ELC
EDGAR LOMAX VALUE FUND
SEMI-ANNUAL REPORT
FOR THE PERIOD ENDED
APRIL 30, 1999
<PAGE>
EDGAR LOMAX VALUE FUND
Semi-Annual Report
April 30, 1999
Dear fellow shareholder:
We are pleased to bring you up-to-date on the performance and steady
growth of the Edgar Lomax Value Fund as of April 30, 1999. From its "kick off"
on December 12, 1997 through the end of this past April, the Fund returned an
annualized 19.4% while its assets grew to $3.8 million.
The timing of this report couldn't be better. The stock market--as
represented by the S&P 500 Index--rose to record levels over the past three
years, levels we argue are supported by neither the earnings nor the underlying
assets of many of its companies. Further, these gains accrued predominantly to a
narrow list of very-large, "growth" stocks. Our stocks and "value" stocks in
general--as measured by the S&P/Barra Value Index--were tossed aside as
investors feared missing out on what appeared to be easy money in this small set
of favored stocks. However, we were very comfortable that investors would
inevitably return to our stocks, many of which are the oldest and most
experienced companies in the U.S. We firmly believed that their relative safety
and bargain prices would not forever remain unappreciated. Our patience was
rewarded during April.
So much unrecognized value had built up in our portfolio that the
prices of its stock holdings literally exploded during the month of April.
Specifically, the Fund gained 15.1% during the month, while the S&P 500 Index
gained only 3.9% and our "value" benchmark, the S&P/Barra Value Index, returned
8.6%. As a result, our return of 13.3% for the first four months of 1999
represents a clear advantage over the S&P 500's 9.0% return and the S&P/Barra
Value's gain of 11.7%. While we can't make any guarantees, we hope April's shift
is just a taste of things to come.
The swing from one group of stocks to another reminds us that investing
in the stock market, despite its historic climb, is not without risk. However,
minimizing risk is a fundamental goal of our stock-selection strategy. First, we
select stocks only from those comprising the S&P 500 Index, consequently
limiting our portfolios to, for all practical purposes, the very largest
publicly-owned companies. We then systematically eliminate those companies we
believe have taken on too much debt. A resulting portfolio should, therefore,
have a more favorable risk profile than that of the S&P 500 itself. Finally, we
absolutely require that our companies pay dividends.
We greatly appreciate the opportunity to be of service. You will
continue to receive our very best efforts in the investment of your hard-earned
money.
Cordially,
/s/ Randall R. Eley
Randall R. Eley
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EDGAR LOMAX VALUE FUND
Footnotes:
The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks
designed to represent the broad domestic stock market.
The S&P/Barra Value Index is an unmanaged capitalization-weighted index of
stocks in the S&P 500 index with lower price-to-book ratios. The number of
stocks is such that the S&P/Barra Value's total market capitalization is
approximately 50% of that of the S&P 500.
The Edgar Lomax Value Fund's annual average total return from inception on
December 12, 1997 through March 31, 1999 was 10.92% (after capping expenses at
1.75% of average net assets annually) compared to the S&P 500 Index's and S&P
Barra Value Index's average annual total returns of 37.46% and 20.15%,
respectively, for the same period.
Performance Figures of the Fund and indexes referenced represent past
performance and are not indicative of future performance of the Fund or the
indexes. Share value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original investment. Indexes do not incur
expenses and are not available for direct investment.
The Fund is distributed by First Fund Distributors, Inc., Phoenix, AZ. Member
NASD
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<PAGE>
EDGAR LOMAX VALUE FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS: 99.92% Market Value
- --------------------------------------------------------------------------------
AEROSPACE/DEFENSE: 3.33%
1,800 General Dynamics Corporation.......................... $ 126,450
-----------
AUTO PARTS & EQUIPMENT: 4.82%
3,200 The Goodyear Tire & Rubber Company.................... 183,000
-----------
AUTOMOBILES: 4.51%
1,925 General Motors Corporation............................ 171,205
-----------
BANKS - MONEY CENTER: 4.44%
1,250 J.P. Morgan & Co., Incorporated....................... 168,438
-----------
BANKS - MAJOR REGIONAL: 2.96%
2,600 Wells Fargo & Company................................. 112,288
-----------
CHEMICALS: 9.81%
2,500 E. I. du Pont de Nemours and Company.................. 176,563
1,125 The Dow Chemical Company.............................. 147,586
925 Union Carbide Corporation............................. 47,984
-----------
372,133
-----------
CHEMICALS - SPECIALTY: 2.39%
2,300 International Flavors & Fragrances, Inc............... 90,850
-----------
COMMUNICATIONS EQUIPMENT: 2.50%
2,750 Harris Corporation.................................... 95,047
-----------
ELECTRIC COMPANIES: 5.00%
2,275 American Electric Power Company, Inc.................. 94,270
3,525 The Southern Company.................................. 95,395
-----------
189,665
-----------
ELECTRICAL EQUIPMENT: 3.43%
1,375 Honeywell, Inc........................................ 130,281
-----------
3
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EDGAR LOMAX VALUE FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 1999 (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Shares Market Value
- --------------------------------------------------------------------------------
