STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH EQUITY
Financial Statements for the Period Ended
September 30, 1998
[STANDISH LOGO]
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
November 25, 1998
Dear Standish Funds Shareholder:
Enclosed you will find the annual statement for your Standish Fund for the
fiscal year ending September 30, 1998.
As of that date, Standish, Ayer & Wood, Inc., the advisor, together with its
affiliate, Standish International Management Company, L.P., had approximately
$45 billion of assets under management including the $6.4 billion of assets
represented by the Standish Funds. Our principal clients are corporate pension
trusts, governmental pension funds, insurance companies, endowments and
foundations, and high net worth individuals. Standish, Ayer & Wood remains
independent and is owned by investment professionals active in the business.
Both assets under management and the professional staff grew considerably over
the past year, while the investment team and the clientele have remained
constant.
During the twelve months ending September 30, 1998, investment returns have
generally been positive. For example, larger capitalization U.S. common stocks
as reflected in the Standard and Poor's 500 Index provided a total return of
9.05%, while higher grade domestic taxable bonds as represented by the Lehman
Aggregate returned 11.49%. However, within the twelve-month period there has
been considerable volatility. The quarter ending September 30, 1998 was a
particularly difficult period for U.S. equities, especially smaller
capitalization U.S. stocks, emerging market bonds, and domestic bonds with
perceived credit risk.
Recent dramatic events have included Russia's de facto default on its debt,
extreme pressures on a very large hedge fund, trading losses by major financial
institutions, and disarray in the currency and credit markets. A major change
has taken place in investor perception of risk and in rapid deleveraging of the
global financial system.
Clearly all financial market participants are operating in a more difficult
environment. Standish, Ayer & Wood is devoted to producing superior long-term
returns through very disciplined investment philosophies designed to uncover
value. We remain confident we have the capability to do a superior job by
adhering to our disciplines.
We appreciate the opportunity to serve you and hope you will find the following
information helpful.
Sincerely yours,
/s/ Ted Ladd
Edward H. Ladd
Chairman
2
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH EQUITY FUND
Management Discussion and Analysis
The fiscal year ended on September 30, 1998 has seen a remarkable degree of
turmoil in the world's financial system. Not surprisingly, the year has also
been marked by a high degree of equity volatility. The U.S. equity market
experienced relatively strong returns during the first half of the year but
turned sharply negative during the summer months. The fourth quarter of the
fiscal year was down sharply and experienced the worst total return result for
any quarter of the decade. Performance results for the Standish Equity Fund has
been poor on both an absolute and relative basis. For the twelve-month period,
the Standish Equity Fund returned -9.33%. This compares to a return of 9.05% for
the S&P 500.
One important contributor to this poor relative performance was the
extraordinarily narrow nature of performance in 1998's year to date. While the
S&P 500 returned 9.05% on a capitalization weighted basis, the return of the
average stock in the index was a negative -3.9%. A broader universe of 1200
large and medium capitalization stocks from which we draw our portfolio choices
had a negative return of -11.8%. Given our tendency to hold stocks from across
the broad universe of large and medium capitalization stocks, this performance
concentration tended to hurt our relative performance for the year.
Another important element of 1998's performance was the poor performance of
valuation as stock selection criteria. In the first nine months of the year,
stocks with favorable valuation characteristics underperformed. For example, the
ten percent of the universe with the lowest price to earnings ratios
underperformed the average stock dramatically during the year; this is in
contrast to the historical pattern where low price to earnings ratios are
typically associated with above average returns. Because our investment
disciplines focus on finding companies whose growth prospects are under valued
in the marketplace, this poor return to value had an importantly negative impact
on our portfolio returns. Over all, our stock selection efforts did not add
value in 1998 and, when combined with the high degree of concentration in
performance within the S&P 500, our total return results for the fiscal year are
disappointing.
As we look toward 1999, we believe that the recent turbulence in the U.S. equity
market creates significant opportunity for future positive performance. Our
analysts have continued to be successful in identifying companies with superior
earnings prospects. Those strong earnings, combined with poor absolute price
performance, have created a portfolio with very attractive valuation
characteristics. Our stock selection process is driven by proprietary modeling
techniques that have a successful longer-term record, and the recent interlude
of poor results has not diminished our confidence in our disciplines. Our
analysts remain focused on finding the best investment opportunities across a
range of industry sectors.
Although periods of below market performance are discouraging, we believe that
they are inevitably part of any disciplined pursuit of above average return. As
with past periods of under performance (such as early 1992 and 1994),
persistence in our disciplines should lead eventually to better performance. We
are grateful for your support and pledge to continue our efforts at meeting your
performance goals.
Sincerely,
/s/ Ralph S. Tate /s/ David C. Cameron
Ralph S. Tate David C. Cameron
3
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH EQUITY FUND
Comparison of Change in Value of $100,000 Investment in
Standish Equity Fund and the S&P 500 Index
[The following table was originally a line graph in the printed materials.]
