[NATIONAL ASSET MANAGEMENT CORE EQUITY FUND]
SEMI-ANNUAL REPORT
FOR THE PERIOD ENDED
OCTOBER 31, 1999
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
Dear Fellow Shareholders:
We are pleased to present you with the first semi-annual report on the progress
of the National Asset Management Core Equity Fund for the five-month period
ending October 31, 1999. The Fund got off to a good start in its first five
months of existence, gaining 7.20%. This compares quite favorably to the S&P 500
Index that advanced by 5.21% over the same time period.
The goal of the Fund is to earn a high total investment return. Our investment
philosophy is to pursue this goal in three ways: to stay fully invested in the
stock market, to blend both growth and value investment styles, and to diversify
the portfolio among three attributes or types of stocks: growth, high yield, and
low P/E. The Fund invests in these attributes because they each have
outperformed the S&P 500 Index over the long term, but each performs quite
differently during different economic conditions.
Over the last five months the market environment has favored large
capitalization growth stocks, which we have been emphasizing in the portfolio.
Value stocks have not been able to sustain the brief rally they experienced in
the second quarter. We continue to monitor the economy, watching diligently for
indications of a favorable environment for the more cyclical low P/E and high
yield stocks. Should it materialize, we will gradually shift the attribute
weightings accordingly.
The portfolio is broadly diversified across the major sectors of the large
capitalization equity market. The largest single sector weighting is technology,
which at times approached 25% of the portfolio and 5% larger than the S&P 500
Index weighting. This overweighting was the largest single source of extra
market return during the Fund's first five months. The technology stocks in the
portfolio can be characterized as those which are leaders in their niches. These
companies are benefiting financially from the technology and communication
revolution taking place in the world today. All of these are well established
companies which are very profitable, and not the faddish IPOs associated with
the dot.com craze.
Our outlook is for the large capitalization high quality companies to continue
to perform well, driven by strong market shares and solid relative earning
growth. Without question, we are in an environment where progress will
systematically be interrupted by periods of volatility. The trends of increasing
global free trade and low inflation should allow corporate earnings growth to be
solid in the new year.
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
We thank you for your support and the trust you have expressed in us by
investing in our Fund. We look forward to a long and mutually rewarding
relationship.
Sincerely,
NATIONAL ASSET MANAGEMENT EQUITY TEAM
Past performance of the Fund and the S&P 500 Index is not predictive of future
performance. Fund share values will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original investment. The S&P 500
Index is an unmanaged capitalization-weighted index of 500 stocks designed to
represent the broad domestic economy. Indexes are not available for direct
investment and do not incur expenses.
The information contained in this report is authorized for use when proceeded or
accompanied by a prospectus for the Fund. The Fund is distributed by First Fund
Distributors, Inc., 4455 E. Camelback Rd., Suite 261E, Phoenix, AZ 85018.
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS: 98.26% Market Value
- --------------------------------------------------------------------------------
BASIC INDUSTRY: 8.08%
270 Alcoa Inc............................................. $ 16,403
170 Champion International Corporation.................... 9,828
110 E. I. du Pont de Nemours and Company.................. 7,088
300 Ingersoll-Rand Company................................ 15,675
200 Praxair, Inc.......................................... 9,350
330 Sigma-Aldrich Corporation............................. 9,405
250 Willamette Industries, Inc............................ 10,391
-----------
78,140
-----------
CAPITAL GOODS: 8.21%
200 Caterpillar Inc....................................... 11,050
40 Emerson Electric Co................................... 2,403
214 General Electric Company.............................. 29,010
320 Lucent Technologies Inc............................... 20,560
360 Pitney Bowes Inc...................................... 16,402
-----------
79,425
-----------
CONSUMER CYCLICAL: 8.38%
270 Dayton Hudson Corporation............................. 17,449
90 Masco Corporation..................................... 2,745
311 The Home Depot, Inc................................... 23,481
410 The Interpublic Group of Companies, Inc............... 16,656
362 Wal-Mart Stores, Inc.................................. 20,679
-----------
81,010
-----------
CONSUMER STAPLES: 9.86%
613 Automatic Data Processing............................. 29,539
300 Ceridian Corp. *...................................... 6,581
150 Cintas Corporation.................................... 9,038
400 CVS Corporation....................................... 17,375
60 Philip Morris Companies Inc........................... 1,511
250 Safeway Inc. *........................................ 8,828
180 The Coca-Cola Company................................. 10,620
470 Walgreen Co........................................... 11,838
-----------
95,330
-----------
4
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 1999 (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Shares Market Value
