ADVISORS SERIES TRUST, N-30D, 1998-08-31

ADVISORS SERIES TRUST
N-30D, 1998-08-31

Previous: MID-STATE BANCSHARES, 8-K/A, 1998-08-31

Next: ADVISORS SERIES TRUST, NSAR-A, 1998-08-31

Al Frank Asset Management, Inc.
P.O. Box 1438, Laguna Beach, CA 92652
Phone 949-497-7657 Fax 949-497-7658

Dear Fund Shareholder,

By the time our Fund got underway on 1/2/98, the U.S. stock markets
had already witnessed an historic advance that had run over seven years without
a major market-wide setback. Of course, there had been several sector and
individual stock declines during the long-lived bull market. For example, shares
of the Big Three American auto companies had substantial "corrections" which
were more than overcome by subsequent advances, enough to record all-time new
high market prices.

Unfortunately for the Fund, a great number of advancing stocks,
especially in the bank, drug, insurance groups and two of the American auto
companies (as we did obtain a small position in Chrysler), were already too high
priced to buy this year in keeping with our prudent investment strategy. As you
probably know, The Al Frank Fund follows the same principles and strategies
espoused in The Prudent Speculator newsletter, and in my most recent book, Al
Frank's New Prudent Speculator. That is, we buy stocks that are significantly
undervalued as determined by fundamental analysis of their corporation's
financial statements, growth rates, inflation rates and interest rates. Thus, we
buy "out-of-favor," undervalued shares for their three to five year potential
market appreciation.

Undervalued, out-of-favor stocks often take years to reach their fair
value in terms of market price. Our 21-year experience as investors and
investment advisors shows that quite frequently, a "winning" position doesn't
develop until the third, fourth or fifth year of ownership. Even if there are
small gains early on, the big profits are generated as the out-of-favor
corporation becomes in favor, recognized as a strong and growing company with
substantial multi-year increases in sales, earnings and book value. Beginners
may become impatient for quick results, but superior investing is usually a case
of slow but steady wins the race.

Most of the stocks that met our buy criteria between 1/1/98 and
6/30/98 have been smaller capitalization ones with an overweighting in
computer-related technology corporations. With the exception of an early Spring
rally, these shares have, through the end of June, been in a declining market.
For example, while the Dow Jones Industrial Average and Standard & Poor's 500
Index had six-month gains of 13.20% and 16.84%, respectively, our recent
purchases are better represented by the Russell 2000 Index of smaller
capitalization stocks, which saw a decline of 6.92% between 4/21/98 and 6/30/98.
Many of the technology stocks in the Fund suffered much greater short term
losses than the Russell 2000's average setback.

At one point, when the Fund reached a Net Asset Value of $11.83 on
4/23/98, it looked like the beaten down secondary technology stocks would be
repriced upward in the market even as the large capitalization "blue chip" high
momentum shares had a substantial but reasonable reassessment downward. Alas,
the volatile selling of overvalued high priced shares took the undervalued ones
lower also, so that by 6/30/98, with the NAV at $9.83, the disparity in value
between large and small cap categories was at extreme levels. Many stocks traded
for values not seen since 1990.

Our longer term outlook is that the undervalued small cap shares will
likely outperform the overvalued large caps for several years, as has happened
several times during the past 73 years of market history. We expect to be
handsomely rewarded for our patience, selection and purchases in the coming
months and years. This expectation has been met over the past 21 years of
professional involvement in the market. We are not limited to buying only small
cap stocks. When the larger corporations trade at deep discounts to their
fundamental value, we pounce on them with equal elan.

Faithfully yours,

/s/ Al Frank

Al Frank
<PAGE>
The Al Frank Fund

Airlines: 2.9%
1,600 KLM Royal Dutch Air............................................... 65,500
1,500 UAL Corp.*........................................................ 117,000
---------
182,500
---------
Athletic Equipment: 1.8%
37,213 First Team Sports*................................................ 79,078
6,430 Saucony, Inc. - Class B*.......................................... 36,168
---------
115,246
---------
Auto-Cars / Light Trucks: 0.5%
600 Chrysler Corp..................................................... 33,825
---------

Auto / Truck Parts and Equipment: 2.6%
1,400 Excel Industries, Inc............................................. 20,038
7,200 OEA, Inc.......................................................... 115,200
4,000 TBC Corp.*........................................................ 26,375
---------
161,613
---------
Building and Construction Products - Miscellaneous: 0.3%
1,203 Patrick Industries, Inc........................................... 18,647
---------

Building-Mobile Home / Manufactured Houses: 2.6%
2,900 Cavalier Homes, Inc............................................... 37,519
17,000 SMC Corp.*........................................................ 127,500
---------
165,019
---------
Building-Maintenance and Service: 1.7%
14,500 C.H. Heist Corp.*................................................. 106,938
---------

Capacitors: 3.4%
40,000 Aerovox, Inc.*.................................................... 118,750
7,100 Kemet Corp.*...................................................... 93,409
---------
212,159
---------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
The Al Frank Fund

Circuits: 1.9%
2,000 Hadco Corp.*...................................................... 46,625
10,000 Integrated Device Technology, Inc.*............................... 71,406
--------
118,031
--------
Computer Software: 0.4%
1,250 Software Spectrum, Inc.*.......................................... 25,547
--------

Computers-Memory Devices: 7.1%
13,734 Applied Magnetics Corp.*.......................................... 104,721
1,200 Dataram Corp.*.................................................... 13,950
4,400 Exabyte Corp.*.................................................... 36,712
5,000 Komag, Inc.*...................................................... 27,109
800 Quantum Corp.*.................................................... 16,575
9,777 Read-Rite Corp.*.................................................. 88,298
3,500 Seagate Technology, Inc.*......................................... 83,344
6,200 Western Digital Corp.*............................................ 73,238
--------
443,947
--------
Computers-Micro: 0.7%
1,100 Micron Electronics, Inc.*......................................... 13,303
2,500 Sequent Computer Systems, Inc.*................................... 30,547
--------
43,850
--------
Computers-Peripheral Equipment: 6.5%
19,390 ESS Technology*................................................... 91,497
4,000 Microtouch Systems, Inc.*......................................... 74,375
3,000 S3 Inc.*.......................................................... 15,281
8,700 Smart Modular Technologies*....................................... 128,053
18,475 Trident Microsystems, Inc.*....................................... 98,726
--------
407,932
--------
Consulting-Services: 0.1%
600 Right Management Consultants*..................................... 7,913
--------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
The Al Frank Fund

Diamonds / Precious Stones: 0.6%
2,000 Debeers Consolidated Mines ADR.................................... 34,875
--------

Disposable Medical Products: 1.6%
13,774 Utah Medical Products, Inc.*...................................... 99,862
--------

Diversified Operator / Commercial Service: 1.7%
15,300 McRae Industries - Class A........................................ 107,100
--------

Electric Products-Miscellaneous: 1.7%
6,450 Kulicke & Soffa Industries*....................................... 109,247
--------

Electronic Components-Miscellaneous: 2.0%
8,289 Nam Tai Electronics, Inc.......................................... 125,630
--------

Electronic Components-Semiconductor: 9.2%
1,100 Applied Materials, Inc.*.......................................... 32,484
7,000 Atmel Corp.*...................................................... 95,375
1,500 Electroglas, Inc.*................................................ 19,546
3,500 International Rectifier Corp.*.................................... 29,750
3,800 Lam Research Corp.*............................................... 72,556
7,650 National Semiconductor Corp.*..................................... 100,884
6,500 Silicon Valley Group, Inc.*....................................... 103,594
4,983 Siliconix, Inc.*.................................................. 124,575
--------
578,764
--------
Electronic Measuring Instruments: 1.5%
3,950 Cohu, Inc......................................................... 96,652
--------

Finance-Leasing Companies: 1.4%
20,800 Prime Capital Corp.*.............................................. 88,400
--------
</TABLE>

