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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
1235 WESTLAKES DRIVE, SUITE 330
BERWYN, PA 19312
(610) 296-1400
ANNUAL REPORT
AUGUST 31, 2000
<PAGE>
CHARTWELL SMALL CAP VALUE FUND
October 3, 2000
Dear Shareholder:
The period ending August 31, 2000 realized very strong absolute returns for
small cap value stocks and, for the first extended period in more than three
years, superior returns relative to growth stocks and large cap stocks. The
technology and internet stock boom came and went, leaving many more stable,
slower growing stocks in the financial, real estate, healthcare and energy
sectors looking more attractive by comparison. Your portfolio returned 27.82% in
the period, far outpacing the Russell 2000 Value Index return of 16.01%.
Your portfolio's investments in the basic industry, financial, healthcare
sectors along with a few select technology stocks contributed the most to the
period's strong performance. Teekay Shipping (basics), AmeriCredit and Southwest
Bancorporation (financials), Edwards Lifesciences and ICU Medical (healthcare)
and Bel Fuse and Park Electrochemical (tech) were some of the outstanding
performers. Reynolds and Reynolds (tech) and Remedytemp (business services), the
latter which was sold during the year, were two of our weakest stocks.
We continue to adhere to the same investment disciplines of focusing on
inexpensive stocks, critically evaluating the business fundamentals of our
companies for improving prospects and looking for catalysts that will lead the
market to value the stocks at a higher level. Even after the recent strong
performance, we believe our stocks are inexpensively valued. We are
outperforming our market benchmark and still believe that smaller, more
value-oriented stocks have a bright future.
/s/ David C. Dalrymple
David C. Dalrymple, CFA
Managing Partner and Portfolio Manager
2
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CHARTWELL SMALL CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
Comparison of the change in value of a $10,000 investment in the
Chartwell Small Cap Value Fund versus the Russell 2000 Value Index(1).
Total Return(2)
Since inception (10/1/99).....27.82%
Chartwell Small Cap Russell 2000
Value Fund Value Index
---------- -----------
1 Oct 99 10,000 10,000
30 Nov 99 10,130 9,851
29 Feb 00 10,557 10,492
31 May 00 11,419 10,442
31 Aug 00 12,782 11,602
Past performance does not predict future performance.
(1) The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
(2) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period. Total return is not annualized.
3
<PAGE>
CHARTWELL LARGE CAP VALUE FUND
October 3, 2000
Dear Shareholder:
The recently completed fiscal year was a challenging one in which the Chartwell
Large Cap Value Fund returned 6.61% for the eleven months ended August 31, 2000.
The Fund's return was slightly behind that of our benchmark, the Russell 1000
Value Index, which returned 7.91% for the same period.
The broad stock market came under pressure since the Federal Reserve adopted a
tight money posture in an effort to slow an over-heated economy. Greenspan's
engineered slowdown was evidenced by six interest rate hikes in the last year.
The Fed also believes that the strong stock market has created a wealth effect,
leading to the possibility that consumers would spend in excess of the economy's
ability to produce. Most stocks have had a difficult time in this environment
and investors are searching for signs that the economy is beginning to slow.
As we move into the fourth quarter of 2000, we believe that the Federal Reserve
has accomplished its goal of slowing the economic advance. Higher interest rates
and energy costs combined with the sharp declines in the NASDAQ should set the
table for a slower end of the year. The slowdown in the economy should bode well
for value investors.
Your portfolio continues to look very attractive in terms of valuation and
prospective earnings growth. We believe that the market will broaden and
recognize companies that are selling at reasonable valuations and have
sustainable earnings. The Fund's portfolio is positioned to take advantage of
this.
/s/ Kevin A. Melich /s/ Terry F. Bovarnick
Mr. Kevin A. Melich, CFA Ms. Terry F. Bovarnick, CFA
Managing Partner and Portfolio Manager Managing Partner and Portfolio Manager
This information is authorized for use when preceded or accompanied by a current
prospectus for the Funds. Performance figures of the Funds and indices
referenced represent past performance and are not indicative 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.