Standish Equity Fund S&P 500 Index
-------------------- -------------
Inception 1/2/91 100000 100000
1/31/91 105200 104360
2/28/91 112000 111822
3/31/91 116300 114528
4/30/91 115748 114803
5/31/91 119964 119751
6/30/91 113088 114266
7/31/91 118475 119591
8/31/91 120439 122425
9/30/91 120036 120381
10/31/91 123528 121994
11/30/91 119985 117077
12/31/91 133349 130471
1/31/92 131582 128044
2/29/92 133713 129709
3/31/92 129660 127180
4/30/92 129974 130919
5/31/92 129031 131560
6/30/92 126256 129600
7/30/92 132182 134901
8/31/92 128425 132135
9/30/92 131336 133694
10/31/92 134788 134162
11/30/92 141851 138724
12/31/92 146046 140430
1/31/93 151326 141610
2/28/93 152104 143536
3/31/93 157328 146564
4/30/93 151810 143017
5/31/93 157718 146850
6/30/93 161675 147276
7/31/93 159998 146687
8/31/93 167599 152246
9/30/93 172405 151074
10/31/93 174758 154201
11/30/93 172461 152736
12/31/93 176446 154585
1/1/94 182557 159840
2/28/94 181758 155509
3/31/94 172390 148729
4/30/94 172734 150632
5/31/94 172046 153103
6/30/94 166978 149352
7/31/94 170853 154250
8/31/94 178198 160575
9/30/94 172357 156641
10/31/94 175142 160165
11/30/94 165683 154335
12/31/94 169774 156619
1/31/95 169655 160676
2/28/95 178304 166937
3/31/95 184642 171862
4/30/95 191011 176932
5/31/95 197797 184004
6/30/95 205154 188272
7/31/95 216634 194523
8/31/95 217112 195011
9/30/95 224766 203241
10/31/95 222845 202515
11/30/95 234311 211406
12/31/95 233529 215477
1/31/96 240371 222812
2/29/96 247416 224878
3/31/96 249495 227043
4/30/96 255894 230390
5/31/96 259262 236332
6/30/96 256195 237232
7/31/96 245225 226751
8/31/96 253418 231533
9/30/96 268901 244564
10/31/96 277543 251309
11/30/96 298105 270306
12/31/96 296213 264951
1/31/97 310417 281505
2/28/97 311180 283712
3/31/97 299689 272054
4/30/97 310647 288269
5/31/97 334555 305824
6/30/97 352494 319525
7/31/97 385105 344959
8/31/97 375928 325642
9/30/97 400265 343487
10/31/97 389192 332014
11/30/97 400183 347387
12/31/97 403649 353353
1/31/98 401916 357260
2/28/98 430411 383028
3/31/98 454671 402643
4/30/98 451488 406694
5/31/98 436824 399703
6/30/98 446191 415939
8/31/98 352014 346511
9/30/98 362931 374564
4
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Statement of Assets and Liabilities
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
Investment in Standish Equity Portfolio ("Portfolio"), at value (Note 1A) $ 198,773,089
Receivable for Fund shares sold 209,801
Other assets 390
--------------
Total assets 198,983,280
Liabilities
Payable for Fund shares redeemed $ 534,966
Distribution payable 58,479
Payable to Investment Adviser (Note 3) 36,748
Accrued trustees' fees and expenses (Note 3) 1,985
Accrued accounting, custody & transfer agent fees 5,069
Accrued expenses and other liabilities 24,261
------------
Total liabilities 661,508
--------------
Net Assets $ 198,321,772
==============
Net Assets consist of:
Paid-in capital $ 191,966,395
Accumulated net realized gain 17,161,224
Distributions in excess of net investment income (57,846)
Net unrealized depreciation (10,748,001)
--------------
Total Net Assets $ 198,321,772
==============
Shares of beneficial interest outstanding 5,293,383
==============
Net Asset Value, offering and redemption price per share
(Net Assets/Shares outstanding) $ 37.47
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Statement of Operations
For the Year Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income (Note 1B)
Dividend income allocated from Portfolio (net of withholding
taxes of $4,477) $ 2,219,683
Interest income allocated from Portfolio 594,052
Expenses allocated from Portfolio (1,298,402)
--------------
Net investment income from Portfolio 1,515,333
Expenses
Registration fees $ 45,926
Accounting, custody and transfer agent fees 44,283
Legal and audit services 26,709
Trustees' fees and expenses (Note 3) 3,919
Insurance expense 910
Miscellaneous 5,001
------------
Total expenses 126,748
--------------
Net investment income 1,388,585
--------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) allocated from Portfolio on:
Investment security transactions 20,775,670
Financial futures contracts (344,475)
------------
Net realized gain 20,431,195
Change in unrealized appreciation (depreciation) allocated
from Portfolio on:
Investment securities (44,697,530)
Financial futures contracts (84,318)
------------
Change in net unrealized appreciation (depreciation) (44,781,848)
--------------
Net realized and unrealized loss (24,350,653)
--------------
Net Decrease in Net Assets from Operations $ (22,962,068)
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended Year Ended
September 30, 1998 September 30, 1997 December 31, 1996
-------------------- ------------------ --------------------
<S> <C> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income $ 1,388,585 $ 939,068 $ 1,549,680
Net realized gain 20,431,195 22,264,592 16,774,749
Change in net unrealized appreciation
(depreciation) (44,781,848) 16,959,255 6,696,912
-------------- -------------- --------------
Net increase (decrease) in Net Assets from
Investment Operations (22,962,068) 40,162,915 25,021,341
-------------- -------------- --------------
Distributions to Shareholders (Note 2)
From net investment income (1,388,585) (1,248,360) (1,481,454)