See Notes to Financial Statements.
4
<PAGE>
The Al Frank Fund

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited), Continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Shares Market Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finance-Mortgage Loan / Banker: 2.7%
1,500 Aames Financial Corp.............................................. $ 20,625
819 First Union Corp.................................................. 47,715
2,350 Green Tree Financial Corp......................................... 100,609
--------
168,949
--------
Footwear and Related Apparel: 0.7%
2,500 R.G. Barry*....................................................... 41,250
--------
Health Care Cost Containment: 0.4%
20,000 FPA Medical Management, Inc.*..................................... 22,813
--------
Industrial Automated / Robot: 0.9%
3,450 PRI Automation Inc.*.............................................. 58,866
--------
Medical Information Systems: 2.1%
10,000 HCIA, Inc.*....................................................... 129,375
--------
Medical Laser Systems: 0.3%
3,800 Summit Technology, Inc.*.......................................... 20,781
--------
Metal-Diversified: 3.4%
5,100 Asarco, Inc....................................................... 113,475
7,487 Cyprus Amax Minerals Co........................................... 99,203
--------
212,678
--------
Network Software: 1.6%
33,834 Netmanage, Inc.*.................................................. 101,502
--------
Networking Products: 6.7%
2,150 3Com Corp.*....................................................... 66,045
6,500 Adaptec, Inc.*.................................................... 92,828
9,500 Cabletron Systems*................................................ 127,656
2,500 Standard Microsystems Corp.*...................................... 21,953
16,510 Zoom Telephonics, Inc.*........................................... 109,895
--------
418,377
--------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
The Al Frank Fund

Retail-Apparel / Shoe: 4.5%
4,000 Gymboree Corp.*................................................... 60,625
71,800 One Price Clothing Stores*........................................ 221,009
--------
281,634
--------
Retail-Miscellaneous / Diversified: 2.0%
26,230 Tandycrafts Inc.*................................................. 122,953
--------
Rubber and Plastics: 2.4%
15,705 Applied Extrusion Technology*..................................... 115,334
6,000 Lamson & Sessions Co.*............................................ 37,125
--------
152,459
--------
Steel Pipe and Tube: 1.4%
7,500 Maverick Tube Corp.*.............................................. 86,719
--------
Steel-Producers: 4.6%
3,700 Bethlehem Steel Corp.*............................................ 46,019
950 Inland Steel Industries Inc....................................... 26,778
10,477 LTV Corp.......................................................... 100,186
9,046 Rouge Industries Inc. - Class A................................... 115,337
--------
288,320
--------
Sugar: 1.9%
13,000 Imperial Holly Corp............................................... 117,813
--------
Textile-Home Furnishings: 0.7%
4,961 Conso Products Co.*............................................... 41,083
--------
Tobacco: 1.7%
4,500 RJR Nabisco Holdings Corp......................................... 106,875
--------
Tools-Hand Held: 1.1%
7,000 P&F Industries - Class A*......................................... 71,531
--------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
The Al Frank Fund

Total Common Stocks (cost $6,646,428)............................. 6,018,572
---------

Principal Amount SHORT-TERM INVESTMENTS: 0.5%
- ---------------------------------------------------------------------------------------------------------
$32,496 Star Treasury Fund, 5.72% (cost $32,496).......................... 32,496
----------

Total Investments in Securities (cost $6,678,924+): 96.5% ........ 6,051,068
Other Assets less Liabilities: 3.5%............................... 216,349
----------
Total Net Assets: 100.0% ......................................... $6,267,417
==========

*Non-incoming producing security.

+At June 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:

Gross unrealized appreciation............................. $ 367,614
Gross unrealized depreciation............................. (995,470)
----------
Net unrealized depreciation..................... $ (627,856)
==========
</TABLE>
7
<PAGE>
The Al Frank Fund

STATEMENT OF ASSETS AND LIABILITIES at June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (identified cost $6,678,924) ....................... $6,051,068
Receivables:
Due from Advisor.............................................................. 2,831
Dividends and interest ....................................................... 3,831
Securities sold............................................................... 52,972
Fund shares sold.............................................................. 148,226
Deferred organization costs............................................................. 31,567
Other................................................................................... 18,603
----------
Total assets ........................................................ 6,309,098
----------
LIABILITIES
Payables:
Administration fee............................................................ 2,466
Distribution fees............................................................. 1,327
Securities purchased.......................................................... 30,035
Fund shares repurchased....................................................... 739
Accrued expenses........................................................................ 7,114
----------
Total liabilities.................................................... 41,681
----------

NET ASSETS.................................................................................. $6,267,417
==========

Net asset value, offering and redemption price per share
($6,267,417/637,321 shares outstanding;
unlimited number of shares (par value $.01) authorized) ...................... $9.83
=====

COMPONENTS OF NET ASSETS
Paid-in capital......................................................................... $6,910,078
Accumulated net investment loss......................................................... (23,455)
Net realized gain on investments........................................................ 8,650
Net unrealized depreciation on investments.............................................. (627,856)
----------
Net assets ................................................................... $6,267,417
==========
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
The Al Frank Fund

STATEMENT OF OPERATIONS
For the Period from January 2, 1998* through June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividends...................................................................... $ 12,074
Interest ...................................................................... 7,280
----------
Total income.......................................................... 19,354
----------

Expenses
Advisory fee................................................................... 18,981
Administration fee............................................................. 14,712
Transfer agent fees............................................................ 9,757
Professional fees.............................................................. 7,357
Custody fees................................................................... 6,554
Fund accounting fees........................................................... 5,043
Registration fees.............................................................. 4,823
Distribution fees.............................................................. 4,745
Printing fees.................................................................. 4,433
Amortization of deferred organization costs.................................... 3,433
Other.......................................................................... 3,108
Directors' fees................................................................ 2,770
----------
Total expenses........................................................ 85,716
Less: Advisory fee waiver and absorption.............................. (42,907)
----------
Net expenses.......................................................... 42,809
----------
Net investment loss ........................................ (23,455)
----------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions................................... 8,650
Net change in unrealized depreciation on investments........................... (627,856)
----------
Net realized and unrealized loss on investments....................... (619,206)
----------
Net Decrease in Net Assets Resulting from Operations ....... $ (642,661)
==========
</TABLE>

*Commencement of operations.

See Notes to Financial Statements.
9
<PAGE>
The Al Frank Fund

STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
January 2, 1998*
through
June 30, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C>
NET INCREASE (DECREASE) IN ASSETS FROM
OPERATIONS
Net investment loss .............................................................. $ (23,455)
Net realized gain from security transactions...................................... 8,650
Net change in unrealized depreciation on investments.............................. (627,856)
----------
Net decrease in net assets resulting from operations ................... (642,661)
----------

CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding shares (a)...... 6,910,078
----------
Total increase in net assets ........................................... 6,267,417

NET ASSETS
Beginning of period .............................................................. -0-
----------
End of period .............................................................. $6,267,417
==========

(a) A summary of capital shares transactions is as follows:
January 2, 1998*
through
June 30, 1998
-----------------------
Shares Value
------- ----------
Shares sold........................................................ 691,249 $7,466,682
Shares redeemed.................................................... (53,928) (556,604)
------- ----------
Net increase....................................................... 637,321 $6,910,078
======= ==========
</TABLE>

*Commencement of operations.