4
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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL LARGE CAP VALUE FUND
Comparison of the change in value of a $10,000 investment in the
Chartwell Large Cap Value Fund versus the Russell 1000 Value Index(1).
Total Return(2)
Since inception (10/1/99).....6.61%
Chartwell Large Cap Russell 1000
Value Fund Value Index
---------- -----------
1 Oct 99 10,000 10,000
30 Nov 99 10,230 10,493
29 Feb 00 9,628 9,442
31 May 00 10,661 10,581
31 Aug 00 10,661 10,793
Past performance does not predict future performance.
(1) The Russell 2000 Value Index measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth
values.
(2) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period. Total return is not annualized.
5
<PAGE>
CHARTWELL SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000
--------------------------------------------------------------------------------
Shares COMMON STOCKS: 96.20% Market Value
--------------------------------------------------------------------------------
BASIC INDUSTRY: 14.69%
520 AptarGroup, Inc..................................... $ 12,122
1,080 Arch Chemicals, Inc................................. 19,642
640 Bemis Company, Inc.................................. 21,440
880 CLARCOR, Inc........................................ 18,150
960 Cytec Industries, Inc.*............................. 32,040
790 Kaydon Corp......................................... 17,429
750 Teekay Shipping Corp................................ 34,688
1,320 U.S. Aggregates, Inc................................ 22,770
810 USFreightways Corp.................................. 25,262
-----------
203,543
-----------
BUSINESS SERVICES: 0.86%
730 MSC Industrial Direct Co.*.......................... 11,863
-----------
CAPITAL SPENDING: 6.84%
880 APW Ltd.*........................................... 38,720
1,170 Gardner Denver, Inc.*............................... 17,038
850 Regal-Beloit Corp................................... 14,662
1,510 Stewart & Stevenson Services, Inc................... 24,349
-----------
94,769
-----------
CONSUMER CYCLICAL: 4.73%
420 Borg-Warner Automotive, Inc......................... 14,437
1,140 D.R. Horton, Inc.................................... 22,373
2,550 Dal-Tile International, Inc.*....................... 28,688
-----------
65,498
-----------
CONSUMER SERVICES: 10.32%
900 Jack in the Box, Inc.*.............................. 19,856
2,390 Pier 1 Imports, Inc................................. 28,083
950 ShopKo Stores, Inc.*................................ 10,866
1,650 Station Casinos, Inc.*.............................. 23,719
721 The Men's Wearhouse, Inc.*.......................... 21,990
810 Tropical Sportswear Int'l Corp.*.................... 14,630
2,650 West Marine, Inc.*.................................. 23,850
-----------
142,994
-----------
See Note to Financial Statements.
6
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CHARTWELL SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
CONSUMER STAPLES: 3.16%
460 Alberto-Culver Co., Class B......................... $ 13,024
290 Canandaigua Brands, Inc.*........................... 15,624
600 Corn Products International, Inc.................... 15,075
-----------
43,723
-----------
ENERGY: 9.68%
610 Cal Dive International, Inc.*....................... 35,075
770 Lone Star Technologies, Inc.*....................... 38,693
1,080 Louis Dreyfus Natural Gas Corp.*.................... 37,530
670 Precision Drilling Corp*............................ 22,780
-----------
134,078
-----------
FINANCIAL SERVICES: 17.73%
1,340 AmeriCredit Corp.*.................................. 37,017
1,110 Community First Bankshares, Inc..................... 19,980
880 Cullen/Frost Bankers, Inc........................... 27,280
1,010 Financial Federal Corp.*............................ 21,463
1,100 Hudson United Bancorp............................... 27,706
3,930 MicroFinancial, Inc................................. 38,563
1,420 Mobile Mini, Inc.*.................................. 26,536
190 Radian Group, Inc................................... 11,804
590 Southwest Bancorp, Inc.*............................ 17,147
360 Wilmington Trust Corp............................... 18,135
-----------
245,631
-----------
HEALTHCARE: 5.65%
1,280 Edwards Lifesciences Corp.*......................... 33,600
1,100 ICU Medical, Inc.*.................................. 25,781
930 Renal Care Group, Inc.*............................. 18,832
-----------
78,213
-----------
REITS: 8.12%
620 Alexandria Real Estate Equities, Inc................ 21,700
725 Arden Realty, Inc................................... 18,487
620 Home Properties of New York, Inc.................... 18,406
1,110 PS Business Parks, Inc.............................. 29,415
910 SL Green Realty Corp................................ 24,399
-----------
112,407
-----------
See Notes to Financial Statements.
