KAMINSKI POLAND FUND
Semi-Annual Report
December 31, 1998
MANAGED BY KAMINSKI ASSET MANAGEMENT, INC.
319 1st Avenue, Suite 400
Minneapolis, MN 55401
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Dear Shareholder:
We are pleased to bring you this Semi-Annual Report for the Kaminski Poland Fund
covering the period July 1, 1998 through December 31, 1998. During this time,
the Fund was down 24.61% in comparison to the WIG Index loss of 17.71%.
In general, emerging markets have been hurt very badly over the last year.
Globalization was more of a factor in investment trends than ever before. The
Asian economic crisis continues to cause commotion on the stock exchanges
worldwide. Markets in Central Europe were particularly weak due to the decision
of the Russian government to allow a devaluation of its currency. Foreign
investors took profits and left Poland, continuing to perceive it as a link to
the Russian ruble crisis.
This global volatility presented some challenges for the Fund. Many of the
Fund's top holdings are construction driven and unfortunately remained out of
favor with investors for much of 1998. The Fund's heavy sector weightings and
its buy-and-hold strategy also add to its volatility. However, we feel the
Fund's long-term performance potential is still attractive. Investors seeking
long-term growth of capital should not focus on short-term performance but
rather on the Fund's long-term value.
In the fourth quarter, the Fund's management positioned the Fund for a slowing
economy by reducing holdings in economically sensitive sectors, like
construction, and by increasing its position in banking and information
technology. Both changes proved beneficial for the Fund, as the growth rate of
the economy slowed and both banking and information technology sectors performed
well during the last months of the year. We are very comfortable with
portfolio's risk-reward perspective, and are particularly comfortable with the
Fund's specific holdings.
The end of 1998 was also a time of some value emerging in Central Europe. In
December alone, the Kaminski Poland Fund gained 6.92%. Poland continues to offer
the investor an opportunity to participate in a dynamically changing economy.
Privatization and continued progression toward EU membership has led to
increased market activity and expansion of the business community. We strongly
believe that by overcoming many of its challenges, Poland is likely to be
stronger and a more competitive participant in the European economy.
Overall, the Kaminski Poland Fund continues to purchase solid companies
demonstrating strong management and earnings growth in excess of 10%. We are
committed to our long-term value approach and continue to focus on your
financial goals.
Cordially,
/s/
M.G. Kaminski
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at December 31, 1998 (Unaudited)
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Shares COMMON STOCKS: 97.02% Market Value
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<S> <C> <C>
Building and Construction: 14.64%
11,900 Budimex S.A.*........................................................... $ 52,363
4,850 Exbud S.A.*............................................................. 41,719
13,750 Mostostal Krakow S.A.*.................................................. 22,640
9,500 Mostostal Zabrze S.A.................................................... 34,790
31,700 Mostostal-Export S.A.................................................... 33,297
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184,809
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Chemicals - Diversified: 8.44%
1,850 Gorazdze S.A............................................................ 30,986
19,500 Huta Olawa S.A.......................................................... 29,340
19,500 Polifarb-Cieszyn Wroclaw S.A.*.......................................... 46,224
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106,550
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Commercial Banks: 17.46%
3,825 Bank Handlowy W Warszawie*.............................................. 47,018
45,000 Big Bank Gdanski S.A.*.................................................. 40,241
6,650 Grupa Pekao S.A.*....................................................... 83,066
15,500 Kredyt Bank PBI S.A.*................................................... 50,163
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220,488
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Conglomerates: 12.30%
14,400 Elektrim Spolka Akcyjna S.A............................................. 155,344
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Food - Miscellaneous/Diversified: 5.57%
19,500 Agros Holding S.A.*..................................................... 70,305
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Medical - Drugs: 7.58%
4,550 Medicines S.A.*......................................................... 44,563
3,600 Polfa Kutno*............................................................ 51,100
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95,663
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Metal - Diversified: 2.07%
10,000 Hutmen S.A.*............................................................ 26,118
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Multi-Line Insurance: 11.46%
47,000 Polisa S.A.*............................................................ $ 54,705
4,400 Tuir Warta S.A.*........................................................ 89,936
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144,641
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Rubber - Tires: 3.21%
2,750 Debica S.A.............................................................. 40,596
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Technology: 4.64%
3,390 Optimus S.A.*........................................................... 32,721
1,000 Softbank S.A.*.......................................................... 25,834
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58,555
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Telecommunications: 4.04%
10,000 Telekomunikacja Polska - GDR*........................................... 51,000
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Television: 5.61%
10,500 @Entertainment, Inc.*................................................... 70,875
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Total Investments in Securities (cost $1,722,872)+: 97.02% ............. 1,224,944
Cash and Other Assets less Liabilities: 2.98%........................... 37,676
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Total Net Assets: 100.0% ............................................... $ 1,262,620
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*Denotes a non-income producing security.
