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,
September 30, 1999 to March 31, 2000, was up 53.3% and for the past twelve
months ended March 31, 2000, was up 76.6%. 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 the Periods Ending March 31, 2000
Since Inception
Fund/Index 1st Quarter 2000 6 Months 1 Year (April 1, 1999)
---------- ---------------- -------- ------ ---------------
Columbia Partners
Equity Fund 27.2% 53.3% 76.6% 76.6%
S&P 500 Index 2.3% 17.5% 17.9% 17.9%
Russell 2000 Index 7.1% 26.2% 37.3% 37.3%
Columbia Partners
Equity Fund S&P 500 Index Russell 2000 Index
$17,656 $11,794 $13,558
------------------ ------------- ------------------
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
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.
Review & Outlook
The equity markets' performance since our last report has been a
continuation of trends that have been long standing: positive returns, growth
stocks outperforming value stocks, and the technology sector providing the
greatest returns. The numbers, however, mask a volatile first quarter in 2000
that took investors, and the NASDAQ market in particular, on a wild roller
coaster ride.
After a few shaky days in early January, technology and biotech stocks
got back down to the important business of heading to the stratosphere. At its
peak on March 10, the NASDAQ was up 24% year to date. The NASDAQ then went
through a series of gyrations, mostly to the downside, which saw the Index drop
10% from its high, but still finish up 12.4% for the quarter.
We believe that a correction in the technology stocks was inevitable.
The sector had moved up too quickly, and many stocks had become fully valued. We
also believe that this is a healthy occurrence, and should be followed by a
recovery. Based on valuation concerns, we had pared back our tech holdings in
the fourth quarter, and continued to take profits in the first quarter. We are
emphasizing consumer cyclical and telecommunications stocks, and energy stocks
representation has been increased.
We continue to look for companies with strong earnings growth whose
stocks are selling at reasonable valuations. A disciplined blend of both the
growth and the value philosophies is the best investment strategy for producing
consistent incremental return, we believe, and our portfolios are diversified
across all economic sectors to constrain risk.
As long as fundamentals remain intact, we expect market leadership to
return to the growth oriented stocks and sectors. As always, we will be diligent
in observing shifting trends in expectations and fundamentals for the various
market sectors. Our emphasis will shift along with confirmed shifts in our
indicators.
Very truly yours,
Terence W. Collins, President
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<TABLE>
<CAPTION>
COLUMBIA PARTNERS EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000
<S> <C> <C>
COMMON STOCK - 80.7% SHARES VALUE
APPAREL STORES - 1.9%
Chico's FAS, Inc. (a) 26,535 $ 449,851
-----------------
AUTOS & AUTO PARTS - 1.5%
Gentex Corp. (a) 9,805 363,398
-----------------
BANKS - 4.8%
Citigroup, Inc. 19,452 1,153,747
-----------------
BEVERAGES - 1.5%
Coca-Cola Co. 7,665 361,692
-----------------
BUILDING SUPPLIES - 3.4%
Home Depot, Inc. 12,380 809,342
-----------------
COMMUNICATIONS EQUIPMENT - 4.6%
Cable Design Technologies Corp. (a) 9,230 308,628
Lucent Technologies, Inc. 7,075 429,806
Terayon Communication Systems, Inc. (a) 1,740 356,700
-----------------
1,095,134
-----------------
COMPUTER SERVICES & SOFTWARE - 12.6%
Ariba, Inc. (a) 1,485 311,293
Citrix Systems, Inc. (a) 9,065 600,556
ImproveNet, Inc. (a) 60 443
Inktomi Corp. (a) 2,800 546,000
Microsoft Corp. (a) 8,255 880,189
Rational Software Corp. (a) 5,110 390,596
RealNetworks, Inc. (a) 5,440 309,995
-----------------
3,039,072
-----------------
COMPUTERS & OFFICE EQUIPMENT - 5.3%
Cisco Systems, Inc. (a) 8,250 635,250
Reynolds & Reynolds Co. - Cl A 9,805 262,284
Seagate Technology, Inc. (a) 6,265 377,466
-----------------
1,275,000
-----------------
DEPARTMENT & DISCOUNT STORES - 4.5%
Target Corp. 8,255 617,061
Wal-Mart Stores, Inc. 8,255 470,019
-----------------
1,087,080
-----------------
DRUGS & PHARMACEUTICALS - 3.2%
Pfizer, Inc. 12,875 471,547
Theragenics Corp. (a) 22,745 298,528
-----------------
770,075
-----------------
GROCERY STORES - 2.8%
Safeway, Inc. (a) 14,735 666,759
-----------------
HEALTH - DIVERSIFIED - 3.4%
American Home Products Corp. 7,665 410,557
Johnson & Johnson 5,895 413,387
-----------------
823,944
-----------------
COLUMBIA PARTNERS EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000
COMMON STOCKS - CONTINUED SHARES VALUE
INVESTMENT BANKING & BROKERAGE - 2.3%
Merrill Lynch & Co., Inc. 5,305 $ 549,068
-----------------
MANUFACTURERS - DIVERSIFIED - 2.7%
General Electric Co. 4,125 641,695
-----------------
MEDICAL EQUIPMENT & SUPPLIES - 0.8%
Priority Healthcare - Cl B (a) 1 25
Sybron International Corp. (a) 6,510 188,383
-----------------
188,408
-----------------
OIL & GAS - 3.2%
BJ Services Co. (a) 6,015 440,223
Nabors Industries Inc. (a) 8,485 328,794
-----------------
769,017
-----------------
RESTAURANTS - 2.0%
McDonald's Corp. 12,970 488,807
-----------------
RETAIL SPECIALTY STORES - 2.3%
Costco Wholesale Corp.(a) 10,610 557,688
-----------------
SEMICONDUCTORS - 12.6%
Broadcom Corp. - Cl A (a) 3,625 880,422
Dallas Semiconductor Corp. 7,910 292,176
Intel Corp. 7,075 933,900
TranSwitch Corp. (a) 4,450 427,478
Vitesse Semiconductor Corp. (a) 5,110 491,518
-----------------
3,025,494
-----------------
TELEPHONE SERVICES - 5.3%
Covad Communications Group, Inc. (a) 4,200 304,237
MCI WorldCom, Inc. (a) 7,897 358,326
RCN Corp. (a) 4,365 234,892
Winstar Communications, Inc. (a) 6,427 385,620
-----------------
1,283,075
-----------------
TOTAL COMMON STOCK (COST $15,620,083) 19,398,346
-----------------
PRINCIPAL
VALUE VALUE
Money Market Securities - 15.8%
Firstar Treasury Fund, 5.09% (b) (Cost $3,789,774) 3,789,774 $ 3,789,774
-----------------
TOTAL INVESTMENTS (COST $19,409,857) - 96.5% 23,188,120
-----------------
OTHER ASSETS LESS LIABILITIES - 3.5% 852,237
-----------------
TOTAL NET ASSETS - 100.0% $ 24,040,357
=================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
</TABLE>
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<TABLE>
<S> <C> <C>
COLUMBIA PARTNERS EQUITY FUND MARCH 31, 2000
STATEMENT OF ASSETS & LIABILITIES
ASSETS
Investment in securities (cost $19,409,857) $ 23,188,120
Cash 33,085
Receivable for securities sold 761,917
Dividends receivable 3,427
Interest receivable 9,820
Receivable for fund shares sold 75,000
-------------------
TOTAL ASSETS 24,071,369
LIABILITIES
Accrued investment advisory fee payable $ 25,377
Payable for securities purchased 5,635
-----------------
TOTAL LIABILITIES 31,012
-------------------
NET ASSETS $ 24,040,357
===================
Net Assets consist of:
Paid in capital 16,900,872
Accumulated undistributed net realized gain on investments 3,361,222
Net unrealized appreciation on investments 3,778,263
-------------------
NET ASSETS, for 1,400,556 shares $ 24,040,357
===================
NET ASSET VALUE
Offering price and redemption price per share ($24,040,357 / 1,400,556 ) $ 17.16
===================
</TABLE>
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<TABLE>
<CAPTION>
COLUMBIA PARTNERS EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 35,592
Interest income 63,463
---------------
TOTAL INCOME 99,055
EXPENSES
Investment advisory fee $ 133,984
Trustees' fees 2,596
-------------------
Total expenses before reimbursement 136,580
Reimbursed expenses (2,596)
-------------------
Total operating expenses 133,984
---------------
NET INVESTMENT LOSS (34,929)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 3,818,020
Change in net unrealized appreciation (depreciation)
on investment securities 3,778,263
-------------------
Net gain on investment securities 7,596,283
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,561,354
===============
</TABLE>
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<TABLE>
<CAPTION>
COLUMBIA PARTNERS EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31, 2000
<S> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net investment income (loss) $ (34,929)
Net realized gain on investment securities 3,818,020
Change in net unrealized appreciation (depreciation) 3,778,263
-----------------
Net increase in net assets resulting from operations 7,561,354
-----------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income 0
From net realized gain (421,869)
-----------------
Total distributions (421,869)
-----------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 17,229,187
Shares issued in reinvestment of distributions 421,869
Shares redeemed (750,184)
-----------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 16,900,872
-----------------
TOTAL INCREASE IN NET ASSETS 24,040,357
-----------------
NET ASSETS
Beginning of period 0
-----------------
End of period [including accumulated undistributed
net investment income of $0] $ 24,040,357
=================
</TABLE>
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<CAPTION>
COLUMBIA PARTNERS EQUITY FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED MARCH 31, 2000
<S> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment loss (0.04)
Net realized and unrealized gain 7.59
---------------
Total from investment operations 7.55
---------------
Less Distributions
From net investment income 0.00
From net realized gain (0.39)
---------------
Total distributions (0.39)
---------------
Net asset value, end of period $ 17.16
===============
TOTAL RETURN 76.56%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $24,040
Ratio of expenses to average net assets 1.20%
Ratio of expenses to average net assets
before reimbursement 1.22%
Ratio of net investment income (loss) to
average net assets (0.31)%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.34)%
Portfolio turnover rate 215.08%
</TABLE>
<PAGE>
COLUMBIA PARTNERS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
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 management
investment company. 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.
COLUMBIA PARTNERS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. Generally accepted accounting principles
require that permanent financial reporting tax differences relating to
shareholder distributions be reclassified to accumulated net realized gains.
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 as an independent limited
liability company owned 50% by its employees and 50% by Galway Capital
Management, L.L.C., a venture capital firm. The Advisor was organized in 1995.
The investment decisions for the Fund are made by a team of the Advisor, 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 fiscal year ended
March 31, 2000 the Advisor received a fee of $133,984 from the Fund. The Advisor
has voluntarily agreed to reimburse other expenses to the extent necessary to
maintain total operating expenses at the rate of 1.20%. For the fiscal year
ended March 31, 2000, the Advisor reimbursed expenses of $2,596. There is no
assurance that such reimbursement will continue in the future.
COLUMBIA PARTNERS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 fiscal year
ended March 31, 2000 the Administrator received fees of $30,000 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 fiscal year ended March 31, 2000, Unified received
fees of $15,790 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 fiscal year ended March 31,
2000, Unified received fees of $15,600 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 fiscal year ended March 31, 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
MARCH 31, 2000 - CONTINUED
NOTE 4. SHARE TRANSACTIONS
As of March 31, 2000 there was an unlimited number of authorized shares for
the Fund. Paid in capital at March 31, 2000 was $16,900,872.
Transactions in shares were as follows:
FOR THE FISCAL YEAR ENDED
MARCH 31, 2000
SHARES DOLLARS
Shares sold 1,426,414 $17,229,187
Shares issued in
reinvestment 30,997 421,869
Shares redeemed
(56,855) (750,184)
---------- -----------
1,400,556 $16,900,872
========== ===========
NOTE 5. INVESTMENTS
For the fiscal year ended March 31, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $32,638,522 and
$20,836,460, respectively. As of March 31, 2000, the gross unrealized
appreciation for all securities totaled $4,106,042 and the gross unrealized
depreciation for all securities totaled $327,779 for a net unrealized
appreciation of $3,778,263. The aggregate cost of securities for federal income
tax purposes at March 31, 2000 was $19,409,857.
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>
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Board of Trustees
Columbia Partners Equity Fund (a series of the AmeriPrime Funds)
We have audited the accompanying statement of assets and liabilities of the
Columbia Partners Equity Fund, including the schedule of portfolio investments,
as of March 31, 2000, and the related statement of operations, the statement of
changes in net assets , and the financial highlights for the for the period
indicated. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held by
the custodian as of March 31, 2000, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Columbia Partners Equity Fund as of March 31, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for the
period indicated, in conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 20, 2000
<PAGE>
Dear Fellow Shareholders,
The Martin Capital Opportunity Funds performed extremely well for the first
fiscal year, which ended March 31, 2000. The U.S. Opportunity Fund returned
61.9% for the fiscal year vs. 17.9% for the S&P 500. The Austin Opportunity Fund
returned 40.2% for the period from inception September 1, 1999 through March 31,
2000 vs. 14.3% for the S&P 500 during that same time frame. These returns were
achieved with practically no turnover within the portfolios.
Both funds performed well due in part to the strength of the high-tech sector.
Although the fiscal year ended with some weakness in those same high-tech
stocks, we remain committed to buying quality growth companies and holding them
for the long term.
OUTLOOK
The short-term outlook is clouded by higher oil prices and rising interest
rates, pushed up over the past nine months by inflation concerns associated with
potentially unsustainable economic growth. These higher rates are primarily
responsible for the market volatility we have seen recently. In the long term,
productivity of the labor force is increasing at a rapid rate, spurred by the
high-tech revolution. This increasing productivity will allow faster economic
growth with less inflation. It will also help to increase corporate earnings.
Within the Martin Capital Opportunity Funds, we have attempted to select
companies that will benefit from the demand for greater productivity.