See Notes to Financial Statements.
10
<PAGE>
The Al Frank Fund

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - For a capital share outstanding throughout the period (Unaudited)
- --------------------------------------------------------------------------------------------------------
January 2, 1998*
through
June 30, 1998
- --------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period................................................ $10.00
Income from investment operations:
Net investment loss....................................................... (0.04)
Net realized and unrealized loss on investments........................... (0.13)
------
Total from investment operations.................................................... (0.17)
------

Net asset value, end of period...................................................... $ 9.83
======

Total return........................................................................ (1.70%)+

Ratios/supplemental data:
Net assets, end of period (millions)................................................ $ 6.3

Ratio of expenses to average net assets:
Before expense reimbursement.............................................. 4.48%++
After expense reimbursement............................................... 2.24%++

Ratio of net investment loss to average net assets:
Before expense reimbursement.............................................. (3.47%)++
After expense reimbursement............................................... (1.22%)++

Portfolio turnover rate............................................................. 1.51%
</TABLE>

*Commencement of operations.

+Not annualized.

++Annualized.

See Notes to Financial Statements.
11
<PAGE>
The Al Frank Fund

NOTES TO FINANCIAL STATEMENTS at June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Al Frank Fund (the "Fund") is a series of shares of Advisors
Series Trust (the "Trust"), which is registered under the Investment Company Act
of 1940 (the "1940 Act") as a diversified, open-end management investment
company. The Fund began operations on January 2, 1998. The Fund's objective is
seeking growth of capital by investing in out of favor and undervalued equity
securities.

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 Trustees. 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.

D. Deferred Organization Costs. The Fund has incurred expenses
of $35,000 in connection with its organization. These costs
have been deferred and are being amortized on a
straight-line basis over a period of sixty months from the
date the Fund commenced investment operations.

E. 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 six months ended June 30, 1998, Al Frank Asset Management,
Inc. (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.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

the Advisor, if so requested by the Advisor, in subsequent fiscal years 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. The Advisor is permitted to be
reimbursed only for fee reductions and expense payments made in the previous
three fiscal years, but is permitted to look back five years and four years,
respectively, during the initial five years and sixth year of the Fund's
operations. Any such reimbursement is also contingent upon Board of Trustees
review and approval at the time the reimbursement is made. Such reimbursement
may not be paid prior to the Fund's payment of current ordinary operating
expenses. For the period ended June 30, 1998, the Advisor reduced its fees and
absorbed Fund expenses in the amount of $42,907; 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 at the annual rate of 0.20% of average net assets,
subject to a $30,000 annual minimum.

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 - DISTRIBUTION COSTS

The Trust has adopted a Distribution Plan (the "Plan") in accordance
with Rule 12b-1 under the 1940 Act. The Plan provides that the Fund may pay a
fee to the Advisor, acting as Distribution Coordinator, at an annual rate of up
to 0.25% of the average daily net assets of the Fund. The fee is paid to the
Distribution Coordinator as reimbursement for, or in anticipation of, expenses
incurred for distribution-related activity. During the period ended June 30,
1998, the Fund paid the Distribution Coordinator in the amount of $4,745.

NOTE 5 - PURCHASES AND SALES OF SECURITIES

For the period ended June 30, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term investments, were
$6,690,749 and $52,972, respectively.

NOTE 6 - Line of Credit

At June 30, 1998, the Fund has established an uncommitted line of
credit agreement in the amount of $500,000 with Star Bank, N.A., the Fund's
custodian of assets. The current annual interest rate on any borrowing under the
agreement is equal to the Broker Call Rate, as published in the Wall Street
Journal as the Call Money Rate, plus 0.50%, payable monthly, in arrears. The
purpose of the agreement is to either meet temporary or emergency cash needs,
including redemption requests that might otherwise require the untimely
disposition of securities from the Fund's portfolio, or for leverage purposes.
Borrowing money by the Fund involves special risk considerations that are more
fully outlined in the Fund's prospectus. The Fund had no borrowing under the
agreement at June 30, 1998.
13
<PAGE>
Advisor

Al Frank Asset Management
465 Forest Avenue, Suite I
Laguna Beach, California 92651

Distributor

First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, Arizona 85018

Custodian

Star Bank, N.A.
425 Walnut Street, M/L 6118
Cincinnati, Ohio 45202

Transfer Agent

American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788

Legal Counsel

Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104
<PAGE>

The Al Frank Fund

SEMI-ANNUAL REPORT
June 30, 1998

The Al Frank Fund
465 Forest Avenue, Suite I
Laguna Beach, CA 92651
(888) 263-6443

<PAGE>
August 1998

Dear Shareholder,

We are pleased to report on the progress of the Avatar Advantage Balanced Fund
for the six months ended on June 30, 1998. During this period, the Avatar asset
allocation philosophy participating in rising markets while attempting to limit
losses during market downturns - helped the Fund realize a total return of
+13.00%. Other market indices for the same period were as follows:

S&P 500 +17.7% Lehman Brothers Gov't/Corp. +4.2%
Dow Jones Industrials +14.1 60 Stock/40 Bond Benchmark +12.3
NASDAQ +20.9

For the first half of the year, Avatar maintained significant equity and bond
positions. Our exposure ranged between 55% and 65% invested in stocks, 30% to
40% in bonds, and the remainder in cash.

1998 -- The First Six Months in Review
- --------------------------------------

The first strong stirrings of the financial crisis in Asia began to make an
economic impact on the market at the end of the first quarter. Nevertheless, the
stock market continued to rise steadily throughout the first half of the year.
Strong U.S. economic growth drove this advance. This growth cycle is unique:
despite 10 years of business expansion there have been no inflationary pressures
on the economy. Also contributing to the expansion have been stable interest
rates and rising corporate profits.

The greatest gains in the equity portion of the portfolio came from the
technology, consumer cyclical, pharmaceutical and financial stocks. In addition
to benefiting from stable earnings and a positive interest rate environment,
these groups were helped by their limited exposure to Asia. Less favorable
performances were in the energy, commodity, industrial and utility sectors.
Fundamentals in these sectors were lackluster due in large part to the turmoil
in Asia and poor valuation rankings. In the fixed income portion of the
portfolio, we maintained duration longer than the benchmark for the entire
period.

Market Outlook
- --------------

Currently, the ability of corporations to sustain their profits is testing the
markets. Concerns are mounting regarding the effect the slumping economies in
Russia and Latin America will have on U.S. companies already beleaguered by the
loss of profits as a result of the recessions in Asia. Foreign currencies have
been falling against the dollar, which translates into falling prices for U.S.
companies as they compete with cheaper imports. The interest rate climate
remains positive for the U.S. market. However, until the focus diminishes
regarding the deterioration of corporate earnings, the market faces substantial
risk. Adding to these worries are the record high valuations and narrow market
breadth. Given these concerns, Avatar has reduced equity exposure to 45% and
raised bond exposures to 40%, bringing cash to 15%.

Our goal at Avatar is to evaluate current investment risk and alter the
portfolio asset mix to reflect the environment at hand. We will continue to
monitor risk conditions in both domestic and international markets. Until we see
signs of moderating risk, we will continue to take a cautious stance.

