UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-9537
MFS CALIFORNIA MUNICIPAL FUND
(Exact name of registrant as specified in charter)
111 Huntington Avenue, Boston, Massachusetts 02199
(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, Massachusetts 02199
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: November 30
Date of reporting period: August 31, 2013
| ITEM 1. | SCHEDULE OF INVESTMENTS. |
QUARTERLY REPORT
August 31, 2013
MFS® CALIFORNIA MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
8/31/13 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Issuer | Shares/Par | Value ($) | ||||||
| Municipal Bonds - 173.2% | ||||||||
| Airport Revenue - 7.9% | ||||||||
| Los Angeles, CA, Department of Airports Rev. (Los Angeles International), “C”, BHAC, 5.25%, 2038 | $ | 750,000 | $ | 774,786 | ||||
| Orange County, CA, Airport Rev., “A”, 5%, 2031 | 190,000 | 192,668 | ||||||
| San Diego County, CA, Regional Airport Authority Rev., “A”, 5%, 2021 | 500,000 | 546,410 | ||||||
| San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 2030 | 285,000 | 279,614 | ||||||
| San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 2031 | 150,000 | 146,045 | ||||||
| San Jose, CA, Airport Rev., “A-2”, 5.25%, 2034 | 440,000 | 442,702 | ||||||
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| $ | 2,382,225 | |||||||
| General Obligations - General Purpose - 10.2% | ||||||||
| Commonwealth of Puerto Rico, “A”, 5.5%, 2018 | $ | 370,000 | $ | 376,545 | ||||
| State of California, AMBAC, 6%, 2017 | 1,000,000 | 1,163,330 | ||||||
| State of California, 5.25%, 2035 | 455,000 | 467,303 | ||||||
| State of California, 5.5%, 2040 | 630,000 | 649,732 | ||||||
| State of California, 5.25%, 2040 | 415,000 | 422,146 | ||||||
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| $ | 3,079,056 | |||||||
| General Obligations - Schools - 27.8% | ||||||||
| Alhambra, CA, Unified School District, “B”, ASSD GTY, 5.25%, 2028 | $ | 500,000 | $ | 528,255 | ||||
| Banning, CA, Unified School District (Election of 2006), “B”, ASSD GTY, 5.25%, 2033 | 500,000 | 515,435 | ||||||
| Beaumont, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, AGM, 0%, 2040 | 955,000 | 189,119 | ||||||
| Chabot-Las Positas, CA, Community College (Election of 2004), “B”, AMBAC, 5%, 2030 | 60,000 | 66,691 | ||||||
| El Camino, CA, Community College District (Election of 2002), “C”, 4%, 2037 | 550,000 | 465,608 | ||||||
| Lake Tahoe, CA, Unified School District (Election of 2008), Capital Appreciation, AGM, 0%, 2045 | 515,000 | 168,493 | ||||||
| Montebello, CA, Unified School District (Election of 2004), “A-1”, ASSD GTY, 5.25%, 2034 | 355,000 | 366,800 | ||||||
| Napa Valley, CA, Unified School District, 5%, 2020 | 225,000 | 260,159 | ||||||
| Peralta, CA, Community College District, AGM, 5%, 2016 | 500,000 | 557,130 | ||||||
| Pittsburg, CA, Unified School District, “B”, AGM, 5.5%, 2034 | 500,000 | 525,135 | ||||||
| Pomona, CA, Unified School District, “A”, NATL, 6.55%, 2029 | 1,000,000 | 1,152,190 | ||||||
| San Diego County, CA, Southwestern Community College District (Election of 2008), “C”, 5%, 2040 | 370,000 | 364,065 | ||||||
| San Diego, CA, Community College (Election of 2002), 5.25%, 2033 | 125,000 | 134,093 | ||||||
| San Joaquin, CA, Delta Community College District (Election of 2004), “B”, Capital Appreciation, AGM, 0%, 2018 | 400,000 | 353,076 | ||||||
| Santee, CA, School District (Election of 2006), Capital Appreciation, “D”, ASSD GTY, 0%, 2043 | 765,000 | 118,996 | ||||||
| Vallejo City, CA, Unified School District, “A”, NATL, 5.9%, 2025 | 500,000 | 511,650 | ||||||
| Victor, CA, Elementary School District (Election of 2008), “A”, ASSD GTY, 5.125%, 2034 | 500,000 | 514,460 | ||||||
| Washington, CA, Yolo County Unified School District (New High School Project), 5%, 2021 | 450,000 | 480,528 | ||||||
| West Contra Costa, CA, Unified School District, “A”, NATL, 5.7%, 2023 | 500,000 | 585,305 | ||||||
