal axis shows the time period starting with the
inception of the Fund (11/22/93) and through April 1998, at three month
intervals.
The Florida Intangible Tax
The Florida intangible tax is assessed against intangible assets such as stocks,
bonds, and mutual funds as of January 1 each year.
Each of The Florida TaxFree Funds will ordinarily invest at least 65% of its
assets in Florida obligations. While state-specific tax-free funds can invest
up to 35% in out-of-state issues, your Funds' portfolio management committee
intends to keep the Funds completely exempt from the Florida Intangible Tax by
investing in only Florida or other exempt issues at the appropriate time.
We appreciate your investment in The Florida TaxFree Funds and urge you to
contact us at 1-800-557-7555 whenever we can be of assistance.
Sincerely,
W. Robb Hough, Jr.
President
The Hough Group of Funds
Variable Rate Demand Notes (28%) Principal
Amount Value
Broward County, FL Education, Research,
and Training Auth, IDB, (The
International Game Fish Association
Project), Series 1997, 4.25%, 08/01/04,
NationsBank, N.A., LOC
$2,000,000 $2,000,000
Broward County, FL, IDB,
(W.R. Bonsal Company Project), 4.25%,
09/01/08, NationsBank, N.A., LOC 1,500,000 1,500,000
Collier County, FL HFA, Housing RB,
(River Reach), 4.15%, 12/01/15, Morgan
Guaranty Trust Co., LOC 1,700,000 1,700,000
Collier County, FL HFA, Housing RB,
(Saddlebrook Project), 4.55%, 12/25/30,
Texas Commerce Bank, N.A., LOC 4,900,000 4,900,000
Dade County, FL Health Facilities Auth,
Hospital RB, (Miami Children's
Hospital), 4.30%, 09/01/20,
Barnett Bank of South FL, LOC
5,395,000 5,395,000
Dade County, FL IDA, IDB,
(Dolphins Stadium), Series D, 4.10%,
01/01/16,Societe Generale, LOC 2,100,000 2,100,000
Dade County, FL IDA, IDB,
(Jay W. Lotspeich Project), 4.25%, 12/01/06,
Credit Commercial de France, LOC 500,000 500,000
Dade County, FL IDA, IDB, (Arlington Sales),
4.25%, 06/01/08, Credit Commercial
de France, LOC 1,200,000 1,200,000
Dade County, FL IDA, Industrial
Development RB, (Pot Co.), 4.25%, 12/01/06,
Credit Commercial de France, LOC 500,000 500,000
Dade County, FL IDA, IDB, (Young Associates),
4.25%, 12/01/06, Credit Commercial
de France, LOC 900,000 900,000
Dade County, FL IDA, IDB, (Dynacolor
Graphics Project), 4.25%, 06/01/99, Credit
Commercial de France, LOC 875,000 875,000
Dade County, FL IDA, IDB, (Spectrum Programs
Inc. Project), 4.15%, 10/01/16,
NationsBank, N.A., LOC 1,000,000 1,000,000
Florida HFA, Housing RB, (Clear Lake),
Series D, 4.15%, 12/01/09, Continental
Casualty, GTY 1,000,000 1,000,000
Florida HFA, Housing RB, (Lakes of
Northdale Project), Series D, 4.15%,
06/01/07, SouthTrust Bank of AL, LOC 1,300,000 1,300,000
Florida HFA, Housing RB, (Springs Colony
Project), 1985 Series FF, 4.20%,
09/15/26, FNMA Collateralized 1,000,000 1,000,000
Gainesville, FL, IDB, (Exactech, Inc.
Project), 4.25%, 11/01/17, SunTrust Bank,
Central FL, LOC 1,000,000 1,000,000
Hillsborough County, FL IDA, Pollution
Control RB, (Reynolds Metals Company),
4.10%, 12/01/15, Dresdner Bank, A.G., LOC 1,000,000 1,000,000
Hillsborough County, FL IDA, Pollution
Ctrl RB, (Tampa Electric Co.), 4.40%,
11/01/20 1,000,000 1,000,000
Hillsborough, County, FL IDA, IDB,
(Serigraphic Arts, Inc.), 4.25%, 09/01/07,
Credit Commercial de France, LOC 500,000 500,000
Hillsborough County, FL IDA, Industrial
Development RB, (Berry Packaging Inc.),
4.25%, 07/01/17, NationsBank, N.A., LOC 1,200,000 1,200,000
Okeechobee County, FL, Solid Waste RB,
(Chambers Waste System of FL), 4.35%,
03/01/06, Morgan Guaranty Trust Co., LOC 3,300,000 3,300,000
Orange County, FL HFA, Housing RB,
(Post Lake Apartments Project), 4.15%,
06/01/25, FNMA Collateral Agreement, GTY 800,000 800,000
Variable Rate Demand Notes (Continued)
Principal
Amount Value
Palm Beach County, FL Educational
Facilities Auth, Higher Education RB, (Palm
Beach Atlantic College Project), Series 1997,
4.15%, 12/01/12, NationsBank,
N.A., LOC 3,600,000 3,600,000
Pinellas County, FL HFA, Housing RB,
(Lynn Lake II), 4.25%, 07/01/11,
NationsBank of Georgia, N.A., LOC 1,500,000 1,500,000
Sumter County, FL IDA, IDB, (Great
Southern Wood, FL, Inc.), 4.45%, 04/01/05,
SouthTrust Bank, LOC 500,000 500,000
Tamarac, FL, IDB, (Tampa Bay Business
Center, Inc. Project), 4.25%, 08/01/15,
NationsBank of FL, NA, LOC 1,600,000 1,600,000
Volusia County, FL IDA, IDB,
(RS Displays Inc. Project), 4.25%,
06/01/09, Credit
Commercial de France, LOC 775,000 775,000
Total Variable Rate Demand Notes (Cost $42,645,000) $42,645,000
Principal
Municipal Bonds (72%) Amount Value
Alachua County, FL, Public Improv RB,
5.40%, 08/01/98, FSA Insured
$90,000 $90,259
Alachua County, FL School Board,
Certificates of Participation,
Series A, 3.75%,
07/01/98, AMBAC Insured
215,000 215,000
Bay County, FL, Water & Sewer RB,
3.75%, 09/01/98, MBIA Insured
280,000 280,000
Brevard County, FL School Board,
Revenue Anticipation Notes, 4.25%,
05/08/98 2,000,000 2,000,030
Broward County, FL, GO Bonds,
Series C, 5.30%, 01/01/99
2,650,000 2,677,602
Broward County, FL, Sales Tax Revenue
Commercial Paper, Series A, 3.30%,
05/05/98, Bank of Tokyo-Mitsubishi, LOC
4,163,000 4,163,000
Broward County, FL, Sales Tax Revenue
Commercial Paper, Series A, 3.50%,
06/01/98, Bank of Tokyo-Mitsubishi, LOC
2,500,000 2,500,000
Broward County, FL School Board,
Certificates of Participation, Series C,
3.75%, 07/01/98, AMBAC Insured
300,000 300,000
Broward County, FL, Tourist Development
Tax RB, (Convention Center), 4.40%,
10/01/98, AMBAC Insured
620,000 621,515
Buck Cnty, PA Technical School Auth,
Municipal Lease Oblig, 4.10%, 08/15/98,
AMBAC Insured
500,000 500,530
Canaveral. FL Port Auth, Transportation
RB, 4.70%, 06/01/98, FGIC Insured
50,000 50,019
Centerville City, UT Municipal Building
Auth, Municipal Lease RB, 3.70%,
08/01/98, MBIA Insured
160,000 159,990
Charlotte County, FL, Hospital RB,
(Bon Secours - St. Joseph), Series A, 8.25%,
08/15/98, Pre-refunded @ 102
585,000 603,908
Coral Springs, FL, Water & Sewer RB,
Series A, 4.70%, 09/01/98, FGIC Insured
75,000 75,106
Dade County, FL, Hospital RB,
(Jackson Memorial Hopital), Series A, 4.00%,
06/01/98, MBIA Insured,
1,000,000 1,000,144
Dade County, FL Publis Sevice Tax RB,
4.00%, 10/01/98, FSA Insured
300,000 300,176
Dade County, FL School District,
GO Bonds, 7.00%, 07/01/98
50,000 50,234
Municipal Bonds (Continued) Principal
Amount Value
Dade County, FL School District,
GO Bonds, 4.35%, 07/15/98, AMBAC Insured
100,000 100,126
Dade County, FL School District,
GO Bonds, 6.40%, 08/01/98, MBIA Insured
90,000 90,527
Dade County, FL Water & Sewer System,
Water & Sewer RB, 4.50%, 10/01/98, FGIC
Insured
260,000 260,901
Delaware, State of, GO Bonds, 6.80%,
05/01/98
400,000 400,000
Derry Township, PA School District,
GO Bonds, 3.80%, 11/15/98, FGIC Insured
270,000 270,000
Downtown Savannah, GA Auth, GO Bonds,
(Board of Education Project), 7.20%,
08/01/98, Pre-refunded @ 102
500,000 514,258
East County Water Control District, FL,
Public Improv RB, (Lee County Drain),
5.00%, 11/01/98, Asset Guaranty Insured
500,000 502,319
East Liverpool, OH, Hospital RB,
(East Liverpool City Hospital Project),
Series A, 3.75%, 10/01/98, FSA Insured
160,000 160,000
East Liverpool, OH, Hospital RB,
(East Liverpool City Hospital Project),
Series B, 3.75%, 10/01/98, FSA Insured