/s/ Elizabeth A. Sonders /s/ Charles M. White
Elizabeth A. Sonders Charles M. White
Co-Portfolio Manager Co-Portfolio Manager
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 59.7% Market Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace / Defense Equipment: 1.7%
100 Boeing Co................................................................... $ 4,456
100 Lockheed Martin Corp........................................................ 10,588
100 United Technologies Corp.................................................... 9,250
--------
24,294
--------
Airlines: 0.6%
300 America West Holding Corp. - Class B........................................ 8,569
--------

Auto / Truck Parts and Equipment: 0.7%
200 Lear Corp................................................................... 10,262
--------

Banks: 4.3%
400 Bank of New York, Inc....................................................... 24,275
200 Mellon Bank Corp............................................................ 13,925
300 NationsBank Corp............................................................ 22,950
--------
61,150
--------
Beverages - Non-Alcoholic: 0.9%
300 PepsiCo, Inc................................................................ 12,356
--------

Chemicals - Diversified: 0.4%
100 Imperial Chemical ADR....................................................... 6,450
--------

Commercial Banks: 0.9%
200 Star Banc Corp.............................................................. 12,775
--------

Computer - Micro: 0.8%
400 Compaq Computer Corp........................................................ 11,350
--------

Computer Software: 3.8%
300 Computer Associates International, Inc...................................... 16,669
300 Compuware Corp.*............................................................ 15,337
200 Microsoft Corp.*............................................................ 21,675
--------
53,681
--------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

Cruise Lines: 0.6%
200 Carnival Corp. - Class A.................................................... 7,925
---------
Diversified Manufacturing: 2.3%
300 General Electric Co......................................................... 27,300
100 Masco Corp.................................................................. 6,050
---------
33,350
---------
Diversified Operations: 0.5%
100 Textron, Inc................................................................ 7,169
---------
Electric - Integrated: 1.0%
200 Intel Corp.................................................................. 14,825
---------
Entertainment Software: 0.8%
200 Electronic Arts, Inc........................................................ 10,800
---------
Finance - Mortgage Loan / Banker: 3.0%
400 Federal National Mortgage Association....................................... 24,300
200 Morgan Stanley Dean Witter Discover......................................... 18,275
---------
42,575
---------
Food - Miscellaneous: 1.2%
300 Sara Lee Corp............................................................... 16,781
---------
Food - Retail: 2.3%
200 Kroger Co................................................................... 8,575
600 Safeway, Inc................................................................ 24,412
---------
32,987
---------
Human Resources: 0.7%
300 Accustaff, Inc.............................................................. 9,375
---------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited), Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance: 2.6%
200 Allstate Corp............................................................... $ 18,313
300 Travelers Group, Inc........................................................ 18,187
---------
36,500
---------
Life / Health Insurance: 1.6%
400 SunAmerica, Inc............................................................. 22,975
---------
Manufacturing and Sales of Autos and Trucks: 1.2%
300 Ford Motor Company.......................................................... 17,700
---------
Medical - Drugs: 4.3%
200 Bristol Myers Squibb Co..................................................... 22,988
300 Centocor, Inc............................................................... 10,875
100 Pfizer, Inc................................................................. 10,869
200 Warner-Lambert Co........................................................... 13,875
---------
71,819
---------
Medical - HMO: 0.9%
200 United Healthcare Corp...................................................... 12,700
---------
Medical - Hospitals: 0.7%
300 Tenent Healthcare Corp...................................................... 9,375
---------
Networking Products: 1.3%
200 Cisco Systems, Inc.*........................................................ 18,412
---------
Oil Company: 2.3%
200 Exxon Corp.................................................................. 14,263
300 Texaco, Inc................................................................. 17,906
---------
32,169
---------
Oil - Integrated: 1.4%
100 Schlumberger Ltd............................................................ 6,831
400 USX - Marathon Group........................................................ 13,725
---------
20,556
---------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited), Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paper and Related Products: 1.3%
200 Bowater, Inc................................................................ $ 9,450
200 International Paper Co...................................................... 8,600
--------
18,050
--------
Pipelines: 0.8%
200 Enron Corp.................................................................. 10,813
--------
Radio: 0.7%
200 Chancellor Media Corp....................................................... 9,931
--------
REIT - Storage: 0.6%
300 Public Storage, Inc......................................................... 8,400
--------
Retail - Building Products: 1.2%
200 Home Depot, Inc............................................................. 16,613
--------
Retail - Department Stores: 1.8%
200 Bed Bath & Beyond, Inc...................................................... 10,362
300 Dayton Hudson Corp.......................................................... 14,550
--------
24,912
--------
Retail - Discount: 0.7%
400 TJX Companies, Inc.......................................................... 9,650
--------
Telecommunication Equipment: 2.2%
200 Ciena Corp.................................................................. 13,925
200 Lucent Technologies, Inc.................................................... 16,637
--------
30,562
--------
Telecommunication Services: 2.0%
300 Air Touch Communications, Inc............................................... 17,531
200 GTE Corp.................................................................... 11,125
--------
28,656
--------
Telephone - Local: 1.4%
300 BellSouth Corp.............................................................. 20,138
--------
Telephone - Long Distance: 0.7%
200 Worldcom, Inc.*............................................................. 9,688
--------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

Transportation - Rail: 0.7%
100 Burlington Northern Santa Fe................................................ 9,819
--------

Total Common Stocks (cost $738,873)......................................... 845,525
--------
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS: 34.8%
Principal Amount
- ------------------------------------------------------------------------------------------------------------------------------
$100,000 Fannie Mae MTN, 6.11%, 1/22/2003............................................ 99,445
90,000 U.S. Treasury Bond, 6.625%, 4/30/2002....................................... 93,319
85,000 U.S. Treasury Bond, 12.00%, 8/15/2013....................................... 126,251
145,000 U.S. Treasury Bond, 7.50%, 11/15/2016....................................... 174,136
--------
Total U.S. Government and Govenment
Agency Obligations (cost $492,188)...................................... 493,151
--------

SHORT-TERM INVESTMENTS: 4.3%
- ------------------------------------------------------------------------------------------------------------------------------
60,576 Star Treasury Fund, 4.80% (cost $60,576).................................... 60,576
-----------
Total Investments in Securities
(cost $1,291,637+): 98.8% ............................................. 1,399,252
Other Assets less Liabilities: 1.2%......................................... 16,887
-----------
Total Net Assets: 100.0% ................................................... $ 1,416,139
===========

*Denotes a non-income producing security.

+At June 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:

Gross unrealized appreciation............................................... $ 121,438
Gross unrealized depreciation............................................... (13,823)
----------
Net unrealized appreciation........................................ $ 107,615
==========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

STATEMENT OF ASSETS AND LIABILITIES at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at value
(identified cost $1,291,637) ................................................. $ 1,399,252
Receivables:
Due from Advisor......................................................... 3,183
Dividends and interest .................................................. 9,768
Securities sold.......................................................... 4,882
Deferred organization costs................................................... 11,342
Other......................................................................... 2,287
----------
Total assets ....................................................... 1,430,714
----------

LIABILITIES
Payables:
Administration fee....................................................... 2,466
Distribution fees........................................................ 305
Accrued expenses.............................................................. 11,804
----------
Total liabilities................................................... 14,575
----------

NET ASSETS ........................................................................ $ 1,416,139
===========

Net asset value, offering and redemption price per share
($1,416,139/125,351 shares outstanding; unlimited
number of shares (par value $.01) authorized)............................ $ 11.30
=======

COMPONENTS OF NET ASSETS
Paid-in capital .............................................................. $1,287,313
Undistributed net investment income........................................... 9,990
Undistributed net realized gain on investments................................ 11,221
Net unrealized appreciation on investments.................................... 107,615
----------
Net assets .............................................................. $1,416,139
==========
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

STATEMENT OF OPERATIONS
For the Period from January 13, 1998* through June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends ................................................................... $ 3,627
Interest ................................................................... 14,106
----------
Total income............................................................ 17,733
----------

Expenses
Administration fee........................................................... 13,890
Professional fees............................................................ 6,946
Fund accounting fees......................................................... 5,586
Audit fees................................................................... 5,094
Advisory fee................................................................. 4,127
Transfer agent fees.......................................................... 4,020
Custody fees................................................................. 3,334
Printing fees................................................................ 3,241
Directors' fees.............................................................. 2,606
Other ................................................................... 2,356
Legal fees................................................................... 1,852
Distribution fees............................................................ 1,376
Amortization of deferred organization costs.................................. 1,158
Registration fees............................................................ 406
----------
Total expenses.......................................................... 49,046
Less: Advisory fee waiver and absorption................................ (41,303)
----------
Net expenses............................................................ 7,743
----------
Net investment income.............................................. 9,990
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions................................. 11,221
Net change in unrealized appreciation on investments......................... 107,615
----------
Net realized and unrealized gain on investments......................... 118,836
----------
Net Increase in Net Assets Resulting from Operations.............. $ 128,826
==========
</TABLE>
*Commencement of operations.