In excess of net investment income (35,859) (21,987) --
From net realized gain (25,188,077) (7,692,777) (11,604,448)
-------------- -------------- --------------
Total distributions to shareholders (26,612,521) (8,963,124) (13,085,902)
-------------- -------------- --------------
Fund Share (principal) Transactions (Note 5)
Net proceeds from sale of shares 120,195,070 42,813,303 21,565,418
Value of shares issued to shareholders in
payment of distributions declared 24,950,939 8,649,462 12,463,945
Cost of shares redeemed (67,419,444) (18,347,542) (28,642,403)
-------------- -------------- --------------
Increase in Net Assets from Fund share
transactions 77,726,565 33,115,223 5,386,960
-------------- -------------- --------------
Total Increase in Net Assets 28,151,976 64,315,014 17,322,399
Net Assets
At beginning of year 170,169,796 105,854,782 88,532,383
-------------- -------------- --------------
At end of year (including distributions in
excess of net investment income of $57,846
and $21,987 and undistributed net investment
income of $88,950, respectively) $ 198,321,772 $ 170,169,796 $ 105,854,782
============== ============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
September 30, Year Ended December 31,
---------------------- ------------------------------------------
1998 1997 * 1996 1995 1994 1993
---------- --------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 48.81 $ 38.79 $ 34.81 $ 28.66 $ 30.89 $ 26.28
---------- --------- --------- -------- --------- ---------
Investment Operations:
Net investment income ** 0.30 0.39 0.60 0.76 0.45 0.50
Net realized and unrealized gain (loss) on
investments (4.30) 12.79 8.52 9.94 (1.62) 5.57
---------- --------- --------- -------- --------- ---------
Total from investment operations (4.00) 13.18 9.12 10.70 (1.17) 6.07
---------- --------- --------- -------- --------- ---------
Less distributions declared
to shareholders
From net investment income (0.29) (0.43) (0.56) (0.78) (0.44) (0.47)
In excess of net investment income (0.01) -- -- -- -- --
From net realized gain on investments (7.04) (2.73) (4.58) (3.77) (0.62) (0.99)
---------- --------- --------- -------- --------- ---------
Total distributions (7.34) (3.16) (5.14) (4.55) (1.06) (1.46)
---------- --------- --------- -------- --------- ---------
Net Asset Value, End of Year $ 37.47 $ 48.81 $ 38.79 $ 34.81 $ 28.66 $ 30.89
========== ========= ========= ======== ========= =========
Total Return (9.33)% 35.13% 26.84% 37.55% (3.78)% 20.79%
Ratios/Supplemental Data:
Expenses (to average daily net assets) **(1) 0.71% 0.71%+ 0.71% 0.69% 0.70% 0.80%
Net investment income (to average daily
net assets)** 0.69% 0.95%+ 1.53% 2.05% 1.55% 1.29%
Portfolio turnover (2) -- -- 41% 128% 100% 89%
Net assets, end of year (000's omitted) $ 198,322 $170,170 $105,855 $88,532 $ 86,591 $ 72,916
- -----------------------------------------------
** For the periods indicated the investment adviser did not impose a portion of
its advisory fee and/or reimbursed a portion of the Fund's operating
expenses. If this voluntary reduction had not been taken, the net investment
income per share and the ratios would have been:
Net investment income per share -- $ 0.38 $ 0.59 -- -- $ 0.47
Ratios (to average daily net assets):
Expenses (1) -- 0.72%+ 0.72% -- -- 0.97%
Net investment income -- 0.93%+ 1.52% -- -- 1.12%
</TABLE>
* For the nine months ended September 30, 1997.
+ Computed on an annualized basis.
(1) Includes the Fund's share of Standish Equity Portfolio's allocated
expenses for periods since May 3, 1996.
(2) Portfolio turnover represents the rate of portfolio activity for the
period while the Fund was investing directly in securities. The portfolio
turnover rate for the period since the Fund transferred substantially all
of its investable assets to the Portfolio is shown in the Portfolio's
financial statements which are included elsewhere in this report.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
(1) Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish Equity Fund (the "Fund") is a separate diversified
investment series of the Trust.
The Fund invests all of its investable assets in an interest of the
Standish Equity Portfolio (the "Portfolio"), a subtrust of Standish,
Ayer & Wood Master Portfolio (the "Portfolio Trust"), which is
organized as a New York trust, and has the same investment objective as
the Fund. The value of the Fund's investment in the Portfolio reflects
the Fund's proportionate interest in the net assets of the Portfolio
(approximately 96% at September 30, 1998). The performance of the Fund
is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio are included elsewhere in this report and
should be read in conjunction with the Fund's financial statements.
The following is a summary of significant accounting policies followed
by the Fund in the preparation of the financial statements. The
preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A. Investment security valuations
The Fund records its investment in the Portfolio at value. The method
by which the Portfolio values it's securities is discussed in Note 1A
of the Portfolio's Notes to Financial Statements, which are included
elsewhere in this report.
