01/09/2020

Take a Closer Look at this Mid Cap Fund

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Aquila Three Peaks Opportunity Growth Fund had a notable year in 2019. It was recognized by The Wall Street Journal as a Mid Cap Core Category King based on year-to-date total return performance for the months of May, July, August, October, November and most recently for one-year performance as of December 31, 2019, when the Fund ranked 5th out of 360 funds in the Lipper Mid Cap Core equity category with a total return of 35.9%. The Fund was also recently recognized by Investor’s Business Daily on a list of growth funds leading the market. We credit this success to our distinctive management process that is rooted in intense research and built on our experience in the high yield market. See the Fund Fact Sheet for quarter-end standardized performance.

In selecting investments for Aquila Three Peaks Opportunity Growth Fund, we begin with the universe of companies we know best – those we follow in managing Aquila Three Peaks High Income Fund. We look for issuers of high-yield corporate debt and companies generating free cash flow and improving the corporate balance sheet by paying down debt.

We attempt to mitigate risk by looking for companies in industries with relatively consistent revenue generation (non-cyclical industries), that have demonstrated the ability to grow even in a low-growth economy. Our strategy is to maintain a broadly diversified, well researched, well balanced portfolio to reduce volatility. We implement this strategy through a fundamental, bottom-up analysis of each company in which we invest.

If you are looking for an equity fund with a management strategy unlike many of its peers, take a closer look at Aquila Three Peaks Opportunity Growth Fund. Read more “Take a Closer Look at this Mid Cap Fund”

12/06/2019

Get to Know Arizona’s 21st Century Healthcare Economy

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Tony Tanner, CFA®, recently authored The Ascension of Arizona’s 21st Century Healthcare Economy for Phoenix’s inBusiness publication. Read the article to learn more about how the healthcare sector in Arizona has become a significant component of the state’s economy and a contributor to growth.

Tony Tanner

Tony Tanner, CFA®

Tony Tanner, CFA® is Senior Vice President of Aquila Investment Management and the Lead Portfolio Manager of Aquila Tax-Free Trust of Arizona.

12/04/2019

Actual 2019 Capital Gain Distributions

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Aquila Three Peaks Opportunity Growth Fund – December 4, 2019 Capital Gain Distributions

 

Hawaiian Tax-Free Trust – December 30, 2019 Capital Gain Distribution

Aquila Distributors LLC does not provide accounting, tax or legal advice. Shareholders should seek tax advice based upon their particular situation.

 

Following are funds that did not pay capital gain distributions in 2019.

 

Aquila Tax-Free Trust of Arizona

Aquila Tax-Free Fund of Colorado

Aquila Churchill Tax-Free Fund of Kentucky

Aquila Narragansett Tax-Free Income Fund (RI)

Aquila Tax-Free Trust of Oregon

Aquila Tax-Free Fund For Utah

Aquila Three Peaks High Income Fund

Printable Version

1 Represents undistributed gains from fiscal year 2019 which must be distributed in 2019 and cannot be reduced.

Shares of the Funds may only be sold by offering the Funds’ Prospectus. Before investing in a Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available on this site,  from your investment professional, and when you call 800-437-1020.

 

11/21/2019

Arizona’s Credit Rating Upgraded

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On November 19, 2019, Moody’s Investor Service upgraded the state of Arizona’s credit rating from Aa2 to Aa1, which is the second-highest credit rating that the agency offers and the highest issuer rating that Arizona has ever received from Moody’s. The current outlook is stable. Moody’s has increased Arizona’s credit rating three times since 2009, and Arizona is the only state to receive two ratings upgrades since 2015. The State is now rated higher by Moody’s than at the outset of the credit crisis.

In a press release, Moody’s cited continued economic growth, a healthy rainy day fund and debt reduction as reasons for the upgrade. Since the great recession, the state has experienced strong growth of reserve funds partly due to diverse population increases over the last decade. As we have stated in our most recent investment commentary, Arizona has one of the most rapidly diversifying economies and fastest growing populations in the country and the state has done a commendable job preparing to support the increase. Paying down debt, strategic new borrowing, and thoughtful management of pension liabilities has positively impacted the state’s fiscal situation.

According to Governor Ducey, Arizona’s rainy day fund is currently at the highest level that is has ever been. Since 2015, the state has turned a $1 billion deficit into a $1 billion dollar surplus. Arizona continues to be committed to investing in K-12 education, public safety and infrastructure.