| West Covina, CA, Unified School District, “A”, NATL, 5.8%, 2021 | 500,000 | 555,320 | ||||||
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| $ | 8,412,508 | |||||||
| Healthcare Revenue - Hospitals - 27.5% | ||||||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Sharp Healthcare), 6.25%, 2039 | $ | 505,000 | $ | 547,364 | ||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Sharp Healthcare), “A”, 5%, 2026 | 110,000 | 113,966 | ||||||
| California Health Facilities Financing Authority Rev. (Cedars-Sinai Medical Center), 5%, 2034 | 250,000 | 243,605 | ||||||
| California Health Facilities Financing Authority Rev. (Memorial Health Services), “A”, 5%, 2033 | 295,000 | 294,248 | ||||||
| California Health Facilities Financing Authority Rev. (Scripps Health), “A”, 5%, 2032 | 525,000 | 521,120 | ||||||
| California Health Facilities Financing Authority Rev. (Scripps Health), “A”, 5%, 2040 | 255,000 | 243,673 | ||||||
| California Health Facilities Financing Authority Rev. (Sutter Health), “B”, 5.5%, 2020 | 500,000 | 590,185 | ||||||
| California Health Facilities Financing Authority Rev. (Sutter Health), “B”, 5.875%, 2031 | 500,000 | 544,640 | ||||||
| California Municipal Finance Authority, COP (Community Hospitals of Central California), 5.25%, 2027 | 250,000 | 248,325 | ||||||
| California Statewide Communities Development Authority Rev. (Adventist), ASSD GTY, 5%, 2037 | 500,000 | 483,890 | ||||||
| California Statewide Communities Development Authority Rev. (Catholic Healthcare West), “K”, ASSD GTY, 5.5%, 2041 | 1,000,000 | 1,031,850 | ||||||
| California Statewide Communities Development Authority Rev. (Enloe Medical Center), “A”, CALHF, 5.5%, 2023 | 500,000 | 552,675 | ||||||
1
Portfolio of Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||||||
| Municipal Bonds - continued | ||||||||
| Healthcare Revenue - Hospitals - continued | ||||||||
| California Statewide Communities Development Authority Rev. (Huntington Memorial Hospital), 5%, 2035 | $ | 535,000 | $ | 498,657 | ||||
| California Statewide Communities Development Authority Rev. (Kaiser Permanente), “A”, 5%, 2042 | 455,000 | 430,530 | ||||||
| California Statewide Communities Development Authority Rev. (Santa Ynez Valley Cottage Hospital), 5.25%, 2030 | 260,000 | 269,386 | ||||||
| California Statewide Communities Development Authority Rev. (Sutter Health), “A”, 5%, 2032 | 610,000 | 604,089 | ||||||
| California Statewide Communities Development Authority Rev. (Trinity Health Corp.), 5%, 2041 | 450,000 | 432,855 | ||||||
| Santa Clara County, CA, Financing Authority Rev. (El Camino Hospital), AMBAC, 5.125%, 2041 | 400,000 | 387,672 | ||||||
| Upland, CA, COP (San Antonio Community Hospital), 6.375%, 2032 | 250,000 | 273,563 | ||||||
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| $ | 8,312,293 | |||||||
| Healthcare Revenue - Long Term Care - 2.7% | ||||||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Episcopal Senior Communities), 6.125%, 2041 | $ | 150,000 | $ | 152,544 | ||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Eskaton Properties, Inc.), 5%, 2035 | 230,000 | 204,808 | ||||||
| California Statewide Communities Development Authority Rev. (Episcopal Communities & Services for Seniors Obligated Group), 5%, 2047 | 315,000 | 259,513 | ||||||
| California Statewide Communities Development Authority Rev. (Eskaton Properties, Inc.), 5.25%, 2034 | 230,000 | 213,339 | ||||||
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| $ | 830,204 | |||||||
| Miscellaneous Revenue - Other - 3.2% | ||||||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Jackson Lab), 5.75%, 2015 (c) | $ | 385,000 | $ | 429,776 | ||||
| ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Jackson Lab), 5%, 2037 | 400,000 | 381,760 | ||||||
| California Infrastructure & Economic Development Bank Rev. (Walt Disney Family Museum), 5.25%, 2033 | 160,000 | 161,304 | ||||||