See Notes to Financial Statements.
8
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
January 13, 1998*
through
June 30, 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C>
NET INCREASE IN ASSETS FROM
OPERATIONS
Net investment income............................................................. $ 9,990
Net realized gain from security transactions...................................... 11,221
Net change in unrealized appreciation on investments.............................. 107,615
------------
Net increase in net assets resulting from operations ................... 128,826
------------

CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from
net change in outstanding shares (a)......................................... 1,287,313
------------
Total increase in net assets ........................................... 1,416,139

NET ASSETS
Beginning of period .............................................................. -0-
------------
End of period .............................................................. $ 1,416,139
============

(a) A summary of capital share transactions is as follows:

January 13, 1998*
through
June 30, 1998
------- -----------
Shares Value
------- -----------
Shares sold............................................... 125,351 $ 1,287,313
Shares redeemed........................................... -0- -0-
------- -----------
Net increase.............................................. 125,351 $ 1,287,313
======= ===========
</TABLE>

*Commencement of operations.

See Notes to Financial Statements.
9
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

Financial Highlights - For a Capital Share Outstanding
throughout the period (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
January 13, 1998*
through
June 30, 1998
- ---------------------------------------------------------------------------------------------------------

<S> <C>
Net asset value, beginning of period.............................................. $ 10.00
Income from investment operations:
Net investment income................................................... 0.08
Net realized and unrealized gain on investments......................... 1.22
-------
Total from investment operations.................................................. 1.30
-------

Net asset value, end of period.................................................... $11.30
=======

Total return .............................................................. 13.00%+

Ratios/supplemental data:
Net assets, end of period (millions).............................................. $ 1.4

Ratio of expenses to average net assets:
Before expense reimbursement............................................ 8.85%++
After expense reimbursement............................................. 1.40%++

Ratio of net investment income (loss) to average net assets:
Before expense reimbursement............................................ (5.65%)++
After expense reimbursement............................................. 1.80%++

Portfolio turnover rate........................................................... 43.25%
</TABLE>

*Commencement of operations.

+Not annualized.

++Annualized.

See Notes to Financial Statements.
10
<PAGE>
THE AVATAR ADVANTAGE BALANCED FUND

NOTES TO FINANCIAL STATEMENTS at June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Avatar Advantage Balanced Fund (the "Fund") is a series of shares
of Advisors Series Trust (the "Trust"), which is registered under the Investment
Company Act of 1940 (the "1940 Act") as a diversified, open-end management
investment company. The Fund began operations on January 13, 1998. The Fund's
objective is to seek long-term capital appreciation by investing in equity
securities during rising stock markets and limiting loss during market declines.

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.

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 method.
Purchase discounts and premiums on securities held by the
Fund are accreted and amortized to maturity using the
effective interest method.

D. Deferred Organization Costs. The Fund has incurred expenses
of $12,500 in connection with its organization. These costs
have been deferred and are being amortized on a
straight-line basis over a period of sixty months from the
date the Fund commenced investment operations.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

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 six months ended June 30, 1998, Avatar Investors Associates
Corp. (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 0.75% 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 1.40% 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 so
requested by the Advisor, in subsequent fiscal years 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. The Advisor is permitted to be reimbursed only for
fee reductions and expense payments made in the previous three fiscal years, but
is permitted to look back five years and four years, respectively, during the
initial five years and sixth year of the Fund's operations. Any such
reimbursement is also contingent upon Board of Trustees review and approval at
the time the reimbursement is made. Such reimbursement may not be paid prior to
the Fund's payment of current ordinary operating expenses. For the period ended
June 30, 1998, the Advisor reduced its fees and absorbed Fund expenses in the
amount of $41,303; no amounts were reimbursed.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

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 - DISTRIBUTION COSTS

NOTE 5 - PURCHASES AND SALES OF SECURITIES

For the period ended June 30, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term investments, were
$1,614,310 and $393,967, respectively.
13
<PAGE>
Advisor

Avatar Investors Associates Corp.
900 Third Avenue
New York, New York 10022

Distributor

First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, Arizona 85018

Custodian

Star Bank, N.A.
425 Walnut Street, M/L 6118
Cincinnati, Ohio 45202

Transfer Agent

American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
888-263-6452

Legal Counsel

Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, California 94104

This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.

Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
<PAGE>

The Avatar Advantage
Balanced Fund

Semi-Annual Report

June 30, 1998
<PAGE>
August 1998

Dear Shareholder,

We are pleased to report on the progress of the Avatar Advantage International
Equity Fund for it's first five months which ended on June 30, 1998. During that
period, the Avatar asset allocation philosophy - participating in rising markets
while attempting to limit losses during market downturns - helped the fund
realize a total return of +8.1%.

The Morgan Stanley Capital International EAFE+Canada index was +10.1 for the
same time period.

1998 - The First Six Months in Review
- -------------------------------------

World financial markets were very volatile during the first half of 1998. The
financial crisis in Asia had a severe negative economic impact thoughout the
region. The Japanese economy, saddled with enormous corporate and government
debt, searched in vain for a way to stimulate it's beleaguered economic
situation and restore sentiment. Conversely, the European markets soared to new
highs on solid economic data such as low inflation, low unemployment and steady
corporate growth. The fundamentals as we approach European Monetary Union were
also very positive for the participating equity markets, thus adding to the
upswing in these markets.

Our research was correct in forecasting most of these market situations. In
early 1998, we were under-invested thoughout Asia and did not suffer the
negative impact that a fully-invested approach would have. Not surprisingly,
most of our gains in the portfolio came from participating in the rise of the
European stock markets. Our models readings for early 1998 were positive for
most of Europe and we were therefore fully-invested thoughout this region.

Market Outlook
- --------------

Currently, many of the world financial markets are still in turmoil. Concerns
are mounting regarding the real impact of the slumping economies in Japan,
Russia and the emerging markets. Unfortunately, it has become clear that Asia's
problems are far from over. It is also difficult to determine what impact the
still unfolding Russian political and financial situation will have on key
European markets; particularly Germany and France.

Our current research for Asia remains low neutral and our research for Europe
has turned less bullish in the past several weeks. We have reduced our exposure
throughout the world and cautiously wait for some resolutions to the many
pending global economic, financial, and political situations. Given these
concerns, Avatar has reduced exposure to 67% equities and 33% cash.

Our goal at Avatar is to evaluate current investment risk and alter the
portfolio country mix and weightings to reflect the environment at hand. We will
continue to monitor risk conditions throughout the world. Until we see signs of
moderating risk, we will continue to take a cautious stance.

/s/ Elizabeth A. Sonders /s/ Charles M. White

Elizabeth A. Sonders Charles M. White
Co-Portfolio Manager Co-Portfolio Manager
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Shares Open-END FUNDS: 68.5% Market Value
- ----------------------------------------------------------------------------------------
<S> <C> <C>
800 WEBS - Australia Index Series...................... $ 7,550
1,000 WEBS - Canada Index Series......................... 14,688
1,500 WEBS - France Index Series......................... 33,094
1,800 WEBS - Germany Index Series........................ 43,087
400 WEBS - Italy Index Series.......................... 10,450
10,000 WEBS - Japan Index Series.......................... 98,125
700 WEBS - Netherlands Index Series.................... 19,644
200 WEBS - Spain Index Series.......................... 5,900
1,000 WEBS - Switzerland Index Series ................... 18,875
1,800 WEBS - United Kingdom Index Series................. 37,800
--------

Total Open-End Funds
(cost $271,033).................................. 289,213
--------

Principal Amount SHORT-TERM INVESTMENTS: 31.4%
- ----------------------------------------------------------------------------------------
$132,702 Star Treasury Fund (cost $132,702)................. 132,702
--------

Total Investments in Securities
(cost $403,735+): 99.9% ........................ 421,915
Other Assets less Liabilities: 0.1%................ 589
--------
Total Net Assets: 100.0% .......................... $422,504
========

+At June 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:

Gross unrealized appreciation...................... $ 21,399
Gross unrealized depreciation...................... (3,219)
--------
Net unrealized appreciation................. $ 18,180
========
</TABLE>

WEBS (World Equity Benchmark Shares) are each a series of WEBS INDEX FUND, INC.,
an open-end management investment company. Each Index Series represents a
portfolio of ordinary foreign shares and seeks to provide investment results
that track the performance of that country's publicly traded equity securities
in the aggregate.

