COLUMBIA PARTNERS
Equity Fund
Dear Fellow Shareholders:
We are pleased to present the investment results for the Columbia Partners
Equity Fund. The Fund, in the six-month period since we last reported to you,
March 31, 2000 to September 30, 2000, was down 2.91% and for the past twelve
months ending September 30, 2000, was up 56.68%. The Fund's investment results
are compared to the unmanaged S&P 500 Index and the Russell 2000 Index in the
table and chart below.
- Returns for Periods Ending September 30, 2000 -
<TABLE>
<S> <C> <C> <C> <C>
Average Annual
3rd QTR. Calendar Since Inception
Fund/Index 2000 Year-To-Date 1 Year (April 1, 1999)
-------------------- --------- -------------- --------- ---------------
Columbia Partners 5.51% 23.50% 56.68% 43.23%
Equity Fund
S&P 500 -0.97% -1.39% 13.28% 8.93%
Russell 2000 1.11% 4.18% 23.39% 21.28%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Columbia Partners Russell
Equity Fund S&P 500 Index 200 Index
$17,141 $11,369 $13,356
3/31/99 $ 10,000 $ 10,000 $ 10,000
6/30/99 10,980 10,705 11,510
9/30/99 10,940 10,036 10,746
12/31/99 13,880 11,530 12,694
3/31/00 17,656 11,794 13,558
6/30/00 16,246 11,480 13,210
9/30/00 17,141 11,369 13,356
</TABLE>
The Columbia Partners Equity Fund's historical results are net of all expenses,
and assume reinvestment of dividends and capital gains since April 1, 1999
(commencement of operations), versus the gross market benchmarks (the S&P 500
Index and the Russell 2000 Index), which assume all dividends are reinvested.
When trying to achieve benchmark returns, investment management fees,
transaction costs and execution costs will be incurred. PAST PERFORMANCE IS NOT
PREDICTIVE OF FUTURE PERFORMANCE.
<PAGE>
Review & Outlook
The equity markets hit a rough spot in the middle quarters of this
year, with the S&P 500 retracing 4%, and the tech-heavy NASDAQ Index
declining by 20%. Fears of a slowing economy were the culprit, as Alan
Greenspan and the Federal Reserve boosted interest rates to control
inflation. Investors fled growth oriented technology and consumer
cyclical stocks, seeking stability in "safe haven" sectors, including
health care and consumer staples.
We anticipated that the technology correction, which began at the end
of the first quarter, would carry though into the second quarter. We
were, however, surprised by the duration and magnitude of the decline.
Fortunately, our stock selection in the tech sector was very strong
during the period, and we added a great deal of value relative to the
S&P 500. Our emphasis on communications related chip companies, and
relative underexposure to PC related companies was a positive stance.
We also added value in the second worst performing sector in the
benchmark, consumer cyclical, by focusing on retailers that have
continued to execute and exceed sales expectations. Finally, our
overweight in the energy sector proved beneficial, as this was one of
the best performing sectors in the Index.
At present, we are emphasizing technology stocks, where we find
numerous stocks attractive at current valuations, energy stocks, where
expected earnings growth is more attractive than it has been in years,
and select consumer cyclical stocks. We will continue to look for
companies with strong earnings growth whose stocks are selling at
reasonable valuations.
Very truly yours,
Terence W. Collins
President
<PAGE>
Columbia Partners Equity Fund
Schedule of Investments - September 30, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Common Stock - 86.2% Shares Value
Apparel Stores - 3.5%
Chico's FAS, Inc. (a) 25,385 $ 863,090
----------------
Autos & Auto Parts - 1.4%
Gentex Corp. (a) 13,865 346,625
----------------
Banks - 3.8%
Chase Manhattan Corp. 7,217 333,335
Citigroup, Inc. 10,969 593,012
----------------
926,347
----------------
Beverages - 1.6%
Coca-Cola Co. 7,185 396,073
----------------
Building Supplies - 2.1%
Home Depot, Inc. 10,000 529,375
----------------
Communications Equipment - 0.7%
Terayon Communication Systems, Inc. (a) 4,895 166,124
----------------
Computer Services & Software - 12.6%
Ariba, Inc. (a) 4,195 600,999
Commerce One, Inc. (a) 6,030 473,355
Inktomi Corp. (a) 3,965 452,010
Microsoft Corp. (a) 7,405 446,614
Priceline.com, Inc. 10,995 130,566
Rational Software Corp. (a) 14,450 1,002,469
----------------
3,106,013
----------------
Computers & Office Equipment - 9.7%
Brocade Communications Systems, Inc. (a) 3,265 770,540
Cisco Systems, Inc. (a) 7,450 411,613
Seagate Technology, Inc. (a) 8,855 610,995
Wind River Systems, Inc. (a) 12,500 599,219
----------------
2,392,367
----------------
Department & Discount Stores - 2.8%
Target Corp. 13,940 357,213
Wal-Mart Stores, Inc. 6,970 335,431
----------------
692,644
----------------
Diversified Services - Staffing - 2.5%
Robert Half International, Inc. (a) 17,705 614,142
----------------
Drugs & Pharmaceuticals - 4.0%
Pfizer, Inc. 10,805 485,550
Shire Pharmaceutical Group Plc. (a) (c) 9,670 499,214
----------------
984,764
----------------
Food - Dairy Products - 1.7%
Suiza Foods Corp. (a) 8,275 422,542
----------------
Grocery Stores - 2.2%
Safeway, Inc. (a) 11,500 536,906
----------------
</TABLE>
<PAGE>
Columbia Partners Equity Fund
Schedule of Investments - September 31, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Common Stocks - continued Shares Value
Health - Diversified - 6.0%
American Home Products Corp. 6,535 $ 368,819
Johnson & Johnson 5,010 470,627
Orthodontic Centers of America, Inc. (a) 18,870 628,607
----------------
1,468,053
----------------
Investment Banking & Brokerage - 2.2%
Merrill Lynch & Co., Inc. 8,400 554,400
----------------
Manufacturers - Diversified - 2.3%
General Electric Co. 9,930 574,078
----------------
Oil & Gas - 9.1%
BJ Services Co. (a) 8,505 519,868
Nabors Industries, Inc. (a) 12,000 628,800
Schlumberger Limited 4,940 406,624
Trico Marine Services, Inc. (a) 44,030 698,976
----------------
2,254,268
----------------
Retail Specialty Stores - 1.2%
Costco Wholesale Corp.(a) 8,710 304,306
----------------
Semiconductors - 9.9%
Broadcom Corp. - Class A (a) 2,815 686,156
Intel Corp. 7,620 316,706
TranSwitch Corp. (a) 12,580 801,975
Vitesse Semiconductor Corp. (a) 7,225 642,573
----------------
2,447,410
----------------
Telecommunications - 6.9%
Avanex Corp. (a) 3,325 358,061
Metromedia Fiber Network, Inc., Class A (a) 12,320 299,530
ONI Systems Corp. (a) 4,845 418,184
Sonus Networks, Inc. (a) 3,310 418,301
Worldcom, Inc. (a) 6,532 198,409
----------------
1,692,485
----------------
Total Common Stock (Cost $17,758,996) 21,272,012
----------------
Principal
Value Value
Money Market Securities - 13.8%
Firstar Treasury Fund, 5.47% (b) (Cost $3,416,296) 3,416,296 $ 3,416,296
----------------
TOTAL INVESTMENTS (Cost $21,175,292) - 100.0% 24,688,308
----------------
Other assets less liabilities - 0.0% 897
----------------
Total Net Assets - 100.0% $ 24,689,205
================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at
September 30, 2000.