B. Securities transactions and income
Securities transactions are recorded as of the trade date. Currently,
the Fund's net investment income consists of the Fund's pro rata share
of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally
accepted accounting principles. Prior to the Fund's investment in the
Portfolio, the Fund held its investments directly. For investments held
directly, interest income was determined on the basis of interest
accrued, dividend income was recorded on the ex-dividend date and
realized gains and losses from securities sold were recorded on the
identified cost basis.
C. Federal taxes
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year.
D. Other
All net investment income and realized and unrealized gains and losses
of the Portfolio are allocated pro rata among all the investors in the
Portfolio.
(2) Distributions to Shareholders:
The Fund's dividends from short-term and long-term capital gains, if
any, after reduction of capital losses will be declared and distributed
at least annually, as will dividends from net investment income. In
determining the amounts of its dividends, the Fund will take into
account its share of the income, gains or losses, expenses, and any
other tax items of the Portfolio. Dividends from net investment income
and capital gains distributions, if any, are reinvested in additional
shares of the Fund unless the shareholder elects to receive them in
cash. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These
9
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
differences are primarily due to differing treatments for futures
transactions. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications between
paid-in capital, undistributed net investment income, and accumulated
net realized gains (losses).
(3) Investment Advisory Fee:
The Fund does not directly pay any investment advisory fees, but
indirectly bears its pro rata share of the compensation paid by the
Portfolio to Standish, Ayer & Wood, Inc. ("SA&W") for such services.
See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. The Trust pays no compensation
directly to its trustees who are affiliated with SA&W or to its
officers, all of whom receive remuneration for their services to the
Trust from SA&W. Certain of the trustees and officers of the Trust are
directors or officers of SA&W.
(4) Investment Transactions:
Increases and decreases in the Fund's investment in the Portfolio for
the year ended September 30, 1998 aggregated $120,083,951 and
$68,617,387, respectively.
(5) Shares of Beneficial Interest:
The Declaration of Trust permits the Trust to issue an unlimited number
of full and fractional shares of beneficial interest having a par value
of one cent per share. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year Ended Nine Months Ended Year Ended
September 30, 1998 September 30, 1997 December 31, 1996
------------------ ------------------ -----------------
<S> <C> <C> <C>
Shares sold 2,736,286 979,248 561,325
Shares issued to shareholders in
payment of distributions declared 611,487 202,060 325,504
Shares redeemed (1,540,993) (423,446) (701,269)
------------------ ------------------ -----------------
Net increase 1,806,780 757,862 185,560
================== ================== =================
</TABLE>
At September 30, 1998, the Fund had three shareholders of record owning
approximately 13%, 12% and 12% of the Fund's outstanding voting shares,
respectively.
10
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Equity Fund
- --------------------------------------------------------------------------------
Tax Information - Unaudited:
Pursuant to section 852 of the Internal Revenue Code, the Fund
designates $11,427,981 as capital gain dividends for the year ended
September 30, 1998. Of this amount $6,177,902 and $5,250,079 represent
20% and 28% long term gain designations, respectively.
11
<PAGE>
Report of Independent Accountants
To the Trustees of Standish, Ayer & Wood Investment Trust and
Shareholders of Standish Equity Fund:
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material respects,
the financial position of Standish, Ayer & Wood Investment Trust:
Standish Equity Fund (the "Fund"), at September 30, 1998, the results
of its operations, the changes in its net assets and the financial
highlights for the periods indicated therein, in conformity with
generally accepted accounting principles. These financial statements
and financial highlights (herein referred to as "financial statements")
are the responsibility of the Fund's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 18, 1998
12
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 94.5%
Basic Industry -- 1.0%
Southdown, Inc. 46,300 $ 2,083,500
----------------
Capital Goods -- 7.9%
Cordant Technologies Inc. 37,700 1,595,181
Crane Company 47,850 1,124,475
Ingersoll Rand Co. 61,050 2,316,084
Navistar International* 115,200 2,606,400
Precision Castparts Corp. 45,300 1,868,625