See Notes to Financial Statements.
2
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

STATEMENT OF ASSETS AND LIABILITIES at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------

<S> <C>
ASSETS
Investments in securities, at value
(identified cost $403,735)................................... $ 421,915
Receivables:
Due from Advisor............................................. 9,926
Interest ................................................... 623
Deferred organization costs....................................... 11,534
Other ........................................................ 2,690
---------
Total assets ........................................... 446,688
---------

LIABILITIES
Accrued expenses.................................................. 24,184
---------
Total liabilities....................................... 24,184
---------

NET ASSETS ............................................................ $ 422,504
=========

Net asset value, offering and redemption price per
share ($422,504/39,099 shares outstanding;
unlimited number of shares (par value $0.01),
authorized) ................................................. $ 10.81
======

COMPONENTS OF NET ASSETS
Paid-in capital .................................................. $ 392,097
Accumulated net investment loss................................... (921)
Undistributed net realized gain on investments.................... 13,148
Net unrealized appreciation on investments........................ 18,180
---------
Net assets .................................................. $ 422,504
=========
</TABLE>

See Notes to Financial Statements.
3
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

STATEMENT OF OPERATIONS
For the Period from February 2, 1998* through June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------

<S> <C>
INVESTMENT INCOME
Income
Interest ................................................... $ 1,679
---------
Total income............................................ 1,679
---------

Expenses
Custodian and accounting fees................................ 16,225
Administration fee........................................... 11,589
Professional fees............................................ 5,795
Transfer agent fees.......................................... 5,602
Reports to shareholders...................................... 2,704
Trustees' fees............................................... 2,173
Other ................................................... 1,999
Advisory fee................................................. 1,576
Amortization of deferred organization costs.................. 966
Distribution fees............................................ 394
Registration fees............................................ 338
---------
Total expenses.......................................... 49,361
Less: Advisory fee waiver and absorption................ (46,761)
---------
Net expenses............................................ 2,600
---------
Net investment loss ............................... (921)
---------

REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions................. 13,148
Net change in unrealized appreciation on
investments................................................ 18,180
---------
Net realized and unrealized gain on
investments........................................... 31,328
---------
Net Increase in Net Assets Resulting
from Operations ................................. $ 30,407
=========
</TABLE>

*Commencement of operations.

See Notes to Financial Statements.
4
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
February 2, 1998*
through
June 30, 1998
- ----------------------------------------------------------------------------------------

<S> <C>
NET INCREASE (Decrease) IN ASSETS FROM
OPERATIONS
Net investment loss ................................................... $ (921)
Net realized gain from security transactions........................... 13,148
Net change in unrealized appreciation of securities.................... 18,180
---------
Net increase in net assets resulting
from operations ............................................ 30,407
---------

CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a)............................................... 392,097
---------
Total increase in net assets ..................................... 422,504
NET ASSETS
Beginning of period ................................................... -0-
---------
End of period $ 422,504
=========
</TABLE>

(a) A summary of capital share transactions is as follows:

<TABLE>
<CAPTION>
February 2, 1998*
through
June 30, 1998
---------------------------------
Shares Value
-------- ---------
<S> <C> <C>
Shares sold......................................... 39,104 $392,147
Shares redeemed..................................... (5) (50)
------- --------
Net increase........................................ 39,099 $392,097
======= ========
</TABLE>

*Commencement of operations.

See Notes to Financial Statements.
5
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
February 2, 1998*
through
June 30, 1998
- -----------------------------------------------------------------------------------------

<S> <C>
Net asset value, beginning of period................................... $10.00
------
Income from investment operations:
Net investment loss............................................... (0.02)
Net realized and unrealized gain on
investments ................................................... 0.83
------
Total from investment operations....................................... 0.81
------

Net asset value, end of period......................................... $10.81
======

Total return 8.10%+

Ratios/supplemental data:
Net assets, end of period (millions)................................... $ 0.4

Ratio of expenses to average net assets:
Before expense reimbursement...................................... 30.15%++
After expense reimbursement....................................... 1.59%++

Ratio of net investment loss to average net assets:
Before expense reimbursement...................................... (29.12)%++
After expense reimbursement....................................... (0.56)%++

Portfolio turnover rate................................................ 106.81%
</TABLE>

*Commencement of operations.

+Not annualized.

++Annualized.

See Notes to Financial Statements.
<PAGE>
THE AVATAR ADVANTAGE
INTERNATIONAL EQUITY ALLOCATION FUND

NOTES TO FINANCIAL STATEMENTS at June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Avatar Advantage International Equity Allocation Fund (the "Fund")
is a series of shares of beneficial interest of Advisors Series Trust (the
"Trust"), which is registered under the Investment Company Act of 1940 (the
"1940 Act") as a diversified, open-end management investment company. The Fund
began operations on February 2, 1998. The Fund's objective is to seek long-term
capital appreciation by investing in equity securities of issuers outside of the
U.S. during rising stock markets and limiting loss during market declines.

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.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

For the six months ended June 30, 1998, Avatar Investors Associates
Corp. (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 1.65% 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 so
requested by the Advisor, in subsequent fiscal years 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. The Advisor is permitted to be reimbursed only for
fee reductions and expense payments made in the previous three fiscal years, but
is permitted to look back five years and four years, respectively, during the
initial five years and sixth year of the Fund's operations. Any such
reimbursement is also contingent upon Board of Trustees review and approval at
the time the reimbursement is made. Such reimbursement may not be paid prior to
the Fund's payment of current ordinary operating expenses. For the period ended
June 30, 1998, the Advisor reduced its fees and absorbed Fund expenses in the
amount of $46,761; no amounts were reimbursed.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

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 the Fund's expenses and reviews the Fund's expense accruals. For its
services, the Administrator receives a fee monthly at the annual rate of 0.20%
of average net assets, subject to a $30,000 minimum.

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 - DISTRIBUTION COSTS

NOTE 5 - PURCHASES AND SALES OF SECURITIES

For the period ended June 30, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$531,707 and $273,823, respectively.
9
<PAGE>
Advisor
Avatar Investors Associates Corp.
900 Third Avenue
New York, New York 10022

Distributor
First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261-E
Phoenix, Arizona 85018

Custodian
Star Bank, N.A.
425 Walnut Street M/L 6118
Cincinnati, Ohio 45202

Transfer Agent
Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202

Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, California 94104

This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.

The Avatar Advantage
International Equity
Allocation Fund

Semi-Annual Report

June 30, 1998
<PAGE>

The Avatar
Advantage Equity
Allocation Fund

Semi-Annual Report

June 30, 1998
<PAGE>
August 1998

Dear Shareholder,

We are pleased to report on the progress of the Avatar Advantage Equity
Allocation Fund for the six months ended on June 30, 1998. During this period,
the Avatar asset allocation philosophy -participating in rising markets while
attempting to limit losses during market downturns - helped the fund realize a
total return of +14.72%. Other market indices for the same period were as
follows:

S&P 500 +17.7%
Dow Jones Industrials +14.1
NASDAQ +20.9
Russell 2000 + 5.3

For the first half of the year, Avatar maintained a significant equity position.
Our exposure ranged between 75% and 90% invested in stocks, the remainder in
cash.