ENGINEERING AND CONSTRUCTION: 2.07%
2,350 Fluor Corporation..................................... $ 78,431
-----------
FINANCIAL - DIVERSIFIED: 7.61%
1,000 American Express Company.............................. 130,688
2,100 Citigroup Inc......................................... 158,025
-----------
288,713
-----------
INSURANCE - MULTI-LINE: 6.00%
1,325 CIGNA Corporation..................................... 115,523
1,900 The Hartford Financial Services Group, Inc............ 111,981
-----------
227,504
-----------
LEISURE TIME - PRODUCTS: 2.66%
4,200 Brunswick Corporation................................. 100,800
-----------
MACHINERY - DIVERSIFIED: 4.41%
2,600 Caterpillar Inc....................................... 167,375
-----------
MANUFACTURING - DIVERSIFIED: 5.51%
2,350 Minnesota Mining and Manufacturing Company............ 209,150
-----------
OIL - DOMESTIC INTEGRATED: 3.65%
1,650 Atlantic Richfield Company............................ 138,497
-----------
OIL - INTERNATIONAL INTEGRATED: 5.85%
1,100 Chevron Corporation................................... 109,725
1,350 Exxon Corporation..................................... 112,134
-----------
221,859
-----------
PHOTOGRAPHY/IMAGING: 2.50%
1,275 Eastman Kodak Company................................. 95,147
-----------
RAILROADS: 2.76%
3,200 Norfolk Southern Corporation.......................... 104,600
-----------
RETAIL - SPECIALTY/APPAREL: 4.09%
3,550 The Limited, Inc...................................... 155,313
-----------
4
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EDGAR LOMAX VALUE FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 1999 (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Shares Market Value
- --------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE: 3.76%
3,100 Sears, Roebuck and Co................................. $ 142,600
-----------
TELEPHONE: 3.04%
2,000 Bell Atlantic Corporation............................. 115,250
-----------
TOBACCO: 2.82%
3,050 Philip Morris Companies Inc........................... 106,940
-----------
Total common stocks (cost $3,261,382)................. 3,791,536
-----------
Principal
Amount SHORT-TERM INVESTMENTS: 0.24%
- --------------------------------------------------------------------------------
$8,907 Star Treasury Fund 4.84%.............................. 8,907
-----------
Total Investments in Securities (cost $3,150,561):
100.16%............................................. 3,800,443
Liabilities in excess of other assets: (0.16)%........ (5,983)
-----------
TOTAL NET ASSETS: 100.00% ............................ $ 3,794,460
===========
See accompanying Notes to Financial Statements.
5
<PAGE>
EDGAR LOMAX VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments in securities, at value (identified cost
of $3,270,289)........................................... $ 3,800,443
Receivables
Due from Advisor..................................... 3,258
Dividends and interest............................... 3,873
Prepaid expenses .......................................... 3,388
-----------
Total assets................................... 3,810,962
-----------
LIABILITIES
Payables
Administration fees.................................. 2,466
Accrued expenses........................................... 14,036
-----------
Total liabilities.............................. 16,502
-----------
NET ASSETS ..................................................... $ 3,794,460
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($3,794,460/300,401 shares outstanding;
unlimited number of shares authorized, par value $0.01).... $ 12.63
===========
COMPONENTS OF NET ASSETS
Paid-in capital............................................ $ 3,041,358
Net investment income in excess of dividends............... 12,760
Accumulated net realized gain on investments............... 210,188
Net unrealized appreciation on investments ................ 530,154
-----------
Net assets........................................... $ 3,794,460
===========
See accompanying Notes to Financial Statements.
6
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EDGAR LOMAX VALUE FUND
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends............................................ $ 45,568
Interest............................................. 646
-----------
Total income................................... 46,214
-----------
Expenses
Advisory fees (Note 3)............................... 16,956
Administration fees (Note 3)......................... 14,876
Professional fees.................................... 8,927
Fund accounting fees................................. 8,023
Transfer agent fees.................................. 6,447
Reports to shareholders.............................. 3,472
Custody fees......................................... 3,281
Trustee fees......................................... 1,893
Other ............................................... 1,445
Registration fees.................................... 1,111
Insurance expense.................................... 1,015
-----------
Total expenses................................. 67,446
Less, advisory fee waiver and absorption
(Note 3)....................................... (37,772)
-----------
Net expenses................................... 29,674
-----------
Net investment income...................... 16,540
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions............... 211,499
Net change in unrealized appreciation on investments....... 362,608
-----------
Net realized and unrealized gain on investments...... 574,107
-----------
Net Increase in Net Assets Resulting from
Operations............................... $ 590,647
===========
See accompanying Notes to Financial Statements.
