03/24/2021

Bourbon Boom Creates Revenue for Kentucky

by

Whether you enjoy a glass occasionally or have sworn off brown liquor since college, there is no denying that bourbon distilling has once again become a big business for the state of Kentucky. Horses and coal put the state on the map, but bourbon is what is drawing the largest crowds, leading distillers to undergo capital improvements of over $2.3 billion collectively along the bourbon trail.

Distilleries in Kentucky employ just over 20,000 people with annual payroll of close to $1 billion. Recent estimates show 9.2 million barrels of bourbon currently aging in rickhouses, a little over two barrels per Kentuckian, generating property tax revenues of approximately $29 million annually. While this is good news for the State’s finances, it is causing issues for distilleries big and small. Kentucky is the only state with a barrelage tax, which may ultimately be accountable for the sudden growth of distilleries outside of Kentucky. In 2014, the Kentucky legislature passed a corporate income tax credit to help offset the taxation, however, the rapid increase in aging barrels has greatly reduced the benefit of the tax credit. The value of aging barrels was around $3.8 billion in 2020, an increase of $400 million since 2019 and twice the assessed value of barrels in 2010.

Booms and busts

Prior to 2019, the previous peak of barrels in rickhouses was in 1968 when the state had 8.7 million barrels aging. Bourbon started losing its luster in the 1970s and was out of favor through the 1980s when rum and vodka took over the top spots nationally. During that time, much of the bourbon produced in Kentucky was exported overseas. However, prominent bourbon distillers saw an opening for another domestic bourbon boom in the late 1990s, when the Beverage Testing Institute in Chicago obtained a bottle of Pappy Van Winkle in 1997 and gave it a score of 99 out of 100 – the highest rating ever given to a whiskey. Anticipating the resurgence of bourbon enthusiasts, the Kentucky Distillers Association started the Bourbon Trail in 1999 with ten distillers. Today there are 38 distilleries only 20 minutes from each other, and the total barrelage has increased 164% since 2000. Read more “Bourbon Boom Creates Revenue for Kentucky”

03/16/2021

Kentucky Experiences Substantial Growth in Logistics

by

Kentucky revenue has held up well during the COVID-19 pandemic. General fund revenue for the current fiscal year was up 5.6% through the end of 2020, increasing 16.1% in December after a slight downturn in November. One notable business sector contributing to revenue growth in the state is logistics.

The business of logistics is a critical component of supply chains, and is growing at a rapid pace in Kentucky, employing close to 83,000 people. Kentucky’s central location in the Ohio Valley makes it a prime spot for distribution across the United States for many suppliers and shippers. Leaders in the sector are pushing Kentucky legislators to provide funding and subsidies to help build out the State’s infrastructure in areas surrounding warehouses and airports. To date, lawmakers have provided resources to help with traffic problems around Shepardsville, where a third cloverleaf highway interchange has been completed to help alleviate tractor trailer congestion.

To further ease major traffic problems related to the sector’s rapid expansion, a new warehouse area has been established slightly further south near the Bardstown exit off of Interstate 65. McKesson Corporation, the oldest and largest healthcare company in the nation, recently signed a lease in the Shepardsville area for a one million-square-foot warehouse which is currently being used to distribute COVID-19 vaccines. Five weeks prior to the first vaccine shipping date in mid-December, the CDC along with project Warp Speed, was involved in helping build out refrigeration units to store vaccine doses for Pfizer and Moderna. With the world watching, the first shipment of Prizer-BioNTech vaccines departed the Louisville UPS Worldport Hub on December 13, 2020. The UPS Worldport Hub is the second largest freight enplanement airport in the U.S. and fourth largest worldwide.
Read more “Kentucky Experiences Substantial Growth in Logistics”

02/04/2021

Chris Johns Covered Munis on CNBC’s The Exchange

by

Aquila’s municipal bond fund portfolio manager, Chris Johns, was a recent guest on CNBC’s The Exchange with Brian Sullivan. Chris and Brian discussed the growing size of outstanding municipal bond debt and the importance of in-depth credit research in an environment where demand is high and credit spreads are narrow. Chris also shared his thoughts on current credit trends and the risk profile of municipals.