Powerful bull markets are characterized by high valuations. As long as the
economy keeps growing at above average rates and inflation remains lower than
average, high valuation levels can be sustained indefinitely. From time to time,
however, when the economy shows signs of slowing to a below-average rate of
growth, or inflation looks like it may pick up, the stock market can be
merciless in reducing valuation levels. Eventually, when the stock market begins
to look past short-term economic growth or inflation concerns to long-term
above-average economic growth and lower inflation trends, the bull market
resumes, taking stocks to new highs. As long as we can make a good case for
long-term sustainable growth with low inflation, we will be much less inclined
to try to protect portfolios from apparent short-term risks at the expense of
missing out on long-term bull market returns.
Thank you for your trust and confidence in the Martin Capital Opportunity Funds.
Sincerely,
Paul B. Martin, Jr.
<PAGE>
AUSTIN OPPORTUNITY FUND
The Austin Opportunity Fund performed well as the Central Texas region continues
to grow at a feverish pace. Population growth and job creation continues at
near-record levels while new private ventures and initial public offerings are a
weekly occurrence. The fund is invested in a balance of locally founded
companies such as Vignette, PSW Technologies, and NetSolve along with older,
more established companies with significant operations in Austin such as
Advanced Micro Devices, Applied Materials and Apple Computer.
Ten Largest Holdings Percent of Net Assets 3/31/00
-------------------- -----------------------------
Vignette 6.7%
Advanced Micro Devices 4.9%
Applied Materials 4.2%
Broadwing 3.5%
Apple Computer 3.2%
PSW Technologies 3.2%
Cirrus Logic 2.8%
NetSolve 2.8%
Motorola 2.7%
National Instruments 2.7%
We believe the Austin Opportunity Fund will continue to perform well over the
long term. The constantly expanding global economy will become increasingly
dependant upon technology and innovation leadership - both strong traits of the
Central Texas region.
Returns for the Periods Ending March 31, 2000
Fund/Index 1st Quarter 2000 6 Months 1 Year Since Inception
---------- ---------------- -------- ------ ---------------
Martin Capital Austin
Opportunity Fund 6.1% 42.5% n/a 40.2%
S&P 500 Index 2.3% 17.5% n/a 14.3%
Martin Capital
Austin Opportunity Fund S&P 500 Index
$14,020 $11,429
----------------------- -------------
8/31/99 $10,000.00 $10,000.00
9/30/99 9,840.00 9,725.90
10/31/99 10,490.00 10,341.35
11/30/99 12,000.00 10,551.59
12/31/99 13,210.00 11,173.08
01/31/00 13,530.00 10,611.75
02/29/00 14,520.00 10,410.87
3/31/00 14,020.00 11,429.36
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 March 31, 2000. The S&P 500 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>
U.S. OPPORTUNITY FUND
The U.S. Opportunity Fund exceeded our performance expectations as the U.S.
economy and equity markets both expanded at a rapid rate. Most of the key
holdings are in the technology sector at this time. This is a reflection of our
belief that technology is the driver of economic growth into the 21st century.
Our high-tech holdings have outperformed more traditional industries over the
past 12 months.
Ten Largest Holdings Percent of Net Assets 3/31/00
-------------------- -----------------------------
Qualcomm 4.4%
Vignette 3.4%
Lam Research 3.2%
Oracle Corp. 3.2%
LSI Logic 2.7%
Applied Materials 2.5%
Sun Microsystems 2.5%
Advanced Micro Devices 2.3%
Cisco Systems 2.3%
Altera Corporation 2.2%
Broad-based stock indices such as the S&P 500 exceeded long-term average rates
of growth during the first year of the U.S. Opportunity Fund. Not surprisingly,
economic fundamentals were excellent during this time frame. The period was
characterized by low inflation and significant growth in output both in terms of
hours worked [productivity] and in the aggregate [GDP]. This scenario of high
employment and productivity coupled with low inflation has persisted for so long
that the Federal Reserve is rethinking its traditional trade-offs of economic
growth against price increases.
The U.S. Opportunity Fund portfolio is structured to take advantage of an
economy expanding at a healthy pace in an environment of low inflation and free
markets. This approach has contributed to the high returns achieved over the
past year, and we believe will continue to help sustain solid returns in the
future.
Returns for the Periods Ending March 31, 2000
Fund/Index 1st Quarter 2000 6 Months 1 Year Since Inception
---------- ---------------- -------- ------ ---------------
Martin Capital U.S.
Opportunity Fund 10.7% 54.9% 61.9% 61.9%
S&P 500 Index 2.3% 17.5% 17.9% 17.9%
Martin Capital
U.S. Opportunity Fund S&P 500 Index
$16,190 $11,794
--------------------- -------------
3/31/99 $10,000.00 $10,000.00
4/30/99 9,870.00 10,387.30
5/31/99 9,690.00 10,142.06
6/30/99 10,560.00 10,704.94
7/31/99 10,210.00 10,370.73
8/31/99 10,350.00 10,319.40
9/30/99 10,450.00 10,036.54
10/31/99 11,410.00 10,671.65
11/30/99 12,640.00 10,888.61
12/31/99 14,630.00 11,529.95
01/31/00 14,110.00 10,950.68
02/29/00 15,750.00 10,743.39
03/31/00 16,190.00 11,794.41
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 March 31, 2000. The S&P 500 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>
<TABLE>
<CAPTION>
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000
<S> <C> <C>
COMMON STOCKS - 90.6% SHARES VALUE
BIOTECHNOLOGY & DRUGS - 2.0%
Luminex Corp. (a) 400 $ 8,775
Pharmaceutical Product Development, Inc. (a) 700 11,856
-----------------
20,631
-----------------
BUSINESS SERVICES - 0.1%
American Physicians Service Group, Inc. (a) 500 1,531
-----------------
CABLE & OTHER PAY TELEVISION SERVICES - 0.9%
Classic Communications, Inc. (a) 600 9,450
-----------------
COMMUNICATIONS EQUIPMENT - 3.7%
Motorola, Inc. 200 28,475
Tellabs, Inc. (a) 30 1,888
VTEL Corp. (a) 1,100 8,525
-----------------
38,888
-----------------
COMPUTER SERVICES & SOFTWARE - 17.6%
BMC Software, Inc. (a) 300 14,812
Computer Sciences Corp. (a) 300 23,700
Electronic Arts, Inc. (a) 300 21,356
Electronic Data Systems Corp. 200 12,938
Netpliance, Inc. (a) 1,000 14,500
NetSolve, Inc. (a) 900 29,025
Perficient, Inc. (a) 700 13,913
Pervasive Software, Inc. (a) 1,600 20,600
PSW Technologies, Inc. (a) 850 33,787
-----------------
184,631
-----------------
COMPUTERS & OFFICE EQUIPMENT - 12.7%
Apple Computer, Inc. (a) 250 33,953
Crossroads Systems, Inc. (a) 240 24,780
Dell Computer Corp. (a) 450 24,300
IKON Office Solutions, Inc. 200 1,238
International Business Machines Corp. 180 21,240
National Instruments Corp. (a) 600 28,162
-----------------
133,673
-----------------
ELECTRICAL EQUIPMENT - 4.2%
Applied Materials, Inc. (a) 470 44,327
-----------------
ELECTRONIC INSTRUMENTS - 8.9%
Advanced Micro Devices, Inc. (a) 900 51,469
Electrosource, Inc. (a) 1,000 14,312
Solectron Corp. (a) 600 24,225
XeTel Corp. (a) 1,000 3,125
-----------------
93,131
-----------------
ENTERTAINMENT - 1.0%
Grand Adventures Tour & Travel Publishing Corp. (a) 2,000 10,000
-----------------
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
GROCERY STORES - 2.4%
Whole Foods Market, Inc. (a) 600 24,834
-----------------
HEALTH - DIVERSIFIED - 1.7%
Abbott Laboratories, Inc. 500 17,688
-----------------
HEALTHCARE FACILITIES - 0.4%
Columbia/HCA Healthcare Corp. 100 2,531
Prime Medical Services, Inc. (a) 200 1,775
-----------------
4,306
-----------------
INDUSTRIAL MACHINERY - 0.5%
DTM Corp. (a) 2,000 5,125
-----------------
INSURANCE - 0.8%
Citizens, Inc. (a) 300 1,969
Financial Industries Corp. 100 950
Humana, Inc. (a) 200 1,487
InterContinental Life Corp. (a) 200 2,000
National Western Life Insurance Co. - Cl A (a) 30 2,430
-----------------
8,836
-----------------
INTERNET INFORMATION PROVIDERS - 11.9%
Drkoop.com, Inc. (a) 1,500 5,531
Garden.com, Inc. (a) 1,500 12,187
Hoover's, Inc. 1,830 20,816
ProsoftTraining.com (a) 700 15,575
Vignette Corp. (a) 440 70,483
-----------------
124,592
-----------------
MANUFACTURERS - DIVERSIFIED - 0.3%
Minnesota Mining & Manufacturing Co. 30 2,668
-----------------
MEDICAL EQUIPMENT & SUPPLIES - 1.0%
Arrhythmia Research Technology, Inc. (a) 2,000 5,000
Encore Medical Corp. (a) 2,000 5,625
-----------------
10,625
-----------------
NATURAL GAS - 1.7%
Southern Union Co. 1,000 18,063
-----------------
OIL & GAS OPERATIONS - 0.4%
Brigham Exploration Co. (a) 2,000 4,500
-----------------
PERSONAL & HOUSEHOLD PRODUCTS - 0.1%
Surrey, Inc. (a) 1,000 1,594
-----------------
PHOTOGRAPHY & IMAGING - 1.9%
Dupont Photomask, Inc. (a) 350 20,278
-----------------
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
PRINTING & PUBLISHING - 2.2%
Harte-Hanks Communications, Inc. 1,000 22,688
-----------------
REAL ESTATE DEVELOPERS - 0.2%
Stratus Properties, Inc. (a) 500 2,125
-----------------
RESTAURANTS - 1.3%
Schlotzky's Inc. (a) 2,200 13,200
-----------------
RETAIL & WHOLESALE - SPECIALTY - 3.7%
EZCORP, Inc. - Cl A 500 1,969
pcOrder.com, Inc. - Cl A (a) 700 15,750
Travis Boats & Motors, Inc. (a) 1,600 21,200
-----------------
38,919
-----------------
SCIENTIFIC & TECHNICAL INSTRUMENTS - 0.8%
ThermoQuest Corp. (a) 500 8,406
-----------------
SEMICONDUCTORS - 4.5%
Cirrus Logic, Inc. (a) 1,600 29,200
Silicon Laboratories, Inc. (a) 200 17,700
-----------------
46,900
-----------------
TELECOMMUNICATIONS SERVICES - 3.7%
Broadwing, Inc. 1,000 37,126
SBC Communications, Inc. 40 1,688
-----------------
38,814
-----------------
TOTAL COMMON STOCKS (COST $788,288) 950,423
-----------------
PRINCIPAL
VALUE VALUE
Money Market Securities - 10.1%
Firstar Treasury Fund, 5.09% (b) (Cost $105,373) 105,373 105,373
-----------------
TOTAL INVESTMENTS - 100.7% (COST $893,661) 1,055,796
-----------------
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.7)% (6,970)
-----------------
TOTAL NET ASSETS - 100.0% $ 1,048,826
=================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND MARCH 31, 2000
STATEMENT OF ASSETS & LIABILITIES
ASSETS
Investment in securities (cost $893,661) $ 1,055,796
Cash 2,526
Dividends receivable 19
Interest receivable 1,060
-------------------
TOTAL ASSETS 1,059,401
LIABILITIES
Accrued investment advisory fee payable $ 1,003
Payable for securities purchased 9,562
Accrued other payables 10
-----------------
TOTAL LIABILITIES 10,575
-------------------
NET ASSETS $ 1,048,826
===================
Net Assets consist of:
Paid in capital $ 886,691
Net unrealized appreciation on investments 162,135
-------------------
NET ASSETS, for 74,784 shares $ 1,048,826
===================
NET ASSET VALUE
Offering price and redemption price per share ($1,048,826 / 74,784) $ 14.02
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
STATEMENT OF OPERATIONS FOR THE PERIOD SEPTEMBER 1, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 262
Interest income 2,250
---------------
TOTAL INCOME 2,512
EXPENSES
Investment advisory fee $ 4,479
Trustees' fees 938
-------------------
Total expenses before reimbursement 5,417
Reimbursed expenses (938)
-------------------
Total operating expenses 4,479
---------------
NET INVESTMENT LOSS (1,967)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 65
Change in net unrealized appreciation
on investment securities 162,135
-------------------
Net gain on investment securities 162,200
---------------
NET INCREASE IN NET ASSETS $ 160,233
RESULTING FROM OPERATIONS ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD SEPTEMBER 1, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (1,967)
Net realized gain on investment securities 65
Change in net unrealized appreciation 162,135
-----------------
Net increase in net assets resulting from operations 160,233
-----------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 889,826
Shares redeemed (1,233)
-----------------
Net increase in net assets resulting
from share transactions 888,593
-----------------
TOTAL INCREASE IN NET ASSETS 1,048,826
-----------------
NET ASSETS
Beginning of period 0
-----------------
End of period [including accumulated undistributed
net investment income of $0] $ 1,048,826
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
FOR THE PERIOD SEPTEMBER 1, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000
<S> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment loss (0.04)
Net realized and unrealized gain 4.06
---------------
Total from investment operations 4.02
---------------
Net asset value, end of period $ 14.02
===============
TOTAL RETURN (b) 40.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) 1,049
Ratio of expenses to average net assets 1.25% (a)
Ratio of expenses to average net assets
before reimbursement 1.51% (a)