7
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EDGAR LOMAX VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Six Months December 12, 1997*
Ended through
April 30, 1999# October 31, 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM
OPERATIONS
Net investment income ........................ $ 16,540 $ 19,206
Net realized gain on security transactions ... 211,499 11,374
Net change in unrealized appreciation
on investments ............................. 362,608 167,546
----------- -----------
Net increase in net assets resulting
from operations ........................ 590,647 198,126
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ................... (21,112) (1,875)
From net realized gains ...................... (12,684) --
----------- -----------
Total dividends and distibution to
shareholders ........................... (33,796) (1,875)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from
net change in outstanding shares (a) ....... (56,225) 3,097,583
----------- -----------
Total increase in net assets ................. 500,626 3,293,834
NET ASSETS
Beginning of period ............................. 3,293,834 0
----------- -----------
End of period ................................... $ 3,794,460 $ 3,293,834
=========== ===========
</TABLE>
(a) A summary of capital shares transactions is as follows:
Six Months December 12, 1997*
Ended through
April 30, 1999# October 31, 1998
--------------------------------------------------------
Shares Paid in Capital Shares Paid in Capital
--------------------------------------------------------
Shares sold ......... 7,352 $ 81,411 334,640 $ 3,410,803
Shares issued on
reinvestments of
distributions 782 8,441 185 1,875
Shares redeemed ..... (13,089) (146,077) (29,369) (315,095)
------- ---------- ------- -----------
Net increase ........ (4,955) $ (56,225) 305,456 $ 3,097,583
======= ========== ======= ===========
* Commencement of operations.
# Unaudited.
See accompanying Notes to Financial Statements.
8
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EDGAR LOMAX VALUE FUND
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Six Months December 12, 1997*
Ended through
April 30, 1999# October 31, 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period ................ $ 10.78 $ 10.00
--------- ---------
Income from investment operations:
Net investment income ......................... 0.07 0.07
Net realized and unrealized gain on investments 1.89 0.72
--------- ---------
Total from investment operations .................... 1.96 0.79
--------- ---------
Less distributions:
From net investment income .................... (0.07) (0.01)
From net realized gains ....................... (0.04) --
--------- ---------
Total distributions ................................. (0.11) (0.01)
Net asset value, end of period ...................... $ 12.63 $ 10.78
========= =========
Total return ........................................ 18.36%++ 7.89%++
Ratios/supplemental data:
Net assets, end of period (thousands) ............... $ 3,794 $ 3,294
Ratio of expenses to average net assets:
Before expense reimbursement .................. 3.97%+ 4.67%+
After expense reimbursement ................... 1.75%+ 1.75%+
Ratio of net investment income to average net assets:
After expense reimbursement ................... 0.97%+ 0.81%+
Portfolio turnover rate ............................. 42.87% 32.71%
</TABLE>
* Commencement of operations.
++ Annualized.
+ Not annualized.
# Unaudited.
9
<PAGE>
EDGAR LOMAX VALUE FUND
NOTES TO FINANCIAL STATEMENTS AT APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Edgar Lomax Value Fund (the "Fund") is a series of shares of Advisors
Series Trust (the "Trust"), which is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund began
operations on December 12, 1997. The investment objective of the Fund is to seek
growth of capital, with a secondary objective of providing income. The Fund
seeks to achieve its objective by investing primarily in equity securities that
it believes are undervalued, reasonably priced and have prospects for continued
consistent growth.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION: The Fund's investments are carried at market
value. Securities listed on an exchange or quoted on a National
Market System are valued at the last sale price. Other securities
are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available, if
any, are valued following procedures approved by the Board of
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.
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 on
the basis of identified cost.
D. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and
decreases in net assets during the reporting period. Actual results
could differ from those estimates.
NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ended April 30, 1999, The Edgar Lomax Company (the
"Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities, and provides most of the personnel needed by the Fund.
As compensation for its services, the Advisor is entitled to a monthly fee at
the annual rate of 1.00% based upon the average daily net assets of the Fund.
For the period ended April 30, 1999, the Fund incurred $16,956 in Advisory Fees.
10
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EDGAR LOMAX VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund and to pay Fund operating
expenses to the extent necessary to limit the Fund's aggregate annual operating
expenses to 1.75% of average net assets (the "expense cap"). Any such reductions
made by the Advisor in its fees or payment of expenses which are the Fund's
obligation are subject to reimbursement by the Fund to the Advisor, if 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 six years and seventh 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
April 30, 1999, the Advisor reduced its fees and absorbed Fund expenses in the
amount of $37,772; no amounts were reimbursed to the Advisor.
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 - SECURITIES TRANSACTIONS
For the period ended April 30, 1999, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$1,454,012 and $1,494,156, respectively.
11
<PAGE>
ADVISOR
The Edgar Lomax Company
6564 Loisdale Court, Suite 310
Springfield, VA 22150
www.edgarlomax.cihost.com
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Rd., Ste. 261E
Phoenix, AZ 85018
CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
TRANSFER AGENT
American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
(800) 385-7003
AUDITORS
McGladrey & Pullen LLP
555 Fifth Avenue, 8th Floor
New York, NY 10017-2416
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 94104