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| $ | 972,840 | |||||||
| Port Revenue - 4.2% | ||||||||
| Alameda Corridor Transportation Authority, California Rev., “A”, AGM, 5%, 2028 | $ | 305,000 | $ | 315,483 | ||||
| Port of Oakland, CA, Rev., “P”, 5%, 2033 | 1,000,000 | 953,010 | ||||||
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| $ | 1,268,493 | |||||||
| Sales & Excise Tax Revenue - 1.7% | ||||||||
| California Economic Recovery, “A”, 5%, 2020 | $ | 250,000 | $ | 288,493 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., Convertible Capital Appreciation, “A”, 0% to 2016, 6.75% to 2032 | 250,000 | 211,583 | ||||||
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| $ | 500,076 | |||||||
| Single Family Housing Revenue - Local - 0.0% | ||||||||
| California Rural Home Mortgage Finance Authority Rev., Mortgage Backed Securities Program, “A”, GNMA, 6.35%, 2029 | $ | 5,000 | $ | 5,096 | ||||
| Single Family Housing - Other - 1.6% | ||||||||
| California Department of Veterans Affairs, Home Purchase Rev., “A”, 4.5%, 2028 | $ | 500,000 | $ | 495,995 | ||||
| Single Family Housing - State - 3.6% | ||||||||
| California Housing Finance Agency Rev. (Home Mortgage), “E”, 4.75%, 2030 | $ | 305,000 | $ | 279,005 | ||||
| California Housing Finance Agency Rev. (Home Mortgage), “K”, 5.3%, 2023 | 190,000 | 190,808 | ||||||
| California Housing Finance Agency Rev. (Home Mortgage), “L”, 5.45%, 2033 | 555,000 | 544,400 | ||||||
| California Housing Finance Agency Rev. (Home Mortgage), “L”, FNMA, 5.5%, 2038 | 80,000 | 77,777 | ||||||
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| $ | 1,091,990 | |||||||
| Solid Waste Revenue - 1.7% | ||||||||
| Salinas Valley, CA, Solid Waste Authority Rev., AMBAC, 5.125%, 2022 | $ | 500,000 | $ | 501,230 | ||||
| State & Agency - Other - 1.5% | ||||||||
| Sacramento County, CA, Public Facilities Project, COP, AMBAC, 4.75%, 2027 | $ | 500,000 | $ | 450,795 | ||||
| State & Local Agencies - 18.7% | ||||||||
| California Public Works Board Lease Rev. (Judicial Council Projects), “A”, 5%, 2028 | $ | 380,000 | $ | 390,401 | ||||
| Compton, CA, Public Finance Authority, AMBAC, 5%, 2032 | 500,000 | 337,830 | ||||||
2
Portfolio of Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||||||
| Municipal Bonds - continued | ||||||||
| State & Local Agencies - continued | ||||||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., FGIC, 5%, 2035 | $ | 255,000 | $ | 248,385 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., BHAC, 5%, 2038 | 1,000,000 | 961,500 | ||||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 2038 | 1,000,000 | 916,710 | ||||||
| Los Angeles County, CA, Schools Regionalized Business Service Corp., Pooled Financing, Capital Appreciation, “A”, AMBAC, 0%, 2018 | 2,020,000 | 1,655,329 | ||||||
| Los Angeles County, CA, Schools Regionalized Business Service Corp., Pooled Financing, Capital Appreciation, “A”, AMBAC, 0%, 2023 | 1,220,000 | 717,592 | ||||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev., “B”, ASSD GTY, 5.5%, 2030 | 390,000 | 417,343 | ||||||
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| $ | 5,645,090 | |||||||
| Tax Assessment - 13.2% | ||||||||
| Dana Point, CA, Community Facilities District, Special Tax, “2006-1”, 4.625%, 2043 | $ | 145,000 | $ | 124,384 | ||||
| Fontana, CA, Public Finance Authority, Tax Allocation Rev. (Sub Lien North Fontana Redevelopment), “A”, AMBAC, 5%, 2029 | 1,000,000 | 1,005,230 | ||||||
| Fullerton, CA, Community Facilities District, Special Tax (Amerige Heights), 5%, 2032 | 155,000 | 149,294 | ||||||
| Huntington Park, CA, Public Financing Authority Rev., “A”, AGM, 5.25%, 2019 | 500,000 | 524,825 | ||||||
| Irvine, CA, Limited Obligation Improvement (Reassessment District #12-1), 4%, 2022 | 115,000 | 117,001 | ||||||
| Irvine, CA, Limited Obligation Improvement (Reassessment District #12-1), 5%, 2023 | 60,000 | 65,107 | ||||||