Ratio of net investment income (loss) to
average net assets (0.55)% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.81)% (a)
Portfolio turnover rate 0.80% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL U.S. OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000
<S> <C> <C>
COMMON STOCKS - 85.9% SHARES VALUE
APPAREL STORES - 1.1%
Gap, Inc. 800 $ 39,950
-----------------
BANKS - 2.7%
Citigroup, Inc. 780 46,264
Toronto-Dominion Bank 2,000 53,375
-----------------
99,639
-----------------
BUILDING SUPPLIES - 1.4%
Home Depot, Inc. 800 52,300
-----------------
COMMUNICATIONS EQUIPMENT - 8.6%
At Home Corp. - Cl A (a) 700 23,056
Lucent Technologies, Inc. 600 36,450
Motorola, Inc. 400 56,950
QUALCOMM, Inc. (a) 1,100 164,037
VTEL Corp. (a) 5,000 38,750
-----------------
319,243
-----------------
COMPUTER SERVICES & SOFTWARE - 18.1%
3Com Corp. (a) 1,000 55,625
Advent Software, Inc. (a) 1,600 73,400
America Online, Inc. (a) 700 47,513
BMC Software, Inc. (a) 700 34,562
Cadence Design Systems, Inc. (a) 1,900 38,713
Computer Associates International, Inc. 800 47,350
EMC Corp. (a) 600 75,600
Microsoft Corp. (a) 400 42,650
Networks Associates, Inc. (a) 1,500 48,375
Oracle Corp. (a) 1,500 117,094
Prodigy Communications Corp. (a) 1,500 22,594
Yahoo! Inc. (a) 400 68,550
-----------------
672,026
-----------------
COMPUTERS & OFFICE EQUIPMENT - 11.6%
Altera Corp. (a) 900 80,325
Cisco Systems, Inc. (a) 1,100 84,700
Dell Computer Corp. (a) 1,000 54,000
Hewlett-Packard Co. 400 53,250
Micron Technology, Inc. (a) 500 63,000
Sun Microsystems, Inc. (a) 1,000 93,688
-----------------
428,963
-----------------
CONSTRUCTION - 0.6%
Centex Corp. 1,000 23,687
-----------------
DRUGS & PHARMACEUTICALS - 2.7%
Lilly (Eli) & Co. 500 31,563
Merck & Co., Inc. 500 31,469
Pfizer, Inc. 1,000 36,625
-----------------
99,657
-----------------
MARTIN CAPITAL U.S. OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
ELECTRICAL EQUIPMENT - 5.8%
American Power Conversion Corp. (a) 1,700 $ 72,887
Applied Materials, Inc. (a) 1,000 94,313
General Electric Co. 300 46,669
-----------------
213,869
-----------------
ELECTRONIC INSTRUMENTS - 7.2%
LSI Logic Corp. (a) 1,400 100,537
Texas Instruments, Inc. 500 81,000
Advanced Micro Devices, Inc. (a) 1,500 85,781
-----------------
267,318
-----------------
ENTERTAINMENT - 1.3%
Time Warner, Inc. 500 49,469
-----------------
FINANCE - DIVERSIFIED - 1.2%
American Express Co. 300 44,681
-----------------
GROCERY STORES - 0.9%
Whole Foods Market, Inc. (a) 800 33,112
-----------------
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%
Lam Research Corp. (a) 2,600 117,162
-----------------
INSURANCE - 1.0%
Berkshire Hathaway Inc. - Cl B (a) 20 36,460
-----------------
INTERNET INFORMATION PROVIDERS - 3.4%
Vignette Corp. (a) 800 128,150
-----------------
INVESTMENT COMPANY - 1.2%
Bear Stearns Cos., Inc. 1,000 45,750
-----------------
MEDICAL EQUIPMENT & SUPPLIES - 2.4%
Colorado MEDtech, Inc. (a) 3,000 23,625
Medtronic, Inc. 1,000 51,563
VISX, Inc. (a) 800 14,600
-----------------
89,788
-----------------
PHOTOGRAPHY & IMAGING - 1.2%
Dupont Photomask, Inc. (a) 800 46,350
-----------------
RESTAURANTS - 1.8%
Starbucks Corp. (a) 1,500 67,219
-----------------
RETAIL & WHOLESALE - SPECIALTY - 2.2%
pcOrder.com, Inc. - Cl A (a) 700 15,750
Tiffany & Co. 800 66,950
-----------------
82,700
-----------------
MARTIN CAPITAL U.S. OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
SECURITIES INDUSTRY - 2.6%
E*TRADE Group, Inc. (a) 1,500 $ 44,906
Schwab (Charles) Corp. 900 51,075
-----------------
95,981
-----------------
SEMICONDUCTORS - 1.8%
Intel Corp. 500 66,000
-----------------
TELEPHONE SERVICES - 1.9%
AT&T Corp. 500 28,312
Qwest Communications International, Inc. (a) 900 43,200
-----------------
71,512
-----------------
TOTAL COMMON STOCKS (COST $2,146,282) 3,190,986
-----------------
PRINCIPAL
VALUE VALUE
U.S. GOVERNMENT OBLIGATIONS - 3.2%
U.S. Treasury Bond, 6%, 2/15/2026 (Cost $116,054) 120,000 118,688
-----------------
MONEY MARKET SECURITIES - 10.6%
Firstar Treasury Fund, 5.09% (b) (Cost $391,357) 391,357 391,357
-----------------
TOTAL INVESTMENTS - 99.7% (COST $2,653,693) 3,701,031
-----------------
OTHER ASSETS LESS LIABILITIES - 0.3% 12,204
-----------------
TOTAL NET ASSETS - 100.0% $ 3,713,235
=================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MARTIN CAPITAL U.S. OPPORTUNITY FUND MARCH 31, 2000
STATEMENT OF ASSETS & LIABILITIES
ASSETS
Investment in securities (cost $2,653,693) $ 3,701,031
Cash 496
Dividends receivable 739
Interest receivable 3,308
Receivable for fund shares sold 11,500
Other receivables 84
-------------------
TOTAL ASSETS 3,717,158
LIABILITIES
Accrued investment advisory fee payable $ 3,743
Accrued other payables 180
-----------------
TOTAL LIABILITIES 3,923
-------------------
NET ASSETS $ 3,713,235
===================
Net Assets consist of:
Paid in capital $ 2,665,897
Net unrealized appreciation on investments 1,047,338
-------------------
NET ASSETS, for 229,413 shares $ 3,713,235
===================
NET ASSET VALUE
Offering price and redemption price per share ($3,713,235 / 229,413) $ 16.19
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL U.S. OPPORTUNITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 4,105
Interest income 11,634
Miscellaneous income 148
---------------
TOTAL INCOME 15,887
EXPENSES
Investment advisory fee $ 22,038
Trustees' fees 2,076
-------------------
Total expenses before reimbursement 24,114
Reimbursed expenses (2,076)
-------------------
Total operating expenses 22,038
---------------
NET INVESTMENT LOSS (6,151)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gains on options transactions 5,598
Change in net unrealized appreciation
on investment securities 1,047,338
-------------------
Net gain on investment securities 1,052,936
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,046,785
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL U.S. OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31, 2000
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (6,151)
Net realized gain on investments 5,598
Change in net unrealized appreciation 1,047,338
-----------------
Net increase in net assets resulting from operations 1,046,785
-----------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 2,694,998
Shares redeemed (28,548)
-----------------
Net increase in net assets resulting
from share transactions 2,666,450
-----------------
TOTAL INCREASE IN NET ASSETS 3,713,235
-----------------
Net Assets
Beginning of period 0
-----------------
End of period [including accumulated undistributed
net investment income of $0] $ 3,713,235
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARTIN CAPITAL U.S. OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED MARCH 31, 2000
<S> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment income (loss) (0.04)
Net realized and unrealized gain 6.23
---------------
Total from investment operations 6.19
---------------
Net asset value, end of period $ 16.19
===============
TOTAL RETURN 61.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) 3,713
Ratio of expenses to average net assets 1.25%
Ratio of expenses to average net assets
before reimbursement 1.37%
Ratio of net investment income (loss) to
average net assets (0.35)%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.47)%
Portfolio turnover rate 0.35%
</TABLE>
<PAGE>
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1. ORGANIZATION
Martin Capital Austin Opportunity Fund (the "Austin Opportunity Fund") and
Martin Capital U.S. Opportunity Fund (the "U.S. 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 and
April 1, 1999, respectively. Each Fund is registered under the Investment
Company Act of 1940, as amended, as a non-diversified open-end management
investment company. 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, and 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.
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
OPTION WRITING- When the 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.
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
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 commissions,
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 period
September 1, 1999 (commencement of operations) through March 31, 2000, the
Advisor received a fee of $4,479 from the Austin Opportunity Fund. For the
fiscal year ended March 31, 2000, the Advisor received a fee of $22,038 from the
U.S. 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 period September 1, 1999 (commencement of
operations) through March 31, 2000, the Advisor reimbursed expenses of $938 for
the Austin Opportunity fund. For the fiscal year ended March 31, 2000, the
Advisor reimbursed expenses of $2,076 for the U.S. 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. All distribution expenses incurred by a Fund under its
plan are paid by the Advisor pursuant to the management agreement.
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 period September 1, 1999 (commencement of
operations) through March 31, 2000, the Administrator received fees of $10,000
from the Advisor for administrative services provided to the Austin Opportunity
Fund. For the fiscal year ended March 31, 2000, the Administrator received fees
of $18,333 from the Advisor for administrative services provided to the U.S.
Opportunity Fund.
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 period September
1, 1999 (commencement of operations) through
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
March 31, 2000, Unified received fees of $6,465 from the Advisor for transfer
agent services provided to the Austin Opportunity Fund. For the fiscal year
ended March 31, 2000, Unified received fees of $17,935 from the Advisor for
transfer agent services provided to the U.S. 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 period September 1, 1999
(commencement of operations) through March 31, 2000, Unified received fees of
$4,258 from the Advisor for fund accounting services provided to the Austin
Opportunity Fund. For the fiscal year ended March 31, 2000, Unified received
fees of $9,600 from the Advisor for fund accounting services provided to the
U.S. 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 period September 1, 1999 (commencement
of operations) through March 31, 2000 and for the fiscal year ended March 31,
2000 for the Austin Opportunity Fund and U.S. Opportunity Fund, respectively.
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 March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was $886,691.
Transactions in shares were as follows:
FOR THE PERIOD SEPTEMBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
THROUGH MARCH 31, 2000
SHARES DOLLARS
Shares sold 74,885 $889,826
Shares redeemed (101) (1,233)
--------- ---------
74,784 $888,593
========= =========
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 4. SHARE TRANSACTIONS - CONTINUED
U.S. OPPORTUNITY FUND. As of March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was
$2,665,897.
Transactions in shares were as follows:
FOR THE FISCAL YEAR ENDED
MARCH 31, 2000
SHARES DOLLARS
Shares sold 231,507 $2,694,998
Shares redeemed (2,094) (28,548)
-------- -----------
229,413 $2,666,450
======== ===========
NOTE 5. INVESTMENTS
AUSTIN OPPORTUNITY FUND. For the period September 1, 1999 (commencement of
operations) through March 31, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $790,763 and $2,540,
respectively. The gross unrealized appreciation for all securities totaled
$223,991 and the gross unrealized depreciation for all securities totaled
$61,856 for a net unrealized appreciation of $162,135. The aggregate cost of
securities for federal income tax purposes at March 31, 2000 was $893,661.
U.S. OPPORTUNITY FUND. For the fiscal year ended March 31, 2000, purchases and
sales of investment securities, other than short-term investments, aggregated
$2,262,297 and $5,622, respectively. The gross unrealized appreciation for all
securities totaled $1,163,613 and the gross unrealized depreciation for all
securities totaled $116,275 for a net unrealized appreciation of $1,047,338. The
aggregate cost of securities for federal income tax purposes at March 31, 2000
was $2,653,693.
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.
MARTIN CAPITAL OPPORTUNITY FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
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 March 31, 2000, National
Investor Services owned of record in aggregate more than 27% of the Austin
Opportunity Fund. As of March 31, 2000, National Investor Services owned of
record in aggregate more than 67% of the U.S. Opportunity Fund.