(c) American Depository Receipt
<PAGE>
Columbia Partners Equity Fund September 30, 2000
Statement of Assets & Liabilities
(Unaudited)
Assets
<TABLE>
<S> <C> <C>
Investment in securities (cost $21,175,292) $ 24,688,308
Dividends receivable 6,713
Interest receivable 7,880
Receivable for fund shares sold 60,943
------------------
Total assets 24,763,844
Liabilities
Accrued investment advisory fee $ 11,754
Payable for fund shares purchased 1,357
Payable to custodian 61,528
-----------------
Total liabilities 74,639
------------------
Net Assets $ 24,689,205
==================
Net Assets consist of:
Paid in capital 18,188,687
Accumulated undistributed net realized gain on investments 3,029,430
Accumulated net investment loss (41,928)
Net unrealized appreciation on investments 3,513,016
------------------
Net Assets, for 1,482,211 shares $ 24,689,205
==================
Net Asset Value
Offering price and redemption price per share ($24,689,205 / 1,482,211 ) $ 16.66
==================
</TABLE>
<PAGE>
Columbia Partners Equity Fund September 30, 2000
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend income $ 57,534
Interest income 40,913
---------------
Total Income 98,447
Expenses
Investment advisory fee $ 140,375
Trustees' fees 1,043
Total expenses before reimbursement 141,418
------------------
Reimbursed expenses (1,043)
------------------
Total operating expenses 140,375
---------------
Net Investment Loss (41,928)
---------------
Realized & Unrealized Gain (Loss)
Net realized loss on investment securities (331,792)
Change in net unrealized appreciation (depreciation)
on investment securities (265,247)
------------------
Net gain on investment securities (597,039)
-----------------
Derease in net assets resulting from operations $ (638,967)
=================
</TABLE>
<PAGE>
Columbia Partners Equity Fund
Statement of Changes in Net Assets
<TABLE>
<S> <C> <C>
For the six
months ended For the year
September 30, 2000 ended
Increase in Net Assets (Unaudited) March 31, 2000
---------------------- -------------------
Operations
Net investment income (loss) $ (41,928) $ (34,929)
Net realized gain (loss) on investment securities (331,792) 3,818,020
Change in net unrealized appreciation (depreciation) (265,247) 3,778,263
---------------------- -------------------
Net increase (decrease) in net assets resulting from (638,967) 7,561,354
operations ---------------------- -------------------
Distributions to shareholders
From net investment income 0 0
From net realized gain (loss) 0 (421,869)
---------------------- -------------------
Total distributions 0 (421,869)
---------------------- -------------------
Share Transactions
Net proceeds from sale of shares 2,056,647 17,229,187
Shares issued in reinvestment of distributions 0 421,869
Shares redeemed (768,832) (750,184)
---------------------- -------------------
Net increase in net assets resulting
from share transactions 1,287,815 16,900,872
---------------------- -------------------
Total increase in net assets 648,848 24,040,357
---------------------- -------------------
Net Assets
Beginning of period 24,040,357 0
---------------------- -------------------
End of period [including accumulated undistributed
net investment loss of $41,928 & $0, respectively] $ 24,689,205 $ 24,040,357
====================== ===================
</TABLE>
<PAGE>
Columbia Partners Equity Fund
Financial Highlights
<TABLE>
<S> <C> <C>
Six months
ended Year
September 30, ended
2000 March 31,
(Unaudited) 2000
---------------- ------------------
Selected Per Share Data
Net asset value, beginning of period $ 17.16 $ 10.00
---------------- ------------------
Income from investment operations
Net investment loss (0.03) (0.04)
Net realized and unrealized gain (loss) (0.47) 7.59
---------------- ------------------
Total from investment operations (0.50) 7.55
---------------- ------------------
Less Distributions
From net investment income 0.00 0.00
From net realized gain (loss) 0.00 (0.39)
---------------- ------------------
Total distributions 0.00 (0.39)
---------------- ------------------
Net asset value, end of period $ 16.66 $ 17.16
================ ==================
Total Return (2.91)(b) 76.56%
Ratios and Supplemental Data
Net assets, end of period (000) $24,689 $24,040
Ratio of expenses to average net assets 1.20% (a) 1.20%
Ratio of expenses to average net assets
before reimbursement 1.21% (a) 1.22%
Ratio of net investment income (loss) to
average net assets (0.36)(a) (0.31)%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.37)(a) (0.34)%
Portfolio turnover rate 89.30% (a) 215.08%
</TABLE>
(a) Annualized
(b) For a period of less than a full year, total return is not annualized.
<PAGE>
Columbia Partners Equity Fund
Notes to Financial Statements
September 30, 2000
(Unaudited)
NOTE 1. ORGANIZATION
Columbia Partners Equity Fund (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on February 2, 1999 and
commenced operations on April 1, 1999. The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end series of
the Trust. The Fund's investment objective is to provide long-term capital
growth. The Declaration of Trust permits the Trustees to issue an unlimited
number of shares of beneficial interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations- Securities, which are traded on any exchange or on
the NASDAQ over-the-counter market, are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Advisor's opinion, the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Advisor determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Advisor, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust (the
"Board").
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Advisor,
subject to review of the Board. Short-term investments in fixed-income
securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on at least an
annual basis. The Fund intends to distribute its net long-term capital gains and
its net short-term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains or losses for financial statements and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Columbia Partners, L.L.C. (the "Advisor") to manage the
Fund's investments. The Advisor was organized in 1995 as an independent limited
liability company owned 50% by its employees and 50% by Galway Capital
Management, L.L.C., a venture capital firm. A team of the Advisor makes the
investment decisions for the Fund, which is primarily responsible for the
day-to-day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage commissions, taxes,
interest, fees and expenses of non-interested person trustees, and extraordinary
expenses. As compensation for its management services and agreement to pay the
Fund's expenses, the Fund is obligated to pay the Advisor a fee of 1.20% of the
average daily net assets of the Fund. It should be noted that most investment
companies pay their own operating expenses directly, while the Fund's expenses,
except those specified above, are paid by the Advisor. For the six months ended
September 30, 2000 the Advisor earned a fee of $140,375 from the Fund. The
Advisor has contractedly agreed to permanently reimburse fees and other expenses
of the trustees to the extent necessary to maintain total operating expenses at
the rate of 1.20%. For the six months ended September 30, 2000, the Advisor
reimbursed expenses of $1,043.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"),
a wholly owned subsidiary of Unified Financial Services, Inc., to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment and personnel.
The Administrator receives a monthly fee from the Advisor equal to an annual
rate of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's
assets from $50 million to $100 million, and 0.050% of the Fund's assets over
$100 million (subject to a minimum fee of $2,500 per month). For the six months
ended September 30, 2000, the Administrator received fees of $15,000 from the
Advisor for administrative services provided to the Fund.
The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer
agent and fund accountant. For its services as transfer agent, Unified receives
a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the six months ended September 30, 2000, Unified
received fees of $7,935 from the Advisor for transfer agent services. For its
services as fund accountant, Unified receives an annual fee from the Advisor
equal to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's
assets from $100 million to $300 million and 0.0200% of the Fund's assets over
$300 million (subject to various monthly minimum fees, the maximum being $2,000
per month for assets of $20 to $100 million). For the six months ended September
30, 2000, Unified received fees of $12,400 from the Advisor for fund accounting
services.
The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor"),
a wholly owned subsidiary of Unified Financial Services, Inc., to act as the
principal distributor of the Fund's shares. There were no payments made to the
Distributor for the six months ended September 30, 2000.
Certain members of management of the Administrator and the Distributor are
also members of management of the AmeriPrime Trust.
Columbia Partners Equity Fund
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 4. SHARE TRANSACTIONS
As of September 30, 2000 there was an unlimited number of authorized shares
for the Fund. Paid in capital at September 30, 2000 was $18,188,687.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six months ended For the fiscal year ended
September 30, 2000 March 31, 2000
(Unaudited)
Shares Shares Dollars Dollars
Shares sold 128,088 128,088 $1,426,414 $17,229,187
Shares issued in
reinvestment 0 0 30,997 421,869
Shares redeemed
(46,433) (46,433) (56,855) (750,184)
-------- --------- -------------- ---------------
81,655 81,655 $1,400,556 $16,900,872
======== ========= ============== ===============
</TABLE>
NOTE 5. INVESTMENTS
For the six months ended September 30, 2000, purchases and sales of
investment securities, other than short-term investments, aggregated $11,798,992
and $9,328,286, respectively. As of September 30, 2000, the gross unrealized
appreciation for all securities totaled $4,836,434 and the gross unrealized
depreciation for all securities totaled $1,323,418 for a net unrealized
appreciation of $3,513,016. The aggregate cost of securities for federal income
tax purposes at September 30, 2000 was $21,175,292.
