EDGAR LOMAX VALUE FUND
Dear Fellow Shareholder:
We are pleased to provide you our first comprehensive report on the
performance of the Edgar Lomax Value Fund. From its inception on December 12,
1997 through April 30, 1998, the Fund has returned 11.50%. At the same time, the
Fund's assets have grown to over $2.8 million.
While our performance has run behind the S&P 500 index, it does not
bother us to do so on a short-term basis. Investing, by its very nature, is a
longer-term process and we fully intend to keep our eye on the ball. That is, we
plan to steadfastly execute our "Large-Cap Value" investment strategy.
Specifically, our "bottom-up" stock-selection process finds great opportunity
among S&P 500 companies that, by and large, are cast aside as slow- or no-growth
situations. However, the companies we select generally have conservative
management teams, solid financial positions and attractive relative valuations.
Further, because of the general investment community's lack of excitement for
them, even average earnings growth can lead to significant price appreciation.
In order to achieve superior long-term performance at the lowest
possible risk, we work very hard to understand and act on fundamental facts and
relationships. Using the price-to-earnings ratio ("P/E"), for example, investors
have historically paid about $14-15 for each dollar of an average company's
earnings per share during the preceding twelve months. While investor euphoria
has pushed the S&P 500's current P/E to around 28 to 1, the Fund's P/E is a much
safer 18 to 1. We simply will not chase any "hot" stocks in order to keep up
with the S&P 500 over the short-term. Rather, we will continue using longtime,
tested indicators (of value) which work very well over more lengthy periods.
As you probably are aware, investing has been both fun and profitable
over the past several years. At times, the gains may even have seemed
effortless. I encourage you to remain disciplined, though, as the coming years
will likely require a great deal more patience. The portfolio we have structured
for the Fund is rooted in this philosophy. Finally, we promise to give you our
best efforts and have, in fact, invested right along with you.
Cordially,
Randall R. Eley
<PAGE>
EDGAR LOMAX VALUE FUND
INVESTMENT PORTFOLIO at April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 97.79% Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automobile: 4.4%
1,825 General Motors Corp..................................................... $ 122,959
------------
Banks: 7.5%
1,225 First Chicago NBD Corp.................................................. 113,772
750 J.P. Morgan & Co., Inc.................................................. 98,437
------------
212,209
------------
Chemical: 9.1%
1,225 Dow Chemical Co......................................................... 118,442
2,825 Union Carbide Corp...................................................... 137,013
------------
255,455
------------
Communications Equipment: 0.8%
450 Harris Corp............................................................. 21,769
------------
Electrical Companies: 8.5%
2,375 American Electric Power................................................. 113,406
4,725 Southern Co............................................................. 125,213
------------
238,619
------------
Electrical Equipment: 3.6%
875 Honeywell Inc........................................................... 81,484
350 Rockwell Int'l Corp..................................................... 19,578
------------
101,062
------------
Electronics: 6.9%
1,170 Raytheon Co., Class A................................................... 64,569
1,300 Raytheon Co., Class B................................................... 73,694
875 Texas Instruments, Inc.................................................. 56,055
------------
194,318
------------
Engineering and Construction: 2.8%
1,650 Fluor Corp.............................................................. 77,963
------------
Insurance: 4.9%
675 CIGNA Corp.............................................................. 139,683
------------
</TABLE>
See accompanying Notes to Financial Statements.