- --------------------------------------------------------------------------------
ENERGY: 6.76%
17 Conoco Inc. - Class B................................. $ 448
160 Exxon Corporation..................................... 11,850
240 Mobil Corporation..................................... 23,160
250 Schlumberger Limited.................................. 15,141
240 Texaco Inc................................... ........ 14,729
-----------
65,328
-----------
FINANCE: 16.45%
150 American General Corporation.......................... 11,128
295 American International Group, Inc..................... 30,367
308 Associates First Capital Corporation.................. 11,242
340 Citigroup Inc. *...................................... 18,403
160 Comerica Incorporated................................. 9,510
210 Commerce Bancshares, Inc.............................. 8,138
310 Fannie Mae............................................ 21,933
170 MGIC Investment Corporation........................... 10,158
340 Radian Group Inc...................................... 17,956
140 The Chase Manhattan Bank.............................. 12,233
155 The PMI Group, Inc.................................... 8,040
-----------
159,106
-----------
HEALTHCARE: 13.86%
346 Bristol-Myers Squibb Company.......................... 26,577
220 Eli Lilly and Company................................. 15,153
250 Guidant Corporation................................... 12,344
200 Johnson & Johnson..................................... 20,950
440 Medtronic, Inc........................................ 15,235
333 Merck & Co, Inc....................................... 26,494
350 Schering-Plough Corporation........................... 17,325
-----------
134,078
-----------
5
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 1999 (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Shares Market Value
- --------------------------------------------------------------------------------
TECHNOLOGY: 21.71%
280 Altera Corporation *.................................. $ 13,615
190 Applied Materials, Inc. *............................. 17,064
321 Cisco Systems, Inc. *................................. 23,754
209 Computer Sciences Corporation *....................... 14,356
300 Fiserv, Inc. *........................................ 9,600
310 Intel Corporation..................................... 24,006
233 International Business
Machines Corporation............................. 22,921
150 Linear Technology Corporation......................... 10,491
180 Maxim Integrated Products, Inc *...................... 14,209
365 Microsoft Corporation *............................... 33,785
290 Teradyne, Inc. *...................................... 11,165
190 Xilinx, Inc. *....................................... 14,939
-----------
209,905
-----------
UTILITY: 4.95%
374 BellSouth Corporation................................. 16,830
190 MCI WorldCom Incorporated *........................... 16,304
290 SBC Communications Inc................................ 14,772
-----------
47,906
-----------
Total Comon Stocks (Cost $894,112).................... 950,228
6
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 1999 (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Principal Amount Short-Term Investments: 7.60%
- --------------------------------------------------------------------------------
$73,541 Firstar Stellar Treasury Fund
(Cost $73,541)................................... 73,541
Total Investments in Securities
(Cost $967,653): 105.86%......................... 1,023,769
Liabilities in excess of
-----------
Other Assets: (5.86)%............................ (56,714)
-----------
TOTAL NET ASSETS: 100.00% ............................ $ 967,055
===========
*Non-income producing security.
+At October 31, 1999, the cost of securities for Federal tax purposes was the
same as the basis for finacial reporting. Unrealized appreciation and
depreciation of securitites were as follows:
Gross unrealized appreciation.................................... $ 74,119
Gross unrealized depreciation.................................... (18,004)
-----------
Net unrealized appreciation............................. $ 56,115
===========
7
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
AT OCTOBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments in securities, at value
(identified cost $967,654) ......................... $ 1,023,769
Receivables
Due from Advisor ................................... 7,406
Receivable for Securities Sold ..................... 1,377
Dividends and interest ............................. 662
Prepaid expenses ....................................... 1,144
-----------
Total assets .................................. 1,034,358
-----------
LIABILITIES
Payables
Securities Purchased ............................... 51,866
Accrued expenses ....................................... 15,437
-----------
Total liabilities ............................. 67,303
-----------
NET ASSETS .................................................... $ 967,055
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($967,055 / 90,175 shares outstanding; unlimited number
of shares [par value $0.01] authorized) ..................... $ 10.72
===========
COMPONENTS OF NET ASSETS
Paid-in capital ........................................ $ 912,047
Net investment income .................................. 393
Accumulated net realized loss on investments ........... (1,500)
Net unrealized appreciation on investments ............. 56,115
-----------
Net assets ......................................... $ 967,055
===========
See accompanying Notes to Financial Statements.