NOTE 8. CALL OPTIONS WRITTEN
U.S. OPPORTUNITY FUND. Transactions in options written during the fiscal year
ended March 31, 2000 were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
Options written 5 $5,600
Options expired (5) (5,600)
------ -------
Options outstanding at March 31, 2000 0 $ 0
====== =======
<PAGE>
MARTIN CAPITAL OPPORTUNITY FUNDS
INDEPENDENT AUDITOR'S REPORT
April 20, 2000
To The Shareholders and Board of Trustees
Martin Capital Opportunity Funds (series of AmeriPrime Funds)
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Martin Capital Opportunity Funds
(comprising, respectively, the Martin Capital Austin Opportunity Fund and the
Martin Capital U.S. Opportunity Fund), as of March 31, 2000, and the related
statements of operations, the statements of changes in net assets, and the
financial highlights for each of the periods indicated. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held as
of March 31, 2000 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
Martin Capital Austin Opportunity Fund and the Martin Capital U.S. Opportunity
Fund as of March 31, 2000, the results of their operations, the changes in their
net assets, and the financial highlights for each of the periods indicated in
conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 20, 2000
<PAGE>
<TABLE>
<CAPTION>
WESTCOTT NOTHING BUT NET FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 101.3% SHARES VALUE
COMMUNICATIONS SOFTWARE - 11.2%
Communication Intelligence Corp. (a) 15,000 $ 89,532
Lernout & Hauspie Speech Products NV (a) 2,000 221,000
-----------------
310,532
-----------------
CORPORATE, PROFESSIONAL & FINANCIAL SOFTWARE - 8.7%
Ariba, Inc. (a) 750 157,219
Cybercash, Inc. (a) 3,625 48,938
Intuit, Inc. (a) 650 35,344
-----------------
241,501
-----------------
DATABASE & FILE MANAGEMENT SOFTWARE - 3.8%
Centura Software Corp. (a) 10,000 103,438
-----------------
DEVELOPMENT TOOLS, AND OPERATING SYSTEMS - 5.5%
BE, Inc. (a) 10,000 151,250
-----------------
DIVERSIFIED TELECOM SERVICE PROVIDERS - 1.4%
Qwest Communications International, Inc. (a) 825 39,600
-----------------
INFORMATION COLLECTION & DELIVERY SERVICES - 16.7%
Hyperfeed Technologies, Inc. (a) 40,000 240,000
Multex.com, Inc. (a) 1,175 43,640
WAVO Corp. (a) 40,000 178,752
-----------------
462,392
-----------------
INTERNET & INTRANET SOFTWARE SERVICES - 7.3%
Exodus Communications, Inc. (a) 400 56,250
Healtheon / WebMd Corp. (a) 1,900 42,988
Inktomi Corp. (a) 265 51,675
Network Solutions, Inc. (a) 250 38,422
RealNetworks Inc. (a) 225 12,821
-----------------
202,156
-----------------
INTERNET & ONLINE CONTENT PROVIDERS - 16.6%
America Online, Inc. (a) 800 54,300
Blue Zone, Inc. 10,000 90,000
Mediconsult.com, Inc. (a) 80,000 230,000
Yahoo, Inc. (a) 500 85,688
-----------------
459,988
-----------------
INVESTMENT BANKING & BROKERAGE - 6.7%
E*Trade Group, Inc. (a) 1,100 32,931
Knight/Trimark Group, Inc. (a) 3,000 153,000
-----------------
185,931
-----------------
MARKETING & PUBLIC RELATION SERVICES - 1.7%
Be Free, Inc. (a) 1,120 24,640
Razorfish, Inc. - Class A (a) 800 21,850
-----------------
46,490
-----------------
WESTCOTT NOTHING BUT NET FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED
MISCELLANEOUS BUSINESS SERVICES - 5.6%
eBAY, Inc. (a) 750 $ 132,000
Ventro Corp. (a) 375 21,234
-----------------
153,234
-----------------
MULTIMEDIA PRODUCTION, GRAPHICS & PUBLISHING - 1.4%
Macromedia, Inc. (a) 430 38,834
-----------------
NETWORKING & COMMUNICATION DEVICES - 5.8%
Foundry Networks, Inc. (a) 240 34,500
LinuxWizardry System, Inc. (a) 35,200 126,498
-----------------
160,998
-----------------
SECURITY SOFTWARE SERVICES - 3.8%
Check Point Software Technologies LTD. (a) 350 59,872
VeriSign, Inc. (a) 300 44,963
-----------------
104,835
-----------------
SERVICES TO FINANCIAL COMPANIES - 2.4%
Checkfree Holdings Corp. (a) 375 26,438
First Data Corp. 900 39,769
-----------------
66,207
-----------------
SERVICES TO COMMUNICATION PROVIDERS - 1.7%
Global Crossing LTD. (a) 650 26,650
Network Access Solutions Corp. (a) 950 20,900
-----------------
47,550
-----------------
SPECIALTY RETAIL - 1.0%
Amazon.com, Inc. (a) 400 26,800
-----------------
TOTAL COMMON STOCKS (COST $3,034,407) 2,801,736
-----------------
TOTAL INVESTMENTS - 101.3% (COST $3,034,407) 2,801,736
-----------------
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.3)% (36,385)
-----------------
TOTAL NET ASSETS - 100.0% $ 2,765,351
=================
(a) Non-income producing
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
WESTCOTT NOTHING BUT NET FUND MARCH 31, 2000
STATEMENT OF ASSETS & LIABILITIES (Unaudited)
ASSETS
Investment in securities (cost $3,034,407) $ 2,801,736
Dividends receivable 18
Interest receivable 592
Receivable for securities sold 174,260
-------------------
TOTAL ASSETS 2,976,606
LIABILITIES
Accrued investment advisory fee payable $ 4,738
Accrued distribution fee payable 177
Payable for securities purchased 13,751
Payable to custodiun bank 192,439
Other payables and accrued expenses 150
-----------------
TOTAL LIABILITIES 211,255
-------------------
NET ASSETS $ 2,765,351
===================
Net Assets consist of:
Paid in capital $ 3,019,791
Accumulated net investment loss (10,665)
Accumulated net realized loss on investments (11,104)
Net unrealized depreciation on investments (232,671)
-------------------
NET ASSETS $ 2,765,351
===================
CLASS A:
Net Asset Value, offering price and redemption
price per share ($273,426/28,362 shares) $ 9.64
===================
CLASS I:
Net Asset Value, offering price and redemption
price per share ($2,491,925/260,053 shares) $ 9.58
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WESTCOTT NOTHING BUT NET FUND
STATEMENT OF OPERATIONS FOR THE PERIOD DECEMBER 8, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 36
Interest income 2,347
---------------
TOTAL INCOME 2,383
EXPENSES
Investment advisory fee $ 12,722
Distribution fees - Class A 177
Trustee's fees 1,343
-------------------
Total expenses before reimbursement 14,242
Reimbursed expenses (1,194)
-------------------
Total operating expenses 13,048
---------------
NET INVESTMENT LOSS (10,665)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized loss on investment securities (11,104)
Change in net unrealized depreciation
on investment securities (232,671)
-------------------
Net loss on investment securities (243,775)
---------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (254,440)
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WESTCOTT NOTHING BUT NET FUND
STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT
OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED)
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment loss $ (10,665)
Net realized loss on investment securities (11,104)
Change in net unrealized depreciation (232,671)
-----------------
Net decrease in net assets resulting from operations (254,440)
-----------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income 0
Return of capital 0
From net realized gain 0
-----------------
Total distributions 0
SHARE TRANSACTIONS - NET INCREASE
Class A 284,693
Class I 2,735,098
-----------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 3,019,791
-----------------
TOTAL INCREASE IN NET ASSETS 2,765,351
-----------------
Net Assets
Beginning of period 0
-----------------
End of period [including accumulated net $ 2,765,351
investment loss of $(10,665)] =================
</TABLE>
<PAGE>
WESTCOTT NOTHING BUT NET FUND
CLASS A
FINANCIAL HIGHLIGHTS FOR THE PERIOD DECEMBER 8, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED)
Selected Per Share Data
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment loss (0.06)
Net realized and unrealized gain (loss) (0.30)
---------------
Total from investment operations (0.36)
---------------
Less distributions:
Distributions from net investment income 0.00
Distributions from net realized gains 0.00
---------------
Total distributions 0.00
---------------
Net asset value, end of period $ 9.64
===============
TOTAL RETURN (a) (3.60)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $273
Ratio of expenses to average net assets 1.97% (b)
Ratio of expenses to average net assets
before reimbursement 2.17% (b)
Ratio of net investment income to
average net assets (1.64)% (b)
Ratio of net investment income (loss) to
average net assets before reimbursement (1.84)% (b)
Portfolio turnover rate 124.70% (b)
(a) For periods of less than a full year, total returns are not annualized.
(b) Annualized
<PAGE>
WESTCOTT NOTHING BUT NET FUND
CLASS I
FINANCIAL HIGHLIGHTS FOR THE PERIOD DECEMBER 8, 1999
(COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED)
Selected Per Share Data
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment loss (0.05)
Net realized and unrealized gain (loss) (0.37)
---------------
Total from investment operations (0.42)
---------------
Less distributions:
Distributions from net investment income 0.00
Distributions from net realized gains 0.00
---------------
Total distributions 0.00
---------------
Net asset value, end of period $ 9.58
===============
TOTAL RETURN (a) (4.20)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $2,492
Ratio of expenses to average net assets 1.72% (b)
Ratio of expenses to average net assets
before reimbursement 1.90% (b)
Ratio of net investment income to
average net assets (1.40)% (b)
Ratio of net investment income (loss) to
average net assets before reimbursement (1.58)% (b)
Portfolio turnover rate 124.70% (b)
(a) For periods of less than a full year, total returns are not annualized.
(b) Annualized
<PAGE>
WESTCOTT NOTHING BUT NET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
The Westcott Nothing But Net Fund (the "Fund") was organized as diversified
series of AmeriPrime Funds (the "Trust") on September 29, 1999 and commenced
operations on December 8, 1999. The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Fund's investment objective is
to provide long-term growth of capital. The Trust Agreement permits the Trustees
to issue an unlimited number of shares of beneficial interest without par value.
The Fund currently consists of two classes of shares, Class A and Class I,
each of which has equal rights as to assets and voting privileges except that
each class has different distribution expenses. Each class has exclusive voting
rights with respect to its distribution plans.
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 VALUATION- 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 opinion of the Adviser, 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
Adviser 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 Adviser, in conformity with guidelines
adopted by and subject to review of 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
Adviser believes such prices accurately reflect the fair market values 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 Adviser,
subject to review by 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
WESTCOTT NOTHING BUT NET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 comply with federal tax
rules regarding distribution of substantially all its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the 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 Aegis Asset Management, Inc. (the "Adviser") to manage the
Fund's investments. Layng Guerriero is primarily responsible for the day-to-day
management of the portfolio of the Fund.
Under the terms of the management agreement (the "Agreement"), the Adviser
manages each Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of each Fund except brokerage, taxes, borrowing costs
(such as (a) interest and (b) dividend expenses on securities sold short), fees
and expenses of the 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 Adviser a fee (based on average daily
net assets) of 1.70% computed and accrued daily and paid. For the period from
December 8, 1999 (commencement of operations) through March 31, 2000, the
Adviser received a fee of $12,722 from the Fund. The Adviser has voluntarily
agreed to reimburse other expenses to the extent necessary to maintain total
operating expenses at the rate of 1.97%, and 1.72% for A and B shares,
respectively. For the period from December 8, 1999 (commencement of operations)
through March 31, 2000, The Adviser reimbursed expenses of $1,194. There is no
assurance that such reimbursement will continue in the future.
WESTCOTT NOTHING BUT NET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
On behalf of the Class A shares, the fund has adopted a distribution fee
(the "Distribution Plan") under Rule 12b-1 of the 1940 Act. Under the
Distribution Plan, the Fund is authorized to pay a fee in an amount not to
exceed on an annual basis 0.25% of the average daily net asset value of the
Class A Shares. For the period from December 8, 1999 (commencement of
operations) through March 31, 2000, the Adviser received distribution fees of
$177 from the Fund for expenses related to the sale of Fund shares.
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 Adviser 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 period from
December 8, 1999 (commencement of operations) through March 31, 2000, the
Administrator received fees of $9,390 from the Adviser 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 Adviser of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the period from December 8, 1999 (commencement of
operations), Unified received fees of $6,653 from the Adviser for transfer agent
services. For its services as fund accountant, Unified receives an annual fee
from the Adviser 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
period from December 8, 1999 (commencement of operations), Unified received fees
of $5,574 from the Adviser 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 period from December 8, 1999 (commencement of operations)
through March 31, 2000. Certain members of management of the Administrator and
the Distributor are also members of management of the AmeriPrime Trust.
WESTCOTT NOTHING BUT NET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) - CONTINUED
NOTE 4. SHARE TRANSACTIONS
As of March 31, 2000, there were an unlimited number of authorized shares
for the Fund. Paid in capital at March 31, 2000 was $3,019,791.
Transactions in shares were as follows:
FOR THE PERIOD DECEMBER 8, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
SHARES DOLLARS
CLASS A:
Shares sold 50,886 $538,241
Shares issued from
reinvested Dividends 0 0
Shares redeemed (22,524) (253,548)
---------- -----------
28,362 $284,693
========== ===========
FOR THE PERIOD DECEMBER 8, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
SHARES DOLLARS
CLASS I:
Shares sold 281,134 $2,960,385
Shares issued from
reinvested Dividends 0 0
Shares redeemed (21,081) (225,287)
---------- ----------
260,053 $2,735,098
========== ==========
NOTE 5. INVESTMENTS
For the period from December 8, 1999 (commencement of operations) through
March 31, 2000, purchases and sales of investment securities, other than
short-term investments, aggregated $3,767,548 and $722,039, respectively. As of
March 31, 2000, the gross unrealized appreciation for all securities totaled
$334,090 and the gross unrealized depreciation for all securities totaled
$566,761 for a net unrealized depreciation of $232,671. The aggregate cost of
securities for federal income tax purposes at March 31, 2000 was $3,034,407.
WESTCOTT NOTHING BUT NET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) - CONTINUED
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 Adviser is not a registered broker-dealer of securities and does not
receive commissions on trades made on behalf of the Fund. 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 March 31, 2000, Margaret
Guerriero beneficially owned in aggregate more than 94% of A Shares of the Fund.
As of March 31, 2000, Eckhard Pfeiffer beneficially owned in aggregate more than
89% of I Shares of the Fund.
<PAGE>
May 1, 2000
Dear Shareholder,
We are pleased to present the performance results of the Shepherd Values Family
of Funds ("Funds") for the period ended March 31, 2000 for your perusal.
SHEPHERD VALUES GROWTH FUND
CORNERSTONE CAPITAL MANAGEMENT, INC.
The Shepherd Values Growth Fund has nearly completed its first full year of
results. The fund has successfully employed its bottom-up, fundamental
discipline of investing in a wide range of U.S. companies. While the funds style
of investing doesn't preclude it to investing in any particular "type" of
company (e.g., value vs. growth), the funds higher weighted P/E and beta has
lent itself well to the investment environment of the past several months. High
P/E stocks have generally outperformed low P/E stocks over the past several
months and we view this trend continuing as investors favor the high growth
sectors such as technology, telecommunications and the Internet.
SHEPHERD VALUES MARKET NEUTRAL FUND
CORNERSTONE CAPITAL MANAGEMENT, INC.
The environment for this fund has been especially challenging over the past
several months. Coupled with the limited asset size of the fund, this has led to
more volatile results than normally expected from this strategy. With a small
number of positions, both long and short, we have greater stock selection risk
and as a result, our volatility exposure is higher than a fund with a large
number of positions and meaningful assets.