+At December 31, 1998, the cost of securities for Federal tax purposes was the
same as the basis for financial reporting. Unrealized appreciation and
depreciation of securities and foreign currency were as follows:
Gross unrealized appreciation........................................... $ 52,530
Gross unrealized depreciation........................................... (550,492)
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Net unrealized depreciation....................................... $ (497,962)
===================================================================================================================================
</TABLE>
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STATEMENT OF ASSETS AND LIABILITIES at December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
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<S> <C>
ASSETS
Investments in securities, at value (cost $1,722,872).................................. $1,224,944
Cash................................................................................... 17,677
Receivables:
Due from Advisor................................................................. 28,205
Dividends........................................................................ 6,225
Deferred organization costs............................................................ 24,997
Prepaid expenses and other assets...................................................... 14,585
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Total assets .............................................................. 1,316,633
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LIABILITIES
Payables:
Administration fee............................................................... 2,466
Distribution fees................................................................ 259
Fund shares repurchased.......................................................... 19,713
Accrued expenses....................................................................... 31,575
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Total liabilities.......................................................... 54,013
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NET ASSETS $1,262,620
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Net asset value, offering and redemption price per share
($1,262,620/203,095 shares outstanding;
unlimited number of shares authorized, par value $0.01) ......................... $6.22
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COMPONENTS OF NET ASSETS
Paid-in capital ....................................................................... $1,865,148
Accumulated net investment loss........................................................ (7,293)
Accumulated net realized loss on investments........................................... (97,273)
Net unrealized appreciation on investments and foreign currency........................ (497,962)
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Net assets ...................................................................... $1,262,620
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STATEMENT OF OPERATIONS - For the Six Months Ended December 31, 1998 (Unaudited)
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<CAPTION>
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<S> <C>
INVESTMENT INCOME
Income
Dividends (net of withholding tax of $62)........................................ $ 9,507
Interest......................................................................... 60
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Total income............................................................... 9,567
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Expenses
Advisory fees (Note 3)........................................................... 8,890
Administration fees (Note 3)..................................................... 15,041
Amortization of deferred organization costs...................................... 3,521
Custodian and accounting fees.................................................... 19,303
Distribution fees (Note 4)....................................................... 1,533
Insurance expense................................................................ 703
Miscellaneous.................................................................... 1,755
Professional fees................................................................ 10,310
Registration fees................................................................ 3,584
Reports to shareholders.......................................................... 4,011
Transfer agent fees.............................................................. 11,029
Trustees' fees................................................................... 2,391
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Total expenses............................................................. 82,071
Less advisory fee waiver and absorption (Note 3)........................... (65,211)
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Net expenses............................................................... 16,860
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Net investment loss ................................................. (7,293)
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS and Foreign Currency
Net realized loss from security transactions..................................... (94,094)
Net realized gain from foreign currency transactions............................. 235
Net change in unrealized depreciation on investments and foreign currency........ (246,426)
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Net realized and unrealized loss on investments and foreign currency....... (340,285)
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Net Decrease in Net Assets Resulting from Operations ................ $ (347,578)