1998 --The First Six Months in Review
- -------------------------------------

The greatest gains in the portfolio came from the technology, consumer cyclical,
pharmaceutical and financial stocks. In addition to benefiting from stable
earnings and a positive interest rate environment, these groups were helped by
their limited exposure to Asia. Less favorable performances were in the energy,
commodity, industrial and utility sectors. Fundamentals in these sectors were
lackluster due in large part to the turmoil in Asia and poor valuation rankings.

Market Outlook
- --------------

/s/ Elizabeth A. Sonders /s/ Charles M. White

Elizabeth A. Sonders Charles M. White
Co-Portfolio Manager Co-Portfolio Manager
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

SCHEDULE OF INVESTMENTS at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Shares COMMON STOCKS: 86.7% Market Value
- ---------------------------------------------------------------------------------------
<S> <C>
Aerospace / Defense Equipment: 2.4%
1,600 Boeing Co........................................... $ 71,300
1,300 Lockheed Martin Corp................................ 137,638
1,400 United Technologies Corp............................ 129,500
---------
338,438
---------

Auto / Truck Parts and Equipment: 1.1%
3,100 Lear Corp........................................... 159,069
---------

Banks: 4.1%
5,100 Bank of New York, Inc............................... 309,506
3,600 NationsBank Corp.................................... 275,400
---------
584,906
---------

Beverages - Non-Alcoholic: 1.3%
4,700 PepsiCo, Inc........................................ 193,581
---------

Chemicals - Diversified: 0.9%
1,900 Imperial Chemical ADR............................... 122,550
---------

Commercial Banks: 1.0%
2,300 Star Banc Corp...................................... 146,912
---------

Computer - Micro: 1.2%
5,800 Compaq Computer Corp................................ 164,575
---------

Computer Software: 4.8%
3,900 Computer Associates International, Inc.............. 216,694
4,200 Compuware Corp.*.................................... 214,594
2,300 Microsoft Corp.*.................................... 249,334
---------
680,622
---------

Cosmetics and Toiletries: 1.7%
2,700 Colgate Palmolive Co................................ 237,600
---------

Cruise Lines: 1.3%
4,800 Carnival Corp., Class A............................. 190,200
---------

Diversified Manufacturing: 3.0%
4,700 General Electric Co................................. $ 427,700
---------
</TABLE>

See Notes to Financial Statements.
3
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

Electric - Integrated: 1.5%
2,800 Intel Corp.......................................... 207,462
---------

Entertainment Software: 1.4%
3,600 Electronic Arts, Inc................................ 194,625
---------

Fiber Optics: 1.1%
2,200 Ciena Corp.......................................... 153,037
---------

Finance - Mortgage Loan / Banker: 6.1%
5,100 Federal National Mortgage Association............... 309,825
2,900 Mellon Bank Corp.................................... 201,912
3,900 Morgan Stanley Dean Witter Discover................. 356,363
---------
868,100
---------
Food - Miscellaneous: 1.5%
3,900 Sara Lee Corp....................................... 218,156
---------

Food - Retail: 3.2%
2,200 Kroger Co........................................... 94,325
8,900 Safeway, Inc........................................ 362,119
---------
456,444
---------
Human Resources: 1.1%
4,900 Accustaff, Inc...................................... 153,125
---------

Insurance: 4.2%
3,266 Allstate Corp....................................... 299,043
4,800 Travelers Group, Inc................................ 290,970
---------
590,013
---------

Life / Health Insurance: 2.1%
5,200 SunAmerica, Inc..................................... 298,675
---------

Machinery - Construction: 0.8%
1,800 Masco Corp.......................................... $ 108,900
---------
</TABLE>

See Notes to Financial Statements.
4
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

Medical - Drugs: 8.6%
2,900 Bristol Myers Squibb Co............................. 333,319
3,700 Centocor, Inc.*..................................... 134,240
2,700 Eli Lilly & Co...................................... 178,369
2,400 Pfizer, Inc......................................... 260,850
4,400 Warner Lambert Co................................... 305,250
---------
1,212,028
---------
Medical - HMO: 0.9%
2,000 United Healthcare Corp.............................. 127,000
---------

Medical - Hospitals: 1.1%
5,000 Tenet Healthcare Corp............................... 156,250
---------

Networking Products: 1.8%
2,750 Cisco Systems, Inc.*................................ 253,258
---------

Oil Company: 3.2%
2,500 Exxon Corp.......................................... 178,281
4,500 Texaco, Inc......................................... 268,594
---------
446,875
---------

Oil - Integrated: 2.1%
1,300 Schlumberger Ltd.................................... 88,806
6,000 USX-Marathon Group.................................. 205,875
---------
294,681
---------

Paper and Related Products: 1.6%
2,300 Bowater, Inc........................................ 108,675
2,700 International Paper Co.............................. 116,100
---------
224,775
---------

Pipelines: 0.8%
2,100 Enron Corp.......................................... $ 113,531
---------
</TABLE>

See Notes to Financial Statements.
5
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

REIT - Storage: 0.8%
4,100 Public Storage, Inc................................. 114,800
---------

Retail - Building Products: 1.3%
2,200 Home Depot, Inc..................................... 182,738
---------

Retail - Department Stores: 3.4%
2,900 Bed Bath & Beyond, Inc.............................. 150,347
3,700 Dayton Hudson Corp.................................. 179,450
2,500 Gap, Inc............................................ 154,062
---------
483,859
---------
Retail - Discount: 1.1%
6,200 TJX Companies, Inc.................................. 149,575
---------

Telecommunication Equipment: 2.0%
3,400 Lucent Technologies, Inc............................ 282,838
---------

Telecommunication Services: 2.9%
3,700 Air Touch Communications, Inc....................... 216,219
3,500 GTE Corp............................................ 194,687
---------
410,906
---------
Telephone - Local: 1.9%
4,100 BellSouth Corp...................................... 275,213
---------

Telephone - Long Distance: 1.6%
4,800 Worldcom, Inc.*..................................... 232,050
---------

Tobacco: 1.1%
3,900 Philip Morris Companies, Inc........................ 153,563
---------

Transportation - Rail: 0.8%
1,100 Burlington Northern Santa Fe........................ $ 108,006
---------
</TABLE>

See Notes to Financial Statements.
6
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

Principal Amount U.S. GOVERNMENT OBLIGATIONS: 0.7%
- ------------------------------------------------------------------------------------
$ 100,000 U.S. Treasury Bill, 4.91%, 9/17/1998
(cost $98,936)................................ 98,938
-----------

SHORT-TERM INVESTMENTS: 11.5%
- ------------------------------------------------------------------------------------
1,628,577 Star Treasury Fund (cost $1,628,577)............ 1,628,577
-----------

Total Investments in Securities
(cost $12,283,181+): 98.9% .................. 13,995,714
Other Assets less Liabilities: 1.1%............. 150,330
-----------
Total Net Assets: 100.0% ....................... $14,146,044
===========

*Denotes a non-income producing security.