In volatile market moves, the fund also participated. The fund was particularly
vulnerable to the hype in the Internet sector in the first quarter of 2000, as
it was short business-to-business Internet stocks that saw their shares
skyrocket in January and February and plummet in March, as the SEC examined
accounting practices and revenue recognition policies. The fund maintains
relatively low correlation to the S&P 500, which is an expected characteristic
of an absolute return strategy. We continue to target a fully hedged portfolio
(equal long and short) in light of dramatic shifts within the U.S. equity
markets.
SHEPHERD VALUES SMALL-CAP FUND
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
Starting in March, value stocks staged an impressive rally that significantly
narrowed their performance gap relative to growth stocks. Following several
months of underperformance versus growth stocks, we believe a number of
fundamentals support the case for the continued improvement in the asset class:
better-than-expected earnings, acceleration in global economic growth and rising
productivity.
Industry specific developments have also contributed to the improved performance
among value stocks recently. There is the potential for consolidation, as
evidenced by Citicorp's decision to purchase Traveler's Property and Casualty.
Banks are also supporting an anticipation that the Federal Reserve's interest
rate hikes will soon be over.
We continue to look for small-cap stocks that display the following
characteristics:
o Attractive valuation
o Underlying financial strength
o Evidence of positive change
SHEPHERD VALUES INTERNATIONAL FUND
TEMPLETON PORTFOLIO ADVISORY
The first quarter of 2000 was marked by technology, media and telecommunications
stocks continued outperformance relative to "old economy" stocks. This trend,
coupled with severe volatility, was widely noted in U.S. markets with the
divergence in performance of the NASDAQ Composite (up 12.37%) and the Dow Jones
Industrial Average (down 4.68%) in the first quarter of 2000. Yet, investor
appetite for the above mentioned "new economy" sectors has not been limited to
the U.S. and has spread throughout the world to both developed and emerging
markets. In our view, this "old" vs. "new" economy battle has created a
two-tiered market worldwide with valuations and volatility rising on the one
side and the opportunity of capitalizing on values created by mispricing on the
other.
Throughout Templeton's 50-year history of managing money, the key to their
success has never been to follow the crowd, and during times of extreme
volatility and speculation, they have remained committed to their long-term,
bottom-up approach. According to our manager, today's marketplace has created
tremendous opportunity to find values worldwide and to invest in world-class
"old economy" companies at bargain prices. In the words of Sir John Templeton,
"Too many investors focus on outlook and trend. More profit is made by focusing
on value. In the stock market, the only way to get a bargain is to buy what most
investors are selling."
SHEPHERD VALUES FIXED INCOME FUND
POTOMAC ASSET MANAGEMENT COMPANY
For the calendar year 1999, the bond market, as measured by the major indices,
showed negative returns with the Federal Reserve aggressively using Fed policy
to fight the threat of inflation. For the brief history of the fund, we
maintained a shorter than average maturity for the fund. In early 2000, the
Federal Reserve announced a series of buybacks to retire the 30-year U.S.
Treasury bond in line with policy decisions to use part of the Federal budget
surplus. This has created an inverted yield curve in the fixed income markets
with short- and intermediate-term bonds having higher yields than long-term
bonds. Since the beginning of 2000, we have managed the portfolio's bond
maturity to take advantage of the higher rates available in the
intermediate-term market.
SHEPHERD VALUES VIF EQUITY FUND
This fund is not actively managed; asset level too small for indexing.
VALUES-BASED POLICY
As always, the Shepherd Values Funds maintain consistency with the values-based
policy stated in the prospectus. We continue to monitor positions on a daily
basis to ensure this consistency at all times. Subsequently, we work closely
with our research partner, the Values Investment Forum, Inc. to provide the
Shepherd Values Funds with customized research on the values standards of
corporate America. While we clearly exclude a number of companies from the
Shepherd Values Funds as a result of this policy, we don't believe it has any
imposing impact on the overall performance of the Shepherd Values Funds, whether
on an absolute basis or when compared to appropriate benchmarks.
We appreciate your continued trust and confidence. As always, please don't
hesitate to contact us with any questions or comments.
Respectfully,
Jason D. Huntley
Chief Investment Officer
Shepherd Advisory Services, Inc.
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Fixed Income Fund
Schedule of Investments - March 31, 2000
<S> <C> <C>
Corporate Bonds - 42.5% Principal Value
The Goldman Sachs Group, Inc., 6.65%, 05/15/09 50,000 $ 46,412
Morgan Stanley Dean Witter & Co., 6.40%, 4/28/08 20,000 18,512
-----------------
-----------------
TOTAL CORPORATE BONDS (Cost $64,776) 64,924
-----------------
-----------------
U.S. Government Securities - 16.6%
Federal Home Loan Bank, 7.375%, 2/12/10 (Cost $25,531) 25,000 25,405
-----------------
-----------------
Money Market Securities - 3.7%
Firstar Treasury Fund, 5.09% (a) (Cost $5,700) 5,700 5,700
-----------------
-----------------
TOTAL INVESTMENTS - 62.8% (Cost $96,007) 96,029
-----------------
-----------------
Other assets less liabilities - 37.2% 56,831
-----------------
-----------------
Total Net Assets - 100.0% $ 152,860
=================
(a) Variable rate security; the coupon rate shown represents the rate at March 31, 2000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Shepherd Values Fixed Income Fund March 31, 2000
Statement of Assets & Liabilities
Assets
Investment in securities (cost $96,007) $ 96,029
Cash 55,643
Interest receivable 1,552
------------------
Total assets 153,224
Liabilities
Accrued investment advisory fee payable $ 364
-----------------
Total liabilities 364
------------------
Net Assets $ 152,860
==================
Net Assets consist of:
Paid in capital $ 152,713
Accumulated undistributed net investment income 540
Accumulated net realized gain (loss) on investments (415)
Net unrealized appreciation on investments 22
------------------
Net Assets, for 15,255 shares $ 152,860
==================
Net Asset Value and
redemption price per share ($152,860 / 15,255) $ 10.02
==================
Maximum offering price per share (100/96.50 of $10.02) $ 10.38
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Fixed Income Fund
Statement of Operations for the Period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C> <C>
Investment Income
Interest income $ 983
---------------
Total Income 983
Expenses
Investment advisory fee $ 365
Trustees' fees 267
------------------
------------------
Total operating expenses 632
Reimbursed expenses (267)
------------------
Net expenses 365
---------------
Net Investment Income 618
---------------
Realized & Unrealized Gain (Loss)
Net realized loss on investment securities (415)
Change in net unrealized appreciation
on investment securities 22
------------------
Net gain on investment securities (393)
---------------
Net increase in net assets resulting from operations $ 225
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Fixed Income Fund
Statement of Changes in Net Assets for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income 618
Net realized gain (loss) on investment securities (415)
Change in net unrealized appreciation 22
-----------------
-----------------
Net increase in net assets resulting from operations 225
-----------------
Distributions to shareholders
From net investment income (78)
From net realized gain -
-----------------
-----------------
Total distributions (78)
-----------------
Share Transactions
Net proceeds from sale of shares 162,915
Shares issued in reinvestment of dividends 71
Shares redeemed (10,273)
-----------------
Net increase in net assets resulting
from share transactions 152,713
-----------------
-----------------
Total increase in net assets 152,860
-----------------
Net Assets
Beginning of period -
-----------------
End of period [including accumulated undistributed net
investment income of $540] 152,860
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Fixed Income Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) 0.09
Net realized and unrealized gain (0.03)
--------------
Total from investment operations 0.06
--------------
Less Distributions
From net investment income (0.04)
From net realized gain 0.00
--------------
Total Distributions (0.04)
Net asset value, end of period $ 10.02
==============
Total Return (b) (c) 0.52%
Ratios and Supplemental Data
Net assets, end of period (000) $ 153
Ratio of expenses to average net assets 1.25% (a)
Ratio of expenses to average net assets
before reimbursement 2.16% (a)
Ratio of net investment income to
average net assets 2.11% (a)
Ratio of net investment income to
average net assets before reimbursement 1.20% (a)
Portfolio turnover rate 836.69% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Growth Fund
Schedule of Investments - March 31, 2000
<S> <C> <C>
Common Stocks - 107.6% Shares Value
Auto & Truck Manufacturers - 3.8%
Ford Motor Co. 1,000 $ 46,125
-----------------
-----------------
Commercial Banks - 5.8%
Bank of New York, Inc. 250 10,391
Citigroup, Inc. 1,000 59,312
-----------------
-----------------
69,703
-----------------
-----------------
Computer Communication Equip. - 3.8%
Cisco Systems, Inc. (a) 600 46,200
-----------------
-----------------
Computer Peripheral Equip. - 2.3%
Micron Electronics, Inc. (a) 2,000 28,000
-----------------
-----------------
Computer Storage Devices - 6.8%
EMC Corp. (a) 450 56,700
Maxtor Corp. (a) 2,000 25,875
-----------------
-----------------
82,575
-----------------
-----------------
Crude Petroleum & Natural Gas - 3.7%
Enron Corp. 600 44,925
-----------------
-----------------
Electromedical & Electrotherapeutic Apparatus - 8.0%
Medtronic, Inc. 1,000 51,563
Summit Technology, Inc. (a) 5,000 45,625
-----------------
-----------------
97,188
-----------------
-----------------
Electronic Computers - 2.2%
Dell Computer Corp. (a) 500 27,000
-----------------
-----------------
General Industrial Machinery & Equip. - 4.2%
Tyco International, Inc. 1,000 50,562
-----------------
-----------------
Household Appliances - 5.5%
Maytag Corp. 2,000 66,250
-----------------
-----------------
Perfumes, Cosmetics & Other Toilet Preparations - 0.9%
Colgate-Palmolive Co. 200 11,350
-----------------
-----------------
Photographic Equip. & Supplies - 3.6%
Eastman Kodak, Inc. 800 43,450
-----------------
-----------------
Radio & TV Broadcasting & Communications Equip. - 3.6%
Nokia Corp. (c) 200 43,450
-----------------
-----------------
Radio Telephone Communications - 2.7%
Sonera Group Plc (c) 500 33,187
-----------------
-----------------
Shepherd Values Growth Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Retail - Variety Stores - 0.7%
Wal-Mart Stores, Inc. 150 $ 8,541
-----------------
-----------------
Retail-Building Materials - 1.2%
Fastenal Co. 300 14,362
-----------------
-----------------
Retail-Drug Stores & Proprietary Stores - 0.8%
Walgreen Co. 400 10,300
-----------------
-----------------
Retail-Eating Places - 1.9%
McDonald's Corp. 600 22,613
-----------------
-----------------
Retail-Grocery Stores - 3.7%
Safeway, Inc. (a) 1,000 45,250
-----------------
-----------------
Security Brokers, Dealers & Flotation Cos. - 4.2%
Knight/Trimark Group, Inc. (a) 1,000 51,000
-----------------
-----------------
Semiconductors & Related Devices - 4.3%
Conexant Systems, Inc. (a) 400 28,450
JDS Uniphase Corp. (a) 200 24,113
-----------------
-----------------
52,563
-----------------
-----------------
Service - Advertising - 5.1%
Verticalnet, Inc. (a) 100 13,594
Interpublic Group, Inc. 1,000 47,812
-----------------
-----------------
61,406
-----------------
-----------------
Services-Computer Programming Services - 1.4%
Entrust Technologies, Inc. (a) 200 17,075
-----------------
-----------------
Services-Management Services - 2.7%
ServiceMaster Co. 2,900 32,625
-----------------
-----------------
Services-Prepackaged Software - 7.9%
Ariba, Inc. (a) 100 20,963
BMC Software (a) 1,000 49,375
Check Point Software Technologies Ltd. (a) (c) 150 25,659
-----------------
-----------------
95,997
-----------------
-----------------
Services-Specialty Facilities - 1.9%
Orthodontic Centers of America, Inc. (a) 1,200 23,025
-----------------
-----------------
Telephone & Telegraph Apparatus - 7.3%
Comverse Technology, Inc. (a) 200 37,800
Nortel Networks Corp. 400 50,500
-----------------
-----------------
88,300
-----------------
-----------------
Shepherd Values Growth Fund
Schedule of Investments - March 31, 2000 - continued - continued
Common Stocks - continued Shares Value
Telephone Communications - 6.4%
Exodus Communications, Inc. (a) 250 $ 35,156
Lucent Technologies, Inc. 700 42,525
-----------------
-----------------
77,681
-----------------
-----------------
Wholesale-Groceries & Related Products - 1.2%
Sysco Corp. 400 14,275
-----------------
-----------------
TOTAL COMMON STOCKS (Cost $1,304,978) 1,304,978
-----------------
-----------------
Principal
Amount
Money Market Securities - 1.3%
Firstar Treasury Fund, 5.09% (b) (Cost $15,051) $ 15,051 15,051
-----------------
-----------------
TOTAL INVESTMENTS - 108.9% (Cost $1,320,029) 1,320,029
-----------------
-----------------
Other assets less liabilities - (8.9)% (107,224)
-----------------
-----------------
Total Net Assets - 100.0% $ 1,212,805
=================
(a) Non-Income Producing
(b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000
(c) American Depository Receipt
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Growth Fund March 31, 2000
Statement of Assets & Liabilities
<S> <C> <C>
Assets
Investment in securities (cost $1,320,029) $ 1,320,029
Cash 17,440
Receivable for securities sold 44,074
Receivable for fund shares sold 1,930
Dividends receivable 494
Interest receivable 55
Receivable from advisor 15,396
------------------
Total assets 1,399,418
Liabilities
Accrued investment advisory fee payable $ 1,634