| North Natomas, CA, Community Facilities District Special Tax, “4-E”, 5.25%, 2033 | 160,000 | 153,130 | ||||||
| San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “A”, AMBAC, 5.25%, 2025 | 500,000 | 512,340 | ||||||
| San Dieguito, CA, Public Facilities Authority, ‘‘A’’, AMBAC, 5%, 2032 | 500,000 | 458,295 | ||||||
| San Francisco, CA, City & County Redevelopment Successor Agency, Community Facilities District No. 6 (Mission Bay South Public Improvements), “A”, 5%, 2033 | 130,000 | 123,698 | ||||||
| San Jose, CA, Redevelopment Agency, Tax Allocation (Merged Area Redevelopment Project), “C”, NATL, 4.25%, 2030 | 900,000 | 755,217 | ||||||
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| $ | 3,988,521 | |||||||
| Tobacco - 3.9% | ||||||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.125%, 2047 | $ | 1,000,000 | $ | 665,980 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 715,000 | 521,700 | ||||||
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| $ | 1,187,680 | |||||||
| Toll Roads - 1.8% | ||||||||
| Foothill/Eastern Corridor Agency, CA, Toll Road Rev., NATL, 5.125%, 2019 | $ | 250,000 | $ | 250,268 | ||||
| Riverside County, CA, Transportation Commission, Toll Rev., “A”, 5.75%, 2044 | 320,000 | 309,235 | ||||||
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| $ | 559,503 | |||||||
| Transportation - Special Tax - 3.5% | ||||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority, Highway Rev., “Y”, AGM, 5.5%, 2016 (c) | $ | 450,000 | $ | 510,525 | ||||
| San Francisco, CA, Bay Area Rapid Transit District, Sales Tax Rev., “A”, 5%, 2036 | 220,000 | 224,070 | ||||||
| San Francisco, CA, Municipal Transportation Agency Rev., “B”, 5%, 2037 | 335,000 | 332,709 | ||||||
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| $ | 1,067,304 | |||||||
| Universities - Colleges - 6.2% | ||||||||
| California Educational Facilities Authority Rev. (Dominican University of California), 5%, 2025 | $ | 120,000 | $ | 121,349 | ||||
| California Educational Facilities Authority Rev. (University of San Francisco), 6.125%, 2030 | 285,000 | 316,658 | ||||||
| California Public Works Board Lease Rev. (The Regents of the University of California), 5%, 2028 | 375,000 | 401,895 | ||||||
| California State University Rev., “A”, 5%, 2024 | 370,000 | 406,312 | ||||||
| California Statewide Communities Development Authority Rev. (Lancer Plaza Project), 5.875%, 2043 | 230,000 | 201,009 | ||||||
| University Enterprises, Inc. (Auxiliary Organization), “A”, FGIC, 4.375%, 2030 | 500,000 | 425,110 | ||||||
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| $ | 1,872,333 | |||||||
| Universities - Secondary Schools - 1.5% | ||||||||
| California Statewide Communities Development Authority, School Facility Rev. (Alliance for College-Ready Public Schools), “A”, 6.1%, 2032 | $ | 150,000 | $ | 143,366 | ||||
| California Statewide Communities Development Authority, School Facility Rev. (Alliance for College-Ready Public Schools), “A”, 6.375%, 2047 | 315,000 | 298,119 | ||||||
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| $ | 441,485 | |||||||
3
Portfolio of Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||||||
| Municipal Bonds - continued | ||||||||
| Utilities - Cogeneration - 1.3% | ||||||||
| California Pollution Control Financing Authority, Water Furnishing Rev. (Poseidon Resources Desalination Project), 5%, 2045 | $ | 505,000 | $ | 395,430 | ||||
| Utilities - Municipal Owned - 10.6% | ||||||||
| California Department of Water Resources, Power Supply Rev., “L”, 5%, 2019 (f) | $ | 805,000 | $ | 936,320 | ||||
| California Department of Water Resources, Power Supply Rev., “N”, 5%, 2020 | 205,000 | 238,421 | ||||||
| Northern California Power Agency, Capital Facilities Rev., “A”, 5.25%, 2024 | 390,000 | 411,208 | ||||||
| Sacramento, CA, Municipal Utility District Rev., “U”, AGM, 5%, 2019 | 750,000 | 849,750 | ||||||
| Sacramento, CA, Municipal Utility District Rev., “X”, 5%, 2025 | 370,000 | 399,929 | ||||||