<PAGE>
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
Dear Fellow Shareholders,
The Martin Capital Opportunity Funds suffered from recent downturns in the
technology sector. For the six months since March 31, 2000, the U.S. Opportunity
Fund returned -12.6% vs. -3.61% for the S&P 500. The Austin Opportunity Fund
returned -23.5% for the same period. The Texas Opportunity Fund returned +3.1%
for the period from inception August 1, 2000 through September 30, 2000 vs.
+0.6% for the S&P 500 during that same time frame.
As we stated in our annual report, we remain committed to buying quality growth
companies and holding them for the long-term. As witnessed these past few
months, this "buy-and-hold" strategy hurt our short-term performance. However,
we keep a five to ten year outlook on the stocks within these funds and we
believe that long-term investors will be well rewarded. Because our investment
discipline makes it unlikely for us to sell highly appreciated stocks, we will
make additional investments in times of severe market weakness. The recent lows
in the last few weeks have presented us with such special opportunities.
There is a Wall Street saying that no one rings a bell at the bottom, meaning
that it is difficult to know when the next rally will begin. We accept that it
is impossible to know how low the market will go before it turns around;
however, with current attractive valuation levels and the high probability of
long-term strong economic growth with low inflation, we are very confident that
somewhat higher exposure to the stock market today will be rewarded with better
investment returns tomorrow.
Economic Outlook
The rate of growth in our economy, which peaked last fall and eased slightly in
the first two quarters of this year, slowed further in the third quarter. The
combination of higher interest rates and higher oil product prices has left
consumers and businesses with less cash to spend, so sales of all kinds have
been pinched. Manufacturing has slowed, as less production is needed to meet
reduced demand, so fewer new jobs are created. The labor market shows signs of
loosening up, so there is a slightly slower growth in new payrolls and therefore
slightly slower growth in consumer spending. Added to all this is the fact that
we're only four and a half months out from the last Fed rate hike, so that
hasn't yet had time to produce a slowing effect on the economy. Thus, the
outlook is one of continued slowing over the next few months. Nevertheless, we
have an extraordinarily robust economy in this country. Most people who want to
work have jobs and are earning good pay; few remain unemployed. Because of this
employment situation, the strong flow of paychecks into consumer purchases will
continue. As two-thirds of our economy is based on consumer spending, there is
little to no chance of a recession. Although the labor market may be loosening a
bit, the change is nowhere near being substantial enough to become a drain on
the economy. We are fortunate because other countries around the world with less
vigorous economies may have considerably more trouble coping with higher oil
prices in the longer term. As the inflation rate eventually ebs and the economy
slows, we predict that the Fed will need to lower rates early in 2001, which
will bring a return to more rapid economic growth with low inflation.
We appreciate your confidence in us.
Sincerely,
Paul B. Martin, Jr.
<PAGE>
U.S. Opportunity Fund
The U.S. Opportunity Fund under-performed the S&P 500 as technology stocks sold
off due to earnings concerns. As we stated in our annual report, it is
unreasonable to expect the continuous spectacular returns we generated during
our first full year of operations. Conversely, we recognize that sometimes the
markets can become oversold. The current oversold conditions have presented us
with a great opportunity for a short-term rebound in our performance numbers.
Our ten largest holdings are listed below.
<TABLE>
<S> <C> <C>
Symbol Description Percent of Net Assets 9/30/00
------ ----------- -----------------------------
EMC EMC Corp. 3.2%
ADVS Advent Software, Inc. 3.0%
PALM Palm Inc. Com. 2.8%
SUNW Sun Microsystems, Inc. 2.7%
ORCL Oracle Corp. 2.7%
ALTR Altera Corp. 2.4%
GLW Corning, Inc. 2.1%
TIF Bear Stearns Cos., Inc. 1.9%
BSC Tiffany & Co. 1.9%
VIGN Vignette Corp. 1.9%
</TABLE>
Returns for the Periods Ending September 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Average Annual
Since Inception
Fund/Index 3rd Quarter 2000 6 Months 1 Year (April 1, 1999)
---------- ---------------- -------- ------ ---------------
Martin Capital U.S. -8.89% -12.60% 35.41% 41.50%
Opportunity Fund
S&P 500 Index 4.82% 2.03% 19.89% 25.93%
</TABLE>
Comparison of $10,000 Investment in
the U.S. Opportunity Fund and S&P 500 Index
<TABLE>
<S> <C> <C>
U.S.
Opportunity Fund S&P 500 Index
$14,150 $11,368
--------------------- -------------
4/1/99 $10,000 $10,000
6/30/99 10,560 10,705
9/30/99 10,450 10,037
12/31/99 14,630 11,529
3/31/00 16,190 11,794
6/30/00 15,530 11,480
9/30/00 14,150 11,368
</TABLE>
This chart shows the value of a hypothetical initial investment of $10,000 in
the Fund and the S&P 500 Index on April 1, 1999 (commencement of operations) and
held through September 30, 2000. The S&P Index is a widely recognized unmanaged
index of common stock prices. Performance figures reflect the change in value of
the stocks in the index, reinvestment of dividends and are not annualized. The
index returns do not reflect expenses, which have been deducted from the Fund's
return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS.
<PAGE>
Austin Opportunity Fund
The Austin Opportunity Fund also under-performed the major indexes due to the
high concentration of local companies in technology. Although weak in the short
term, these same technology companies are poised for a nice turnaround as the
global economy becomes ever more reliant on the goods and services these
companies provide. The fund's largest positions are listed below.
<TABLE>
<S> <C> <C>
Symbol Description Percent of Net Assets 9/30/00
------ ----------- -----------------------------
CRUS Cirrus Logic, Inc. 8.8%
VIGN Vignette Corp. 5.3%
AMD Advanced Micro Devices, Inc. 5.1%
ERTS Electronic Arts, Inc. 4.3%
WFMI Whole Foods Market, Inc. 4.2%
SLR Solectron Corp. 3.7%
HHS Harte-Hanks Communications, Inc. 3.7%
AMAT Applied Materials, Inc. 3.5%
CRUS Cirrus Logic, Inc. 8.8%
VIGN Vignette Corp. 5.3%
</TABLE>
Returns for the Periods Ending September 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Average Annual
Since Inception
Fund/Index 1st Quarter 2000 6 Months 1 Year (September 1, 1999)
---------- ---------------- -------- ------ -------------------
Martin Capital Austin -10.80% -23.50% 9.15% -18.70%
S&P 500 Index -0.98% -3.61% 13.26% -5.278%
</TABLE>
Comparison of a $10,000 Investment
in the Austin Opportunity Fund and S&P 500 Index
<TABLE>
<S> <C> <C>
Austin
Opportunity Fund S&P 500 Index
$10,740 $11,016
--------------------- -------------
9/1/99 $10,000 $10,000
9/30/99 9,840 9,726
10/31/99 10,490 10,341
11/30/99 12,000 10,552
12/31/99 13,210 11,173
1/31/00 11,350 10,611
2/29/00 14,520 10,412
3/31/00 14,040 11,429
4/30/00 13,110 11,085
5/31/00 11,050 10,858
6/30/00 12,040 11,125
7/31/00 11,180 10,950
8/31/00 12,120 11,629
9/30/00 10,740 11,016
</TABLE>
This chart shows the value of a hypothetical initial investment of $10,000
in the Fund and the S&P 500 Index on September 1, 1999 (commencement of
operations) and held through September 30, 2000. The S&P Index is a widely
recognized unmanaged index of common stock prices. Performance figures
reflect the change in value of the stocks in the index, reinvestment of
dividends and are not annualized. The index returns do not reflect
expenses, which have been deducted from the Fund's return. THE FUND'S
RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS.
<PAGE>
Texas Opportunity Fund
The brand-new Texas Opportunity Fund opened on August 1, 2000. It outperformed
the S&P 500 during this short time frame. We have a slight over-weighting in
technology issues in this fund due to our long-term bullish outlook for this
sector. The fund also benefited from a significant exposure to energy stocks, a
key component of the Texas economy. Our top holdings are listed below.