7
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CHARTWELL SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
TECHNOLOGY: 9.54%
1,220 Avant! Corp.*....................................... $ 17,766
1,230 Bel Fuse, Inc.*..................................... 42,743
610 CTS Corp............................................ 31,297
430 Park Electrochemical Corp........................... 17,281
1,270 The Reynolds & Reynolds Co.......................... 23,019
-----------
132,106
-----------
UTILITIES: 4.97%
860 ITC/DeltaCom, Inc.*................................. 12,148
1,310 MDU Resources Group, Inc............................ 32,750
877 SCANA Corp.......................................... 24,008
-----------
68,906
-----------
Total Common Stocks
(Cost $1,171,110): 96.29%......................... 1,333,731
-----------
Principal
Amount SHORT-TERM INVESTMENTS: 3.81%
--------------------------------------------------------------------------------
$ 52,733 Firstar Stellar Treasury Fund (Cost $52,733)........ 52,733
-----------
Total Investments in Securities
(Cost $1,223,843+): 100.10%....................... 1,386,464
Liabilities in excess of Other Assets: (0.10%)...... (1,319)
-----------
Total Net Assets: 100.00%........................... $ 1,385,145
===========
* Non-income producing security.
+ At August 31, 2000, the cost of securities for Federal tax purposes was
$1,225,206. Gross unrealized appreciation and depreciation of securities is
as follows:
Gross unrealized appreciation........................ $ 221,913
Gross unrealized depreciation....................... (60,655)
-----------
Net unrealized appreciation....................... $ 161,258
===========
See Notes to Financial Statements.
8
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CHARTWELL LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000
--------------------------------------------------------------------------------
Shares COMMON STOCKS: 96.29% Market Value
--------------------------------------------------------------------------------
BANKING: 16.68%
3,940 Citigroup Inc....................................... $ 229,997
8,355 First Security Corp................................. 127,414
8,536 Fleet Boston Corp................................... 364,381
7,140 MBNA Corp........................................... 252,131
2,410 Nationwide Financial Services, Inc.................. 96,099
2,145 The PNC Financial Services Group, Inc............... 126,421
5,137 The Chase Manhattan Bank............................ 287,030
-----------
1,483,473
-----------
BASIC INDUSTRY: 3.73%
8,710 Abitibi-Consolidated, Inc........................... 97,443
2,545 E. I. du Pont de Nemours and Co..................... 114,207
2,030 Praxair, Inc........................................ 89,827
660 Weyerhaeuser Co..................................... 30,566
-----------
332,043
-----------
CAPITAL GOODS: 13.23%
5,680 Honeywell, Inc...................................... 219,035
2,790 Minnesota Mining and Manufacturing Co............... 259,470
6,955 Motorola, Inc....................................... 250,815
6,550 National Semiconductor Corp.*....................... 291,475
4,275 Pitney Bowes, Inc................................... 156,305
-----------
1,177,100
-----------
COMMUNICATIONS: 4.28%
3,880 ALLTEL Corp......................................... 196,182
4,428 SBC Communications, Inc............................. 184,878
-----------
381,060
-----------
CONSUMER CYCLICAL: 4.22%
4,606 Ford Motor Co....................................... 111,399
2,145 The Black & Decker Corp............................. 85,934
8,920 The Limited, Inc.................................... 178,400
-----------
375,733
-----------
CONSUMER STAPLES: 8.04%
4,520 Kimberly-Clark Corp................................. 264,420
4,455 The McGraw-Hill Companies, Inc...................... 275,932
5,910 Philip Morris Companies, Inc........................ 175,084
-----------
715,436
-----------
See Notes to Financial Statements.