Aquila Tax-Free Trust of Arizona, is the state’s oldest single-state tax-exempt municipal bond fund in existence today, and has over 33 years of history investing in Arizona’s municipal bond market with a local portfolio management team. A hallmark of our investment process is having managers in the markets in which we invest so that we can see firsthand what is happening from a legislative and economic standpoint. The recent upgrade will positively impact the quality of our investment grade portfolio. As of 09/30/19, over 68.5% of our holdings were rated Aa or higher.


Before investing in one of the Aquila Group of Funds, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available here, from your financial professional, or by calling 800-437-1020.

Consideration should be given to the risks of investing. Investments in bonds involve certain risks including a decline in value due to rising interest rates, a real or perceived decline in credit quality of the issuer, borrower, counterparty, or collateral, adverse tax or legislative changes, court decisions, market or economic conditions. Fund performance could be more volatile than that of funds with greater geographic diversification. For certain investors, some dividends may be subject to Federal and state taxes, including Alternative Minimum Tax (AMT). Please consult your professional tax advisor.

Independent rating services (such as Standard & Poor’s, Moody’s and Fitch) assign ratings, which generally range from AAA (highest) to D (lowest), to indicate the credit worthiness of the underlying bonds in the portfolio. Where the independent rating services differ in the rating they assign to an issue, or do not provide a rating for an issue, the highest available rating is used in calculating allocations by rating.

11/12/2019

Aquila Three Peaks Opportunity Growth Fund Recognized as a Category King

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Aquila Three Peaks Opportunity Growth Fund was once again recognized as a Category King by The Wall Street Journal for the year-to-date period ending October 31, 2019. The Category Kings report recognizes the top performing funds, based on total return, in 10 Lipper categories for the year-to-date period. Aquila Three Peaks Opportunity Growth Fund Class Y (ATGYX) was listed at #5 in the Lipper Mid Cap Core equity category, out of 375 funds. During this period, the Fund generated a return of 28.1% compared to the Lipper Mid Cap Core category average of 20.3% and the Russell 3000 Index return of 22.7%. The Fund was also listed as a Category King in May, July and August of this year based on year-to-date returns.
Read more “Aquila Three Peaks Opportunity Growth Fund Recognized as a Category King”

10/28/2019

2019 Aquila Tax-Free Fund For Utah Annual Shareholder Meeting

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Shareholders of Aquila Tax-Free Fund For Utah are cordially invited to attend their annual shareholder meeting Tuesday, November 19, 2019 at 8:30 a.m. at the Little America Hotel, 500 South Main Street, Salt Lake City, Utah. Breakfast will be served prior to the meeting.

Attendees will have the opportunity to visit with Fund Executives, Trustees, the Portfolio Managers and hear from Brian Butler, CPA and CFO of Salt Lake City Corporation’s Department of Airports. In his role as CFO of the Airport, Brian is responsible for overseeing the construction budget and debt financing of the new Salt Lake City Airport that is scheduled to begin opening in 2020.

Mr. Butler received his bachelors degree in Corporate Finance from Brigham Young University, an additional bachelors degree in Accounting from Utah Valley University, as well as a Masters of Accountancy from the University of Utah. He is a CPA and belongs to both the Utah Association of Certified Public Accounts as well as the American Institute of Certified Public Accountants. Prior to joining the Airport in 2015, Brian worked in public accounting as an auditor for Eide Bailly, as well as a Financial Representative for Fidelity Investments.

We look forward to seeing you in Salt Lake City.

10/16/2019

Colorado’s November Ballot – School Bonds

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On November 5, 2019, Colorado voters will decide on approximately $1.2 billion of K-12 municipal issuance and mill levy overrides in 20 local elections, as well as Proposition CC, a statewide ballot measure that would end the cap on state tax revenue as required by the Taxpayer’s Bill of Rights (TABOR). TABOR is a constitutional limit to the amount of revenue that Colorado and local governments are able to retain and spend or save. Excess revenue collected over the TABOR limit must be refunded to taxpayers unless voters authorize retention of the excess amount.

Historically, the State has experienced difficulty passing funding for K-12 public schools and transportation projects. As a result, the State is requesting voters approve Proposition CC, which permits excess revenue to be distributed to public schools, higher education, roads, bridges and transit beginning in fiscal year 2019-20.This strategy has recently been successful at the local level, with Colorado cities exercising similar strategies to spend TABOR funds. If the measure passes, the increases in funding may benefit our holdings of public school, higher education and transportation bonds. However, TABOR funding is unpredictable and, therefore, difficult to budget. The Colorado Legislative Council Staff projects revenue exceeding the TABOR limit will be $428.5 million in 2019, $264.3 million in 2020 and $142.9 million in 2021.