360,000 360,000
Erie County, PA, GO Bonds, 4.00%,
09/01/98, FGIC Insured
300,000 300,000
Escambia County, FL Utilities Auth,
Public Improv RB, Series D, 4.00%,
01/01/99,
FGIC Insured (When-Issued)
305,000 305,000
Escambia County, FL Utilities Auth,
Water & Sewer RB, Series B, 3.60%,
01/01/99,FGIC Insured
85,000 85,000
Escambia County, FL Utilities Auth,
Water & Sewer RB, Series C, 3.60%,
01/01/99, FGIC Insured
285,000 285,000
Escambia County, FL Utilities Auth,
Public Improv RB, Series 1998, 3.60%,
01/01/99, FSA Insured
510,000 510,000
Ferris State University, MI, Public
Improv RB, 3.60%, 10/01/98, AMBAC Insured
150,000 150,000
First Florida Governmental Financing
Commission, Industrial Development RB,
Series A, 4.40%, 07/01/98, MBIA Insured
50,000 50,013
Florida Development Finance Corporation,
IRB, (FDFC Guaranty Program),
1997 Series A, 6.25%, 05/01/98,
AMBAC Insured 45,000 45,000
Florida Development Finance Corporation,
IRB, (FDFC Guaranty Program),
1997 Series B, 6.25%, 05/01/98, AMBAC Insured
25,000 25,000
Florida Development Finance Corporation,
IRB, (FDFC Guaranty Program), 1997 Series C,
6.25%, 05/01/98, AMBAC Insured
55,000 55,000
Florida HFA, Homeowner Mortgage RB,
Series 3, 4.30%, 07/01/98, GNMA:
Collateralized
100,000 100,093
Florida HFA, Single Family Mortgage RB,
4.00%, 06/01/98, GIC: Assured Return,
Mandatory Tender @ 100
1,500,000 1,500,000
Florida School Boards Association,
Inc., Municipal Lease RB, (Orange County
School Board Project), 6.80%, 07/01/98,
Escrowed to Maturity
2,000,000 2,010,409
Florida, State of, GO Bonds, Senior Lien,
(Jacksonville Transportation), Series A,
6.50%, 07/01/98
1,540,000 1,546,779
Florida State Board of Education, GO Bonds,
Series A, 7.25%, 06/01/98,
Escrowed to Maturity
100,000 100,281
Florida State Board of Education, GO Bonds,
Series A, 5.75%, 06/01/98, Escrowed to
Maturity
200,000 200,288
Florida State Board of Education,
GO Bonds, Series A, 6.00%, 06/01/98
200,000 200,345
Florida State Board of Education, GO Bonds,
Series B, 5.625%, 06/01/98
300,000 300,454
Florida State Board of Education, GO Bonds,
Series A, 4.70%, 01/01/99
60,000 60,272
Municipal Bonds (Continued)
Principal
Amount Value
Florida State Board of Education,
GO Bonds, Series A, 7.00%,
06/01/98 3,900,000 3,911,343
Florida State Board of Education, GO Bonds,
Series A, 6.50%, 06/01/98
4,010,000 4,019,064
Florida State Board of Education, GO Bonds,
Series A-1, 6.25%, 05/01/98, Escrowed to
Maturity
300,000 300,000
Florida State Board of Education, GO Bonds,
Series B-1, 7.875%, 06/01/98, Pre-refunded
@ 102
1,870,000 1,913,952
Florida State Department of General
Services, Public Improv RB, (Division of
Facilities Management - FL Facilities
Pool), 8.125%, 09/01/98, Pre-refunded @ 102
750,000 775,909
Florida State Division of Bond Finance,
Sales Tax RB, (Department of General
Services - Preservation 2000), Series B,
4.00%, 07/01/98, AMBAC Insured
3,350,000 3,350,826
Florida State Division of Bond Finance,
Department of General Services, Public
Improv RB, (Dept of Environmental
Protection-Preservation 2000),
Series A, 4.50%, 07/01/98, FSA Insured
1,775,000 1,777,763
Florida State Division of Bond Finance,
Sales Tax RB, (Department of General
Services - Preservation 2000), 4.40%,
07/01/98, FSA Insured
1,000,000 1,000,907
Florida State Division of Bond Finance,
Department of General Services,
Public Improv RB, (Dept of Environmental
Protection - Save Our Coast), 4.30%,
07/01/98, AMBAC Insured
250,000 250,267
Florida Local Government Commission,
Commercial Paper, (Florida Association
of Counties Pooled Program), 3.35%,
05/05/98, First Union National Bank, LOC
1,000,000 1,000,000
Florida Local Government Commission,
Commercial Paper, (Florida Association
of Counties Pooled Program), 3.60%,
06/01/98, First Union National Bank, LOC
2,530,000 2,530,000
Florida Local Government Commission,
Commercial Paper, (Florida Association
of Counties Pooled Program), 3.50%,
05/01/98, First Union National Bank, LOC
1,000,000 1,000,000
Florida Municipal Power Agency,
Commercial Paper, Pooled Loan Project,
3.30%, 05/07/98, First Union National
Bank of NC, LOC 905,000 905,000
Fort Lauderdale, FL, GO Bonds,
(Parking Improv Project), 4.80%,
07/01/98
290,000 290,469
Gainesville, FL, Electric Util RB,
Commercial Paper, (Utility System C),
3.45%, 06/04/98
894,000 894,000
Gainesville, FL, Electric Util RB,
Commercial Paper, (Utility System C),
3.60%, 06/30/98
3,356,000 3,356,000
Gulf County, FL School District,
Sales Tax RB, 4.10%, 06/01/98,
Asset Guaranty Insured
80,000 80,000
Harrison County, WV, Special
Obligation RB, Series A, 5.60%,
05/15/98, Escrowed to Maturity 100,000 100,069
Hillsborough County, FL Aviation Auth,
Transportation RB, (Tampa International
Airport), Series A, 4.50%, 10/01/98,
AMBAC Insured
755,000 756,984
Hillsborough County, FL School Board,
Certificates of Participation,
(Master Lease Program), 4.20%,
07/01/98, Escrowed to Maturity
300,000 300,119
Hillsborough County,
FL School District, Capital Improv RB,
Series 1998, 3.50%, 08/01/98,
MBIA Insured
315,000 315,000
Hillsborough County, FL Water &
Sewer RB, Series A, Zero Coupon,
08/01/98, MBIA Insured
1,610,000 1,594,562
Homestead, FL, Special Insurance
Assessment RB, (Hurricane Andrew
Covered Claim), 4.60%, 09/01/98,
Escrowed to Maturity
305,000 305,957
Jackson, MS, Water & Sewer RB,
Series A, 7.90%, 09/01/98,
Pre-refunded @ 103
500,000 521,830
Jacksonville, FL Elec Auth,
Commercial Paper, Series C-1,
3.40%, 05/11/98, Morgan Guaranty,
Liquidity Provider
1,000,000 1,000,000
Jacksonville, FL, Excise Tax RB,
Series A, Zero Coupon, 10/01/98,
Pre-refunded @ 44.777
25,000 10,939
Jacksonville, FL Health Facilities
Auth, Hospital RB, (Charity Obligated
Group), Series A, 3.75%, 08/15/98,
MBIA Insured
800,000 800,000
Municipal Bonds (Continued)
Principal
Amount Value
Jacksonville, FL Health Facilities Auth,
Hospital RB, (Charity Obligated Group),
Series B, 3.85%, 08/15/98
405,000 405,000
Jacksonville, FL, Commercial Paper, 3.35%,
05/01/98, Morgan Guaranty, Credit Suisse,
Bayerische Landesbank Girozentrale,
SunBank, IRC 4,000,000 4,000,000
Jacksonville, FL, Commercial Paper,
(Florida Power & Light), Series 1992,
3.65%, 05/11/98
2,000,000 2,000,000
Jacksonville, FL, Commercial Paper,
(Florida Power & Light), Series 1992,
3.40%, 05/07/98
1,000,000 1,000,000
Jacksonville, FL, Sales Tax RB,
(River City Renaissance Project),
3.85%, 10/01/98, FGIC Insured
200,000 200,000
Lee County, FL Hospital Board of
Directors, Hospital RB, (Lee Memorial
Hospital Project), Commercial Paper,
1995 Series A, 3.40%, 05/06/98,
SunTrust Bank, Central FL, LOC
1,500,000 1,500,000
Lee County, FL Hospital Board of
Directors, Hospital RB, (Lee
Memorial Hospital Project),
Commercial Paper, Series C, 3.70%,
06/08/98, SunTrust Bank,
Central FL, LOC
3,000,000 3,000,000
Lee County, FL Hospital Board of
Directors, Hospital RB,
(Lee Memorial Hospital Project),
Commercial Paper, Series D, 3.40%,
05/13/98, SunTrust Bank, Central FL,
LOC
1,800,000 1,800,000
Lee County, FL Hospital Board of
Directors, Hospital RB, (Lee Memorial
Health System Project),
Commercial Paper, 1997 Series B,
3.70%, 05/20/98, SunTrust Bank,
Central FL, LOC 1,000,000 1,000,000
Lee County, FL HFA, Single Family
Mortgage RB, Series A-4, 3.70%,
12/15/98, GNMA Collateralized,