9
<PAGE>
CHARTWELL LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
ENERGY: 18.96%
5,020 Baker Hughes, Inc................................... $ 183,544
1,285 Burlington Resources, Inc........................... 50,517
530 Columbia Energy Group............................... 37,199
6,475 Conoco, Inc. - Class A.............................. 163,089
1,575 Conoco, Inc. - Class B.............................. 41,147
4,910 Constellation Energy Corp.......................... 187,808
1,750 Diamond Offshore Drilling, Inc...................... 78,422
2,660 Exxon Mobil Corp.................................... 217,122
2,815 Kerr-McGee Corp..................................... 177,873
5,350 PECO Energy Co.................................... 257,803
6,330 The Williams Companies, Inc......................... 291,576
-----------
1,686,100
-----------
HEALTHCARE: 6.77%
2,590 American Home Products Corp......................... 140,346
3,270 Baxter International, Inc........................... 272,227
4,735 Schering-Plough Corp................................ 189,992
-----------
602,565
-----------
INSURANCE/OTHER: 8.61%
2,749 American General Corp............................... 200,162
730 Fannie Mae.......................................... 39,238
4,460 Freddie Mac......................................... 187,877
4,150 Household International, Inc........................ 199,200
2,095 The Hartford Financial Services Group, Inc.......... 139,579
-----------
766,056
-----------
PHARMACEUTICALS: 1.68%
2,815 Bristol-Myers Squibb Co............................. 149,195
-----------
TECHNOLOGY: 1.48%
2,187 Agilent Technologies, Inc.*......................... 131,903
-----------
TELECOMMUNICATIONS: 2.91%
3,600 MCI WorldCom, Inc.*................................. 131,400
3,795 Sprint Corp......................................... 127,132
-----------
258,532
-----------
See Notes to Financial Statements.
10
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CHARTWELL LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS AT AUGUST 31, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
UTILITIES: 5.61%
2,390 The Coastal Corp.................................... $ 164,611
6,320 The Montana Power Co................................ 227,915
2,436 Verizon Corp........................................ 106,271
-----------
498,797
-----------
Total Common Stocks
(Cost $8,285,086): 96.20%......................... 8,557,993
-----------
Principal
Amount SHORT-TERM INVESTMENTS: 6.86%
--------------------------------------------------------------------------------
$610,134 Firstar Stellar Treasury Fund (Cost $610,134)....... 610,134
-----------
Total Investments in Securities
(Cost $8,895,220+): 103.06%....................... 9,168,127
Liabilities in excess of Other Assets: (3.06%)...... (272,476)
-----------
Total Net Assets: 100.00%........................... $ 8,895,651
===========
* Non-income producing security.
+ At August 31, 2000, the cost of securities for Federal tax purposes was
$8,963,961. Gross unrealized appreciation and depreciation of securities is
as follows:
Gross unrealized appreciation....................... $ 665,162
Gross unrealized depreciation....................... (460,996)
-----------
Net unrealized appreciation......................... $ 204,166
===========
See Notes to Financial Statements.
11
<PAGE>
CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
STATEMENTS OF ASSETS AND LIABILITIES AT AUGUST 31, 2000
Small Cap Large Cap
Value Fund Value Fund
---------- ----------
ASSETS
Investments in securities, at value
(identified cost $1,223,843 and
$8,895,220, respectively)..................... $1,386,464 $9,168,127
Receivables:
Due From Advisor.............................. 7,254 3,383
Dividends and interest........................ 959 20,229
Fund shares sold.............................. -- 225
Securities sold............................... 17,000 10,452
Prepaid expenses................................ 1,136 2,557
---------- ----------
Total assets............................... 1,412,813 9,204,973
---------- ----------
LIABILITIES
Payables:
Due to administrator.......................... 2,548 2,548
Securities purchased.......................... -- 288,876
Accrued expenses................................ 25,120 17,898
---------- ----------
Total liabilities.......................... 27,668 309,322
---------- ----------
NET ASSETS........................................ $1,385,145 $8,895,651
========== ==========
Net asset value and redemption price
per share ($1,385,145/108,610 and
$8,895,651/836,652 shares outstanding;
unlimited number of shares (par value
$0.01) authorized).............................. $ 12.75 $ 10.63
========== ==========
COMPONENTS OF NET ASSETS
Paid-in capital................................. $1,164,392 $8,576,831
Undistributed net investment income............. 2,624 64,690
Accumulated net realized gain (loss)
on investments................................ 55,508 (18,777)
Net unrealized appreciation
on investments ............................... 162,621 272,907
---------- ----------
Net assets................................. $1,385,145 $8,895,651
========== ==========
See Notes to Financial Statements.