| Vernon, CA, Electric System Rev., “A”, 5.5%, 2041 | 370,000 | 361,216 | ||||||
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| $ | 3,196,844 | |||||||
| Utilities - Other - 2.7% | ||||||||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | $ | 245,000 | $ | 267,217 | ||||
| Southern California Public Power Authority (Natural Gas Project No. 1), “A”, 5%, 2033 | 585,000 | 551,632 | ||||||
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| $ | 818,849 | |||||||
| Water & Sewer Utility Revenue - 16.2% | ||||||||
| Atwater, CA, Public Financing Authority Wastewater Rev., ASSD GTY, 5%, 2034 | $ | 500,000 | $ | 448,930 | ||||
| Bay Area, CA, Water Supply & Conservation Agency, “A”, 5%, 2034 | 225,000 | 229,799 | ||||||
| California Department of Water Resources (Center Valley Project), “A-E”, 5%, 2028 | 500,000 | 547,315 | ||||||
| Chino Basin, CA, Regional Financing Authority Rev. (Inland Empire Utilities Agency), “A”, AMBAC, 5%, 2038 | 1,000,000 | 1,034,790 | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 5.75%, 2037 | 110,000 | 79,994 | ||||||
| Escondido CA, Joint Powers Financing Authority Rev. (Water System Financing), 5%, 2041 | 460,000 | 439,337 | ||||||
| Los Angeles, CA, Department of Water & Power Waterworks Rev., “C”, NATL, 5%, 2014 (c) | 500,000 | 519,705 | ||||||
| Madera, CA, Irrigation Financing Authority Rev., 6.5%, 2040 | 440,000 | 462,708 | ||||||
| Norco, CA, Financing Authority Enterprise Rev., AGM, 5.625%, 2039 | 215,000 | 215,482 | ||||||
| San Francisco, CA, City & County Public Utilities Commission, Wastewater Rev., “B”, 4%, 2036 | 355,000 | 304,040 | ||||||
| Sonoma County, CA, Water Agency Rev., “A”, AGM, 5%, 2036 | 600,000 | 604,194 | ||||||
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| $ | 4,886,294 | |||||||
| Total Municipal Bonds | $ | 52,362,134 | ||||||
| Money Market Funds - 5.2% | ||||||||
| MFS Institutional Money Market Portfolio, 0.09%, at Net Asset Value (v) | 1,564,978 | $ | 1,564,978 | |||||
| Total Investments | $ | 53,927,112 | ||||||
| Other Assets, Less Liabilities - 2.4% | 726,356 | |||||||
| VMTPS, at liquidation value (issued by the fund) - (80.8)% | (24,425,000 | ) | ||||||
| Net Assets applicable to common shares - 100.0% | $ | 30,228,468 | ||||||
| (c) | Refunded bond. |
| (f) | All or a portion of the security has been segregated as collateral for open futures contracts. |
| (v) | Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end. |
The following abbreviations are used in this report and are defined:
| COP | Certificate of Participation | |
| VMTPS | Variable Rate Municipal Term Preferred Shares |
4
Portfolio of Investments (unaudited) – continued
| Insurers | ||
| AGM | Assured Guaranty Municipal | |
| AMBAC | AMBAC Indemnity Corp. | |
| ASSD GTY | Assured Guaranty Insurance Co. | |
| BHAC | Berkshire Hathaway Assurance Corp. | |
| CALHF | California Housing Finance Agency | |
| FGIC | Financial Guaranty Insurance Co. | |
| FNMA | Federal National Mortgage Assn. | |
| GNMA | Government National Mortgage Assn. | |
| NATL | National Public Finance Guarantee Corp. |
Derivative Contracts at 8/31/13
Futures Contracts Outstanding at 8/31/13
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) |
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| Asset Derivatives | ||||||||||||||||
| Interest Rate Futures | ||||||||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 20 | $2,485,625 | December - 2013 | $6,980 | |||||||||||
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| Liability Derivatives | ||||||||||||||||
| Interest Rate Futures | ||||||||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 4 | $527,625 | December - 2013 | $(3,741 | ) | ||||||||||
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At August 31, 2013, the fund had liquid securities with an aggregate value of $51,178 to cover any commitments for certain derivative contracts.