<TABLE>
<S> <C> <C>
Symbol Description Percent of Net Assets 9/30/00
------ ----------- -----------------------------
ITWO i2 Technologies, Inc. 4.4%
DYN Dynegy, Inc. - Cl A 4.3%
REI Reliant Energy, Inc. 3.7%
PRFT Perficient, Inc. 3.5%
DELL Dell Computer Corp. 3.4%
CRDS Crossroads Systems, Inc. 3.3%
CPQ Compaq Computer Corp. 3.2%
RIG Transocean Sedco Forex, Inc 3.2%
TXI Texas Industries, Inc. 3.1%
TXU TXU Corp. 3.1%
</TABLE>
Returns for the Periods Ending September 30, 2000
<TABLE>
<S> <C>
Average Annual
Since Inception
Fund/Index (September 1, 1999)
----------- ------------------
Martin Capital Texas
Opportunity Fund 3.10%
S&P 500 Index 6.50%
</TABLE>
Comparison of a $10,000 Investment
in the Texas Opportunity Fund and S&P 500 Index
<TABLE>
<S> <C> <C>
Texas
Opportunity Fund S&P 500 Index
$10,310 $10,060
--------------------- -------------
8/1/00 $10,000 $10,000
8/31/00 11,010 10,621
9/30/00 10,310 10,060
</TABLE>
This chart shows the value of a hypothetical initial investment of $10,000
in the Fund and the S&P 500 Index on August 1, 2000 (commencement of
operations) and held through September 30, 2000. The S&P Index is a widely
recognized unmanaged index of common stock prices. Performance figures
reflect the change in value of the stocks in the index, reinvestment of
dividends and are not annualized. The index returns do not reflect
expenses, which have been deducted from the Fund's return. THE FUND'S
RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS.
<PAGE>
Martin Capital U.S. Opportunity Fund
Schedule of Investments - September 30, 2000
<TABLE>
<S> <C> <C>
Common Stocks - 97.0% Shares Value
Apparel Stores - 0.3%
Gap, Inc. 800 $ 16,100
---------------
Banks -1.8%
Citigroup, Inc. 1,866 100,881
---------------
Building Supplies -1.2%
Home Depot, Inc. 1,300 68,819
---------------
Communications Equipment & Services - 7.0%
3Com Corp. (a) 5,000 95,937
Exodus Communications, Inc. (a) 1,600 79,000
Lucent Technologies, Inc. 1,200 36,750
Motorola, Inc. 2,300 65,550
QUALCOMM, Inc. (a) 1,400 99,750
VTEL Corp. (a) 5,000 12,187
---------------
389,174
---------------
Computer Services & Software - 19.8%
Advent Software, Inc. (a) 2,420 169,097
BMC Software, Inc. (a) 2,400 45,900
Cadence Design Systems, Inc. (a) 1,900 48,806
Computer Associates International, Inc. 2,400 60,750
EMC Corp. (a) 1,800 179,100
Excite@home (a) 1,700 24,012
Microsoft Corp. (a) 1,200 72,375
Netsolve, Inc. (a) 3,000 21,375
Networks Associates, Inc. (a) 2,800 63,350
New Era of Networks (a) 3,000 72,984
Oracle Corp. (a) 1,900 149,625
Palm, Inc. (a) 2,900 153,526
Prodigy Communications Corp. (a) 1,500 7,687
Perficient, Inc. (a) 2,000 36,000
---------------
1,104,587
---------------
Computers & Office Equipment - 11.9%
Altera Corp. (a) 2,800 133,700
Apple Computer, Inc. 2,000 51,500
Cisco Systems, Inc. (a) 1,800 99,450
Dell Computer Corp. (a) 2,200 67,788
Hewlett-Packard Co. 800 77,500
Micron Technology, Inc. (a) 1,700 78,200
Sun Microsystems, Inc. (a) 1,300 151,775
---------------
659,913
---------------
Construction - 0.6%
Centex Corp. 1,000 32,125
---------------
Drugs & Pharmaceuticals - 4.3%
Lilly (Eli) & Co. 1,000 81,125
Merck & Co., Inc. 1,000 74,438
Pfizer, Inc. 1,800 80,888
---------------
236,451
---------------
</TABLE>
<TABLE>
<S> <C> <C>
<PAGE>
Martin Capital U.S. Opportunity Fund
Schedule of Investments - September 30, 2000 - continued
Common Stocks - continued Shares Value
Electrical Equipment - 3.9%
American Power Conversion Corp. (a) 2,700 $ 51,806
Applied Materials, Inc. (a) 1,300 77,106
General Electric Co. 1,500 86,719
---------------
215,631
---------------
Electronic Instruments - 5.3%
Advanced Micro Devices, Inc. (a) 4,200 99,225
Agilent Technologies, Inc. (a) 1,500 73,406
LSI Logic Corp. (a) 1,900 55,575
Texas Instruments, Inc. 1,400 66,500
---------------
294,706
---------------
Entertainment - 2.5%
Electronic Arts, Inc. (a) 2,000 98,750
Time Warner, Inc. 500 39,125
---------------
137,875
---------------
Finance - Diversified - 1.6%
American Express Co. 1,500 91,125
---------------
Grocery Stores - 1.6%
Whole Foods Market, Inc. (a) 1,700 91,269
---------------
Industrial Machinery & Equipment - 1.4%
Lam Research Corp. (a) 3,700 77,469
---------------
Insurance -1.5%
Berkshire Hathaway Inc. - Cl B (a) 40 82,800
---------------
Integrated Circuits - 1.2%
Dallas Semiconductor Corp. 2,000 65,750
---------------
Internet Services - 3.9%
America Online, Inc. (a) 700 37,625
Vignette Corp. (a) 3,600 107,550
Yahoo! Inc. (a) 800 72,800
---------------
217,975
---------------
Investment Banking & Brokerage Services - 7.3%
Bear Stearns Cos., Inc. 1,700 110,500
E-Trade Group, Inc. (a) 3,000 49,312
Schwab (Charles) Corp. 2,600 92,300
Southwest Securities Group, Inc. 2,750 80,438
TD Waterhouse Group (a) 4,000 74,500
---------------
407,050
---------------
Lodgings - 1.8%
Four Seasons Hotels (a) 1,400 102,463
---------------
Long Distance Carriers - 0.5%
Sprint Corp. 1,000 29,312
---------------
Medical Appliances & Equipment - 3.2%
Medtronic, Inc. 1,900 98,444
Colorado Medtech, Inc. (a) 3,000 25,500
Visx, Inc. (a) 2,000 53,875
---------------
177,819
</TABLE>
<PAGE>
Martin Capital U.S. Opportunity Fund
Schedule of Investments - September 30, 2000 - continued
<TABLE>
<S> <C> <C>
Common Stocks - continued Shares Value
Oil & Gas Pipelines & Storage - 1.6%
Enron Corp. 1,000 $ 87,625
---------------
Restaurants - 1.9%
Starbucks Corp. (a) 2,600 104,162
---------------
Retail & Wholesale - Specialty - 2.2%
pcOrder.com, Inc. - Cl A (a) 4,000 14,250
Tiffany & Co. 2,800 107,975
---------------
122,225
---------------
Semiconductors - 1.2%
Intel Corp. 1,600 66,500
---------------
Semiconductor Equipment & Materials -1.5%
Dupont Photomask, Inc. (a) 1,400 82,250
---------------
Switching & Transmission Equipment - 3.3%
Corning, Inc. 400 118,900
JDS Uniphase Corp. (a) 700 66,281
---------------
185,181
---------------
Telephone Services -2.1%
AT&T Corp. 1,000 29,125
Qwest Communications International, Inc. (a) 1,800 86,625
---------------
115,750
---------------
Wireless Communication Services - 0.6%
Sprint PCS Group (a) 1,000 35,063
---------------
TOTAL COMMON STOCKS (Cost $ 4,996,270) 5,398,050
---------------
Principal
U.S. Government Obligations - 3.6% Value
U.S. Treasury Bond, 6.00%, 02/15/26 (Cost $ 194,416) 198,188
---------------
TOTAL INVESTMENTS - 100.6% (Cost $ 5,190,685) 5,596,238
Other assets less liabilities - 0.6% (31,041)
---------------
TOTAL NET ASSETS -100% $ 5,565,197
===============
</TABLE>
(a) Non-income producing
Written Put Options
<TABLE>
<S> <C> <C>
Common Stocks Index / Expiration Date @ Exercise Price to Put Value
------------------------------------------------------
------------- ---------------
Dell Computer Corp. / October 2000 @ 35 2500 $ 10,625
NASDAQ 100 Trust Unit / December 2000 @ 70 7000 8,750
NASDAQ 100 Trust Unit / November 2000 @ 80 7000 14,875
------------- ---------------
Totals (Premiums received $25,799) $ 34,250
===============
</TABLE>
<PAGE>
Martin Capital U.S. Opportunity Fund
September 30, 2000
Statement of Assets & Liabilities
(Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities (cost $5,190,685) $ 5,596,238
Dividends receivable 1,402
Interest receivable 1,470
Receivable for securities sold 669,625
Other receivables 84
------------------
Total assets 6,268,819
Liabilities
Put Options Written (Premium received $25,799) $ 34,250
Accrued investment advisory fee payable 5,906
Accrued other payables 100
Payable for fund shares redeemed 465
Payable for securities purchased 56,012
Payable to custodian 606,889
-----------------
Total liabilities 703,622
------------------
Net Assets $ 5,565,197
==================
Net Assets consist of:
Paid in capital 5,142,235
Accumulated net investment loss (17,915)