Federal taxes payable 15,396
Payable for securities purchased 165,035
Payable for fund shares redeemed 4,548
-----------------
Total liabilities 186,613
------------------
Net Assets $ 1,212,805
==================
Net Assets consist of:
Paid in capital 1,134,959
Accumulated undistributed net investment income 54
Accumulated undistributed net realized gain on investments 77,792
------------------
Net Assets, for 102,670 shares $ 1,212,805
==================
Net Asset Value and
redemption price per share ( $1,212,805 / 102,670) $ 11.81
==================
Maximum offering price per share (100 / 96.50 of $11.81) $ 12.24
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Growth Fund
Statement of Operations for the Period April 13, 1999
(Commencement of Operations) to March 31, 2000
<S> <C> <C>
Investment Income
Dividend income $ 1,632
Interest income 1,631
---------------
Total Income 3,263
Expenses
Investment advisory fee $ 3,209
Tax expense 15,396
Trustees' fee 1,971
------------------
Total expenses before fee waiver & reimbursements 20,576
Waived & reimbursement expenses (17,367)
------------------
Total operating expenses 3,209
---------------
Net Investment income 54
---------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 77,792
------------------
Net gain on investment securities 77,792
---------------
---------------
Net increase in net assets resulting from operations $ 77,846
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Growth Fund
Statement of Changes in Net Assets for the period April 13, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 54
Net realized gain on investment securities 77,792
-----------------
Net increase in net assets resulting from operations 77,846
-----------------
Distributions to shareholders
From net investment income -
From net realized gain -
-----------------
Total distributions -
-----------------
Share Transactions
Net proceeds from sale of shares 1,170,553
Shares issued in reinvestment of distributions -
Shares redeemed (35,594)
-----------------
Net increase in net assets resulting
from share transactions 1,134,959
-----------------
-----------------
Total increase in net assets 1,212,805
-----------------
Net Assets
Beginning of period -
-----------------
End of period [including accumulated undistributed net
investment income of $54] $ 1,212,805
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Growth Fund
Financial Highlights for the period April 13, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) -
Net realized and unrealized gain 1.81
--------------
Total from investment operations 1.81
--------------
Less Distributions
From net investment income -
From net realized gain(loss) -
--------------
Total distributions -
Net asset value, end of period $ 11.81
==============
Total Return (b) (c) 18.10%
Ratios and Supplemental Data
Net assets, end of period (000) $ 1,213
Ratio of expenses to average net assets 1.03% (a)
Ratio of expenses to average net assets
before waivers & reimbursements 7.32% (a)
Ratio of net investment income to
average net assets 0.02% (a)
Ratio of net investment income to average
net assets before waivers & reimbursements (6.28)%(a)
Portfolio turnover rate 175.06% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values International Fund
Schedule of Investments - March 31, 2000
<S> <C> <C>
Common Stocks - 52.8% Shares Value
Aerospace & Defense - 3.4%
BAE Systems PLC (c) 165 $ 3,706
Rolls Royce PLC (c) 205 3,319
-----------------
-----------------
7,025
-----------------
-----------------
Auto & Truck Manufacturers - 3.0%
Volkswagen AG (c) 365 3,192
Volvo AB - Class B (c) 110 3,004
-----------------
-----------------
6,196
-----------------
-----------------
Biotechnology & Drugs - 1.2%
Nycomed Amersham (c) 65 2,568
-----------------
-----------------
Chemical & Allied Products - 6.3%
Aventis SA (c) 65 3,510
Basf AG (c) 80 3,797
Imperial Chemical Industry (c) 60 1,935
Norsk Hydro ASA (c) 100 3,806
-----------------
-----------------
13,048
-----------------
-----------------
Commercial Banks - 4.6%
Australia & New Zealand Banking Group (c) 80 2,520
Credicorp LTD 105 1,135
ForeningsSparbanken AB (c) 220 2,992
HSBC Holdings (c) 45 2,742
-----------------
-----------------
9,389
-----------------
-----------------
Conglomerates - 1.1%
Pacific Dunlop LTD (c) 635 2,302
-----------------
-----------------
Drilling Oil & Gas Wells - 3.0%
Lasmo PLC (c) 255 1,594
Repsol SA (c) 220 4,689
-----------------
-----------------
6,283
-----------------
-----------------
Electric Utilities - 4.6%
Centrais Electricas (c) 110 1,050
CLP Holdings Limited (c) 635 2,846
Gener SA (c) 85 1,148
Korea Electric Power (a) (c) 95 1,508
National Power PLC (c) 140 2,914
-----------------
-----------------
9,466
-----------------
-----------------
Financial Services - 2.1%
Cheung Kong Holdings LTD (c) 190 2,843
First Pacific Co. LTD (c) 615 1,491
-----------------
-----------------
4,334
-----------------
-----------------
Gold & Silver Ores - 0.6%
Barrick Gold 75 1,177
-----------------
-----------------
Shepherd Values International Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Insurance - 5.5%
Allied Zurich PLC (a) (c) 185 $ 4,046
AXA-UAP (c) 30 2,151
Scor (c) 40 1,890
XL Capital LTD - Class A 60 3,322
-----------------
-----------------
11,409
-----------------
-----------------
Motor Vehicle Parts & Accessories - 2.2%
Autoliv, Inc. 150 4,500
-----------------
-----------------
Paper Mills - 0.8%
Asia Pulp & Paper (a) (c) 210 1,549
-----------------
-----------------
Photographic Equipment & Supplies - 1.6%
Fuji Photo Film Co. (c) 75 3,300
-----------------
-----------------
Retail - Variety Stores - 1.4%
Marks & Spencer PLC (c) 120 2,903
-----------------
-----------------
Security & Protection Products & Services - 1.7%
Williams PLC (c) 230 3,500
-----------------
-----------------
Security Brokers, Dealers & Flotation Cos. - 0.8%
Nomura Securities (c) 5 1,633
-----------------
-----------------
Semiconductors & Related Devices - 1.0%
Veba AG (c) 40 2,027
-----------------
-----------------
Telephone Communications - 6.1%
Alcatel Alsthom Sponsored (c) 65 2,848
Embratel Participacoes SA (c) 50 1,281
Nippon Telegraph & Telephone (c) 55 4,335
PC Holdings SA (a) (c) 65 1,113
Telecom Corp of New Zealand LTD (c) 80 2,935
-----------------
-----------------
12,512
-----------------
-----------------
Tobacco Products - 0.6%
Grupo Carso SA (a) (c) 150 1,157
-----------------
-----------------
Transportation - 0.5%
Laidlaw, Inc. 780 1,121
-----------------
-----------------
Truck Trailers - 0.7%
Desc SA de CV (a) (c) 95 1,425
-----------------
-----------------
TOTAL COMMON STOCKS (Cost $108,219) 108,824
-----------------
-----------------
Shepherd Values International Fund
Schedule of Investments - March 31, 2000 - continued
Principal
Amount
Money Market Securities - 4.1%
Firstar Treasury Fund, 5.09% (b) (Cost $8,500) $ 8,500 $ 8,500
-----------------
-----------------
TOTAL INVESTMENTS - 56.9% (Cost $116,719) 117,324
-----------------
-----------------
Other assets less liabilities - 43.1% 88,938
-----------------
-----------------
Total Net Assets - 100.0% $ 206,262
=================
=================
(a) Non-Income Producing
(b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000
(c) American Depository Receipt
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Shepherd Values International Fund March 31, 2000
Statement of Assets & Liabilities
Assets
Investment in securities (cost $116,719) $ 117,324
Cash 89,164
Dividends receivable 204
Interest receivable 28
------------------
Total assets 206,720
Liabilities
Accrued investment advisory fee payable $ 494
-----------------
Total liabilities 494
------------------
Net Assets $ 206,226
==================
Net Assets consist of:
Paid in capital $ 205,696
Accumulated net investment loss (75)
Net unrealized appreciation on investments 605
------------------
Net Assets, for 20,756 shares $ 206,226
==================
Net Asset Value and
redemption price per share ($206,226 / 20,756) $ 9.94
==================
Maximum offering price per share (100 / 96.50 of $9.94) $ 10.30
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values International Fund
Statement of Operations for the Period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C> <C>
Investment Income
Dividend income $ 203
Interest income 285
---------------
Total Income 488
Expenses
Investment advisory fee $ 647
Trustees' fees 267
------------------
Total expenses before reimbursement 914
Reimbursed expenses (267)
------------------
Total operating expenses 647
---------------
Net Investment Loss (159)
---------------
Realized & Unrealized Gain (Loss)
Change in net unrealized appreciation
on investment securities 605
------------------
Net gain on investment securities 605
---------------
Net increase in net assets resulting from operations $ 446
===============
</TABLE>
<PAGE>
<TABLE>
Shepherd Values International Fund
Statement of Changes in Net Assets for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Increase (Decrease) in Net Assets
Operations
Net investment loss $ (159)
Net realized gain (loss) on investment securities -
Change in net unrealized appreciation 605
-----------------
-----------------
Net increase in net assets resulting from operations 446
-----------------
Distributions to shareholders
From net investment income (75)
Return of capital -
From net realized gain -
-----------------
Total distributions (75)
-----------------
Share Transactions
Net proceeds from sale of shares 209,069
Shares issued in reinvestment of distributions 66
Shares redeemed (3,280)
-----------------
Net increase in net assets resulting
from share transactions 205,855
-----------------
-----------------
Total increase in net assets 206,226
-----------------
Net Assets
Beginning of period -
-----------------
End of period [including accumulated net
investment loss of $(75)] $ 206,226
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values International Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) (0.02)
Net realized and unrealized gain -
--------------
Total from investment operations (0.02)
--------------
Less Distributions
From net investment income (0.04)
From net realized gain(loss) -
--------------
Total distributions (0.04)
Net asset value, end of period $ 9.94
==============
Total Return (b) (c) (0.24)%
Ratios and Supplemental Data
Net assets, end of period (000) $ 206
Ratio of expenses to average net assets 1.95% (a)
Ratio of expenses to average net assets
before reimbursement 2.75% (a)
Ratio of net investment income to
average net assets (0.48)(a)
Ratio of net investment income to
average net assets before reimbursement (1.28)(a)
Portfolio turnover rate 0.00% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000
<S> <C> <C>
Common Stocks - 79.6% Shares Value
Aerospace/Defense Products - 2.1%
Alliant Techsystems, Inc. (a) 90 $ 5,299
BE Aerospace, Inc. (a) 220 1,293
Scott Technologies, Inc. (a) 200 3,775
-----------------
-----------------
10,367
-----------------
Agricultural Machinery - .9%
Gehl Co. (a) 250 4,562
-----------------
Airlines - 1.0%
Frontier Airlines, Inc. (a) 430 5,106
-----------------
Apparel - Clothing - 1.0%
Kellwood Co. 270 4,776
-----------------
Auto Parts - .9%
Arvin Industiries, Inc. 190 4,323
-----------------
Banking - 9.3%
City National Corp. 130 4,371
Community First Bankshares, Inc. 220 3,520
Community Bank System, Inc. 170 3,889
First Essex Bancorp, Inc. 140 2,161
FirstMerit Corp. 290 5,347
First Republic Bank (a) 170 3,368
F.N.B. Corp. 190 3,491
Greater Bay Bancorp 110 4,427
Imperial Bancorp (a) 170 5,270
Parkvale Financial Corp. 130 2,048
Peoples Heritage Financial Group, Inc. 300 4,500
The Colonial BancGroup, Inc. 290 3,117
-----------------
-----------------
45,509
-----------------
Building Materials & Gardening Supplies - 1.0%
Central Garden & Pet Co. (a) 500 4,937
-----------------
Business Forms & Other Office Supplies - 1.2%
Paxar Corp. (a) 590 5,863
-----------------
Clothing, Shoe & Accesory - .9%
Cato Corp. Cl A 360 4,230
-----------------
Computer Products Distribution & Support - 1.7%
Pomeroy Computer Resources, Inc. (a) 200 3,675
Tech Data Corp. (a) 140 4,603
-----------------
-----------------
8,278
-----------------
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Construction, Mining & Other Heavy Machinery - 1.0%
NACCO Industries, Inc. 100 $ 4,788
-----------------
Consumer Products - Non Durables - .9%
Veterinary Centers of America, Inc. (a) 330 4,537
-----------------
Consumer Services - 1.5%
Central Parking Corp. 120 2,378
Rent-Way, Inc. (a) 250 4,891
-----------------
-----------------
7,269
-----------------
Contract Electronics Manufacturing - .9%
Benchmark Electronics, Inc. (a) 110 4,173
-----------------
Corporate, Professional & Financial Software - 1.6%
Deltek Systems, Inc. (a) 260 3,981
MAPICS, Inc. (a) 250 3,984
-----------------
-----------------
7,965
-----------------
Department Stores - .5%
Value City Department Stores, Inc. (a) 170 2,380
-----------------
Discount & Variety Retailing - .7%
ShopKo Stores, Inc. (a) 180 3,352
-----------------
Diversified Building Materials - .8%
Ameron International Corp. 110 3,912
-----------------
Diversified Chemicals - 2.0%
Engelhard Corp. 350 5,403
OM Group, Inc. 100 4,556
-----------------
-----------------
9,959
-----------------
Diversified Electronics - 1.4%
Vishay Intertechnology, Inc. (a) 120 6,728
-----------------
Diversified Utilities - 2.0%
Alliant Energy Corp. 150 4,519
UGI Corp. 230 5,060
-----------------
-----------------
9,579
-----------------
Drug Manufactures - Other - 1.1%
Chattem, Inc. (a) 370 5,226
-----------------
Electric Utilities - 1.9%
IDACORP, Inc. 150 5,137
Sierra Pacific Resources 320 4,000
-----------------
-----------------
9,137
-----------------
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Electronics Distribution - 1.1%
Pioneer-Standard Electronics, Inc. 330 $ 5,198
-----------------
Gas Utilities - 1.7%
Energen Corp. 330 5,589
NUI Corp. 110 2,833
-----------------
-----------------
8,422
-----------------
Hardware & Fasteners - .6%
SPS Technologies, Inc. (a) 100 3,113
-----------------
Healthcare Plans - .9%
Trigon Healthcare, Inc. (a) 120 4,290
-----------------
Industrial Equipment & Product Distribution - .8%
Kaman Corp. Cl A 400 3,900
-----------------
Information Technology Consulting Services - 1.1%
Complete Business Solutions. Inc. (a) 100 2,237
iGATE Capital Corp. (a) 70 3,159
-----------------