2
<PAGE>
EDGAR LOMAX VALUE FUND
INVESTMENT PORTFOLIO at April 30, 1998 (Unaudited), continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing: 4.5%
1,350 Minnesota Mining & Mfg.................................................. $ 127,406
------------
Oil: 16.0%
2,700 Amoco Corp.............................................................. 119,475
1,450 Atlantic Richfield Co................................................... 113,100
1,100 Chevron Corp............................................................ 90,956
1,750 Exxon Corp.............................................................. 127,641
------------
451,172
------------
Paper and Forest Products: 5.2%
2,800 International Paper Co.................................................. 146,125
------------
Photography/Imaging: 5.0%
1,975 Eastman Kodak Co........................................................ 142,570
------------
Railroads: 4.7%
4,000 Norfolk Southern Corp................................................... 133,750
------------
Restaurants: 1.9%
875 McDonalds Corp.......................................................... 54,141
------------
Retail: 5.7%
4,750 Limited, Inc............................................................ 159,422
------------
Telecommunications: 2.7%
1,250 AT&T Corp............................................................... 75,078
------------
Tobacco Products: 3.6%
2,750 Philip Morris Co., Inc.................................................. 102,609
------------
Total common stocks (cost $2,490,485)................................... 2,756,310
------------
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
EDGAR LOMAX VALUE FUND
INVESTMENT PORTFOLIO at April 30, 1998 (Unaudited), continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Principal Amount REPURCHASE AGREEMENT: 2.2% Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$62,019 Star Treasury Fund, 4.84%............................................... $ 62,019
------------
Total Investments in Securities (cost $2,552,504+): 99.9%............... 2,818,329
Other Assets less Liabilities: 0.01%.................................... 386
------------
Total Net Assets: 100.00% .............................................. $ 2,818,715
============
</TABLE>
+At April 30, 1998, the cost of securities for Federal tax purposes was the same
as the basis for financial reporting. Unrealized appreciation and depreciation
of securities were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation........................................... $ 291,785
Gross unrealized depreciation........................................... (25,960)
------------
Net unrealized appreciation....................................... $ 265,825
============
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
EDGAR LOMAX VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES - April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investment in securities, at value (cost of $2,552,504)................................ $ 2,818,329
Receivables:
Due from Advisor................................................................. 6,583
Subscriptions receivable......................................................... 3,450
Dividends and interest receivable................................................ 3,051
Prepaid expenses....................................................................... 3,605
------------
Total assets............................................................... 2,835,018
------------
LIABILITIES:
Accrued expenses....................................................................... 16,303
------------
Total liabilities.......................................................... 16,303
------------
NET ASSETS .................................................................................. $ 2,818,715
============
Net asset value, offering and redemption price per share ($2,818,715/253,048
shares outstanding; unlimited number
of shares (par value $.01) authorized)................................................. $11.14
======
COMPONENTS OF NET ASSETS
Paid-in capital........................................................................ 2,536,035
Accumulated net investment income...................................................... 5,488
Accumulated net realized gain on investments........................................... 11,367
Net unrealized appreciation on investments............................................. 265,825
------------
Net assets....................................................................... $ 2,818,715
============
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
EDGAR LOMAX VALUE FUND
STATEMENT OF OPERATIONS - For the Six Months Ended April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends........................................................................ $ 21,747
Interest......................................................................... 2,254
------------
Total income............................................................... 24,001
------------
Expenses:
Advisory fees ................................................................... 9,445
Administration fee............................................................... 11,260
Custodian and accounting fees.................................................... 8,135
Transfer agent fees.............................................................. 4,880
Professional fees................................................................ 5,631
Insurance expense................................................................ 961
Fidelity Bond expense............................................................ 17
Trustees' fees................................................................... 2,191
Registration fees................................................................ 665
Other............................................................................ 1,502
Reports to shareholders.......................................................... 2,628
------------
Total expenses............................................................. 47,315
Less, expenses reimbursed.................................................. (30,677)
------------
Net expenses............................................................... 16,638
------------
Net investment income ............................................... 7,363
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions........................................... 11,367
Net change in unrealized appreciation on investments................................... 265,825
------------
Net realized and unrealized gain on investments.................................. 277,192
------------
Net increase in Net Assets Resulting from Operations ..................... $ 284,555
============
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
EDGAR LOMAX VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
December 12, 1997*
through
April 30, 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
INCREASE IN NET ASSETS FROM
OPERATIONS
Net investment income...................................................... $ 7,363
Net realized gain from security transactions............................... 11,367
Net change in unrealized appreciation on investments....................... 265,825
------------
Net increase in net assets resulting from operations ................ 284,555
------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income...................................................... (1,875)
------------
Net realized gain from security transactions............................... 0
------------
Total dividends and distributions to shareholders.................... (1,875)
------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding shares (a) 2,536,035
------------
Total increase in net assets ........................................ 2,818,715
NET ASSETS
Beginning of period........................................................ --
------------
End of period.............................................................. $ 2,818,715
============
</TABLE>
(a) A summary of capital shares transactions is as follows:
<TABLE>
<CAPTION>
December 12, 1997*
through
April 30, 1998
--------------------------
Shares Value
<S> <C> <C>
Shares sold................................................................ 267,667 2,696,780
Shares issued on reinvestments of distributions............................ 185 1,875
Shares redeemed............................................................ (14,804) (162,620)
Net increase............................................................... 253,048 $2,536,035
</TABLE>
*Commencement of operations.
See accompanying Notes to Financial Statements.