See attached supplemental information. For more information see notes to financial statements as disclosed in the most recent semiannual or annual report.
5
Supplemental Information
8/31/13 (unaudited)
(1) Investment Valuations
Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less generally are valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.
Various inputs are used in determining the value of the fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures contracts. The following is a summary of the levels used as of August 31, 2013 in valuing the fund’s assets or liabilities:
| Investments at Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Municipal Bonds | $— | $52,362,134 | $— | $52,362,134 | ||||||||||||
| Mutual Funds | 1,564,978 | — | — | 1,564,978 | ||||||||||||
| Total Investments | $1,564,978 | $52,362,134 | $— | $53,927,112 | ||||||||||||
| Other Financial Instruments | ||||||||||||||||
| Futures Contracts | $3,239 | $— | $— | $3,239 | ||||||||||||
For further information regarding security characteristics, see the Portfolio of Investments.
(2) Portfolio Securities
The cost and unrealized appreciation and depreciation in the value of the investments owned by the fund, as computed on a federal income tax basis, are as follows:
| Aggregate cost | $54,781,569 | |||
| Gross unrealized appreciation | 1,580,847 | |||
| Gross unrealized depreciation | (2,435,304 | ) | ||
| Net unrealized appreciation (depreciation) | $(854,457 | ) |
The aggregate cost above includes prior fiscal year end tax adjustments, if applicable.
6
Supplemental Information (unaudited) – continued
(3) Transactions in Underlying Affiliated Funds – Affiliated Issuers
An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the fund assumes the following to be an affiliated issuer:
| Underlying Affiliated Fund | Beginning Shares/Par Amount |
Acquisitions Shares/Par Amount |
Dispositions Shares/Par Amount |
Ending Shares/Par Amount |
||||||||||||
| MFS Institutional Money Market Portfolio | 1,001,732 | 5,915,713 | (5,352,467 | ) | 1,564,978 | |||||||||||
| Underlying Affiliated Fund | Realized Gain (Loss) |
Capital Gain Distributions |
Dividend Income |
Ending Value |
||||||||||||
| MFS Institutional Money Market Portfolio | $— | $— | $650 | $1,564,978 | ||||||||||||
7
| ITEM 2. | CONTROLS AND PROCEDURES. |
| (a) | Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this Form N-Q, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. |
| (b) | There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| ITEM 3. | EXHIBITS. |
File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
Notice
A copy of the Agreement and Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: MFS CALIFORNIA MUNICIPAL FUND
| By (Signature and Title)* | JOHN M. CORCORAN | |
| John M. Corcoran, President |
Date: October 17, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* | JOHN M. CORCORAN | |
| John M. Corcoran, President (Principal Executive Officer) |
Date: October 17, 2013
| By (Signature and Title)* | DAVID L. DILORENZO | |
| David L. DiLorenzo, Treasurer (Principal Financial Officer and Accounting Officer) |
Date: October 17, 2013
| * | Print name and title of each signing officer under his or her signature. |