You can watch Chris’ segment on CNBC’s website, under The Exchange’s Muni Money section, or listen to the segment on The Exchange’s January 29th podcast; available on all podcast platforms.

Chris has managed Aquila Tax-Free Fund of Colorado for over 30 years and Aquila Tax-Free Trust of Oregon, which he co-manages with Tim Iltz, since 2011.

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 financial adviser, and when you call 800-437-1020.

01/14/2021

The Wall Street Journal Quotes PM Chris Johns on Muni Issuance Boom

by

Chris Johns

Municipal bond issuance is at a 10-year high, reports The Wall Street Journal earlier this week. And Wall Street’s paper of record reached out to Aquila portfolio manager Chris Johns for his insights on the boom.

Muni bond issuance totaled $474 billion in 2020 as state and local governments took advantage of low interest rates to raise capital while revenue streams continued to decline due to pandemic pressures. Taxable issuance was up for the year as governments took advantage of the ability to fill budget gaps with those funds, and lower-rated borrowers caught a break as risk tolerance shifted with the search for yield.

“Alongside the drop in yields, another factor driving the borrowing was that yield-hungry investors were willing to accept less interest from lower-rated borrowers relative to what they demanded from higher-rated ones”  – Chris Johns

 

Mr. Johns has managed Aquila Tax-Free Fund of Colorado for over 30 years and is a co-portfolio manager, along with Tim Iltz, of Aquila Tax-Free Trust of Oregon.

 

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 financial adviser, and when you call 800-437-1020.

01/08/2021

A Distinctive Midcap Fund Celebrates 10 Years

by

The Aquila Three Peaks Opportunity Growth Fund strategy celebrated its 10-year anniversary in the fourth quarter of 2020. In October 2010, the management team at Three Peaks Capital Management brought a new approach to Aquila’s equity fund, which was launched as a rocky mountain regional investment strategy in 1994. Through detailed research of the corporate debt market for the management of Aquila Three Peaks High Income Fund, industry veteran, Sandy Rufenacht, and his team noticed that prudent corporate actions taken to improve balance sheets, reduce debt and create free cash flow often laid the groundwork for potentially strong equity returns.

Over the past decade the Fund has been recognized by Barron’s, Lipper, the Wall Street Journal, Investor’s Business Daily, and a number of other publications. We credit the Fund’s success to the distinctive management process that is rooted in intense research and built on extensive experience in the high-yield market.

A conservative approach

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 “A Distinctive Midcap Fund Celebrates 10 Years”

12/30/2020

Actual 2020 Capital Gain Distributions

by

Following are capital gain distributions paid on December 3, 2020, and December 30, 2020.

Aquila Three Peaks Opportunity Growth Fund paid a short-term capital gain distribution of $1.70172, and a long-term capital gain distribution of $0.70763 on December 3, 2020 with a record date of December 2, 2020.

Hawaiian Tax-Free Trust paid a long-term capital gain distribution of $0.02283 on December 30, 2020 with a record date of December 29, 2020.

The following funds did not capital gains distributions in December, 2020.

 

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 realized gains from fiscal year 2020 which must be distributed in 2020 and cannot be reduced.

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

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 from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

12/09/2020

Tony Tanner, CFA® Discusses the Muni Market on Asset TV Masterclass

by

Tony Tanner, CFA®, Portfolio Manager of Aquila Tax-Free Trust of Arizona, was among a panel of municipal experts on Asset TV’s November 2020 Municipal Bond Masterclass. The full program, which offers one hour of CE credit, covers municipal credit, the impact of the coronavirus pandemic, macro considerations for investors, and much more.

Watch Tony’s portion of the program for his thoughts on the municipal bond market, finding credit opportunities and which sectors he is watching closely.