Sundstrand Corp. 55,200 2,559,900
Trinity Industries 43,400 1,407,788
United Technologies Corp. 19,300 1,475,244
US Freightways Corp. 69,800 1,387,275
----------------
16,340,972
----------------
Consumer Stable -- 12.7%
American Greetings Corp. Class A 26,700 1,056,319
Eastman Kodak Company 25,000 1,932,813
Heinz H J Co. 36,400 1,860,950
Interstate Bakeries Corp. 115,400 3,577,399
Kroger Co.* 45,200 2,260,000
Owens Illinois* 87,700 2,192,500
Philip Morris Companies Inc. 62,700 2,888,119
Quaker Oats Company 20,400 1,203,600
Rexall Sundown Inc. 69,100 1,066,731
Safeway, Inc. 109,400 5,073,424
Supervalu, Inc. 72,600 1,692,488
Universal Foods Corp. 79,300 1,655,388
----------------
26,459,731
----------------
Early Cyclical -- 3.4%
AMR Corp. 33,800 1,873,788
Centex Corp. 25,500 879,750
Continental Airlines, Class B* 24,900 939,975
Furniture Brands Intl Inc.* 47,800 932,100
Kaufman And Broad Home 63,100 1,478,906
UAL Corp.* 14,000 907,375
----------------
7,011,894
----------------
Energy -- 7.5%
Ashland Oil Inc. 27,500 1,271,875
British Petroleum Co. PLC ADR 41,573 3,627,256
Coastal Corp. 70,600 2,382,750
El Paso Energy Corp. 77,400 2,510,663
Exxon Corp. 39,600 2,779,425
Seacor Smit Inc.* 22,200 921,300
USX-Marathon Group 42,800 1,516,725
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Energy (continued)
Veritas DGC, Inc.* 32,200 $ 537,338
----------------
15,547,332
----------------
Financial -- 12.3%
Americredit* 59,800 1,457,625
Amsouth Bancorp 91,700 3,129,262
Charter One Financial, Inc. 575 14,303
Chase Manhattan Corp. 46,800 2,024,100
Comerica, Inc. 40,300 2,208,944
Conseco, Inc. 60,300 1,842,919
Fleet Financial Group, Inc. 27,400 2,012,188
Golden West Financial Corp. 33,300 2,724,356
MGIC Investment Corp. 65,400 2,411,625
Northfork Bancorp 113,750 2,275,000
Old Republic International Corp. 73,450 1,652,625
Reliastar Financial Corp. 24,900 971,100
The PMI Group, Inc. 36,200 1,656,150
Webster Financial Corp. 47,800 1,165,125
----------------
25,545,322
----------------
Growth Cyclical -- 7.5%
CKE Restaurants Inc. 94,700 2,817,325
Federated Department Stores* 41,200 1,498,650
Jones Apparel Group, Inc.* 86,800 1,990,975
Nautica Enterprises Inc.* 103,200 1,928,550
Ross Stores, Inc. 40,400 1,156,450
Tiffany & Co. 28,000 878,500
TJX Cos, Inc. 112,000 1,995,000
Tommy Hilfiger Corp.* 54,800 2,246,800
VF Corp. 28,700 1,065,488
----------------
15,577,738
----------------
Health Care -- 11.6%
Abbott Laboratories 61,900 2,688,781
Amerisource Health Corp., Class A* 39,200 2,133,950
Amgen, Inc.* 45,400 3,430,537
Bergen Brunswig Corp., Class A 32,100 1,623,056
Genzyme Corp. - General Division* 67,500 2,438,438
HCR Manor Care, Inc.* 93,600 2,743,650
Hillenbrand Industries, Inc. 3,000 147,000
Integrated Health Services 128,200 2,155,363
Mylan Labs Inc. 57,800 1,705,100
Schering-Plough Corp. 25,800 2,671,913
Steris Corp.* 23,900 675,175
Sybron International Corp. 84,100 1,608,413
----------------
24,021,376
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate -- 2.0%
Felcor Lodging Trust Inc., REIT 39,200 $ 953,050
Liberty Property Trust, REIT 42,600 1,014,413
Prentiss Properties Trust, REIT 53,200 1,270,150
Starwood Hotels and Resorts, REIT 33,200 1,012,600
----------------
4,250,213
----------------
Services -- 12.7%
Ameritech Corp. 500 23,688
AT&T Corporation 35,700 2,086,219
Bellsouth Corp. 85,200 6,411,299
Century Telephone Enterprise 60,200 2,844,450
Herman Miller Inc. 65,900 1,301,525
Interim Services, Inc.* 65,300 1,342,731
Knight Ridder, Inc. 64,600 2,874,700
Omnicom Group 41,200 1,854,000
Robert Half Intl Inc.* 33,300 1,438,144
U.S. West Inc. 74,500 3,906,593
Xerox Corp. 26,800 2,271,300
----------------
26,354,649
----------------
Technology -- 14.3%
American Power Conversion Corp.* 39,800 1,499,963
Apple Computer Inc.* 86,600 3,301,624
Brightpoint Inc. 123,100 946,331
Cadence Design Systems, Inc. 122,800 3,139,074
DSP Communications Inc.* 139,800 1,153,350
Microchip Technology Inc.* 89,300 1,953,438
Networks Associates Inc. 75,100 2,666,050
Oracle Corp.* 86,300 2,513,488
Storage Technology Corp. 92,500 2,352,969
Sun Microsystems, Inc.* 76,900 3,830,580
Symbol Technologies Inc. 43,200 2,216,700
Tech Data Corp.* 45,700 2,287,856
Unisys Corp.* 79,000 1,797,250
----------------
29,658,673
----------------
Utilities -- 1.6%
Baltimore Gas & Electric Co. 46,400 1,548,600
FPL Group Inc. 27,400 1,909,438
----------------
3,458,038
----------------
TOTAL EQUITIES (COST $208,357,011) $ 196,309,438
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 7.4%
U.S. Government Agency -- 0.5%
FHLMC Discount+ 0.000% 12/08/1998 $500,000 $ 494,665
FHLMC Discount+ 0.000% 12/04/1998 350,000 346,679
FHLMC Discount+ 0.000% 12/03/1998 100,000 99,095
----------------
Total U.S. Government Agency (Cost $940,914) 940,439
----------------
Repurchase Agreements -- 6.9%
Salomon Smith Barney Inc. Repurchase Agreement, dated 9/30/98, due 10/01/98, with
maturity value of $3,778,274 and an effective yield of 4.75%, collateralized by a U.S.