Accumulated undistributed net realized gain on investments 43,775
Net unrealized appreciation on investments 397,102
------------------
Net Assets, for 393,372 shares $ 5,565,197
==================
Net Asset Value
Offering price and redemption price per share ($5,565,197/393,372) $ 14.15
==================
</TABLE>
<PAGE>
Martin Capital U.S. Opportunity Fund
Statement of Operations for the six months ended September 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend income $ 4,975
Interest income 8,635
---------------
Total Income 13,610
Expensesory fee $ 31,525
Trustees' fees 655
------------------
Total expenses before reimbursement 32,180
Reimbursed expenses (655)
------------------
Total operating expenses 31,525
---------------
Net Investment Loss (17,915)
---------------
Realized & Unrealized Gain (Loss)
Net realized gain on:
Investment securities 24,557
Option securities 19,218
Change in net unrealized depreciation
on investment securities & option securities (650,236)
------------------
Net realized/unrealized loss on investment securities & option securities (606,461)
---------------
Net increase in net assets resulting from operations $ (624,376)
===============
</TABLE>
<PAGE>
Martin Capital U.S. Opportunity Fund
Statement of Changes in Net Assets
<TABLE>
<S> <C> <C>
Six months ended
September 30, 2000 Year ended
(Unaudited) March 31, 2000
----------------- -----------------
Increase (Decrease) in Net Assets
From Operations
Net investment loss $ (17,915) $ (6,151)
Net realized gain on investments 0 5,598
Change in net unrealized appreciation/(depreciation) (650,236) 1,047,338
----------------- -----------------
Net increase/(decrease) in net assets resulting from operations (668,151) 1,046,785
----------------- -----------------
Share Transactions
Net proceeds from sale of shares 2,596,345 2,694,998
Shares redeemed (120,007) 28,548
----------------- -----------------
Net increase in net assets resulting
from share transactions 2,476,338 2,666,450
----------------- -----------------
----------------- -----------------
Total Increase in Net Assets 1,808,187 3,713,235
----------------- -----------------
Net Assets
Beginning of period 3,713,235 0
----------------- -----------------
End of period [including accumulated undistributed
net investment loss of $17,915 and $6,151, respectively] $ 5,521,422 $ 3,713,235
================= =================
</TABLE>
<PAGE>
Martin Capital U.S. Opportunity Fund
Financial Highlights
<TABLE>
<S> <C> <C>
Six months ended
September 30, 2000 Year ended
(Unaudited) March 31, 2000
------------------- ---------------------
Selected Per Share Data
Net asset value, beginning of period $ 16.19 $ 10.00
-------------- ---------------
Income from investment operations
Net investment income (loss) (0.05) (0.04)
Net realized and unrealized gain (loss) (1.99) 6.23
-------------- ---------------
Total from investment operations (2.04) 6.19
-------------- ---------------
Net asset value, end of period $ 14.15 $ 16.19
============== ===============
Total Return (12.60)(b) 61.90% (b)
Ratios and Supplemental Data
Net assets, end of period (000) $5,565 $3,713
Ratio of expenses to average net assets 1.25% (a) 1.25% (a)
Ratio of expenses to average net assets
before reimbursement 1.29% (a) 1.37% (a)
Ratio of net investment income (loss) to
average net assets (0.71)(a) (0.35)(a)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.75)(a) (0.47)(a)
Portfolio turnover rate 28.75% (a) 0.35% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, the total return is not annualized.
<PAGE>
Martin Capital Texas Opportunity Fund
Schedule of Investments - September 30, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Common Stocks - 98.4% Shares Value
Airlines - 6.7%
AMR Corp. (a) 200 $ 6,550
Continental Airlines, Inc. - Cl B (a) 100 4,544
Southwest Airlines Co. 250 6,062
---------------
17,156
---------------
Biotechnology & Drugs - 5.0%
Lexicon Genetics, Inc. (a) 220 6,957
Texas Biotechnology Corp. (a) 350 5,691
---------------
12,648
---------------
Communications Equipment - 1.9%
Efficient Networks, Inc. (a) 130 4,851
---------------
Computer Services & Software - 12.9%
BMC Software, Inc. (a) 300 5,738
i2 Technologies, Inc. (a) 60 11,224
Inet Technologies, Inc. (a) 110 3,217
NetSolve, Inc. (a) 500 3,562
Perficient, Inc. (a) 500 9,000
---------------
32,741
---------------
Computers & Office Equipment - 12.2%
Compaq Computer Corp. 300 8,256
Crossroads Systems, Inc. (a) 1,000 8,500
Dell Computer Corp. (a) 280 8,627
National Instruments Corp. (a) 130 5,736
---------------
31,119
---------------
Concrete & Cement Producers - 3.1%
Texas Industries, Inc. 250 7,969
---------------
Electronic Instruments - 1.9%
Texas Instruments, Inc. (a) 100 4,750
---------------
Food Service Distributor - 2.4%
Sysco Corp. (a) 130 6,021
---------------
Grocery Stores - 2.3%
Whole Foods Market, Inc. (a) 110 5,906
---------------
Insurance - 2.5%
American General Corp. 80 6,240
---------------
Intergrated Circuits - 1.8%
Dallas Semiconductor Corporation 140 4,603
---------------
Internet Information Providers - 2.7%
Vignette Corp. (a) 230 6,871
---------------
Investment Banking & Brokerage - 2.3%
Southwest Securities Group, Inc. 200 5,850
---------------
Medical Equipment & Supplies - 2.2%
Luminex Corp. (a) 150 5,700
--------------
Oil & Gas Operations - 5.2%
Apache Corp. (a) 100 $ 5,913
Coastal Corp. 100 7,412
---------------
13,325
---------------
Oil and Gas Services - 12.7%
Dynegy, Inc. - Cl A 190 10,830
Enron Corp. 70 6,134
Transocean Sedco Forex, Inc. 140 8,207
Valero Energy Corp. 200 7,038
---------------
32,209
---------------
<PAGE>
Radio Broadcasting & Programming - 1.7%
Clear Channel Communications (a) 75 4,249
---------------
Semiconductors - 1.6%
Silicon Laboratories, Inc. (a) 100 4,100
---------------
Semiconductor Equipment & Materials - 2.3%
DuPont Photomasks, Inc. (a) 100 5,875
---------------
Telecommunications - Miscellaneous - 1.9%
Crown Castle International Corp. (a) 160 4,970
---------------
Telecommunications Services - 3.8%
SBC Communications, Inc. 120 5,985
Allegiance Telecom, Inc. (a) 100 3,725
---------------
9,710
---------------
Travel Services - 2.5%
Sabre Holdings Corporation - Cl A (a) 220 6,366
---------------
Utilities - 6.8%
Reliant Energy, Inc. 200 9,300
TXU Corp. 200 7,925
---------------
17,225
---------------
TOTAL COMMON STOCKS (Cost $ 247,104) 250,454
---------------
TOTAL INVESTMENTS - 98.4% (Cost $ 247,104) 250,454
---------------
Other assets - 1.6% 4,106
---------------
TOTAL NET ASSETS - 100% $ 254,560
===============
(a) Non-income producing
</TABLE>
Put Options Written September 30, 2000
<TABLE>
<S> <C> <C>
Shares
Subject
Common Stocks / Expiration Date @ Exercise Price to Put Value
Dell Computer Corp. / October 2000 @ 35 5,000 $ 2,125
NASDAQ 100 Trust Unit / December 2000 @ 70 3,000 375
NASDAQ 100 Trust Unit / November 2000 @ 80 3,000 638
---------------
Total (premiums received $1,869 ) $ 3,138
===============
</TABLE>
<PAGE>
Martin Capital Texas Opportunity Fund September 30, 2000
Statement of Assets & Liabilities
(Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities (cost $247,104) $ 250,454
Dividends receivable 153
Interest receivable 33
Receivable for investments sold 29,378
------------------
Total assets 280,018
Liabilities
Put options written (premiums received $1,869) $ 3,138
Accrued investment advisory fee payable 252
Payable to custodian bank 22,068
-----------------
Total liabilities 25,458
------------------
Net Assets $ 254,560
==================
Net Assets consist of:
Paid in capital $ 251,593
Accumulated net investment loss (118)
Accumulated undistributed net realized gain on investments 1,004
Net unrealized appreciation on investments 2,081
------------------