GIC: Transamerica 1,755,000 1,755,000
Lee County, FL, Transportation RB,
(Passenger Facilities Charge), 3.60%,
10/01/98, AMBAC Insured 560,000 559,055
Leon County, FL School Board,
Certificates of Participation,
(Master Lease Program), 3.80%,
07/01/98, MBIA Insured 500,000 499,912
Lewis, WV, Hospital RB, (Crestview
Manor Project), 8.25%, 08/01/98,
Pre-refunded @ 101 75,000 76,520
Lewis, WV, Hospital RB, (Crestview
Manor Project), 8.50%, 08/01/98,
Pre-refunded @ 101 80,000 81,671
Logan, UT, Water & Sewer RB, Series A,
3.70%, 12/15/98, AMBAC Insured
200,000 200,000
Maricopa County, AZ Unified School
District No. 95, GO Bonds,
(Queen Creek), Zero Coupon, 07/01/98,
BIG Insured 155,000 154,031
Marion County, FL School Board,
Certificates of Participation,
Series A, 3.50%, 06/01/98,
FSA Insured 965,000 965,000
Martin County, FL Health Facilities
Auth, Hospital RB, (Martin Memorial
Medical Center), Series A, 3.90%,
11/15/98, MBIA Insured 245,000 245,087
Martin County, FL Health Facilities
Auth, Hospital RB, (Martin Memorial
Medical Center), Series B, 3.90%,
11/15/98, MBIA Insured 420,000 420,149
Miami Beach, FL, GO Bonds, 4.75%,
09/01/98, FGIC Insured 150,000 150,584
Miami, FL Health Facilities Auth,
Hospital RB, (Mercy Hospital Project),
6.15%, 08/01/98, AMBAC Insured 100,000 100,526
Milwaukee, WI Redevelopment Auth,
IDB, (West Wisconsin & North Project),
Zero Coupon, 09/01/98, FSA Insured 70,000 69,140
Missouri State Housing Development
Commission, Single Family Homeowner
Mortgage RB, Loan A-2, 4.20%, 09/01/98,
GNMA/FNMA Collaterallized 140,000 140,213
Nebraska Investment Finance Auth,
Single Family Housing RB, Series B,
4.80%, 09/01/98, GNMA Collateralized 100,000 100,328
Municipal Bonds (Continued) Principal
Amount Value
Okaloosa County, FL School Board,
Sales Tax RB, 5.00%, 09/01/98,
FSA Insured 500,000 501,794
Orange County, FL, Commercial Paper,
3.60%, 06/11/98, NationsBank,
N.A., IRC 600,000 600,000
Orlando, FL Utilities Commission,
Water & Sewer RB, 4.75%, 10/01/98 250,000 251,119
Orlando & Orange County, FL
Expressway Auth, Transportation RB,
Junior Lien, Series A, 3.85%, 07/01/98,
FGIC Insured 100,000 100,008
Palm Beach County, FL, GO Bonds,
Series B, 3.60%, 07/01/98 250,000 250,000
Palm Beach County, FL, Public
Improv RB, (Criminal Justice
Facilities), 4.50%, 06/01/98,
FGIC Insured 120,000 120,064
Palm Beach County, FL HFA,
Single Family Mortgage RB,
Series B, 3.95%, 07/01/98,
GNMA/FNMA Collateralized,
GIC: Bayerische Landesbank
Girozentrale, Mandatory
Tender @ 100 1,000,000 1,000,000
Palm Beach County, FL, Public
Improv RB, (N. County Courthouse
Expansion), 4.50%, 12/01/98,
FSA Insured 315,000 316,433
Palm Beach County, FL, Water
& Sewer RB, 7.00%, 10/01/98,
Pre-refunded @ 102 135,000 139,305
Palm Beach County, FL Health
Facilities Auth, Hospital RB,
(Pooled Hospital Loan Project),
Commercial Paper, 3.50%, 05/04/98,
MBIA Insured, Credit Suisse, SBPA 1,300,000 1,300,000
Parker, CO, Public Improv RB,
(Sales & Use Tax), 3.80%, 11/01/98,
MBIA Insured 530,000 530,000
Pensacola, FL, Natural Gas RB,
Zero Coupon, 12/01/98,
Pre-refunded @ 84.015 20,000 16,344
Pocono Mountain, PA School District,
GO Bonds, 3.75%, 11/15/98,
FSA Insured 210,000 210,000
Polk County, FL, Water & Sewer RB,
Series B, 4.00%, 10/01/98, FGIC
Insured 1,100,000 1,101,456
Polk County, FL, Public Improv RB,
5.50%, 12/01/98, MBIA Insured 90,000 90,897
Pompano Beach, FL, Water & Sewer RB,
4.75%, 07/01/98, MBIA Insured 50,000 50,069
Puerto Rico, Commonwealth of,
Tax and Revenue Anticipation Notes,
Series 1998A, 4.50%, 07/30/98 2,000,000 2,003,623
Puerto Rico, Electric Power Auth,
Electric Util RB, 5.00%, 07/01/98,
Pre-refunded @100 275,000 275,468
Puerto Rico, Electric Power Auth,
Electric Util RB, Series M, 8.00%,
07/01/98, Pre-refunded @102 150,000 153,967
Puerto Rico, Industrial, Medical,
and Environmental Pollution Control
Facilities, Financing Auth, IDB,
(Key Pharmaceuticals), 3.75%,
12/01/98, Morgan Guaranty Trust
Company, LC, Optional
Tender @ 100 1,500,000 1,499,270
Putnam County, FL Development Auth,
Pollution Ctrl RB, (Seminole
Electric Cooperative, Inc.),
Series D, 3.65%, 06/15/98,
National Rural Utilities Cooperative
Finance Corporation, GTY,
Mandatory Tender @ 100 1,500,000 1,500,000
Putnam County, FL Development
Auth, Pollution Ctrl RB,
Seminole Electric Cooperative,
Inc.), Series H-3, 3.50%, 09/15/98,
National Rural Utilities Cooperative
Finance Corporation, GTY,
Mandatory Tender @ 100 1,500,000 1,500,000
St. Johns County, FL, GO Bonds,
4.40%, 09/01/98, MBIA Insured 100,000 100,214
St. Johns County, FL, Water &
Sewer RB, Series A, 5.90%,
06/01/98, MBIA Insured 50,000 50,078
St. Johns River Water Management
District, FL, Water & Sewer RB,
(Land Acquisition), 5.00%,
07/01/98, FSA Insured 1,000,000 1,001,865
Municipal Bonds (Continued) Principal
Amount Value
St. Lucie County, FL,
Commercial Paper,
(Florida Power & Light),
3.65%, 05/12/98 1,000,000 1,000,000
St. Lucie County, FL,
Commercial Paper,
(Florida Power & Light),
3.60%, 06/05/98 2,300,000 2,300,000
St. Lucie County, FL,
Commercial Paper,
(Florida Power & Light),
3.60%, 06/08/98 1,000,000 1,000,000
St. Petersburg, FL, Excise
Tax RB, 3.80%, 10/01/98,
FGIC Insured 100,000 100,026
St. Petersburg, FL Health
Facilities Auth, Hospital RB,
(Bon Secours - Maria Manor Project),
Series B, 7.875%, 08/15/98,
Pre-refunded @ 102 185,000 190,717
St. Petersburg, FL, Electric
Util RB, 6.55%, 06/01/98, MBIA
Insured 100,000 100,227
Sarasota County, FL Public Hosp
Dist, Commercial Paper, Series A,
(Sarasota Memorial Hospital), 3.40%,
05/12/98, SunTrust Bank,
Central Florida, LOC 1,000,000 1,000,000
Sarasota County, FL Public Hosp
Dist, Commercial Paper, Series B,
(Sarasota Memorial Hospital), 3.60%,
06/09/98, SunTrust Bank,
Central Florida, LOC 1,000,000 1,000,000
Sarasota County, FL Public Hosp
Dist, Commercial Paper, Series
1996A, (Sarasota Memorial
Hospital), 3.50%, 06/10/98,
SunTrust Bank, SBPA 2,500,000 2,500,000
Sarasota, FL, Water & Sewer RB,
5.25%, 10/01/98, FGIC Insured 250,000 251,630
Seacoast, FL Utility Auth, Water
& Sewer RB, Series A, Zero Coupon,
03/01/99, Pre-refunded @ 25.9095 130,000 32,626
Seattle, WA, Solid Waste RB,
Series B, 6.90%, 05/01/98,
BIG Insured 100,000 100,000
Strongsville, OH City School
District, GO Bonds, 4.05%, 12/01/98,
MBIA Insured 100,000 100,167
Sunrise, FL, Public Improv RB,
4.30%, 10/01/98, FGIC Insured 100,000 100,203
Sunshine State Governmental
Financing Comm, Commercial Paper,
3.45%, 05/08/98, AMBAC Insured,
SBPA: Union Bank of Switzerland
and The Toronto-Dominion Bank 2,300,000 2,300,000
Tampa, FL, Hospital RB,
(Catholic Health East), Series A-2,
3.75%, 11/15/98, AMBAC Insured 900,000 900,000
Transylvania County, NC, GO Bonds,
4.20%, 06/01/98, FGIC Insured 455,000 455,050
Trinity River Auth, TX, Solid
Waste RB, (Regional Wastewater
System), 7.375%, 08/01/98,
Pre-refunded @ 100 100,000 100,884
Volusia County, FL School District,
GO Bonds, 4.75%, 06/01/98,
FSA Insured 200,000 200,129
Total Municipal Bonds (Cost $107,951,387) $107,951,387
Total Investments (100%) (Cost $150,596,387) $150,596,387
Summary of Ratings (unaudited):
AAA/Equivalent 93%, AA/Equivalent 7%
Average Portfolio Maturity 48.65 Days
Principal
Variable Rate Demand Notes (9%) Amount Value
Los Angeles County, CA IDA, IDB,
(Southland Sheet & Metals Co.