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</TABLE>
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STATEMENT OF CHANGES IN NET ASSETS
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<CAPTION>
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Six Months July 9, 1997*
Ended through
December 31, 1998# June 30, 1998
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<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss............................................................. $ (7,293) $ (13,532)
Net realized loss from security transactions.................................... (94,094) (3,414)
Net realized gain from foreign currency transactions............................ 235 -0-
Net change in unrealized depreciation on investments and foreign currency....... (246,426) (251,536)
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Net decrease in net assets resulting from operations ..................... (347,578) (268,482)
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CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a).................................................... 248,425 1,630,255
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Total increase (decrease) in net assets .................................. (99,153) 1,361,773
NET ASSETS
Beginning of period............................................................. 1,361,773 -0-
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End of period .................................................................. $1,262,620 $1,361,773
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(a) A summary of capital share transactions is as follows:
Six Months July 9,1997*
Ended through
December 31, 1998# June 30, 1998
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Shares Value Shares Value
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Shares sold........................... 78,241 $ 504,812 195,353 $1,927,665
Shares redeemed....................... (40,116) (256,387) (30,383) (297,410)
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Net increase.......................... 38,125 $ 248,425 164,970 $1,630,255
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*Commencement of operations.
#Unaudited.
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FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
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Six Months July 9, 1997*
Ended through
December 31, 1998# June 30, 1998
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<S> <C> <C>
Net asset value, beginning of period..................................... $ 8.25 $10.00
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Loss from investment operations:
Net investment loss................................................ (0.04) (0.08)++
Net realized and unrealized loss on investments.................... (1.99) (1.67)
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Total from investment operations......................................... (2.03) (1.75)
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Net asset value, end of period........................................... $ 6.22 $ 8.25
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Total return............................................................. (24.61%)++ (17.60%)++
Ratios/supplemental data:
Net assets, end of period (millions)..................................... $ 1.3 $ 1.4
Ratio of expenses to average net assets:
Before expense reimbursement....................................... 13.32%+ 17.57%+
After expense reimbursement........................................ 2.75%+ 2.75%+
Ratio of net investment loss to average net assets:
Before expense reimbursement....................................... (11.76%)+ (16.30%)+
After expense reimbursement........................................ (1.18%)+ (1.48%)+
Portfolio turnover rate.................................................. 21.43% 25.74%
#Unaudited.
*Commencement of operations.
+Annualized.
++Net investment loss per share is calculated using the ending balance prior to
consideration of adjustments for permanent book and tax differences.
++Not annualized.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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NOTE 1 - ORGANIZATION
The Kaminski Poland Fund (the "Fund") is a series of shares of Advisors
Series Trust (the "Trust"), which is registered under the Investment Company Act
of 1940 as a non-diversified, open-end management investment company. The Fund
began operations on July 9, 1997. The Fund's primary investment objective is to
seek long term growth of capital by investing in publicly-traded securities of
companies based in the Republic of Poland.
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: Investments in securities traded on the Warsaw
Stock Exchange, Poland's primary exchange, are valued at the last
reported sale price at the close of regular trading on the last
business day of the period; securities traded on the exchange for
which there have been no sales are valued at the mean between the last
available bid and asked price. Securities for which market quotations
are not readily available are valued following procedures approved by
the Board of Trustees. Short-term investments are valued at amortized
cost, which approximates market value.
U.S. Government securities with less than 60 days remaining to
maturity when acquired by the Fund are valued on an amortized cost
basis. U.S. Government securities with more than 60 days remaining to
maturity are valued at the current market value (using the mean
between the bid and the asked price) until the 60th day prior to
maturity, and are then valued at amortized cost based upon the value
on such date unless the Board determines during such 60-day period
that this amortized cost basis does not represent fair value.