Unlike at the State level, Colorado voters have historically shown a willingness to approve local bond issues. These measures are used to finance new schools and other capital improvements throughout the state. School district bond issues on the November ballot range in size from approximately $2.5 million to as much as $395 million. Depending upon voter sentiment, this election could potentially provide the Aquila Tax-Free Fund of Colorado with a broad opportunity to invest in a variety of projects as bonds are sold later this year and into 2020.

09/27/2019

Tony Tanner talks Munis on Asset TV’s Fixed Income Masterclass

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Tony Tanner, CFA®, SVP, of Aquila Investment Management and Lead Portfolio Manager of Aquila Tax-Free Trust of Arizona, recently participated in a Fixed Income Masterclass panel for Asset TV. Co-panelists were Christian Pariseault, Head of Fixed Income and Global Asset Allocation Institutional Portfolio Managers at Fidelity Investments, Colleen Denzler, investor at Smith Capital Investors, and Nolan Anderson, Fixed Income Portfolio Manager at Weitz Investment Management.

 

Tony discusses current opportunities presented by the inclusion of tax-exempt fixed income in a bond allocation, the localized nature of the municipal bond market, the continuing double tax-free advantage of single-state municipal investing, the primary risk and return characteristics of fixed income that investors should balance, and the benefits of leveraging professional management in accessing the municipal bond market.

In addition to Tony’s comments on the municipal market, Colleen, Nolan and Christian and Tony provide perspective on the global economic environment, current market volatility and conditions in the broader fixed income market.

The full program linked above provides CE Credit. We hope you find the program informative.

You’ll find additional information regarding Aquila Tax-Free Trust of Arizona on this site, along with the Fund prospectus.

09/22/2019

Cheaper by the Portfolio – The Mutual Fund Value Proposition

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The art and practice of picking individual municipal bonds can be a lot like picking apples. Finding great values or a real gem is primarily a function of market conditions and variety. If one has a discerning taste in apples they are more likely to encounter a wider variety of in season, locally grown apples at a farmers market rather than at Costco. With municipals, it’s always easier to obtain value when there is wide variety of both the types of bonds available and sellers willing to trade.

In today’s municipal bond market, demand is strong (not much variety in sellers) and yields are compressed across the yield curve (not much variation among yields), making it more difficult to find a great individual bond value. Combining this with the shift in Fed policy that has moved from tightening to easing in a matter of months, interest rates have been driven lower with a magnitude and speed that has resulted in the market yields of some individual bonds falling much further than the distribution yield of a diversified mutual fund portfolio.

In a market like we are experiencing today, the most attractive municipal bond values may actually be found in established, well diversified municipal bond mutual fund portfolios. This applies to both establishing new exposure to municipal bonds in an asset allocation, and to reinvesting maturity proceeds or making additions to an existing fixed income portfolio.

In comparing the change in intermediate market yields of some individual bonds with the yields of Aquila Tax-Free Trust of Arizona (AZTYX) for example, there is now a substantially larger yield advantage in the Fund. After peaking the first week of November 2018, market yields of individual bonds across the intermediate yield curve have fallen dramatically.

 

while the SEC 30-Day yield of AZTYX has held up better (please read the Fund prospectus here):

 

This can be attributed to a couple factors. First, active portfolio management may enable a fund manager to better sustain the portfolio income and dividend of a mutual fund by capitalizing on the opportunities that fluctuating interest rates often present (sort of like having a personal shopper at the muni bond “farmers market”). Second, the market yield and price change of an individual bond is more sensitive to a change in market yields than the yield and price change for a diversified portfolio of bonds.

That is because the average maturity and duration of a portfolio of bonds is not the same as the actual maturity and duration of any one specific bond.
Read more “Cheaper by the Portfolio – The Mutual Fund Value Proposition”

09/12/2019

Recognized as a Wall Street Journal Category King: Aquila Three Peaks Opportunity Growth Fund

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Aquila Three Peaks Opportunity Growth Fund, was once again included in a Wall Street Journal Category Kings report for the year-to-date period ending August 31, 2019. The Category Kings report recognizes the top performing funds, based on total return, in 10 Lipper categories for the year-to-date period. Aquila Three Peaks Opportunity Growth Fund Class Y (ATGYX) was listed at #1 in the Lipper Mid Cap Core equity category, out of 392 funds. During this period, the Fund generated a return of 27.3% compared to the Lipper Mid Cap Core category average of 16.2% and the Russell 3000 Index return of 18.02%. The Fund was also listed as a Category King in May and July; falling in second place and third place, respectively, in the Mid Cap Core category based on the year-to-date return through May 31, 2019 and July 31, 2019.
Read more “Recognized as a Wall Street Journal Category King: Aquila Three Peaks Opportunity Growth Fund”