Project), 5.75%, 12/01/05,
Dai-Ichi Kangyo Bank, Ltd., LOC $400,000 $400,000
Los Angeles County, CA IDA, IDB,
(Komax Systems), 5.85%, 12/01/06,
Dai-Ichi Kangyo Bank, Ltd., LOC 300,000 300,000
Los Angeles County, CA IDA, IDB,
(Walter & Howard Lim), 5.85%,
12/01/06, Dai-Ichi Kangyo Bank,
Ltd., LOC 100,000 100,000
Palm Beach County, FL, Water &
Sewer RB, 5.00%, 10/01/11, The
Sanwa Bank, Limited, LOC 200,000 200,000
St. Lucie County, FL, Pollution
Control RB, (Florida Power & Light),
3.85%, 01/01/27 1,000,000 1,000,000
Total Variable Rate Demand Notes (Cost $2,000,000) $2,000,000
Principal
Municipal Bonds (91%) Amount Value
Bay County, FL, Pollution Ctrl RB,
(International Paper Co. Project),
5.70%, 06/01/98, Pre-refunded @ 100 $15,000 $15,001
Bay Medical Center, FL, Hospital RB,
(Bay Medical Center Project), 4.70%,
10/01/02, AMBAC Insured 100,000 101,873
Bradenton, FL Util System, Water &
Sewer RB, Series A, 7.10%, 10/01/99,
AMBAC Insured 100,000 104,330
Brevard County, FL School Board,
Certificates of Participation, 6.50%,
07/01/02, Pre-refunded @ 102 100,000 110,185
Broward County, FL, GO Bonds,
Series C, 5.50%, 01/01/00 100,000 102,231
Broward County, FL, GO Bonds, Series B,
5.60%, 01/01/01 200,000 207,808
Broward County, FL, GO Bonds, Series B,
6.00%, 01/01/04 50,000 53,780
Broward County, FL, Certificates of
Participation, 6.40%, 06/01/03, AMBAC
Insured 85,000 88,605
Broward County, FL Educational Facilities
Auth, Higher Education RB, (Nova
Southeastern University Project), 5.40%,
04/01/02, Connie Lee Insured 75,000 78,329
Broward County, FL School District, GO
Bonds, 5.70%, 02/15/01 300,000 310,995
Broward County, FL, Water & Sewer RB,
Series A, Zero Coupon, 10/01/99, AMBAC
Insured 10,000 9,454
Canaveral, FL, Transportation RB, 5.40%,
06/01/02, FGIC Insured 100,000 104,918
Celebration Community Development
District, FL, Special Assessment RB,
Series B, 4.60%, 05/01/03, MBIA Insured 250,000 253,568
Clay County, FL HFA, Single Family
Mortgage RB, (Multi-County Program),
4.80%, 04/01/02, GNMA/FNMA
Collateralized 150,000 151,220
Clay County, FL, HFA, Single Family
Mortgage RB, (Multi-County Prorgram),
4.50%, O4/01/03. GNMA/FNMA
Collateralized 250,000 249,773
Principal
Municipal Bonds (Continued) Amount Value
Clay County, FL, School Board,
Certificates of Participation,
(Master Lease Program), 4.50%,
07/01/99, MBIA Insured 140,000 140,976
Clearwater, FL, Water & Sewer RB,
Series B, 6.75%, 12/02/98,
Pre-refunded @ 103.50 75,000 78,932
Dade County, FL, GO Bonds,
Series I, 6.90%, 07/01/01,
AMBAC Insured 250,000 271,130
Dade County, FL, GO Bonds,
Series CC, 6.80%, 10/01/02,
AMBAC Insured 200,000 221,788
Dade County, FL Aviation Auth,
Transportation RB, Series X, 5.25%,
10/01/01 100,000 103,437
Dade County, FL Educational Facilities
Auth, Higher Education RB, (St.
Thomas University), 7.65%, 01/01/00,
Pre-refunded @ 102 40,000 43,081
Dade County, FL, Guaranteed Entitlement
Spl Assmt Bonds, Series B, Zero Coupon,
02/01/00, MBIA Insured 250,000 233,315
Dade County, FL, Guaranteed Entitlement
Spl Assmt Bonds, Series B, Zero Coupon,
02/01/01, MBIA Insured 250,000 223,393
Dade County, FL School Board,
Certificates of Participation, 5.00%,
05/01/01, MBIA Insured 125,000 128,219
Dade County, FL School District,
GO Bonds, 5.00%, 06/01/00,
MBIA Insured 50,000 51,060
Dade County, FL Solid Waste System,
Solid Waste RB, Series A, Zero Coupon,
10/01/99, Escrowed to Maturity 70,000 66,146
Dade County, FL, Special Assessment RB,
(Various Purpose Improv Projects),
Series A, 7.15%, 07/01/02, FSA Insured 100,000 106,304
Dade County, FL Health Facilities Auth,
Hospital RB, (Catholic Health &
Rehabilitation Inc.), 7.45%, 08/15/99,
SunTrust Bank, LOC 50,000 51,928
Delray Beach, FL, GO Bonds, (Decade of
Excellence Program), 6.80%, 02/01/00,
Pre-refunded @ 102 50,000 53,276
Duval County, FL School District,
GO Bonds, 5.625%, 08/01/00,
AMBAC Insured 75,000 77,621
Escambia County, FL Health Facilities
Auth, Hospital RB, (Azalea Trace, Inc.