Net Assets, for 24,686 shares $ 254,560
==================
Net Asset Value
Offering price and redemption price per share ($ 254,560 / 24,686) $ 10.31
==================
</TABLE>
<PAGE>
Martin Capital Texas Opportunity Fund
Statement of Operations for the period August 1, 2000
(Commencement of Operations) through September 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend income $ 287
Interest income 65
---------------
Total Income 352
Expenses
Investment advisory fee $ 470
Trustees' fees 362
------------------
Total expenses before reimbursement 832
Reimbursed expenses (362)
------------------
Total operating expenses 470
---------------
Net Investment Loss (118)
---------------
Realized & Unrealized Gain (Loss)
Net realized gains 1,004
Change in net unrealized appreciation
on investment securities 2,081
------------------
Net realized/unrealized gain on investment securities 3,085
---------------
Net increase in net assets resulting from operations $ 2,967
===============
</TABLE>
<PAGE>
Martin Capital Texas Opportunity Fund
Statement of Changes in Net Assets for the period August 1, 2000
(Commencement of Operations) through September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
Increase (Decrease) in Net Assets
From Operations
Net investment loss $ (118)
Net realized gain on investments 1,004
Change in net unrealized appreciation 2,081
-----------------
Net increase in net assets resulting from operations 2,967
-----------------
Share Transactions
Net proceeds from sale of shares 251,593
Shares redeemed 0
-----------------
Net increase in net assets resulting
from share transactions 251,593
-----------------
Total Increase in Net Assets 254,560
-----------------
</TABLE>
<PAGE>
Martin Capital Texas Opportunity Fund
Financial Highlights for the period August 1, 2000
(Commencement of Operations) through September 30, 2000
(Unaudited)
Selected Per Share Data
<TABLE>
<S> <C>
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) (0.01)
Net realized and unrealized gain 0.32
--------------
Total from investment operations 0.31
--------------
Net asset value, end of period $ 10.31
==============
Total Return 3.10% (b)
Ratios and Supplemental Data
Net assets, end of period (000) $255
Ratio of expenses to average net assets 1.25% (a)
Ratio of expenses to average net assets
before reimbursement 2.21% (a)
Ratio of net investment income (loss) to
average net assets (0.31)(a)
Ratio of net investment income (loss) to
average net assets before reimbursement (1.27)(a)
Portfolio turnover rate 104.83% (a)
(a) Annualized
(b) For a period of less than a full year, the total return is not annualized.
</TABLE>
Martin Capital Austin Opportunity Fund
Schedule of Investments - September 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C>
Common Stocks - 101.0% Shares Value
Biotechnology & Drugs - 2.0%
Pharmaceutical Product Development, Inc. (a) 700 $ 18,594
----------
Business Services - 0.2%
American Physicians Service Group, Inc. (a) 500 1,812
----------
Cable & Other Pay Television Services - 0.3%
Classic Communications, Inc. - Cl A (a) 600 3,038
----------
Communications Equipment & Services - 2.8%
Motorola, Inc. 750 21,375
Tellabs, Inc. (a) 30 1,432
VTEL Corp. (a) 1,100 2,681
-----------
25,488
-----------
Computer Services & Software - 16.0%
BMC Software, Inc. (a) 300 5,737
Computer Sciences Corp. (a) 370 27,473
Concero, Inc. (a) 1,090 4,905
Electronic Arts, Inc. (a) 780 38,513
Electronic Data Systems Corp. 200 8,300
eLoyalty Corp. (a) 1,000 12,750
Netpliance, Inc. (a) 1,000 1,500
NetSolve, Inc. (a) 1,100 7,837
Perficient, Inc. (a) 1,600 28,800
Pervasive Software, Inc. (a) 1,600 3,300
Prodigy Communications Corp. 1,000 5,125
------------
144,240
------------
Computers & Office Equipment - 11.9%
Apple Computer, Inc. (a) 1,000 25,750
Crossroads Systems, Inc. (a) 700 5,950
Dell Computer Corp. (a) 550 16,947
IKON Office Solutions, Inc. 200 788
International Business Machines Corp. 230 26,393
National Instruments Corp. (a) 710 31,329
------------
107,157
------------
Electrical Equipment - 4.2%
Active Power, Inc. (a) 100 6,200
Applied Materials, Inc. (a) 530 31,436
------------
37,636
-----------
Electronic Instruments - 10.2%
Advanced Micro Devices, Inc. (a) 1,960 46,305
Electrosource, Inc. (a) 1,000 4,375
Solectron Corp. (a) 730 33,671
XeTel Corp. (a) 1,000 8,000
------------
92,351
------------
Entertainment - 0.5%
Grand Adventures Tour & Travel Publishing Corp. (a) 2,000 4,750
------------
Common Stocks - continued
Grocery Stores - 4.2%
Whole Foods Market, Inc. (a) 710 38,118
------------
Health Care Plans - 0.2
Humana, Inc. (a) 200 2,150
------------
Health - Diversified - 3.4%
Abbott Laboratories, Inc. 640 30,440
-------------
Healthcare Facilities - 0.6%
Columbia/HCA Healthcare Corp. 100 3,713
Prime Medical Services, Inc. (a) 200 1,550
-------------
5,263
--------------
Industrial Machinery - 1.3%
DTM Corp. (a) 2,000 11,500
-------------
Insurance - 0.8%
Citizens, Inc. (a) 300 2,006
Financial Industries Corp. 100 900
InterContinental Life Corp. (a) 200 1,950
National Western Life Insurance Co. - Cl A (a) 30 2,190
-----------------
7,046
-----------------
Internet Information Providers - 8.0%
Drkoop.com, Inc. (a) 1,500 1,734
Garden.com, Inc. (a) 1,500 1,359
Hoover's, Inc. (a) 1,830 11,666
ProsoftTraining.com (a) 700 9,975
Vignette Corp. (a) 1,600 47,800
---------------
72,534
---------------
Investment Banking & Brokerage Services - 1.2%
Schwab (Charles) Corp. 300 10,650
---------------
Manufacturers - Diversified - 0.3%
Minnesota Mining & Manufacturing Co. 30 2,734
--------------
Medical Equipment & Supplies - 4.0%
Arrhythmia Research Technology, Inc. (a) 2,000 3,625
Encore Medical Corp. (a) 2,000 4,500
Luminex Corp. (a) 400 15,200
Sulzer Medica Ltd. (a) (b) 500 13,000
--------------
36,325
---------------
Natural Gas - 2.9%
Southern Union Co. 1,300 25,756
---------------
Oil & Gas Operations - 0.7%
Brigham Exploration Co. (a) 2,000 6,625
-----------------
Personal & Household Products - 0.1%
Surrey, Inc. (a) 1,000 750
-----------------
Printing & Publishing - 3.7%
EpicEdge, Inc. (a) 200 550
Harte-Hanks Communications, Inc. 1,220 33,245
-----------------
33,795
-----------------
Real Estate Developers - 0.3%
Stratus Properties, Inc. (a) 500 2,250
-----------------
Restaurants - 1.0%
Schlotzky's, Inc. (a) 2,200 9,213
-----------------
Retail & Wholesale - Specialty - 1.0%
EZCORP, Inc. - Cl A 500 625
pcOrder.com, Inc. - Cl A (a) 700 2,494
Travis Boats & Motors, Inc. (a) 1,600 5,900
------------
9,019
------------
Semiconductors - 12.5%
Cirrus Logic, Inc. (a) 1,980 79,819
Cypress Semiconductor Corp. (a) 200 8,312
Intel Corp. 400 16,625
Silicon Laboratories, Inc. (a) 200 8,200
------------
112,956
------------
Semiconductor Equipment & Materials - 2.9%
Dupont Photomasks, Inc. (a) 450 26,437
------------
Telecommunications Services - 3.8%
Aperian, Inc. (a) 334 2,125
Broadwing, Inc. 1,170 29,908
SBC Communications, Inc. 40 1,995
-------------
34,028
-------------
TOTAL COMMON STOCKS (Cost $1,016,257) 912,655
-------------
TOTAL INVESTMENTS - 101.0% (Cost $1,016,257) 912,655
-------------
Liabilities in excess of other assets - (1.0)% (8,891)
-------------
TOTAL NET ASSETS - 100.0% $ 903,764
==============
(a) Non-income producing
(b) American Depository Receipt
Put Options Written September 30, 2000
Shares Subject
Common Stocks Index / Expiration Date @ Exercise Price to Put Value
------------------------------------------------------ -------------- -----------------
Dell Computer Corp. / October 2000 @ 35 1,000 $ 4,250
NASDAQ 100 Trust / December 2000 @ 70 1,200 1,500
NASDAQ 100 Trust / November 2000 @ 100 1,200 2,550
-----------------
-----------------
Total (premiums received $5,575) 3,400 $ 8,300