Foreign securities are recorded in the financial statements after
translation to U.S. dollars, based on the applicable exchange rate at
the end of the period. The Fund does not isolate that portion of the
results of operations arising as a result of changes in the currency
exchange rate from the fluctuations arising as a result of changes in
the market prices of investments during the period.
Interest income is translated at the exchange rates which existed at
the dates the income was accrued. Exchange gains and losses related to
interest income are included in interest income on the accompanying
Statement of Operations.
B. Repurchase Agreements: The Fund may enter into repurchase agreements
with government securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System or with such
other brokers or dealers that meet the credit guidelines established
by the Board of Trustees. The Fund will always receive and maintain,
as collateral, securities whose market value, including accrued
interest, will be at least equal to 102% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry
transfer to the account of the custodian. To the extent that the term
of any repurchase transaction exceeds one business day, the value of
collateral is marked-to-market on a daily basis to ensure the adequacy
of the collateral.
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If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
C. 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.
Differences exist between net realized capital losses for financial
statement and tax purposes due to the deferral of capital losses for
tax purposes.
It is the Fund's policy to reclassify the net effect of permanent
differences between book and taxable income to trust capital accounts
on the statements of assets and liabilities. As a result of permanent
book-to-tax differences for the period ended June 30, 1998, the
accumulated net investment loss was reclassified into paid-in capital.
This reclassification had no effect on net assets, net asset value per
share, or the change in net assets resulting from operations.
D. Security Transactions, Dividends and Distributions: Security
transactions are accounted for on the trade date. The cost of
securities owned on realized transactions are relieved on the
first-in, first-out (FIFO) basis for book and tax purposes. Dividend
income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains and losses on securities sold are
determined on the basis of identified cost.
E. Deferred Organization Costs: The Fund has incurred expenses of $35,427
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.
F. Concentration of Risk: As of December 31, 1998, the Fund held a
significant portion of its assets in foreign securities. Certain price
and foreign exchange fluctuations as well as economic and political
situations in Poland could have an impact on the Fund's net assets. It
is the Trust's policy to continually monitor these off-balance sheet
risks.
G. 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 December 31, 1998, Kaminski 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 1.45% based upon the average daily net assets of the Fund.
For the six months ended December 31, 1998, the Fund incurred $8,890 in Advisory
Fees.
<PAGE>
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 2.75% of average net assets (the "expense cap"). Any such reductions
made by the Advisor in its fees or payment of expenses which are the Fund's
obligation are subject to reimbursement by the Fund to the Advisor, if so
requested by the Advisor, in 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 six years and seventh year of the Fund's operations. Any such
reimbursement is also contingent upon Board of Trustees' subsequent review and
ratification of the reimbursed amounts. Such reimbursement may not be paid prior
to the Fund's payment of current ordinary operating expenses. For the six months
ended December 31, 1998, the Advisor reduced its fees and absorbed Fund expenses
in the amount of $65,211; no amounts were reimbursed.
Investment Company Administration, L.L.C. (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 monthly
fee at the annual rate of 0.20% of average daily net assets, subject to a
minimum fee of $30,000 annually.
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also officers and/or directors of the
Administrator and the Distributor.
NOTE 4 - 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 .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. For the six months ended December 31, 1998, the
Fund paid the Distribution Coordinator in the amount of $1,533.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
For the six months ended December 31, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$501,612 and $249,552, respectively.
<PAGE>
Advisor
Kaminski Asset Management, Inc.
319 1st Avenue, Suite 400
Minneapolis, MN 55401
Web Page www.polfund.com
Distributor
First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85018
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
Transfer Agent
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
(888) 229-2105
Auditor
PricewaterhouseCoopers LLP
650 Third Avenue South, Suite 1300
Minneapolis, MN 55402
(612) 332-7000
Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 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.