Project), 9.25%, 01/01/99,
Pre-refunded @ 102 50,000 52,790
Escambia County, FL Health Facilities
Auth, Hospital RB, (Azalea Trace,
Inc. Project), 5.25%, 01/01/03 300,000 300,963
Escambia County, FL HFA, Single
Family Mortgage RB, (Multi-County
Program), Series A, 4.70%, 04/01/01,
GNMA Collateralized 115,000 116,026
Escambia County, FL HFA, Single
Family Mortgage RB, (Multi-County
Program), Series A, 4.50%, 04/01/03,
GNMA Collateralized 250,000 249,883
Escambia County, FL, Public Improv RB,
Series A, 5.00%, 01/01/00 250,000 252,495
Escambia County, FL School Board,
Certificate of Participation, 6.25%,
02/01/02, Pre-refunded @ 100 45,000 48,088
Escambia County, FL School Board,
Municipal Lease Obligation, Certificate
of Participation, 5.80%, 02/01/00,
Escrowed to Maturity 15,000 15,457
Escambia County, FL School Board,
Municipal Lease Obligation, Certificate
of Participation, 5.80%, 02/01/00,
FSA Insured 35,000 36,096
Florida Development Finance Corporation,
IRB, (FDFC Guaranty Program), 1997
Series B, 4.90%, 05/01/03,
AMBAC Insured 40,000 41,288
Florida Development Finance Corporation,
IRB, (FDFC Guaranty Program), 1997
Series C, 4.90%, 05/01/03,
AMBAC Insured 30,000 30,966
Florida HFA, General Mortgage RB,
Series A, 5.75%, 06/01/02,
FHA Insured 50,000 52,080
Florida HFA, Housing RB, Single
Family Mortgage RB, 1995 Series A,
5.70%, 01/01/01, GNMA Collateralized 70,000 72,317
Municipal Bonds (Continued) Principal
Amount Value
Florida HFA, Homeowner Mortgage &
RB, 1995 Series 1A, 4.75%, 07/01/01 100,000 100,666
Florida HFA, Housing RB, (Turtle
Creek Apartments Project), 1996
Series C, 4.75%, 05/01/00,
AMBAC Insured 85,000 85,775
Florida HFA, Rfdg Homeowner
Mortgage & RB, Series 2,
5.20%, 01/01/02 295,000 300,694
Florida HFA, Housing RB,
(Lake Carlton Arms), 7.375%,
12/01/99, National Life
Insurance Co., GTY, Mandatory
Tender @ 100 115,000 115,240
Florida State, Pollution Ctrl RB,
Series I, 5.30%, 07/01/99 25,000 25,278
Florida State Department of
Transportation, GO Bonds,
(Right-of-Way Acquisition and
Bridge Construction),
Series 1997A, 6.40%, 07/01/02 200,000 217,212
Florida State Board of Education,
GO Bonds, Series 1991A,
6.40%, 01/01/04 100,000 104,206
Florida State Board of Education,
GO Bonds, Series A, Zero Coupon,
06/01/00, Pre-refunded @ 37.658 100,000 34,629
Florida State Board of Education,
GO Bonds, Series A, 7.25%, 06/01/00,
Pre-refunded @ 102 185,000 200,316
Florida State Board of Education,
GO Bonds, Series C, 5.125%,
06/01/00 100,000 102,257
Florida State Board of Education,
GO Bonds, Series A, 5.25%,
06/01/00 65,000 66,569
Florida State Board of Education,
GO Bonds, Series A, 5.50%,
01/01/01 250,000 258,750
Florida State Board of Education,
GO Bonds, Series C, 5.90%,
05/01/00, Escrowed to Maturity 25,000 25,286
Florida State Department of General
Services, Division of Facilities
Management, Public Improv RB,
(FL Facilities Pool), 7.00%,
09/01/00, Pre-refunded @ 102 100,000 108,443
Florida State Division of Bond Finance,
Department of General Services,
Public Improv RB, (Dept of Natural
Resources-Preservation 2000), Series A,
5.80%, 07/01/01, MBIA Insured 115,000 121,167
Florida State Division of Bond Finance,
Department of General Services,
Public Improv RB, (Dept of Environmental
Protection-Preservation 2000), Series A,
5.00%, 07/01/01, AMBAC Insured 150,000 154,506
Florida Municipal Power Agency, Electric
Util RB, (St. Lucie Project), 5.00%,
10/01/01, FGIC Insured 100,000 102,584
Florida State Turnpike Auth,
Transportation RB, 7.50%, 07/01/99,
Pre-refunded @ 102 40,000 42,488
Florida State Turnpike Auth,
Transportation RB, Series A, 6.25%,
07/01/01, Pre-refunded @ 100 45,000 47,969
Fort Myers, FL, Electric Util RB,
Series B, Zero Coupon, 10/01/99,
Pre-refunded @ 26.012 40,000 9,796
Gainesville, FL Util System, Electric
Util RB, Series A, 5.90%, 10/01/00 50,000 52,121
Hernando County, Fl School District,
GO Bonds, 5.10%, 09/01/01,
MBIA Insured 120,000 122,771
Hernando County, FL, Solid Waste RB,
7.10%, 10/01/00, Pre-refunded @ 102 100,000 108,894
Hillsborough County, FL Aviation Auth,
Airport RB, (Tampa International Arpt),
Series B, 7.00%, 10/01/99,
Pre-refunded @ 102 75,000 79,813
Hillsborough County, FL Aviation Auth,
Airport RB, (Tampa International Arpt),
Series A, 6.30%, 10/01/99,
Pre-refunded @ 102 35,000 36,910
Hillsborough County, FL Aviation Auth,
Airport RB, (Tampa International Arpt),
Series A, 6.30%, 10/01/00,
FGIC Insured 40,000 41,910
Hillsborough County, FL,
Public Improv RB, (Criminal
Justice Facilities), 4.75%, 08/01/00,
FGIC Insured 250,000 254,418
Indian Trace Community Development
District, FL, Water Management-Special
Benefit Bonds, Series A, 5.10%,
05/01/01, MBIA Insured 250,000 257,495
Indian Trace Community Development
District, FL, Water Management-Special
Benefit Bonds, Series A, 5.20%,
05/01/02, MBIA Insured 35,000 36,434
Municipal Bonds (Continued) Principal
Amount Value
Indian Trail Water Control
District, FL, Public Improv RB,
(Unit of Development No.1),
Series 1990, 7.875%, 07/01/00 25,000 26,027
Jacksonville, FL, Capital Improv RB,
(Gator Bowl Project), 5.15%,
10/01/02, AMBAC Insured 100,000 104,078
Jacksonville, FL Electric Auth,
Electric Util RB, Issue 2,
Series 11, 5.00%, 10/01/98 100,000 100,477
Jacksonville, FL Electric Auth,
Electric Util RB, Issue One,
Series 2, 9.75%, 10/01/98 100,000 102,431
Jacksonville, FL Electric Auth,
Electric Util RB, Issue 2, Series 7,
4.85%, 10/01/99 100,000 101,407
Jacksonville, FL Health Facilities
Auth, Hospital RB, (St. Lukes
Hospital Association), 6.30%,
11/15/99 50,000 51,634
Jacksonville, FL Health Facilities
Auth, Hospital RB, (National
Benevolent Association-Cypress
Village Project), Series 1996A,
4.50%, 12/01/98 100,000 100,151
Jacksonville, FL Health Facilities
Auth, Hospital RB, (National
Benevolent Association-Cypress
Village Project), Series 1996A,
4.75%, 12/01/99 115,000 115,623
Jacksonville, FL Health Facilities
Auth, Hospital RB, (National
Benevolent Association-Cypress
Village Project), Series 1996A,
5.00%, 12/01/00 125,000 126,231
Jacksonville, FL Health Facilities
Auth, Hospital RB, (National
Benevolent Association-Cypress
Village Project), Series 1996A,
5.20%, 12/01/01 130,000 131,646
Key West, FL Util Board, Electric
Util RB, Capital Appreciation Bonds,
9.75%, 04/01/00, Pre-refunded @ 103
100,000 113,297
Lakeland, FL, Hospital RB,
(Lakeland Regional Medical Center),
4.20%, 11/15/02, MBIA Insured 90,000 90,072
Lakeland, FL, Electric Util RB,
5.25%, 10/01/01 300,000 310,023
Largo, FL, Hospital RB, (Sun Coast
Health System) 5.75%, 03/01/01 285,000 287,642
Lee County, FL HFA, Single Family
Mortgage RB, (Multi-County Program),
Series A, Subseries 2, 5.25%,
03/01/02, GNMA Collateralized 55,000 55,816
Lee County, FL HFA, Single Family
Mortgage RB, (Multi-County Program),
Series 1996A, Subseries 3, 5.00%,
03/01/00, GNMA Collateralized 50,000 50,197
Lee County, FL HFA, Single Family
Mortgage RB, (Multi-County Program),
Series 1996A, Subseries 3, 5.10%,
03/01/01, GNMA Collateralized 50,000 50,298
Lee County, FL School Board,
Certificates of Participation,
Series A, 6.25%, 08/01/01,
Pre-refunded @ 102 80,000 86,457
Lee County, FL School Board,
Certificates of Participation,
Series A, 4.85%, 08/01/03,
FSA Insured 50,000 51,420
Lee County, FL School Board,
Certificates of Participation,