8
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF OPERATIONS - FOR THE PERIOD FROM JUNE 2, 1999* THROUGH
OCTOBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends ........................................... $ 1,697
Interest ............................................ 553
--------
Total income .................................. 2,250
--------
Expenses
Organization expense ................................ 30,000
Administration fee .................................. 12,246
Professional fees ................................... 7,475
Fund accounting fees ................................ 7,349
Transfer agent fees ................................. 6,941
Custodian fees ...................................... 2,858
Reports to shareholders ............................. 1,225
Trustees' fees ...................................... 1,021
Other ............................................... 1,002
Advisory fees ....................................... 977
Registration fees ................................... 326
--------
Total expenses ...................................... 71,420
Less, advisory fee waiver and
absorption (Note 3) ....................... (69,563)
--------
Net expenses ................................... 1,857
--------
Net investment income ..................... 393
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss from security transactions ............. (1,500)
Net change in unrealized appreciation on
investments ......................................... 56,115
--------
Net realized and unrealized gain on
investments .................................... 54,615
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................... $ 55,008
========
* Commencement of operations.
See accompanying Notes to Financial Statements.
9
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
June 2, 1999*
through
October 31, 1999+
-----------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income .................................. $ 393
Net realized loss from security transactions ........... (1,500)
Net change in unrealized appreciation on investments ... 56,115
---------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS .................................. 55,008
---------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a) ............................ 912,047
---------
TOTAL INCREASE IN NET ASSETS ...................... 967,055
---------
NET ASSETS
Beginning of period .......................................... --
---------
END OF PERIOD ................................................ $ 967,055
=========
(a) A summary of capital shares transactions is as follows:
June 2, 1999*
through
October 31, 1999+
Shares Paid in Capital
------ ---------------
Shares sold ....................................... 90,175 $ 912,047
Shares redeemed.................................... -- --
------ ---------
Net increase....................................... 90,175 $ 912,047
====== =========
* Commencement of operations.
+ Unaudited.
10
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
June 2, 1999*
through
October 31, 1999+
-----------------
Net asset value, beginning of period...................... $10.00
Income from investment operations:
Net investment income............................... 0.72
------
Total from investment operations.......................... 0.72
------
Net asset value, end of period............................ $10.72
======
Total return.............................................. 7.20%++
Ratios/supplemental data:
Net assets, end of period (000)........................... $ 967
Ratio of expenses to average net assets:
Before expense reimbursement........................ 35.00%+
After expense reimbursement......................... 0.95%+
Ratio of net investment income to average net assets:
After expense reimbursement......................... 0.19%+
Portfolio turnover rate................................... 14.27%
* Commencement of operations.
+ Annualized.
++ Not Annualized.
See accompanying Notes to Financial Statements.
11
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
AT OCTOBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The National Asset Management Core Equity Fund (the "Fund") is a series of
beneficial interest 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 June 2, 1999.
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 fair value.
Securities that are primarily traded on a national securities exchange
shall be valued at the last sale price on the exchange on which they
are primarily traded on the day of valuation or, if there has been no
sale on such day, at the mean between the bid and asked prices.
Securities primarily traded in the NASDAQ National Market System for
which market quotations are readily available shall be valued at the
last sale price on the day of valuation, or if there has been no sale
on such day, at the mean between the bid and asked prices.
Over-the-counter ("OTC") securities which are not traded in the NASDAQ
National Market System shall be valued at the most recent trade price.
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.
12
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
Realized gains and losses on securities sold are determined on the
basis of identified cost. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
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 October 31, 1999, National Asset Management
Corporation (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 0.50% based upon the average daily net
assets of the Fund. For the period ended October 31, 1999, the Fund incurred
$977 in Advisory Fees.
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 0.95% 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
13
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
the Fund's payment of current ordinary operating expenses. For the period ended
October 31, 1999, the Advisor reduced its fees and absorbed Fund expenses in the
amount of $69,563; no amounts were reimbursed to the Advisor.
Investment Company Administration, LLC (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 following annual rate:
Fund asset level Fee rate
---------------- --------
Less than $15 million $30,000
$15 million to less than $50 million 0.20% of average daily net assets
$50 million to less than $50 million 0.15% of average daily net assets
$100 million to less than $150 million 0.10% of average daily net assets
More than $150 million 0.05% of average daily net assets
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also officers and/or directors of the
Administrator and the Distributor.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the period ended October 31, 1999, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$959,698 and $65,500, respectively.
14
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
CHANGE IN INDEPENDENT ACCOUNTANT
On August 27, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as
independent auditors of the Fund pursuant to an agreement by
PricewaterhouseCoopers LLP ("PwC") to acquire McGladrey's investment company
practice. The McGladrey partners and professionals serving the Fund at the time
of the acquisition joined PwC.
On September 10, 1999, the Fund, with the approval of its Board of Trustees and
its Audit Committee, engaged PwC as its independent auditors.
15
<PAGE>
ADVISOR
National Asset Management Corporation
101 South Fifth Street
Louisville, KY 40202
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
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 94104