=================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Martin Capital Austin Opportunity Fund September 30, 2000
Statement of Assets & Liabilities
(Unaudited)
Assets
Investment in securities (cost $1,016,257) $ 912,655
Dividends receivable 30
Receivable for securities sold 116,062
------------------
Total assets 1,028,747
Liabilities
Put options written (Premium received $5,575) 8,300
Accrued investment advisory fee payable 866
Payable to custodian bank 103,985
Payable for securities purchased 11,772
Payable for fund shares redeemed 60
---------------
Total liabilities 124,983
------------------
Net Assets $ 903,764
==================
Net Assets consist of:
Paid in capital $ 1,009,560
Accumulated net investment loss (4,929)
Accumulated undistributed net realized gain 5,460
Net unrealized depreciation on investments (106,327)
------------------
Net Assets, for 84,174 shares $ 903,764
==================
Net Asset Value
Offering price and redemption price per share ($903,764 / 84,174) $ 10.74
====================
</TABLE>
<PAGE>
Martin Capital Austin Opportunity Fund
Statement of Operations for the six months ended September 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend income $ 562
Interest income 591
---------------
Total Income 1,153
Expenses
Investment advisory fee $ 6,082
Trustees' fees 655
------------------
Total expenses before reimbursement 6,737
Reimbursed expenses (655)
------------------
Total operating expenses 6,082
---------------
Net Investment Loss (4,929)
---------------
Realized & Unrealized Gain (Loss)
Net realized gain on:
Investment securities 5,048
Options securities 412
Change in net unrealized depreciation
on investment securities & option securities (268,462)
------------------
Net realized/unrealized loss on investment (263,002)
---------------
securities & option securities
Net decrease in net assets $ (267,931)
===============
resulting from operations
</TABLE>
<PAGE>
Martin Capital Austin Opportunity Fund
Statement of Changes in Net Assets
<TABLE>
<S> <C> <C>
Six months ended
September 30, 2000 Period ended
(Unaudited) March 31, 2000 (a)
----------------- ---------------------
Increase (Decrease) in Net Assets
From Operations
Net investment loss $ (4,929) $ (1,967)
Net realized gain on investment securities 5,460 65
Change in net unrealized appreciation/depreciation (268,462) 162,135
----------- -----------
Net increase/decrease in net assets resulting from operations (267,931) 160,233
----------- -----------
Share Transactions
Net proceeds from sale of shares 180,893 889,826
Shares redeemed (58,024) (1,233)
------------- -----------
Net increase in net assets resulting
from share transactions 122,869 888,593
------------- -----------
Total increase/decrease in net assets (145,062) 1,048,826
------------- -----------
Net Assets
Beginning of period 1,048,826 0
------------ -----------
End of period [including accumulated undistributed
net investment loss of $4,929 and $1,967] $ 903,764 $ 1,048,826
============= ===========
</TABLE>
(a) For the period September 1, 1999 (commencement of operations)
through March 31, 2000
<PAGE>
Martin Capital Austin Opportunity Fund
Financial Highlights
<TABLE>
<S> <C> <C>
Six months ended
September 30, Period ended
2000 March 31,
(Unaudited) 2000 (c)
---------------- ------------
Selected Per Share Data
Net asset value, beginning of period $ 14.02 $ 10.00
------------ ------------
Income from investment operations
Net investment loss (0.06) (0.04)
Net realized and unrealized gain/loss (3.22) 4.06
------------ ------------
Total from investment operations (3.28) 4.02
------------ ------------
Net asset value, end of period $ 10.74 $ 14.02
============ ============
Total Return (23.50) (b) 40.20% (b)
Ratios and Supplemental Data
Net assets, end of period (000) $904 $1,049
Ratio of expenses to average net assets 1.25% (a) 1.25% (a)
Ratio of expenses to average net assets
before reimbursement 1.38% (a) 1.51% (a)
Ratio of net investment income (loss) to
average net assets (1.01) (a) (0.55) (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (1.15) (a) (0.81) (a)
Portfolio turnover rate 25.19% (a) 0.80% (a)
(a) Annualized
(b) For a period of less than a full year, the total return is not annualized.
(c) For the period September 1, 1999 (commencement of operations) through March
31, 2000.
</TABLE>
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000
(Unaudited)
NOTE 1. ORGANIZATION
Martin Capital Austin Opportunity Fund (the "Austin Opportunity Fund"),
Martin Capital U.S. Opportunity Fund (the "U.S. Opportunity Fund") and Martin
Capital Texas Opportunity Fund (the "Texas Opportunity Fund") were organized as
series of the AmeriPrime Funds, an Ohio business trust (the "Trust") on August
14, 1998 and commenced operations on September 1, 1999, April 1, 1999, and
August 1, 2000 respectively. Each Fund is registered under the Investment
Company Act of 1940, as amended, as a non-diversified series of the Trust. The
investment objective of each Fund is to provide long-term capital appreciation.
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares of beneficial interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
each Fund in the preparation of its financial statements.
Securities Valuations- Securities, which are traded on any exchange or on the
NASDAQ over-the-counter market, are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the advisor's opinion, the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
advisor determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the advisor, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust (the
"Board").
Fixed-income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the advisor,
subject to review of the Board. Short-term investments in fixed-income
securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
Option writing- When a Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current fair value of the option written. Premiums received from writing
options that expire unexercised are treated by the Fund on the expiration date
as realized gains from investments. The difference between the premium and the
amount paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less than
the amount paid for the closing purchase transaction, as a realized loss. If a
call option is exercised, the premium is added to the proceeds from the sale of
the underlying security or currency in determining whether the Fund has realized
a gain or loss. If a put option is exercised, the premium reduces the cost basis
of the securities purchased by the Fund. The Fund as writer of an option bears
the market risk of an unfavorable change in the price of the security underlying
the written option.
Federal Income Taxes- Each Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, each Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- Each Fund intends to distribute substantially all
of its net investment income as dividends to its shareholders on at least an
annual basis. Each Fund intends to distribute its net long-term capital gains
and its net short-term capital gains at least once a year.
Other- Each Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities. Generally accepted accounting principles
require that permanent financial reporting tax differences relating to
shareholder distributions be reclassified to net realized gains and paid-in
capital.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds retain Martin Capital Advisors, L.L.P. (the "Advisor") to manage
each Fund's investments. The Advisor is a Texas limited liability partnership
organized on January 29, 1999. Paul Martin, President and controlling partner of
the Advisor is primarily responsible for the day-to-day management of the Fund's
portfolio.