-----------------
5,396
-----------------
Lawn & Garden Equipment - .8%
The Toro Co. 130 3,900
-----------------
Lodging - .7%
Prime Hospitality Corp. (a) 470 3,496
-----------------
Lumber, Wood Productions & Timber Operations - 1.0%
Pope & Talbot, Inc. 260 4,778
-----------------
Marketing & Public Relations - .5%
Boron LePore & Associates, Inc. (a) 300 2,662
-----------------
Medical Appliances & Equipment - .9%
ADAC Laboratories (a) 340 4,675
-----------------
Medical Products Distribution - 1.0%
Owens & Minor, Inc. 440 4,758
-----------------
Metal Fabrication - .9%
Mueller Industries, Inc. (a) 140 4,287
-----------------
Miscellaneous Building Materials - .8%
NCI Building Systems, Inc. (a) 200 3,763
-----------------
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Miscellaneous Electrical Products - .8%
Smith (A.O.) Corp. (a) 220 $ 3,988
-----------------
Multiline Insurance - .9%
Delphi Financial Group, Inc. (a) 140 4,323
-----------------
Oil & Gas Equipment - .9%
Gulf Island Fabrication, Inc. (a) 280 4,130
-----------------
Oil & Gas Exploration & Production - 2.1%
Noble Affiliates, Inc. 170 5,514
Swift Energy Co. (a) 260 4,631
-----------------
-----------------
10,145
-----------------
Oil & Gas Refining & Marketing - .8%
Valero Energy Corp. 130 3,997
-----------------
Oil & Gas Services - 1.9%
Newpark Resources, Inc. (a) 560 4,515
Tuboscope, Inc. (a) 280 4,742
-----------------
-----------------
9,257
-----------------
Paints, Coatings & Other Finishing Products - .8%
Ferro Corp. 220 3,919
-----------------
Personal Care Products - .3%
Nu Skin Enterprises, Inc. (a) 200 1,588
-----------------
Printing, Photocopying & Graphic Design - .8%
Banta Corp. 220 4,070
-----------------
Recreational Vehicles - .9%
National R.V. Holdings, Inc. (a) 260 4,127
-----------------
Real Estate - Diversified & Miscellaneous - .6%
Colonial Properties Trust 120 2,887
-----------------
REIT - Industrial - 1.3%
CenterPoint Properties Trust 90 3,279
Shurguard Storage Centers, Inc. 120 3,090
-----------------
-----------------
6,369
-----------------
REIT - Office - .6%
CarrAmerica Realty Corp. 140 2,949
-----------------
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
REIT - Residential - 1.2%
Manufactured Home Communities, Inc. 120 $ 2,790
Summit Properties, Inc. 160 3,130
-----------------
-----------------
5,920
-----------------
REIT - Retail - 1.3%
The Macerich Co. 160 3,300
Taubman Centers, Inc. 270 3,038
-----------------
-----------------
6,338
-----------------
Reinsurance - 1.7%
Enhance Financial Services Group, Inc. 210 3,124
Reinsurance Group of America, Inc. 210 4,974
-----------------
-----------------
8,098
-----------------
Residential Construction - 1.8%
Beazer Homes USA, Inc. (a) 200 3,750
NVR, Inc. (a) 90 4,860
-----------------
-----------------
8,610
-----------------
Security & Protection Products & Services - .3%
Printrak International, Inc. (a) 100 1,300
-----------------
Scientific & Technical Instruments - 1.2%
Beckman Coulter, Inc. 90 5,777
-----------------
Semiconductor Equipment & Materials - 1.1%
Esterline Technologies Corp. (a) 410 5,330
-----------------
Shipbuilding & Related Services - 1.1%
Newport News Shipbuilding, Inc. 180 5,434
-----------------
Shipping - .8%
Tidewater, Inc. 120 3,817
-----------------
Specialty Chemicals - .5%
International Specialty Products, Inc. (a) 390 2,486
-----------------
Specialty Contracting & Industrial Maintenance - .9%
EMCOR Group, Inc. (a) 200 4,200
-----------------
Staffing, Outsourcing & Other Human Resourses - 1.4%
Interim Services, Inc. (a) 270 5,012
Modis Professional Services, Inc. (a) 150 1,894
-----------------
-----------------
6,906
-----------------
Steel Production - .9%
AK Steel Holding Corp. 230 2,386
Quanex Corp. 110 1,994
-----------------
-----------------
4,380
-----------------
Shepherd Values Small-Cap Fund
Schedule of Investments - March 31, 2000 - continued
Common Stocks - continued Shares Value
Surety, Title & Miscellaneous Insurance - .8%
LandAmerica Financial Group, Inc. 200 $ 3,925
-----------------
Telecommunications - 1.3%
Boston Communications Group, Inc. (a) 240 1,740
RSL Communications, Ltd. (a) 200 4,800
-----------------
-----------------
6,540
-----------------
Trucking - 1.5%
Arkansas Best Corp. (a) 310 3,255
Heartland Express, Inc. (a) 230 3,231
U.S.Xpress Enterprises, Inc., Cl A (a) 100 881
-----------------
-----------------
7,367
-----------------
TOTAL COMMON STOCKS (Cost $370,285) 387,771
-----------------
Principal
Amount
Money Market Securities - 2.1%
Firstar Treasury Fund, 5.09% (b) (Cost $10,000) $ 10,000 $ 10,000
-----------------
TOTAL INVESTMENTS - 81.7% (Cost $380,285) 397,771
-----------------
-----------------
Other assets less liabilities - 18.3% 89,290
-----------------
-----------------
Total Net Assets - 100.0% $ 487,061
=================
(a) Non-Income Producing
(b) Variable rate security; the coupon rate shown represents the rate at September 30, 1999.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Shepherd Values Small-Cap Fund March 31, 2000
Statement of Assets & Liabilities
Assets
Investment in securities (cost $380,285) $ 397,771
Cash 150,276
Receivable for securities sold 1,304
Dividends receivable 21
Interest receivable 42
------------------
Total assets 549,414
Liabilities
Accrued investment advisory fee payable $ 950
Payable for securities purchased 61,403
-----------------
Total liabilities 62,353
------------------
Net Assets $ 487,061
==================
Net Assets consist of:
Paid in capital $ 470,621
Accumulated net investment loss (52)
Accumulated net realized loss on investments (994)
Net unrealized appreciation on investments 17,486
------------------
Net Assets, for 47,079 shares $ 487,061
==================
Net Asset Value and
redemption price per share ($487,061 / 47,079) $ 10.35
==================
Maximum offering price per share (100/96.50 of $10.35) $ 10.73
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Small-Cap Fund
Statement of Operations for the Period October 22, 2000
(Commencement of Operations) to March 31, 2000
<S> <C> <C>
Investment Income
Dividend income $ 37
Interest income 263
---------------
Total Income 300
Expenses
Investment advisory fee $ 950
Trustees' fees 267
------------------
------------------
Total expenses before reimbursement 1,217
Expense reimbursement (267)
------------------
Total operating expenses 950
---------------
Net Investment Income (Loss) (650)
---------------
Realized & Unrealized Gain (Loss)
Net realized loss on investment securities (994)
Change in net unrealized appreciation (depreciation)
on investment securities 17,486
------------------
Net gain on investment securities 16,492
---------------
Net increase in net assets resulting from operations $ 15,842
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Small-Cap Fund
Statement of Changes in Net Assets for the period October 22, 2000
(Commencement of Operations) to March 31, 2000
<S> <C>
Increase (Decrease) in Net Assets
Operations
Net investment loss $ (650)
Net realized gain (loss) on investment securities (994)
Change in net unrealized appreciation (depreciation) 17,486
-----------------
-----------------
Net increase in net assets resulting from operations 15,842
-----------------
Distributions to shareholders
From net investment income (52)
From net realized gain -
-----------------
Total distributions (52)
-----------------
Share Transactions
Net proceeds from sale of shares 532,432
Shares issued in reinvestment of dividends 43
Shares redeemed (61,204)
-----------------
Net increase in net assets resulting
from share transactions 471,271
-----------------
-----------------
Total increase in net assets 487,061
-----------------
Net Assets
Beginning of period -
-----------------
End of period [including accumulated net
investment loss of $(52)] $ 487,061
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values Small-Cap Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) (0.05)
Net realized and unrealized gain 0.42
--------------
Total from investment operations 0.37
--------------
Less Distributions
From net investment income (0.02)
From net realized gain(loss) -
--------------
Total distributions (0.02)
Net asset value, end of period $ 10.35
==============
Total Return (b) (c) 3.70%
Ratios and Supplemental Data
Net assets, end of period (000) $ 487
Ratio of expenses to average net assets 1.80% (a)
Ratio of expenses to average net assets
before reimbursement 2.30% (a)
Ratio of net investment income to
average net assets (1.23)% (a)
Ratio of net investment income to
average net assets before reimbursement (1.74)% (a)
Portfolio turnover rate 41.01% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
</TABLE>
<PAGE>
<TABLE>
Shepherd Values VIF Equity Fund
Schedule of Investments - March 31, 2000
<S> <C> <C>
Principal
Amount
Money Market Securities - 4.0%
Firstar Treasury Fund, 5.09% (a) (Cost $4,600) $ 4,600 4,600
-----------------
-----------------
TOTAL INVESTMENTS - 4.0% (Cost $4,600) 4,600
-----------------
-----------------
Other assets less liabilities - 96.0% 111,067
-----------------
-----------------
Total Net Assets - 100.0% $ 115,667
=================
(a) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Shepherd Values VIF Equity Fund March 31, 2000
Statement of Assets & Liabilities
Assets
Investment in securities (cost $4,600) $ 4,600
Cash 111,333
Interest receivable 19
-------------------
Total assets 115,952
Liabilities
Accrued investment advisory fee payable $ 285
-----------------
Total liabilities 285
-------------------
Net Assets $ 115,667
===================
Net Assets consist of:
Paid in capital $ 115,739
Accumulated net investment loss (72)
-------------------
Net Assets, for 11,560 shares $ 115,667
===================
Net Asset Value and
redemption price per share ($115,667 / 11,560) $ 10.01
===================
Maximum offering price per share (100/96.50 of $10.01) $ 10.37
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values VIF Equity Fund
Statement of Operations for the Period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C> <C>
Investment Income
Interest income $ 325
---------------
Total Income 325
Expenses
Investment advisory fee $ 285
Trustees' fees 267
------------------
Total operating expenses 552
Reimbursed expenses (267)
------------------
285
---------------
Net Investment Income 40
---------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities -
Change in net unrealized appreciation (depreciation)
on investment securities -
------------------
Net gain on investment securities -
---------------
Net increase in net assets resulting from operations $ 40
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values VIF Equity Fund
Statement of Changes in Net Assets for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 40
Net realized gain (loss) on investment securities -
Change in net unrealized appreciation (depreciation) -
-----------------
-----------------
Net increase in net assets resulting from operations 40
-----------------
Distributions to shareholders
From net investment income (112)
From net realized gain -
-----------------
-----------------
Total distributions (112)
-----------------
Share Transactions
Net proceeds from sale of shares 173,645
Shares issued in reinvestment of dividends 100
Shares redeemed (58,006)
-----------------
Net increase in net assets resulting
from share transactions 115,739
-----------------
-----------------
Total increase in net assets 115,667
-----------------
Net Assets
Beginning of period -
-----------------
End of period [including accumulated net
investment loss of $(72)] $ 115,667
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shepherd Values VIF Equity Fund
Financial Highlights for the period October 22, 1999
(Commencement of Operations) to March 31, 2000
<S> <C>
Selected Per Share Data
Net asset value, beginning of period $ 10.00
--------------
Income from investment operations
Net investment income (loss) 0.03
Net realized and unrealized gain -
--------------
Total from investment operations 0.03
--------------
Less Distributions
From net investment income (0.02)
From net realized gain(loss) -
--------------
Total distributions (0.02)
Net asset value, end of period $ 10.01
==============
Total Return (b) (c) 0.31%
Ratios and Supplemental Data
Net assets, end of period (000) $ 116
Ratio of expenses to average net assets 1.00% (a)
Ratio of expenses to average net assets
before reimbursement 1.90% (a)
Ratio of net investment income to
average net assets 0.14% (a)
Ratio of net investment income to
average net assets before reimbursement (0.78)% (a)
Portfolio turnover rate 0.00% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) Total return calculations exclude the effect of sales charges.
</TABLE>
<PAGE>
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1. ORGANIZATION
The Shepherd Values Growth Fund was organized as a diversified series of the
AmeriPrime Funds (the "Trust") on February 2, 1999 and commenced operations on
April 13, 1999. The Fixed Income Fund, Small-Cap Fund and VIF Equity Fund were
organized as diversified series of the Trust on June 25, 1999 and commenced
operations on October 22, 1999. The International Fund was organized as
non-diversified series of the Trust on June 25, 1999 and commenced operations on
October 22, 1999. The investment objective of the Growth, International, and
Small-Cap Funds is long-term capital appreciation. The investment objective of
the Fixed Income Fund is a high level of income over the long term consistent
with the preservation of capital. The investment objective of the VIF Equity
Fund is to track the performance of the VIF 400 Values Index. The Trust is an
open-end investment company established under the laws of Ohio by an Agreement
and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Trust
Agreement permits the Board of Trustees (the "Board") to issue an unlimited
number of shares of beneficial interest of separate series without par value.
Each series of the Trust is referred to herein as a "Fund" or collectively as
the "Funds". Each Fund is one of a series of funds currently authorized by the
Board.
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 that 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 adviser'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 adviser 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 adviser, in conformity with guidelines adopted by and subject to
review of the Board of the Trust.