12
<PAGE>
CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
STATEMENTS OF OPERATIONS
FOR THE PERIOD OCTOBER 1, 1999* THROUGH AUGUST 31, 2000
Small Cap Large Cap
Value Fund Value Fund
---------- ----------
INVESTMENT INCOME
Income
Dividends..................................... $ 11,230 $ 92,673
Interest...................................... 1,466 10,772
---------- ----------
Total income............................... 12,696 103,445
---------- ----------
Expenses
Administration fees (Note 3).................. 27,616 27,616
Organization expense.......................... 25,000 25,000
Advisory fees (Note 3)........................ 6,395 24,155
Professional fees............................. 22,095 19,595
Fund accounting fee........................... 12,889 14,989
Transfer agent fees........................... 11,968 11,968
Custody fees.................................. 5,629 8,629
Trustee fees.................................. 4,164 3,164
Reports to shareholders....................... 1,841 1,841
Other ........................................ 3,476 1,898
Registration fees............................. 900 874
---------- ----------
Total expenses.............................. 121,973 139,729
---------- ----------
Less: advisory fee waiver and
absorption (Note 3)...................... (113,114) (103,216)
---------- ----------
Net expenses................................ 8,859 36,513
---------- ----------
Net investment income.................... 3,837 66,932
---------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS
Net realized gain (loss) from security
transactions.................................. 55,508 (18,777)
Net change in unrealized appreciation
on investments................................ 162,621 272,907
---------- ----------
Net realized and unrealized gain
on investments.............................. 218,129 254,130
---------- ----------
Net Increase in Net Assets
Resulting from Operations.............. $ 221,966 $ 321,062
========== ==========
* Commencement of operations.
See Notes to Financial Statements.
13
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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD OCTOBER 1, 1999* THROUGH AUGUST 31, 2000
Small Cap Large Cap
Value Fund Value Fund
---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income.......................... $ 3,837 $ 66,932
Net realized gain (loss) from security
transactions ................................. 55,508 (18,777)
Net change in unrealized appreciation
on investments................................ 162,621 272,907
---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS..................... 221,966 321,062
---------- ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income..................... (1,213) (2,242)
---------- ----------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase in net assets derived from
net change in outstanding shares (a).......... 1,164,392 8,576,831
---------- ----------
TOTAL INCREASE IN NET ASSETS................... 1,385,145 8,895,651
---------- ----------
NET ASSETS
Beginning of period............................... 0 0
---------- ----------
END OF PERIOD .................................... $1,385,145 $8,895,651
========== ==========
(a) A summary of transactions is as follows:
Small Cap Value Fund Large Cap Value Fund
October 1, 1999* to October 1, 1999* to
August 31, 2000 August 31, 2000
------------------------ ------------------------
Paid in Paid in
Shares Capital Shares Capital
---------- ----------- ---------- -----------
Shares sold............. 135,438 $ 1,429,985 958,809 $ 9,764,051
Shares redeemed......... (26,828) (265,593) (122,157) (1,187,220)
---------- ----------- ---------- -----------
Net increase............ 108,610 $ 1,164,392 836,652 $ 8,576,831
========== =========== ========== ===========
* Commencement of operations.
See Notes to Financial Statements.