Series A, 4.875%, 08/01/99,
FSA Insured 100,000 101,132
Lee County, FL School Board,
Certificates of Participation,
Series A, 4.30%, 08/01/01,
FSA Insured 50,000 50,329
Lee County, FL Hospital Board
of Directors, Hospital RB,
(Lee Memorial Health System Project),
1997 Series A, 5.00%, 04/01/03,
MBIA Insured 150,000 154,338
Lee County, FL Hospital Board of
Directors, Hospital RB, (Lee
Memorial Health System Project),
5.00%, 04/01/03, MBIA Insured 250,000 257,230
Lee County, FL IDA Water & Sewer
RB, (Bonita Springs Utilities
Project), 4.80%, 11/01/01,
MBIA Insured 70,000 71,423
Lee County, FL, Road Improvement
RB, 6.70%, 10/01/98,
Escrowed to Maturity 50,000 50,609
Lee County, FL Solid Waste System,
Solid Waste RB, Series A, 6.90%,
10/01/03, MBIA Insured 100,000 110,079
Municipal Bonds (Continued) Principal
Amount Value
Lee County, FL Solid Waste System,
Solid Waste RB, Series A, 4.50%,
10/01/01, MBIA Insured 95,000 95,715
Leon County, FL School District,
GO Bonds, 6.00%, 07/01/02 250,000 263,470
Manatee County, FL HFA,
Single Family Mortgage RB, 4.00%,
05/01/98, GNMA Collateralized 40,000 40,000
Manatee County, FL HFA,
Single Family Mortgage RB,
Subseries 1, 5.00%, 05/01/99,
GNMA Collateralized 40,000 40,303
Manatee County, FL HFA,
Single Family Mortgage RB,
Subseries 1, 5.375%, 05/01/02,
GNMA Collateralized 40,000 41,158
Martin County, FL, GO Bonds, 6.50,%,
02/01/00, Pre-refunded @ 102 50,000 53,025
Martin County, FL Health Facilities
Auth, Hospital RB, (Martin Memorial
Hospital), Series A, 7.00%, 11/15/00,
MBIA Insured 175,000 187,084
Martin County, FL, Combined Spl
Assmt RB, 5.30%, 11/01/01 150,000 152,441
Miami Beach, FL Redevelopment Agcy,
Tax Increm RB, (City Center/Historic
Conv Village), 4.90%, 12/01/01 50,000 50,259
Miami Beach, FL Redevelopment Agcy,
Tax Increm RB, (Historic Conv Village),
Series B, 5.25%, 12/01/01 160,000 162,654
Miami-Dade County, FL, Special
Obligation RB, Series C, Zero Coupon,
10/01/03, MBIA Insured 250,000 197,680
Miami, FL Health Facilities Auth,
Hospital RB, (Mercy Hospital),
6.45%, 08/01/01, AMBAC Insured 100,000 106,829
Miami, FL, Special Rev Rfdg Bonds,
7.30%, 01/01/01, MBIA Insured 100,000 102,520
Miami, FL Sports & Exhibition Auth,
Special Obligation RB, 7.20%,
04/01/00, Pre-refunded @ 102 175,000 188,484
Naples, FL, Hospital RB,
(Naples Community Hospital,
Inc. Project), 4.40%, 10/01/99,
MBIA Insured 185,000 186,184
New Jersey Health Care Facilities
Auth, Hospital RB, (Community
Memorial Hospital), Series C,
8.00%, 07/01/98, Pre-refunded
@ 102 250,000 256,383
North Broward, FL Hospital
District, Hospital RB, 5.80%,
01/01/99, Escrowed to Maturity 175,000 177,188
North Miami, FL Health Facilities
Auth, Hospital RB, (Catholic Health
Services Obligation Group), 4.80%,
08/15/01, SunTrust Bank, Central
Florida, LOC 100,000 100,719
Ocala, FL, Power Supply Electric
Util RB, 6.75%, 10/01/98,
MBIA Insured 25,000 25,270
Okaloosa County, FL, Water & Sewer
RB, 7.15%, 01/01/99, Pre-refunded
@ 102 50,000 52,103
Orange County, FL Health Facilities
Auth, Hospital RB, (Orlando
Regional Healthcare) Series A,
5.15% 11/01/00, MBIA Insured 75,000 76,981
Orange County, FL HFA, Single
Family Mortgage RB, 5.50%, 10/01/00,
GNMA/FNMA Collateralized 60,000 61,677
Orange County, FL HFA, Single Family
Mortgage RB, Series A, 5.05%,
04/01/02, GNMA/FNMA Collateralized 80,000 81,218
Orange County, FL HFA, Single Family
Mortgage RB, Series A, 4.70%,
03/01/02, GNMA/FNMA
Collateralized 260,000 260,707
Orlando, FL Utilities Commission,
Electric Util RB, 5.20%,
10/01/00 40,000 41,012
Osceola County, FL HFA,
Multifamily Housing RB,
(Tierra Vista Apartments Project),
Series A, 4.85%, 06/01/03,
FSA Insured 70,000 70,878
Palm Beach County, FL, Criminal
Justice Facilities RB, 7.10%,
06/01/00, Pre-refunded @ 102 175,000 188,969
Municipal Bonds (Continued) Principal
Amount Value
Palm Beach County, FL Health
Facilities Auth, Hospital RB,
(Good Samaritan Health System),
5.40%, 10/01/00, Escrowed
to Maturity 105,000 107,647
Palm Beach County, FL Health
Facilities Auth, Hospital RB,
(The Waterford Project),
Series 1997, 4.35%, 10/01/99 200,000 199,802
Palm Beach County, FL Health
Facilities Auth, Hospital RB,
(The Waterford Project),
Series 1997, 5.00%, 10/01/03 150,000 150,914
Palm Beach County, FL School
District, Certificates of
Participation, Series A, 5.50%,
08/01/01, AMBAC Insured 100,000 104,278
Panama City - Bay County, FL,
Airport RB, 4.25%, 10/01/99,
MBIA Insured 75,000 75,275
Pasco County, FL School District,
GO Bonds, 6.10%, 07/01/03,
MBIA Insured 200,000 211,528
Pensacola, FL Health Facilities
Auth, Hospital RB, (Daughters of
Charity National Health), 4.60%,
01/01/00 100,000 100,890
Pinellas County, FL HFA,
Single Family Mortgage RB,
Series 1997C, 4.60%, 09/01/02,
GNMA Collateralized 100,000 100,698
Pinellas County, FL, Capital
Improv RB, 5.50%, 10/01/99 100,000 102,199
Pinellas County, FL Educational
Facilities Auth, Industrial
Development RB, (College Harbor
Issue), Senior Lien, Series 1996A,
7.25%, 12/01/02 280,000 286,966
Pinellas County, FL Educational
Facilities Auth, Industrial
Development RB, (College Harbor
Issue), Junior Lien, Series 1996B,
5.40%, 12/01/00 60,000 60,761
Pinellas County, FL Educational
Facilities Auth, Industrial
Development RB, (College Harbor
Issue), Junior Lien, Series 1996B,
5.60%, 12/01/01 60,000 61,087
Pinellas County, FL Educational
Facilities Auth, Industrial
Development RB, (College Harbor
Issue), Junior Lien, Series 1996B,
5.70%, 12/01/02 65,000 66,680
Pinellas County, FL Health
Facilities Auth, Hospital RB,
(Morton Plant Health System
Project), 4.70%, 11/15/00,
MBIA Insured 100,000 101,529
Pinellas County, FL Health
Facilities Auth, Hospital RB,
(Sunshine Village Nursing Home),
6.50%, 10/01/99 130,000 130,443
Pinellas County, FL,
Transportation Improv RB,
5.25%, 08/01/00, FGIC Insured 150,000 154,220
Pinellas County, FL,
Transportation Improv RB,
5.40%, 08/01/01, FGIC Insured 180,000 187,436
Plantation, FL Health Facilities
Auth, Hospital RB, (Covenant
Village of FL Project), 4.00%,
12/01/99 275,000 274,241
Plantation, FL, Water & Sewer RB,
Zero Coupon, 03/01/03,
MBIA Insured 110,000 89,206
Polk County, FL School Board,
Certificates of Participation,
(School District Financing
Program), 6.375%, 01/01/01,
Pre-refunded @ 102 100,000 107,340
Port Orange, FL Water & Sewer,
RB, 6.40%, 10/01/02,
AMBAC Insured 100,000 103,996
Port St. Lucie, FL Water & Sewer,
RB, Series 1996A, Zero Coupon,
09/01/01, Escrowed to Maturity 150,000 131,520
Puerto Rico Electrical Power Auth,
Electrical Util RB, Series X,
4.75%, 07/01/02, MBIA Insured 75,000 76,501
Puerto Rico Industrial, Tourist,
Educational, Medical & Environmental
Control Facilities Financing Auth,
Hospital RB, (Auxilio Mutuo
Obligated Group), 1997 Series A,
4.80%, 07/01/02, MBIA Insured 190,000 194,163
St. Johns County, FL IDA,
Hospital RB, (Flagler Hospital
Project), 5.50%, 08/01/00 230,000 235,651
St. Johns County, FL IDA,
Hospital RB, (Flagler Hospital
Project), 5.60%, 08/01/01 185,000 192,158
St. Johns River Management
District, FL, Water & Sewer
RB, (Land Acquisition), 5.50%,
07/01/99, Pre-refunded @ 100 50,000 51,018
Municipal Bonds (Continued) Principal
Amount Value
St. Petersburg, FL Professional
Sports Facility, Sales Tax RB,
Series 1995, 5.00%, 10/01/00,