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
adviser 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,
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
securities are valued at fair value as determined in good faith by the adviser,
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- 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. For the fiscal year ended March 31, 2000, the Growth
Fund did not qualify as a regulated investment company. Therefore, the Fund was
required to pay taxes in the amount of $15,396. The Funds' adviser reimbursed
the Fund for this amount.
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 paid in capital. Tax
reclassification was made for the International Fund and the Small Cap Fund.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser. The investment adviser to the Shepherd Values Funds is Shepherd
Advisory Services, Inc., 2505 21st Ave. South, Suite 204, Nashville, Tennessee
37212 ("Shepherd"). Shepherd is a wholly owned subsidiary of Shepherd Financial
Services, Inc., a financial services company.
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
Under the terms of the management agreements (the "Agreements"), Shepherd
manages each Fund's investments subject to approval of the Board and pays all of
the expenses of each Fund except brokerage, taxes, borrowing costs (such as (a)
interest and (b) dividend expenses on securities sold short), fees and expenses
of the non-interested person trustees and extraordinary expenses. As
compensation for its management services and agreement to pay the Fund's
expenses, each Fund is obligated to pay Shepherd a fee based on average daily
net assets, computed and accrued daily and paid monthly at the following annual
rates: Fixed Income Fund, 1.25%; Growth Fund, 1.75%: International Fund, 1.95%;
Small-Cap Fund, 1.80%; VIF Equity Fund, 1.00%. For the period January 21, 2000
to March 31, 2000, Shepherd received a fee of $3,112 from the Growth Fund. For
the period October 22, 1999 to March 31, 2000, Shepherd received a fee of $365
from the Fixed Income Fund, $647 from the International Fund, $950 from the
Small-Cap Fund and $285 from the VIF Fund. Shepherd has contractually agreed to
reimburse other expenses for the Fixed Income, Growth, International, Small-Cap,
and VIF Funds for the fiscal year ended March 31, 2000 to the extent necessary
to maintain total operating expenses at the rates of 1.25%, 1.75%, 1.95%, 1.80%,
and 1.00%, respectively. For the year ended March 31, 2000 Shepherd reimbursed
expenses of $267, $17,367, $267, $267, and $267 for Fixed Income, Growth,
International, Small-Cap, and VIF Funds respectively.
Cornerstone Capital Management, Inc, 102 South Tejon, Suite 430, Colorado
Springs, CO 80903 was the adviser to the Growth Fund prior to June 1, 1999. On
June 1, 1999, The National Capital Companies, LLC acquired all of the stock of
Cornerstone Capital Management, Inc. Pursuant to the Investment Company Act of
1940, as amended, this change in control of Cornerstone resulted in a technical
assignment and termination of the Funds' management agreements with Cornerstone.
As a result of the termination of that agreement, on September 22, 1999 the
Board approved a proposed new management agreement for the Growth Fund with
Cornerstone to be effective as of June 1, 1999. On January 20, 2000,
shareholders approved the proposed new management agreements with Cornerstone.
Cornerstone agreed not to take any advisory fees or be reimbursed for any
expenses from the Growth Fund for the period from June 1, 1999 (the date of its
change in control) to January 20, 2000 (the date of the shareholder approval of
the proposed new management agreements). Accordingly, Cornerstone was only paid
advisory fees for the period from April 13, 1999 (the commencement of the Funds'
operations) to May 31, 1999, during which period it was paid advisory fees in
the amount of $97 from the Growth Fund.
The Sub-Advisers.
Cornerstone Capital Management, Inc, 102 South Tejon, Suite 430, Colorado
Springs, CO 80903 ("Cornerstone") is the Sub-Adviser to the Growth Fund (since
January 21, 2000)and the VIF Equity Fund. Cornerstone is a registered investment
advisory firm formed as a Colorado
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
corporation on April 1, 1997. Cornerstone is a wholly owned subsidiary of
Capital Companies, LLC. Darrel T. Uselton, a director of Cornerstone, is the
controlling shareholder of The National Capital Companies, LLC. Under the terms
of the Sub-Advisory agreements, Cornerstone receives a fee from Shepherd
computed and accrued daily and paid monthly at an annual rate of 0.50% of the
average daily net assets of the Growth Fund and 0.20% of the average daily net
assets of the VIF Equity Fund. For the period January 21, 2000 to March 31,
2000, Cornerstone received a fee of $889 from Shepherd for the Sub-Advisory
services provided to the Growth Fund. For the period October 22, 1999 to March
31, 2000, Cornerstone received $0 from the Shepherd for the Sub-Advisory
services provided to VIF Fund.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") is the
Sub-Adviser to the Small-Cap Fund. Under the Sub-Advisory agreement,
Nicholas-Applegate receives a fee from Shepherd computed and accrued daily and
paid monthly at an annual rate of 0.65% of the average daily net assets of the
Small-Cap Fund. For the period October 22, 1999 to March 31, 2000, the
Nicholas-Applegate received a fee of $131 from Shepherd for the Sub-Advisory
services provided to the Small-Cap Fund.
Potomac Asset Management Company, Inc. ("Potomac") is the Sub-Adviser to the
Fixed Income Fund. Under the terms of the Sub-Advisory agreement, Potomac
receives a fee from Shepherd computed and accrued daily and paid monthly at an
annual rate of 0.35% of the average daily net assets of the Fixed Income Fund.
For the period October 22, 1999 to March 31, 2000, Potomac received a fee of $55
from Shepherd for the Sub-Advisory services provided to the Fixed Income Fund.
Templeton Portfolio Advisory ("TPA"), a division of Templeton/Franklin
Investment Services, Inc., is the Sub-Adviser to the International Fund. Under
the terms of the Sub-Advisory agreement, TPA receives a fee from Shepherd
computed and accrued daily and paid monthly at an annual rate of 0.75% of the
average daily net assets of the International Fund. For the period October 22,
1999 to March 31, 2000, TPA received a fee of $146 from Shepherd for the
Sub-Advisory services provided to International Fund.
Subject always to the control of the Board, each Sub-Adviser, at its
expense, furnishes continuously an investment program for the Fund or Funds for
which it acts as Sub-Adviser. Each Sub-Adviser must use its best judgments to
make investment decisions, place all orders for the purchase and sale of
portfolio securities and execute all agreements related thereto. Each
Sub-Adviser makes its officers and employees available to the Fund's Adviser
from time to time at reasonable times to review investment policies and to
consult with the Adviser regarding the investment affairs of the applicable
Fund. Each Sub-Adviser maintains books and records with respect to the
securities transactions and renders to the
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
Fund's Adviser such periodic and special reports as the Adviser or the Trustees
may request. Each Sub-Adviser pays all expenses incurred by it in connection
with its activities under the Sub-Advisory agreement other than the cost
(including taxes and brokerage commissions, if any) of securities and
investments purchased for a Fund.
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. The administrator earns a monthly fee from Shepherd an
amount 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 period April 13, 1999 (commencement of the Growth Fund's operations) to
March 31, 2000, the Administrator earned fees of $20,000 from Shepherd for
administrative services provided to the Growth Fund. For the period October 22,
1999 (commencement of the Fixed Income, International, Small-Cap, and VIF Equity
Funds' operations) to March 31, 2000, the Administrator earned fees of $8,333
per fund from Shepherd for administrative services provided to each Fund.
Each 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 earns a
monthly fee from Shepherd of $1.20 per shareholder (subject to a minimum monthly
fee of $750). For the period April 13, 1999 (commencement of the Growth Fund's
operations) to March 31, 2000, Unified earned fees of $16,923 from Shepherd for
transfer agent services provided to the Growth Fund. For the period October 22,
1999 (commencement of the Fixed Income, International, Small-Cap, and VIF Equity
Funds' operations) to March 31, 2000, Unified earned fees of $5,411, $5,334,
$5,492 and $5,351 from Shepherd for transfer agent services provided to the
Fixed Income Fund, International Fund, Small Cap Fund, and VIF Equity Fund,
respectively. For its services as fund accountant, Unified earns an annual fee
from Shepherd equal to 0.0275% of the Fund's assets up to $100 million, and
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
period April 13, 1999 (commencement of the Growth Fund's operations) to March
31, 2000, Unified earned fees of $8,900 from Shepherd for fund accounting
services provided to the Growth Fund. For the period October 22, 1999
(commencement of the Fixed Income, International, Small-Cap, and VIF Equity
Funds' operations) to March 31, 2000, Unified earned fees of $4,184, $4,184,
$4,184 and $4,184 from Shepherd for fund accounting services provided to the
Fixed Income Fund, International Fund, Small Cap Fund, and VIF Equity Fund,
respectively.
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
Each Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor"),
a wholly owned subsidiary for Unified Financial Services, Inc., to act as the
principal distributor of each Fund's shares. The Distributor, an affiliate of
the Funds, received sales charges for selling shares of the Funds. For the
period April 13, 1999 (commencement of the Growth Funds' operations) through
March 31, 2000 the Distributor received $744. For the period October 22, 1999
(commencement of the Fixed Income, International, Small-Cap, and VIF Funds'
operations) to March 31, 2000 the Distributor received $71, $119, $143 and $35
from each Fund respectively.
Certain members of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
FIXED INCOME FUND. As of March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was $152,713.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD OCTOBER 22, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C> <C>
SHARES DOLLARS
Shares sold 16,275 $162,915
Share issued from reinvestment of
dividend 7 71
Shares redeemed (1,027) (10,273)
-------- ----------
15,255 $152,713
======== =========
</TABLE>
GROWTH FUND. As of March 31, 2000, there were an unlimited number of authorized
shares for the Fund. Paid in capital at March 31, 2000 was $1,134,959.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD APRIL 13, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C> <C>
SHARES DOLLARS
Shares sold 105,767 $1,170,553
Shares redeemed (3,097) (35,594)
-------- -------------
102,670 $1,134,959
======== ============
</TABLE>
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 4. SHARE TRANSACTIONS - CONTINUED
INTERNATIONAL FUND. As of March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was $205,696.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD OCTOBER 22, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C> <C>
SHARES DOLLARS
Shares sold 21,077 $209,069
Share issued from reinvestment of
dividend 7 66
Shares redeemed (328) (3,280)
-------- -----------
20,756 $205,855
======= ===========
</TABLE>
SMALL-CAP FUND. As of March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was $470,621.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD OCTOBER 22, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C> <C>
SHARES DOLLARS
Shares sold 53,095 $532,432
Share issued from reinvestment of
dividend 4 43
Shares redeemed (6,020) (61,204)
------- ----------
47,079 $471,271
======= =========
</TABLE>
VIF EQUITY FUND. As of March 31, 2000, there were an unlimited number of
authorized shares for the Fund. Paid in capital at March 31, 2000 was $115,739.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD OCTOBER 22, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C> <C>
SHARES DOLLARS
Shares sold 16,509 $173,645
Share issued reinvestment of
dividend 10 100
Shares redeemed (4,959) (58,006)
-------- ----------
11,560 $115,739
======== =========
</TABLE>
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 5. INVESTMENTS
FIXED INCOME FUND. For the period October 22, 1999 (commencement of operations)
to March 31, 2000, purchases and sales of investment securities, other than
short-term investments, aggregated $193,195 and $102,554, respectively. The
gross unrealized appreciation for all securities totaled $404 and the gross
unrealized depreciation for all securities totaled $382 for a net unrealized
appreciation of $22. The aggregate cost of securities for federal income tax
purposes at March 31, 2000 was $96,007.
GROWTH FUND. For the period April 13, 1999 (commencement of operations) to March
31, 2000, purchases and sales of investment securities, other than short-term
investments, aggregated $1,714,304 and $487,118, respectively. The aggregate
cost of securities for federal income tax purposes at March 31, 2000 was
$1,320,029.
INTERNATIONAL FUND. For the period October 22, 1999 (commencement of operations)
to March 31, 2000, purchases and sales of investment securities, other than
short-term investments, aggregated $108,219 and $0, respectively. The gross
unrealized appreciation for all securities totaled $5,917 and the gross
unrealized depreciation for all securities totaled $5,312 for a net unrealized
appreciation of $605. The aggregate cost of securities for federal income tax
purposes at March 31, 2000 was $116,719.
SMALL-CAP FUND. For the period October 22, 1999 (commencement of operations) to
March 31, 2000, purchases and sales of investment securities, other than
short-term investments, aggregated $381,334 and $10,055, respectively. The gross
unrealized appreciation for all securities totaled $25,681 and the gross
unrealized depreciation for all securities totaled $8,195 for a net unrealized
appreciation of $17,486. The aggregate cost of securities for federal income tax
purposes at March 31, 2000 was $380,285.
VIF FUND. For the period October 22, 1999 (commencement of operations) to March
31, 2000, no purchases and sales of long-term investment securities were made.
The aggregate cost of securities for federal income tax purposes at March 31,
2000 was $4,600.
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.
SHEPHERD VALUES FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 - CONTINUED
NOTE 7. RELATED PARTY TRANSACTIONS
The Adviser 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 March 31, 2000, the Charles
Schwab & Co. beneficially owned more than 33%, 47%, and 31% of the Growth Fund,
the International Fund, and the Fixed Income Fund, respectively.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and Board of Trustees
Shepherd Values Growth Fund
Shepherd Values Small-Cap Fund
Shepherd Values International Fund
Shepherd Values VIF Equity Fund
Shepherd Values Fixed Income Fund
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Shepherd Values Funds (comprising,
respectively, the Growth, Small-Cap, International, VIF Equity, and Fixed Income
Portfolios), as of March 31, 2000, and the related statements of operations, the
statements of changes in net assets, and the financial highlights for each of
the periods indicated. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held as
of March 31, 2000 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
Shepherd Values Growth Fund, Shepherd Values Small-Cap Fund, Shepherd Values
International Fund, Shepherd Values VIF Equity Fund, and Shepherd Values Fixed
Income Fund as of March 31, 2000, the results of their operations, the changes
in their net assets, and the financial highlights for each of the periods
indicated, in conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 20, 2000