Treasury obligation with a rate of 7.75%, with a maturity date of 1/31/00 and with an
aggregate market value of $3,853,331. 3,777,776
Prudential-Bache Repurchase Agreement, dated 9/30/98, due 10/01/98, with a
maturity value of $10,614,093 and an effective yield of 4.75%, collateralized by
a U.S. Government obligation with a rate of 6.149%, with a maturity date of
4/01/19 and with an aggregate market value of $10,825,030. 10,612,692
----------------
Total Repurchase Agreements (Cost $14,390,468) 14,390,468
----------------
TOTAL SHORT-TERM INVESTMENTS (COST $15,331,382) 15,330,907
----------------
TOTAL INVESTMENTS -- 101.9% (COST $223,688,393) $ 211,640,345
Other Assets, Less Liabilities -- (1.9)% (4,028,522)
----------------
NET ASSETS -- 100% $ 207,611,823
================
</TABLE>
Notes to the Schedule of Investments:
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
REIT - Real Estate Investment Trust
* Non-income producing security.
+ Denotes all or part of security pledged as collateral to cover margin
requirements on open financial futures contracts (Note 5).
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Statement of Assets and Liabilities
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
Investments, at value (Note 1A) (identified cost, $223,688,393) $ 211,640,345
Cash 276,002
Receivable for investments sold 2,223,459
Interest and dividends receivable 228,708
Miscellaneous receivable 2,150
Tax reclaim receivable 1,500
Deferred organization costs (Note 1E) 38,660
Prepaid expenses 8,681
--------------
Total assets 214,419,505
Liabilities
Payable for investments purchased $ 5,972,352
Payable to investment adviser (Note 2) 276,002
Payable for daily variation margin on open financial futures contracts (Note 5) 506,970
Accrued trustees' fees and expenses (Note 2) 3,043
Accrued accounting and custody fees 20,369
Accrued expenses and other liabilities 28,946
------------
Total liabilities 6,807,682
--------------
Net Assets (applicable to investors' beneficial interests) $ 207,611,823
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Statement of Operations
For the Year Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income (Note 1C)
Dividend income (net of witholding taxes of $4,500) $ 2,247,944
Interest income 602,428
--------------
Total income 2,850,372
Expenses
Investment advisory fee (Note 2) $ 1,017,136
Accounting and custody fees 180,733
Legal and audit services 39,190
Trustees fees and expenses (Note 2) 21,884
Licensing fees 21,058
Amortization of organization cost (Note 1E) 14,936
Insurance expense 7,222
Miscellaneous 13,592
-------------
Total expenses 1,315,751
--------------
Net investment income 1,534,621
--------------
Realized and Unrealized Gain (loss)
Net realized gain (loss)
Investment security transactions 20,066,096
Financial futures contracts (420,737)
-------------
Net realized gain 19,645,359
Change in unrealized appreciation (depreciation)
Investment securities (46,119,061)
Financial futures contracts (89,926)
-------------
Change in net unrealized appreciation (depreciation) (46,208,987)
--------------
Net realized and unrealized loss (26,563,628)
--------------
Net Increase (Decrease) in Net Assets from operations $ (25,029,007)
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
May 3, 1996
Nine Months (commencement of
Year Ended Ended operations) to
September 30, 1998 September 30, 1997 December 31, 1996
-------------------- -------------------- -------------------
<S> <C> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income $ 1,534,621 $ 978,216 1,091,670
Net realized gain 19,645,359 22,264,615 13,302,616
Change in net unrealized appreciation
(depreciation) (46,208,987) 16,959,272 3,404,699
------------- ------------- --------------
Net increase (decrease) in Net Assets
from Investment Operations (25,029,007) 40,202,103 17,798,985
------------- ------------- --------------
Capital Transactions
Assets contributed by Standish Equity Fund
at commencement
(including unrealized gain of $13,669,897) -- -- 97,994,616
Contributions 131,734,295 42,815,799 15,564,794
Withdrawals (69,235,470) (19,153,531) (25,080,761)
------------- ------------- --------------
Increase in Net Assets resulting from
capital transactions 62,498,825 23,662,268 88,478,649
------------- ------------- --------------
Total Increase in Net Assets 37,469,818 63,864,371 106,277,634
Net Assets
At beginning of year 170,142,005 106,277,634 --
------------- ------------- --------------
At end of year $207,611,823 $170,142,005 $ 106,277,634
============= ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Supplemental Data
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
May 3, 1996
Nine Months (commencement of
Year Ended Ended operations) to
September 30, 1998 September 30, 1997 December 31, 1996
-------------------- -------------------- -------------------
<S> <C> <C> <C>
Ratios
Expenses (to average daily net assets) 0.65% 0.66%+ 0.69%+
Net investment income (to average daily
net assets) 0.75% 0.99%+ 1.58%+
Portfolio Turnover 144% 75% 78%
Net assets, end of year (000's omitted) $207,612 $ 170,142 $106,278
</TABLE>
- -----------------------
+ Computed on an annualized basis.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
(1) Significant Accounting Policies:
Standish, Ayer & Wood Master Portfolio (the "Portfolio Trust") was
organized as a master trust fund under the laws of the State of New
York on January 18, 1996 and is registered under the Investment Company
Act of 1940, as amended, as an open-end, management investment company.