 

Mr. Tanner is Senior Vice President of Aquila Investment Management. He is the Lead Portfolio Manager for Aquila Tax-Free Trust of Arizona and also co-manages Aquila Tax-Free Fund for Utah and Aquila Churchill Tax-Free Fund of Kentucky. Joining Mr. Tanner on the panel were Grant Dewey, Head of Municipal Capital Markets at Build America Mutual, and David Hammer, Head of Municipal Bond Portfolio Management at PIMCO.

We hope you find the program informative.

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 financial adviser, and when you call 800-437-1020.

10/29/2020

Estimated Capital Gain Distributions as of October 31, 2020

by

The funds listed below may pay a capital gain distribution in December, 2020. The amount reflected represents a preliminary estimate as of the date indicated, and is based on information available as of October 31, 2020. Estimates are subject to change based on a number of factors, including changes in the number of shares outstanding, certain tax adjustments, market conditions, board approvals, and other circumstances. These factors may also result in year-end distributions being made by funds which show no estimate as of the date of this report. The amount and character of distributions will be finalized on the record dates.

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

Aquila Three Peaks Opportunity Growth Fund: In the event that capital gains distributions are declared, the Fund is anticipated to have a record date of December 2, 2020, an ex-date of December 3, 2020, a payable date of December 3, 2020, and a reinvestment date of December 3, 2020.

Hawaiian Tax-Free Trust and all other Funds: In the event that capital gains distributions are declared, the funds are anticipated to have a record date of December 29, 2020, an ex-date of December 30, 2020, a payable date of December 30, 2020, and a reinvestment date of December 30, 2020.

Although the following funds could pay capital gains distributions in December, 2020, as of the date of this report, a capital gain distribution is not anticipated.

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 realized gains from fiscal year 2020 which must be distributed in 2020 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 from your financial advisor, and when you call 800-437-1020 or visit www.aquilafunds.com.

06/10/2020

Tony Tanner, CFA® on Money Life with Chuck Jaffe

by

Tony Tanner

Tony Tanner

Tony Tanner, CFA®, Municipal Bond Fund Portfolio Manager with Aquila Group of Funds, was recently interviewed on Money Life with Chuck Jaffe.

During their conversation, Tony discussed how the troubled economy and lower interest rates will impact the bond market and may lead investors to diversify their fixed-income holdings. He notes that while he doesn’t anticipate a big wave of municipal defaults, credit-quality will be challenged.

Chuck Jaffe is a veteran financial journalist and nationally syndicated financial columnist whose work appears in newspapers from coast to coast. He started the Money Life podcast in 2012, and previously hosted Your Money and various podcasts for MarketWatch, where he was a senior columnist.

We hope you enjoy the interview.

Before investing in a Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. All prospectuses are available on this site, from your financial advisor, and when you call 800-437-1020.

05/28/2020

Oregon Local Bond Measure Election Analysis

by

In the May 2020 election, Oregon residents approved almost $340 million of general obligation bonds, substantially more than the $180 million approved in May 2019, Although results have yet to be certified, and therefore still preliminary, the bonds approved by this election are in high demand as investors seek high quality tax-exempt investment alternatives.

There are four scheduled election dates in Oregon each year: the second Tuesday in March, the third Tuesday in May, the third Tuesday in September, and the Tuesday after the first Monday in November. In November 2008, Oregon voters approved Ballot Measure 56, which repealed a law requiring more than 50% of a county’s registered voters to vote in bond measure elections held in May and November. As a result, the May election has become an important election to follow for new bond measures.

By election measure 64% of the bond issues were approved; however, 75% of the total requested par amount was approved by voters. Oregon typically sees more ballot measures during general elections, which are held in November, of even-numbered years. Accordingly, the current election falls flat versus the 2019 November general election, which approved a healthy $820 million of new supply.


Read more “Oregon Local Bond Measure Election Analysis”