7
<PAGE>
EDGAR LOMAX VALUE FUND
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
December 12, 1997*
through
April 30, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value at beginning of period............................................... $ 10.00
-------
Income from investment operations:
Net investment (loss) income................................................... 0.03
Net realized and unrealized gain on investments................................ 1.12
-------
Total from investment operations..................................................... 1.15
-------
Less distributions:
From net investment income..................................................... (0.01)
From net realized gain......................................................... 0.00
-------
Total distributions.................................................................. (0.01)
-------
Net asset value, end of period....................................................... $ 11.14
=======
Total return......................................................................... 11.50%++
Ratios/supplemental data:
Net assets, end of period (millions)................................................. $ 2.8
Ratio of expenses to average net assets:
Before expense reimbursement................................................... 4.86%+
After expense reimburesement................................................... 1.72%+
Ratio of net investment loss to average net assets:
Before expense reimbursement................................................... (2.40)%+
After expense reimbursement.................................................... 0.76%+
Portfolio turnover rate.............................................................. 36.32%
Average commission rate paid per share++.............................................. $ .0600
</TABLE>
*Commencement of operations.
+Annualized.
++Not annualized.
See accompanying Notes to Financial Statements.
8
<PAGE>
EDGAR LOMAX VALUE FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Edgar Lomax Value Fund (the "Fund") is a series of shares of Advisors
Series Trust (the "Trust"), which is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund began
operations on December 12, 1997. The investment objective of the Fund is to seek
growth of capital, with a secondary objective of providing income. The Fund
seeks to achieve its objective by investing primarily in equity securities that
it believes are undervalued, reasonably priced and have prospects for continued
consistent growth.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation: The Fund's investments are carried at market
value. Securities listed on an exchange or quoted on a National
Market System are valued at the last sale price. Other securities
are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available, if
any, are valued following procedures approved by the Board of
Directors. Short-term investments are valued at amortized cost,
which approximates market value.
B. Federal Income Taxes: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no federal income tax
provision is required.
C. Security Transactions, Dividends and Distributions: Security
transactions are accounted for on the trade date. Dividend income
and distributions to shareholders are recorded on the ex-dividend
date. Realized gains and losses on securities sold are determined
under the identified cost basis.
D. Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and
decreases in net assets during the reporting period. Actual results
could differ from those estimates.
NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ended April 30, 1998, The Edgar Lomax Company (the
"Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities, and provides most of the personnel needed by the Fund.
As compensation for its services, the Advisor is entitled to a monthly fee at
the annual rate of 1.00% based upon the average daily net assets of the Fund.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund and to pay Fund operating
expenses to the extent necessary to limit the Fund's aggregate annual operating
expenses to 1.75% of average net assets (the "expense cap"). Any such reductions
made by the Advisor in its fees or payment of expenses which are the Fund's
obligation are subject to reimbursement by the Fund to the Advisor, if
9
<PAGE>
EDGAR LOMAX VALUE FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited), continued
- --------------------------------------------------------------------------------
so requested by the Advisor, in the first, second or third fiscal year next
succeeding the fiscal year of the reduction or absorption if the aggregate
amount actually paid by the Fund toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. At this time, the Advisor intends to continue to
reduce fees payable to it by the Fund or to pay Fund operating expenses such
that the Total Fund Operating Expense Ratio will not rise above 1.75% of average
net assets annually. With respect to the reimbursement of a particular fee
reduction or expense payment, a reimbursement to the Advisor is permitted only
within the three year period following the year in which the Advisor reduced the
subject fee or paid the subject expense. Any such reimbursement is also
contingent upon Board of Trustees review and approval at the time the
reimbursement is made. Such reimbursement may be paid prior to the Fund's
payment of current expenses if so requested by the Advisor even if that practice
may require the Advisor to waive, reduce or absorb current Fund expenses. For
the period ended April 30, 1998, the Advisor reduced its fees and absorbed Fund
expenses in the amount of $30,677; no amounts were reimbursed.
Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund's expenses and reviews the
Fund's expense accruals. For its services, the Administrator receives a monthly
fee per portfolio at the annual rate of 0.20% of average daily net assets,
subject to a minimum fee of $30,000 annually.
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also officers and/or directors of the
Administrator and the Distributor.
NOTE 4 - PURCHASES AND SALES OF SECURITES
For the period ended April 30, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$5,344,792 and $751,419, respectively.
10
<PAGE>
Advisor
The Edgar Lomax Company
6564 Loisdale Court, Suite 310
Springfield, VA 22150
www.edgarlomax.cihost.com
Distributor
First Fund Distributors, Inc.
4455 E. Camelback Road, Ste. 261E
Phoenix, AZ 85018
Custodian
Star Bank, N.A.
425 Walnut Street, M/L 6118
Cincinnati, OH 45202
Transfer Agent
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788-0132
(888) 263-6438
Auditors
McGladrey & Pullen LLP
555 Fifth Avenue, 8th Floor
New York, NY 10017-2416
Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 94104
[LOGO]
Edgar Lomax Value Fund
Semi-Annual Report
dated April 30, 1998