MBIA Insured 100,000 102,327
St. Petersburg, FL, Public
Improv RB, 5.80%, 02/01/00,
MBIA Insured 40,000 41,184
Sarasota County, FL Health
Facilities Auth., Hospital RB,
(Sunnyside Properties Project),
Series 1995, 5.50%, 05/15/01 500,000 500,815
Sarasota County, FL Utility
System, Electric Util RB, Zero
Coupon, 06/01/99, Pre-refunded
@ 22.7283 400,000 87,168
Seacoast, FL Util Auth, Water
& Sewer System RB, Series A,
Zero Coupon, 03/01/99,
Pre-refunded @ 67.6395 30,000 19,679
Seacoast, FL Util Auth,
Water & Sewer System RB,
Series A, Zero Coupon, 03/01/99,
Pre-refunded @ 27.8751 315,000 85,154
Seacoast, FL Util Auth,
Water & Sewer RB, Series A,
7.30%, 03/01/99,
Pre-refunded @ 102 55,000 57,678
Seminole, FL Water Control
District, Spl Assmt Bonds,
(Unit of Development No. 2),
Series 1996, 5.95%, 08/01/01 290,000 292,607
South Broward Hospital District,
FL, Hospital RB, 4.65%, 05/01/00,
AMBAC Insured 250,000 253,050
Tallahassee, FL, Electric Util RB,
Series A, 4.90%, 10/01/98 50,000 50,239
Tallahassee, FL Health Facilities,
Hospital RB, (Tallahassee Memorial
Regional Medical Center), Series B,
5.30%, 12/01/00, MBIA Insured 75,000 77,258
Tallahassee, FL Municipal Airport,
Airport Rfdg RB, 4.60%, 10/01/01,
AMBAC Insured 165,000 167,708
Tampa, FL, Public Improv RB,
Series A, 7.50%, 10/01/99,
Washington Mutual, GIC 200,000 203,020
Tampa, FL Sports Auth, IDB,
(Tampa Bay Arena Project), 4.30%,
04/01/99, MBIA Insured 80,000 80,334
University of South Florida,
University Rev Housing Facilities
RB, Series A, 7.00%, 07/01/00,
MBIA Insured 165,000 175,070
University of South Florida,
University Rev Housing Facilities
RB, Series A, 7.00%, 07/01/02,
MBIA Insured 185,000 204,758
Winter Springs, FL, Water &
Sewer RB, 7.15%, 04/01/00,
Pre-refunded @ 102 100,000 107,599
Total Municipal Bonds (Cost $20,349,358) $20,550,495
Total Investments (100%) (Cost $22,349,358) $22,550,495
Summary of Ratings (unaudited):
AAA/Equivalent 65%, AA/Equivalent 13%,
A/Equivalent 11%, BBB/Equivalent 10%, Other 1%
Average Portfolio Maturity 2.54 Years
Statements of Assets and Liabilities
April 30, 1998
Money Fund ShortTerm Fund
ASSETS
Investments in securities, at value
(cost $150,596,387 and
$22,349,358 respectively) $150,596,387 $22,550,495
Cash -- 169,895
Receivables:
Interest 1,374,904 310,704
Fund shares sold 164,853 --
Organization costs,
net of accumulated amortization 4,886 4,886
Total assets
152,141,030 23,035,980
LIABILITIES
Payable for investment
securities purchased 836,176 --
Dividend payable 459,348 78,912
Funds advanced by manager 36,770 4,376
Funds advanced by custodian 1,447,351 --
Total liabilities 2,779,645 83,288
NET ASSETS
Net assets 149,361,385 22,952,692
Number of shares outstanding 149,356,832 2,284,331
Net asset value, offering price
and redemption price per share $ 1.00 $ 10.05
Statement of Operations
Year Ended April 30, 1998
Money Fund ShortTerm Fund
INVESTMENT INCOME
Income:
Interest $5,719,221 $1,230,228
Expenses:
12b-1 fees (Note 2) 135,814 23,468
Investment advisory fee (Note 2) 773,605 165,581
Custodian fees (Note 3) 37,411 14,604
Transfer agency fees and expenses (Note 2) 93,463 13,449
Printing costs 11,136 2,333
Professional fees 8,441 6,134
Insurance 3,203 565
Registration and filing fees 31,073 17,268
Trustees' fees and expenses 8,118 1,433
Amortization of organization costs 8,450 8,450
Other expenses 22,042 4,149
Total expenses 1,132,756 257,434
Expense reimbursements and fee
reductions (Note 2) (710,902) (181,027)
Custodian fees paid indirectly (Note 3) (16,916) (5,138)
Net expenses 404,938 71,269
Net investment income $5,314,283 $1,158,959
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments $ 4,030 $ 49,460
Unrealized appreciation (depreciation)
on investments -- 244,669
Net realized and unrealized gain (loss)
on investments 4,030 294,129
Increase in net assets from operations $5,318,313 $1,453,088
Statements of Changes in Net Assets
MONEY FUND SHORTTERM FUND
Year Year Year Year
Ended Ended Ended Ended
4/30/98 4/30/97 4/30/98 4/30/97
INCREASE (DECREASE) IN
NET ASSETS
Operations:
Net investment income.. $ 5,314,283 $ 4,401,067 $ 1,158,959 $ 749,331
Net realized gain (loss)
on investments 4,030 487 49,460 13,101
Unrealized appreciation
(depreciation) of
investments -- -- 244,669 (59,213)
Increase in net assets
from operations 5,318,313 4,401,554 1,453,088 703,219
Dividends to
shareholders from:
Net investment income... (5,314,077) (4,401,067) (1,158,959) (749,331)
Realized gains -- (170) -- --
Fund share transactions
(Note 4) 12,904,402 22,509,253 (6,194,004) 16,554,851
Net increase in net
assets 12,908,638 22,509,570 (5,899,875) 16,508,739
Net Assets:
Beginning of period 136,452,747 113,943,177 28,852,567 12,343,828
End of period $149,361,385 $136,452,747 $22,952,692 $28,852,567
Notes to Financial Statements
1. Summary of Accounting Policies
The Florida TaxFree Money Market Fund (the "Money Fund") and The Florida TaxFree
ShortTerm Fund (the "ShortTerm Fund") are series of The Hough Group of Funds
(the "Trust") which was organized as a Massachusetts Business Trust on July 22,
1993. The Trust is registered as an open-end non-diversified management
investment company and commenced operations on November 22, 1993. Both Funds
seek a high level of current interest income, exempt from federal income tax, as
is consistent with the preservation of capital and liquidity, and both are
intended to be exempt from Florida intangible property tax. Each Fund is
considered to be a separate entity for financial reporting and tax purposes.
Their financial statements are prepared in accordance with generally accepted
accounting principles for investment companies as follows:
Valuation of Securities
For the Money Fund, investments are stated at amortized cost. Under this
valuation method, a portfolio instrument is valued at cost and any discount or
premium is amortized on a constant basis to the maturity of the instrument. For
the ShortTerm Fund, municipal obligations are stated on the basis of valuations
provided by an independent pricing service approved by the Board of Trustees,
which considers information with respect to transactions in bonds, quotations
from bond dealers, market transactions in comparable securities and various
relationships between securities in determining value.
Variable Rate Demand Notes
The Funds have invested in certain variable interest demand notes which are
redeemable at specified intervals upon demand. The securities are secured as to
principal and interest by bank letters of credit or corporate or insurance
company guarantees. The maturity of these instruments for the purpose of
calculating the portfolio's weighted average maturity is considered to be the
greater of the period until the interest rate is adjusted or until the principal
can be recovered by demand.
Securities Traded on a When-Issued or Delayed Delivery Basis
The Funds may trade securities on a when-issued or delayed delivery basis, with
payment and delivery scheduled for a future date. These transactions are
subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Funds will generally purchase these securities with the intention of acquiring
such securities, it may sell such securities before the settlement date. These
securities are identified on the accompanying Statement of Investments.
Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its income to its shareholders. Therefore, no provision for federal income
tax is required.
Dividends and Distributions
Dividends from investment income (excluding capital gains and losses if any) are
declared daily and paid monthly. Distributions of net capital gains, if any,
realized on the sales of investments are made after the close of the Fund's
fiscal year and in December and/or January, as declared by the Board of
Trustees. Dividends paid from net investment income for the period ended April
30, 1998 are exempt from federal income taxes. However, certain shareholders may
be subject to the Alternative Minimum Tax (AMT).
General
Securities transactions are accounted for on the trade date (the date the order
to buy or sell is executed). Interest income is recorded on the accrual basis.
Realized gains or losses from securities transactions are recorded on the
identified cost basis.
Organization Expenses
Organization expenses are being amortized on a straight-line basis over a
five-year period.
Expenses
Expenses arising in connection with each Fund are allocated directly to the
respective Fund, if specifically identifiable. Other expenses are allocated
between the Funds in proportion to the relative net assets of each Fund.
Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. Investment Management Fees and Other Transactions with Affiliate
Under its investment advisory agreements, William R. Hough & Co. (WRH) provides
the Funds with investment research, advice, and supervision, and manages the
business affairs of each Fund. For these services, the Money Fund and ShortTerm
Fund have agreed to pay WRH a monthly fee at an annual rate of .50% and .60%,
respectively, of their average net assets for the month. For the year ended
April 30, 1998, management fees totaled $773,605 and $165,581 for the Money Fund
and ShortTerm Fund, respectively. The Funds also compensate WRH for services
provided under a Transfer Agency and Fund Accounting Agreement at the rate of
$18 per account per year. During the year ended April 30, 1998, fees under this
agreement amounted to $55,625 and $5,592 for the Money Fund and the ShortTerm
Fund, respectively. However, these and all other expenses of the Funds were
paid by WRH to the extent that they exceeded .20% of each Fund's average daily
net assets for the period May 1, 1997 through July 31, 1997, and .28% of each
Fund's average daily net assets for the period August 1, 1997 through April 30,
1998. Through June 14, 1998 expenses will continue to be paid to WRH to the
extent that they exceed .28% of each Fund's average daily net assets. Effective
June 15, 1998, expenses will be paid by WRH to the extent they exceed .40% of
each Fund's average daily net assets.
The Funds have adopted Distribution and Service Plans (the "Plans") under
Securities and Exchange Commission Rule 12b-1, which authorize each Fund to pay
WRH up to .25% of its annual average net assets for shareholder support services
or sales activities. The amounts reported as 12b-1 fees in the Statements of
Operations represent Fund distribution costs, such as advertising, printing, and
dealer commissions, all of which were paid by WRH, and are included in expense
reimbursements and fee reductions.
During the year ended April 30, 1998, the Money Fund and the ShortTerm Fund paid
$950 and $861, respectively, to WRH for brokerage fees on executions of
portfolio investment transactions.
Fees are paid to Trustees of the Trust at the rate of $1,200 per year plus $250
per meeting.
3. Custodian Fees Paid Indirectly
For the year ended April 30, 1998, custodian fees were reduced by earnings
credits of $16,916 and $5,138 on average daily cash balances for the Money Fund
and ShortTerm Fund, respectively.
4. Fund Shares
The Funds have authorized an unlimited number of shares at no par value.
Capital paid in for the Money Fund and the ShortTerm Fund aggregated
$149,356,832 and $22,788,392, respectively. Transactions in Fund shares for
the years ended April 30, 1998 and 1997 were as follows:
MONEY FUND* SHORTTERM FUND
SHARES AMOUNT
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
4/30/98 4/30/97 4/30/98 4/30/98 4/30/98 4/30/97
Sold 364,568,053 275,829,809 2,728,078 3,200,074 $27,392,402 $31,954,497
Issued on
reinvested
dividends 5,018,708 4,053,913 111,735 66,946 1,122,079 667,960
Redeemed(356,682,359)(257,374,469)(3,453,934)(1,610,609)(34,708,485)(16,067,606)
Net
increase 12,904,402 22,509,253 (614,121) 1,656,411 $(6,194,004) $16,554,851
* All at $1.00 per share
5. Investment Transactions
Purchases and sales/maturities of investment securities (excluding short-term
securities) for the ShortTerm Fund for the year ended April 30, 1998 were
$9,831,595 and $14,133,374, respectively. At April 30, 1998, the cost of
securities for federal income tax purposes was the same as that for financial
reporting purposes. Net unrealized appreciation, which amounted to $201,137
for the ShortTerm Fund, consisted of aggregate gross unrealized appreciation and
(depreciation) of $204,402 and ($3,265), respectively. As of April 30, 1998,
the accumulated net realized loss was $36,837 for the ShortTerm Fund. For tax
purposes, such losses are available to offset future realized capital gains
until the capital loss carryforwards expire in 2002.
6. Financial Highlights
Money Fund
Period
from
Per share operating Year Year Year Year 11/23/93*
peformance Ended Ended Ended Ended to
(for a share outstanding 4/30/98 4/30/98 4/30/96 4/30/95 4/30/94
throughout the period)
Net asset value,
beginning of period........ $1.00 $1.00 $ 1.00 $1.00 $1.00
Income from investment
operations:
Net Investment Income...... 0.034 0.034 0.036 0.035 0.011
Less distributions:
Dividends from net
investment income......... (0.034) (0.034) (0.036) (0.035) (0.011)
Net asset value, end
of period................ $1.00 $1.00 $1.00 $1.00 $1.00
Total return dagger...... 3.50% 3.42% 3.69% 3.59% 2.49%
Ratios/Supplemental Data
Net assets at end of
period (000's).......... $149,361 $136,453 $113,943 $105,647 $23,516
Ratios to Average Daily
Net Assets dagger
Expenses............... .26% .20% .20% .07% .00%
Expenses
(Before reimbursement).... .73% .78% .80% 1.04% 1.96%
double dagger
Net Investment Income..... 3.43% 3.36% 3.62% 3.63% 2.55%
* Commencement of operations.
dagger Figures are annualized for periods less than a year.
double dagger Effective for the year ended April 30, 1996 and thereafter,
expense ratios (before reimbursement) no longer reflect reduction from
custodian fee offset arrangements.
6. Financial Highlights (continued)
ShortTerm Fund
Period
Per share operating Year Year Year Year from
performance Ended Ended Ended Ended 11/22/93*
(for a share outstanding 4/30/98 4/30/97 4/30/96 4/30/95 to 4/30/94
throughout the period)
Net asset value,
beginning of period....... $9.95 $9.94 $9.89 $9.86 $10.00
Income from investment
operations:
Net Investment income.... 0.42 0.43 0.42 0.42 0.16
Net realized and unrealized
gain (loss)
on investments........... 0.10 0.01 0.05 0.03 (0.14)
Total from investment
operations........ 0.52 0.44 0.47 0.45 0.02
Less distributions:
Dividends from net
investment
income................... (0.42) (0.43) (0.42) (0.42) (0.16)
Net asset value,
end of period........... $10.05 $9.95 $9.94 $9.89 $9.86
Total return dagger.... 5.23% 4.59% 4.85% 4.66% 0.49%
Ratios/Supplemental Data
Net assets at end of
period (000's)........ $22,953 $28,853 $12,344 $11,113 $10,757
Ratios to Average Daily
Net Assets dagger
Expenses.............. .26% .20% .20% .07% .05%
Expenses
(Before reimbursement)... .93% 1.18% 1.42% 1.50% 2.77%
double dagger
Net Investment Income.... 4.20% 4.27% 4.25% 4.25% 3.79%
Portfolio turnover rate.. 40.2% 40.9% 83.4% 35.9% 10.9%
* Commencement of operations.
dagger Figures are annualized for periods less than a year.
double dagger Effective for the year ended April 30, 1996 and thereafter,
expense ratios (before reimbursement) no longer reflect reduction from
custodian fee offset arrangements.
Independent Auditor's Report
The Board of Trustees and Shareholders
The Florida TaxFree Funds
We have audited the accompanying statements of assets and liabilities, including
the statements of investments of The Florida TaxFree Money Market Fund and The
Florida TaxFree ShortTerm Fund, series of The Hough Group of Funds, as of April
30, 1998, the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the four years in the period
then ended and for the period from November 22, 1993 (commencement of
operations) to April 30, 1994. These financial statements and financial
highlights are the responsibility of the Funds' 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 amount and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
April 30, 1998, by correspondence with the custodian and brokers. 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
Florida TaxFree Money Market Fund and The Florida TaxFree ShortTerm Fund, series
of The Hough Group of Funds as of April 30, 1998, the results of their
operations, the changes in their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
May 21, 1998