Standish Equity Portfolio (the "Portfolio") is a separate diversified
investment series of the Portfolio Trust.
The following is a summary of significant accounting policies followed
by the Portfolio in the preparation of the financial statements. The
preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A. Investment security valuations
Securities for which quotations are readily available are valued at the
last sale price, or if no sale, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees.
Short-term instruments with less than sixty-one days remaining to
maturity when acquired by the Portfolio are valued on an amortized cost
basis. If the Portfolio acquires a short-term instrument with more than
sixty days remaining to its maturity, it is valued at current market
value until the sixtieth day prior to maturity and will then be valued
at amortized cost based upon the value on such date unless the trustees
determine during such sixty-day period that amortized cost does not
represent fair value.
B. Repurchase agreements
It is the policy of the Portfolio to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the
Portfolio to monitor on a daily basis, the market value of the
repurchase agreement's underlying investments to ensure the existence
of a proper level of collateral.
C. Securities transaction and income
Securities transactions are recorded as of the trade date. Interest
income is determined on the basis of interest accrued. Dividend income
is recorded on the ex-dividend date. Realized gains and losses from
securities sold are recorded on the identified cost basis.
D. Income Taxes
The Portfolio is treated as a partnership for federal tax purposes. No
provision is made by the Portfolio for federal or state taxes on any
taxable income of the Portfolio because each investor in the Portfolio
is ultimately responsible for the payment of any taxes. Since some of
the Portfolio's investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolio, the
Portfolio normally must satisfy the source of income and
diversification requirements applicable to regulated investment
companies (under the Internal Revenue Code) in order for its investors
to satisfy them. The Portfolio will allocate at least annually among
its investors each investor's distributive share of the Portfolio's net
investment income, net realized capital gains, and any other items of
income, gain, loss deduction or credit.
21
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
E. Deferred Organizational Expenses
Costs incurred by the Portfolio in connection with its organization and
initial registration are being amortized on a straight-line basis
through April, 2001.
(2) Investment Advisory Fee:
The investment advisory fee paid to Standish, Ayer & Wood, Inc.
("SA&W") for overall investment advisory and administrative services is
paid monthly at the annual rate of 0.50% of the Portfolio's average
daily net assets. The Portfolio Trust pays no compensation directly to
its trustees who are affiliated with SA&W or to its officers, all of
whom receive remuneration for their services to the Portfolio Trust
from SA&W. Certain of the trustees and officers of the Portfolio Trust
are directors or officers of SA&W.
(3) Purchases and Sales of Investments:
Purchases and proceeds from sales of investments, other than purchased
option transactions and short-term obligations, were as follows:
<TABLE>
<CAPTION>
Year Ended
September 30, 1998
-------------------------------------
Purchases Sales
----------------- -----------------
<S> <C> <C>
U.S. Government Securities $ 3,806,263 $ 0
============= =============
Investments (non-U.S. Government
Securities) $ 335,293,776 $ 274,586,655
============= =============
</TABLE>
(4) Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at September 30, 1998, as computed on a
federal income tax basis, were as follows:
<TABLE>
<S> <C>
Aggregate Cost $ 223,688,393
=================
Gross unrealized appreciation $ 15,060,577
Gross unrealized depreciation $ (27,209,969)
-----------------
Net unrealized appreciation (depreciation) $ (12,149,392)
=================
</TABLE>
22
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
(5) Financial Instruments:
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to seek to
enhance potential gain in circumstances where hedging is not involved.
The nature, risks and objectives of these investments are set forth
more fully in Parts A and B of the Portfolio Trust's registration
statement.
The Portfolio trades the following financial instruments with
off-balance sheet risk:
Options
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Portfolio may use options to seek to hedge against
risks of market exposure and changes in securities prices and foreign
currencies, as well as to seek to enhance returns. Writing puts and
buying calls tend to increase the Portfolio's exposure to the
underlying instrument. Buying puts and writing calls tend to decrease
the Portfolio's exposure to the underlying instrument, or hedge other
portfolio investments. Options, both held and written by the Portfolio,
are reflected in the accompanying Statement of Assets and Liabilities
at market value. The underlying face amount at value of any open
purchased option is shown in the Schedule of Investments. This amount
reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for
the contracts, or if the counterparties do not perform under the
contracts' terms.
Premiums received from writing options which expire are treated as
realized gains. Premiums received from writing options which are
exercised or are closed are added to or offset against the proceeds or
amount paid on the transaction to determine the realized gain or loss.
Realized gains and losses on purchased options are included in realized
gains and losses on investment securities, except purchased options on
foreign currency which are included in realized gains and losses on
foreign currency transactions. If a put option written by the Portfolio
is exercised, the premium reduces the cost basis of the securities
purchased by the Portfolio. The Portfolio, as a writer of an option,
has no control over whether the underlying securities may be sold
(call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written
option. The Portfolio entered into no such transactions for the year
ended September 30, 1998.