+At June 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:

Gross unrealized appreciation................... $ 1,897,901
Gross unrealized depreciation................... (185,368)
-----------
Net unrealized appreciation.............. $ 1,712,533
===========
</TABLE>
7
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

STATEMENT OF ASSETS AND LIABILITIES at June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------

<S> <C>
ASSETS
Investments in securities, at value
(identified cost $12,283,181) ............................... $13,995,714
Receivables:
Dividends and interest ...................................... 17,657
Securities sold.............................................. 73,229
Affiliated broker............................................ 33,494
Deferred organization costs....................................... 30,991
Other ........................................................ 9,424
-----------
Total assets ........................................... 14,160,509
-----------

LIABILITIES
Payables:
Advisory fee................................................. 3,995
Administration fee........................................... 2,548
Distribution fees............................................ 3,042
Fund shares repurchased...................................... 4,182
Accrued expenses.................................................. 698
-----------
Total liabilities....................................... 14,465
-----------

NET ASSETS............................................................. $14,146,044
===========

Net asset value, offering and redemption price per
share ($14,146,044/1,232,793 shares outstanding;
unlimited number of shares (par value $0.01)
authorized) ................................................. $11.47
======

COMPONENTS OF NET ASSETS
Paid-in capital .................................................. $11,790,280
Undistributed net investment income............................... 20,473
Undistributed net realized gain on investments.................... 622,758
Net unrealized appreciation on investments........................ 1,712,533
-----------
Net assets .................................................. $14,146,044
===========
</TABLE>

See Notes to Financial Statements.
8
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

STATEMENT OF OPERATIONS - For the Six Months Ended June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------

<S> <C>
INVESTMENT INCOME
Income
Dividends ................................................... $ 84,143
Interest ................................................... 52,702
-----------
Total income............................................ 136,845
-----------

Expenses
Advisory fee................................................. 68,062
Distribution fees............................................ 20,018
Administration fee........................................... 16,596
Custodian and accounting fees................................ 13,930
Professional fees............................................ 10,001
Other ................................................... 9,593
Transfer agent fees.......................................... 6,447
Reports to shareholders...................................... 5,471
Amortization of deferred organization costs ................. 3,472
Trustees' fees............................................... 2,803
Registration fees............................................ 2,362
-----------
Total expenses.......................................... 158,755
Less: expenses reimbursed............................... (38,855)
-----------
Net expenses............................................ 119,900
-----------
Net investment income ............................. 16,945
-----------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions................. 724,250
Net realized loss from futures transactions.................. (63,179)
Net change in unrealized appreciation on
investments................................................ 1,639,968
-----------
Net gain on investments................................. 2,301,039
-----------
Net Increase in Net Assets Resulting
from Operations ................................. $ 2,317,984
===========
</TABLE>

See Notes to Financial Statements.
9
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Six Months December 3, 1997*
Ended through
June 30, 1998# December 31, 1997
- --------------------------------------------------------------------------------------------------------

<S> <C> <C>
NET INCREASE IN ASSETS FROM
OPERATIONS
Net investment income................................... $ 16,945 $ 7,367
Net realized gain (loss) from security
transactions.......................................... 724,250 (38,313)
Net realized loss from futures
transactions.......................................... (63,179) -0-
Net change in unrealized appreciation
of securities......................................... 1,639,968 72,565
----------- -----------
Net increase in net assets resulting
from operations .................................. 2,317,984 41,619
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net investment income................................... -0- (3,839)
----------- -----------
CAPITAL SHARE TRANSACTIONS
Net (decrease) increase in net assets
derived from net change in
outstanding shares (a)................................ (8,417,925) 20,208,205
----------- -----------
Total (decrease) increase in net
assets .................................... (6,099,941) 20,245,985
NET ASSETS
Beginning of period .................................... 20,245,985 -0-
----------- -----------
End of period (including undistributed
net investment income of $20,473 and
$3,528, respectively)................................. $14,146,044 $20,245,985
=========== ===========
</TABLE>

<TABLE>
<CAPTION>
(a) A summary of capital share transactions is as follows:
Six Months Ended Dec. 3, 1997* through
June 30, 1998# Dec. 31, 1997
------------------------------ -------------------------------
Shares Value Shares Value
-------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold................. 116,480 $1,285,246 2,020,575 $20,204,366
Shares issued in
reinvestment of
distributions............. 0 0 384 3,839
Shares redeemed............. (904,646) (9,703,171) (0) (0)
-------- ----------- --------- -----------
Net (decrease)
increase.................. (788,166) $(8,417,925) 2,020,959 $20,208,205
======== =========== ========= ===========
</TABLE>

*Commencement of operations.
#Unaudited.
See Notes to Financial Statements.
10
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Six Months December 3, 1997*
Ended through
June 30, 1998# December 31, 1997
- ---------------------------------------------------------------------------------------------------

<S> <C> <C>
Net asset value, beginning of period.............. $10.02 $10.00
Income from investment operations:
Net investment income........................ 0.01 0.01
Net realized and unrealized gain on
investments .............................. 1.44 0.02
------ ------
Total from investment operations.................. 1.45 0.03
------ ------

Less distributions:
Dividends from net investment
income..................................... (0.00) (0.01)
------ ------

Net asset value, end of period.................... $11.47 $10.02
====== ======

Total return...................................... 14.72%+ 0.22%+

Ratios/supplemental data:
Net assets, end of period (millions).............. $ 14.1 $ 20.2

Ratio of expenses to average net assets:
Before expense reimbursement................. 1.99%++ 1.52%++
After expense reimbursement.................. 1.50%++ 1.39%++

Ratio of net investment (loss) income to
average net assets:
Before expense reimbursement................. (0.27%)++ 0.33%++
After expense reimbursement.................. 0.21%++ 0.47%++

Portfolio turnover rate........................... 34.32% 13.95%
</TABLE>

*Commencement of operations.
#Unaudited.
+Not annualized.
++Annualized.

See Notes to Financial Statements.
11
<PAGE>
THE AVATAR ADVANTAGE EQUITY ALLOCATION FUND

NOTES TO FINANCIAL STATEMENTS at June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Avatar Advantage Equity Allocation Fund (the "Fund") is a series
of shares of beneficial interest of Advisors Series Trust (the "Trust"), which
is registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company. The Fund began operations
on December 3, 1997. The Fund's objective is to seek long-term capital
appreciation by investing in equity securities during rising stock markets and
limiting loss during market declines.

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.

D. Deferred Organization Costs. The Fund has incurred expenses
of $ 35,000 in connection with its organization. These costs
have been deferred and are being amortized on a
straight-line basis over a period of sixty months from the
date the Fund commenced investment operations.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

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.

F. Futures Contracts. The Company invests in financial futures
contracts solely for the purpose of hedging its existing
portfolio securities, or securities that the Company intends
to purchase, against fluctuations in fair value caused by
changes in prevailing market interest rates. Upon entering
into a financial futures contract, the Company is required
to pledge to the broker an amount ("initial margin
deposit"). Subsequent payments, known as "variation margin,"
are made or received by the Company each day, depending on
the daily fluctuations in the fair value of the underlying
security. The Company records a realized gain or loss equal
to the daily variation margin. Should market conditions move
unexpectedly, the Company may not achieve the anticipated
benefits of the financial futures contracts and may realize
a loss. The use of futures transactions involves the risk of
imperfect correlation in movements in the price of futures
contracts, interest rates and the underlying hedged assets..

NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

For the six months ended June 30, 1998, Avatar Investors Associates
Corp. (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 0.85% based upon the average daily net assets of the
Fund.

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------

previous three fiscal years, but is permitted to look back five years and four
years, respectively, during the initial five years and sixth year of the Fund's
operations. Any such reimbursement is also contingent upon Board of Trustees
review and approval at the time the reimbursement is made. Such reimbursement
may not be paid prior to the Fund's payment of current ordinary operating
expenses. For the period ended June 30, 1998, the Advisor reduced its fees and
absorbed Fund expenses in the amount of $38,855; 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 the Fund's expenses and
reviews the Fund's expense accruals. For its services, the Administrator
receives a fee monthly 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 and trustees of the Trust are also officers and/or
directors of the Administrator and the Distributor.

NOTE 4 - Distribution Costs

NOTE 5 - PURCHASES AND SALES OF SECURITIES

For the period ended June 30, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$4,686,948 and $13,165,074, respectively.
14
<PAGE>
Advisor
Avatar Investors Associates Corp.
900 Third Avenue
New York, New York 10022

Distributor
First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261-E
Phoenix, Arizona 85018

Custodian
Star Bank, N.A.
425 Walnut Street M/L 6118
Cincinnati, Ohio 45202

Transfer Agent
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
888-263-6452

Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, California 94104

This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.