14
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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
Small Cap Large Cap
Value Fund Value Fund
--------------- ---------------
October 1, 1999* October 1, 1999*
to to
August 31, 2000 August 31, 2000
--------------- ---------------
Net asset value, beginning of period....... $10.00 $10.00
------ ------
Income from investment operations:
Net investment income................... 0.05 0.11
Net realized and unrealized gain on
investments.......................... 2.73 0.55
------ ------
Total from investment operations........... 2.78 0.66
------ ------
Less dividends and distributions:
From net investment income.............. (0.03) (0.03)
------ ------
Net asset value, end of period............. $12.75 $10.63
====== ======
Total return............................... 27.82%+ 6.61%+
Ratios/supplemental data:
Net assets, end of period (thousands)...... $1,385 $8,896
Ratio of expenses to average net assets:
Before expense reimbursement........... 15.23%** 2.89%**
After expense reimbursement............ 1.10%** 0.75%**
Ratio of net investment income to
average net assets:
After expense reimbursement............ 0.48%** 1.38%**
Portfolio turnover rate.................... 68.77% 169.14%
* Commencement of operations.
** Annualized.
+ Not Annualized.
See Notes to Financial Statements.
15
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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS AT AUGUST 31, 2000
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Chartwell Large Cap Value Fund and Chartwell Small Cap Value Fund (the
"Funds") are each a series of shares 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. Each Fund's
investment objective is growth of capital, with a secondary objective to provide
current income. The Funds began operations on October 1, 1999.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION: The Funds' 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 Funds' 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, which are determined in accordance with
income tax regulations, are recorded on the ex-dividend date. Net
realized and unrealized gains (losses) differ for financial statement
and tax purposes primarily due to differing treatments of wash sales.
Realized gains and losses on securities sold are determined on the
basis of identified cost.
16
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CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------------------------------------
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 August 31, 2000, Chartwell Investment Partners (the
"Advisor") provided the Funds 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 each
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
Chartwell Large Cap Value Fund and 0.80% based upon the average daily net assets
of the Chartwell Small Cap Value Fund. For the period ended August 31, 2000, the
Chartwell Large Cap Value Fund and the Chartwell Small Cap Value Fund incurred
$24,155 and $6,395, respectively, in Advisory Fees.
The Funds are responsible for their own operating expenses. The Advisor has
agreed to reduce fees payable to it by each Fund and to pay each Fund's
operating expenses to the extent necessary to limit each Fund's aggregate annual
operating expenses to 0.75% of average net assets (the "expense cap") for the
Chartwell Large Cap Value Fund and 1.10% of average net assets (the "expense
cap") for the Chartwell Small Cap Value Fund. Any such reductions made by the
Advisor in its fees or payment of expenses which are a 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 the Fund's 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 reimbursed is made.
Such reimbursement may not be paid prior to a Fund's payment of current ordinary
operating expenses. For the period ended August 31, 2000, the Advisor reduced
17
<PAGE>
CHARTWELL LARGE CAP VALUE FUND
CHARTWELL SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------------------------------------
its fees and absorbed Fund expenses in the amount of $103,216 for the Chartwell
Large Cap Value Fund and $113,114 for the Chartwell Small Cap Value Fund; no
amounts were reimbursed to the Advisor.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Funds' Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Funds; prepares reports and materials to be supplied to the Trustees;
monitors the activities of the Funds' custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund expenses and reviews each Fund's
expense accruals. For its services, the Administrator receives from each Fund 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 $100 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 Funds'
principal underwriter in a continuous public offering of the Funds' 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 August 31, 2000, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, for the
Chartwell Large Cap Value Fund were $17,101,704 and $8,797,773, respectively.
For the period ended August 31, 2000, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, for the
Chartwell Small Cap Value Fund were $1,418,360 and $577,457, respectively.
18
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REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Chartwell Small Cap Value Fund
Chartwell Large Cap Value Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Chartwell Small Cap Value Fund and
Chartwell Large Cap Value Fund, series of Advisors Series Trust (the "Funds") at
August 31, 2000, and the results of each of their operations, the changes in
each of their net assets and the financial highlights for the period from
October 1, 1999 (commencement of operations) through August 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Funds' management;
our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at August 31, 2000 by correspondence with the
custodian and brokers, provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
October 6, 2000
19
<PAGE>
ADVISOR
Chartwell Investment Partners
1235 Westlakes Drive
Suite 330
Berwyn, PA 19312
DISTRIBUTOR
First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85018
TRANSFER AGENT
ICA Fund Services Corp.
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85018
AUDITOR
PricewaterhouseCoopers, LLP
1177 Avenue of the Americas
New York, NY 10036
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.