Futures Contracts
The Portfolio may enter into financial futures contracts for the
delayed sale or delivery of securities or contracts based on financial
indices at a fixed price on a future date. Pursuant to the margin
requirements, the Portfolio deposits either in cash or securities an
amount equal to a certain percentage of the contract amount. Subsequent
payments are made or received by the Portfolio each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for financial statement purposes as unrealized gains or losses
by the Portfolio. There are several risks in connection with the use of
futures contracts as a hedging device. The change in value of futures
contracts primarily corresponds with the value of their underlying
instruments or index, which may not correlate with changes in value of
the hedged investments. Buying futures tends to increase the
Portfolio's exposure to the underlying instrument, while selling
futures tends to decrease the Portfolio's exposure to the underlying
instrument or hedge other portfolio investments. In addition, there is
the risk that the Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market. Losses may arise
if there is an illiquid secondary market or if the counterparties do
not perform under the contracts' terms. The Portfolio enters into
financial futures transactions primarily to seek to manage its exposure
to certain markets and to changes in securities prices and foreign
currencies. Gains and losses are realized upon the expiration or
closing of the futures contracts. At September 30, 1998, the Portfolio
had entered into the following financial futures contracts:
23
<PAGE>
Standish, Ayer & Wood Master Portfolio
Standish Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
Futures Contracts -- continued
<TABLE>
<CAPTION>
Underlying
Face/amount at Unrealized
Contract Position Expiration Date value Gain/(Loss)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S & P 500 (42 Contracts) Long 12/18/98 10,773,000 $ (127,071)
===========
</TABLE>
At September 30, 1998, the Portfolio had segregated sufficient cash
and/or securities to cover margin requirements on open futures
contracts.
24
<PAGE>
Independent Auditor's Report
To the Trustees of Standish, Ayer & Wood Master Portfolio and Investors
of Standish Equity Portfolio:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the supplemental data
present fairly, in all material respects, the financial position of
Standish Equity Portfolio, at September 30, 1998, the results of its
operations, the changes in its net assets and the supplementary data
for the periods indicated therein, in conformity with generally
accepted accounting principles. These financial statements and
supplementary data (herein referred to as "financial statements") are
the responsibility of the Portfolio's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at September 30, 1998, by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.
PricwaterhouseCoopers LLP
Boston, Massachusetts
November 18, 1998
<PAGE>
[This page intentionally left blank]
<PAGE>
[This page intentionally left blank]
<PAGE>
[LOGO] STANDISH FUNDS(R)
One Financial Center
Boston, MA 02111-2662
(800) 729-0066
www.standishfunds.com
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001012705
<NAME> Standish Equity Portfolio
<SERIES>
<NUMBER> 1
<NAME> Standish Equity Portfolio
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 223,688,393
<INVESTMENTS-AT-VALUE> 211,640,345
<RECEIVABLES> 2,455,817
<ASSETS-OTHER> 276,002
<OTHER-ITEMS-ASSETS> 47,341
<TOTAL-ASSETS> 214,419,505
<PAYABLE-FOR-SECURITIES> 5,972,352
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 835,330
<TOTAL-LIABILITIES> 6,807,682
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233,456,836
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (25,845,013)
<NET-ASSETS> 207,611,823
<DIVIDEND-INCOME> 2,247,944
<INTEREST-INCOME> 602,428
<OTHER-INCOME> 0
<EXPENSES-NET> 1,315,751
<NET-INVESTMENT-INCOME> 1,534,621
<REALIZED-GAINS-CURRENT> 19,645,359
<APPREC-INCREASE-CURRENT> (46,208,987)
<NET-CHANGE-FROM-OPS> (25,029,007)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37,469,818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,017,136
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,315,751
<AVERAGE-NET-ASSETS> 203,530,051
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001012705
<NAME> Standish Equity Fund
<SERIES>
<NUMBER> 7
<NAME> Standish Equity Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 198,773,089
<RECEIVABLES> 209,801
<ASSETS-OTHER> 390
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 198,983,280
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 661,508
<TOTAL-LIABILITIES> 661,508
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191,872,989
<SHARES-COMMON-STOCK> 5,293,383
<SHARES-COMMON-PRIOR> 3,486,603
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (57,846)
<ACCUMULATED-NET-GAINS> 16,687,243
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (10,180,614)
<NET-ASSETS> 198,321,772
<DIVIDEND-INCOME> 2,219,683
<INTEREST-INCOME> 594,052
<OTHER-INCOME> (1,298,402)
<EXPENSES-NET> 126,748
<NET-INVESTMENT-INCOME> 1,388,585
<REALIZED-GAINS-CURRENT> 19,863,808
<APPREC-INCREASE-CURRENT> (44,214,461)
<NET-CHANGE-FROM-OPS> (22,962,068)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,424,444)
<DISTRIBUTIONS-OF-GAINS> (25,188,077)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 120,195,070
<NUMBER-OF-SHARES-REDEEMED> (67,419,444)
<SHARES-REINVESTED> 24,950,939
<NET-CHANGE-IN-ASSETS> 77,726,565
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 22,011,512
<OVERDISTRIB-NII-PRIOR> (21,987)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 126,748
<AVERAGE-NET-ASSETS> 200,587,386
<PER-SHARE-NAV-BEGIN> 48.81
<PER-SHARE-NII> 0.30
<PER-SHARE-GAIN-APPREC> (4.30)
<PER-SHARE-DIVIDEND> (0.30)
<PER-SHARE-DISTRIBUTIONS> (7.04)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 37.47
<EXPENSE-RATIO> 0.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