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
Under the terms of each Fund's management agreement (the "Agreements"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of non-interested person trustees, and extraordinary
expenses. As compensation, for its management services and agreement to pay each
Fund's expenses, each Fund is authorized to pay the Advisor a fee computed and
accrued daily and paid monthly at an annual rate of 1.25% of the average daily
net assets of the Fund. It should be noted that most investment companies pay
their own operating expenses directly, while the Fund's expenses, except those
specified above, are paid by the Advisor. For the six months ended September 30,
2000, the Advisor received a fee of $6,082 and $31,525 from the Austin
Opportunity Fund and the U.S. Opportunity Fund, respectively. For the period
August 1, 2000 (commencement of operations) through September 30, 2000, the
Advisor received a fee of $470 from the Texas Opportunity Fund. The Advisor has
voluntarily agreed to reimburse other expenses to the extent necessary to
maintain total operating expenses at the rate of 1.25% for each Fund. For the
six months ended September 30, 2000, the Advisor reimbursed expenses of $655 and
$905 for the Austin Opportunity Fund and the U.S. Opportunity Fund,
respectively. For the period August 1, 2000 (commencement of operations) through
September 30, 2000, the Advisor reimbursed expenses of $362 for the Texas
Opportunity Fund. There is no assurance that such reimbursements will continue
in the future.
Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plan") under which each Fund is authorized
to incur distribution expenses at an annual rate of 0.25% of the average daily
net assets of the Fund. The Advisor, pursuant to the management agreement, pays
all distribution expenses incurred by a Fund under its plan.
Each Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc.,
to manage each Fund's business affairs and to provide each Fund with
administrative services, including all regulatory reporting and necessary office
equipment and personnel. For the six months ended September 30, 2000, the
Administrator received fees of $10,000 and $10,000 from the Advisor for
administrative services provided to the Austin Opportunity Fund and the U.S.
Opportunity Fund, respectively. For the period August 1, 2000 (commencement of
operations) through September 30, 2000, the Administrator received fees of
$3,333 from the Advisor for administrative services provided to the Texas
Opportunity Fund.
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to act as each Fund's transfer
agent and to provide each Fund with fund accounting services. For its services
as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per
shareholder (subject to a minimum monthly fee of $750). For the six months ended
September 30, 2000, Unified received fees of $8,356 and $8,789 from the Advisor
for transfer agent services provided to the Austin Opportunity Fund and the U.S.
Opportunity Fund, respectively. For the period August 1, 2000 (commencement of
operations) through September 30, 2000, Unified received fees of $1,432 from the
Advisor for transfer agent services provided to the Texas Opportunity Fund. For
its services as fund accountant, Unified receives an annual fee from the Advisor
equal to 0.0275% of each Fund's assets up to $100 million, and 0.0250% of each
Fund's assets from $100 million to $300 million, and 0.0200% of each Fund's
assets over $300 million (subject to various monthly minimum fees, the maximum
being $2,000 per month for assets of $20 to $100 million). For the six months
end September 30, 2000, Unified received fees of $5,200 and $6,400 from the
Advisor for fund accounting services provided to the Austin Opportunity Fund and
U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement
of operations) through September 30, 2000, Unified received fees of $900 from
the Advisor for fund accounting services provided to the Texas Opportunity Fund.
Each Fund retains AmeriPrime Financial Securities, Inc. (the
"Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc.,
to act as the principal distributor of each Fund's shares. There were no
payments made to the Distributor for the six months ended September 30, 2000 for
the Austin Opportunity Fund and U.S. Opportunity Fund, respectively. There were
no payments made to the Distributor for the period August 1, 2000 (commencement
of operations) through September 30, 2000 for the Texas Opportunity Fund.
Certain members of management of the Administrator and the Distributor are also
members of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
Austin Opportunity Fund. As of September 30, 2000, there were an unlimited
number of authorized shares for the Fund. Paid in capital at September 30, 2000
was $1,009,560.
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 4. SHARE TRANSACTIONS- continued
Transactions in shares were as follows:
<TABLE>
<S> <C> <C>
For the period end
September 30, 2000
Shares Dollars
Roll forward: 74,784 $886,691
Shares redeemed (5,262) (58,035)
-------- ---------
84,174 $1,009,550
========== ===============
</TABLE>
U.S. Opportunity Fund. As of September 30, 2000, there were an unlimited
number of authorized shares for the Fund. Paid in capital at September 30, 2000
was $5,142,235.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C>
For the fiscal year ended
September 30, 2000
Shares Dollars
Shares sold 172,487.116 $2,296,345
Shares redeemed (8,528.696) (120,007)
-------------------- ---------------
163,958.420 $2,476,338
==================== ===============
</TABLE>
Texas Opportunity Fund. As of September 30, 2000, there were an unlimited number
of authorized shares for the Fund. Paid in capital at September 30, 2000
was $251,593.
Transactions in shares were as follows:
For the period ended
September 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C>
Shares Dollars
Shares sold 24,686 251,593
Shares issued
in reinvestment of dividends 0 0
Shares redeemed 0 0
------------ -----------
24,686 251,593
============ ===========
</TABLE>
NOTE 5. INVESTMENTS
Austin Opportunity Fund. For the period end September 30, 2000, purchases and
sales of investment securities, other than short-term investments, aggregated
$342,574 and $119,653, respectively. The gross unrealized appreciation for all
securities totaled $194,917 and the gross unrealized depreciation for all
securities totaled $301,243 for a net unrealized depreciation of $106,327. The
aggregate cost of securities for federal income tax purposes at September 30,
2000 was $903,764.
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 5. INVESTMENTS- continued
U.S. Opportunity Fund. For the fiscal year ended September 30, 2000, purchases
and sales of investment securities, other than short-term investments,
aggregated $3,609,067 and $690,188 respectively. The gross unrealized
appreciation for all securities totaled $998,646 and the gross unrealized
depreciation for all securities totaled $601,544 for a net unrealized
appreciation of $397,102. The aggregate cost of securities for federal income
tax purposes at September 30, 2000 was $5,596,239.
Texas Opportunity Fund. For the fiscal year ended September 30, 2000, purchases
and sales of investment securities, other than short-term investments,
aggregated $247,104 and $27,510 respectively. The gross unrealized appreciation
for all securities totaled $26,319 and the gross unrealized depreciation for all
securities totaled $24,238 for a net unrealized appreciation of $2,081. The
aggregate cost of securities for federal income tax purposes at September 30,
2000 was $254,560.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 7. RELATED PARTY TRANSACTIONS
The Advisor is not a registered broker-dealer of securities and thus does
not receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of September 30, 2000,
National Investor Services owned of record in aggregate more than 33% of the
Austin Opportunity Fund. As of September 30, 2000, National Investor Services
owned of record in aggregate more than 66% of the U.S. Opportunity Fund. As of
September 30, 2000, National Investor Services owned of record in aggregate more
than 39% and Eileen Vanderlee owned of record in aggregate more than 40% of the
Texas Opportunity Fund
<PAGE>
Martin Capital Opportunity Funds
Notes to Financial Statements
September 30, 2000 - continued
(Unaudited)
NOTE 8. CALL OPTIONS WRITTEN
Austin Opportunity Fund Transactions in options written for the period end
September 30, 2000 were as follows:
<TABLE>
<S> <C> <C>
Number of Premiums
Contracts Received
Options written 3 $5,575
Options expired (3) (5,575)
------ -------
Options outstanding at September 30, 2000 0 0
====== =======
</TABLE>
U.S. Opportunity Fund Transactions in options written during the fiscal year
ended September 30, 2000 were as follows:
Number of Premiums
Contracts Received
<TABLE>
<S> <C> <C>
Options written 237 $45,017
Options expired (72) (19,218)
------ -------
Options outstanding at September 30, 2000 165 25,799
======= =========
</TABLE>
Texas Opportunity Fund Transactions in options written during the fiscal year
ended September 30, 2000 were as follows:
Number of Premiums
Contracts Received
<TABLE>
<S> <C> <C>
Options written 11 $1,869
Options expired (0) (0)
------ -------
Options outstanding at September 30, 2000 11 1,869
======= ========
</TABLE>
