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NATIONAL ASSET
MANAGEMENT
CORE
EQUITY FUND
ANNUAL REPORT
APRIL 30, 2000
<PAGE>
NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
Dear Fellow Shareholders:
We are pleased to provide you with this shareholder update on the performance of
the National Asset Management Core Equity Fund. The Fund's inception date was
June 2, 1999 and this report covers the first eleven months of the fund's
existence through April 30, 2000. The Fund is off to a good start gaining 14.26%
since inception. This compares quite favorably to the S&P 500 Index that
advanced 13.41% over the same time period.
The goal of the Fund is to earn a high total investment return. This goal is
pursued by staying fully invested in the stock market and by using two classic
investment approaches - both value and growth investing - in the portfolio. This
philosophy is implemented by diversifying the portfolio with investments in
three different types of stocks: growth, yield, and low P/E. The Fund invests in
stocks with these attributes because they each have performed quite well over
the long term, while each performs differently during different economic
conditions.
During most of the eleven-month period of the Fund's existence, the market
environment was quite volatile. Large capitalization growth stocks remained in
favor while traditional value stocks lagged. Most of the strong performance was
limited to a very small group of stocks of which almost all were technology
stocks. Even as the Federal Reserve started pushing up interest rates in the
fall of 1999, technology stocks continued to soar. Interest rate fears hurt most
other sectors of the market and economically sensitive sectors, such as basic
materials and transportation stocks, suffered the most. But even technology
stocks proved no match for the Federal Reserve's persistence in raising interest
rates in order to slow the economy. With valuations reaching record levels in
mid-March, fear finally gripped the technology sector of the market as well.
What followed was extreme volatility and declines of many technology stocks of
40% or more from their highs.
The Fund is broadly diversified across the major sectors of the large
capitalization equity market. The largest single sector is the technology
sector. The technology stocks in the portfolio are well-established, profitable
companies. They are benefiting from the technology and communication revolution
taking place in both the domestic and international economies. The Fund also has
significant exposure to sectors sometimes described as the "old economy". They
include basic materials, capital goods, and energy companies. These stocks
performed relatively well when investors began selling expensive technology
stocks and looking for cheaper, safer values.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
Our outlook is for continued periods of sharp volatility until the Federal
Reserve is satisfied that inflationary pressures are abating. Until then, the
tension between fears of a major market decline versus greed associated with
missing a good buying opportunity is likely to create large, short-term swings
in the market. We believe the portfolio is currently balanced with enough
conservative holdings to protect the Fund if fear should gain the upper hand,
but also has sufficient exposure to technology stocks should they regain their
luster.
We thank you for your support and the trust you have expressed in us by
investing in the 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.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
Comparison of the change in value of a $10,000 investment in the National Asset
Management Core Equity Fund versus the S&P 500 Composite Stock Price Index.
Total Return(1)
Since Inception (6/2/99)........ 14.26%
National Asset
Management Core S&P 500 Composite
Equity Fund Stock Price Index
----------- -----------------
2 Jun 99 10,000 10,000
31 Jul 99 10,410 10,281
31 Oct 99 10,720 10,584
31 Jan 00 10,915 10,858
30 Apr 00 11,426 11,341
(1) 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.
Past performance does not predict future performance.
The S&P 500 Composite Stock Price Index is an unmanaged capitalization-weighted
index of 500 stocks designed to represent the broad domestic economy.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 2000
--------------------------------------------------------------------------------
Shares COMMON STOCKS: 99.87% Market Value
--------------------------------------------------------------------------------
BASIC INDUSTRY: 6.70%
1,980 Alcoa Inc........................................... $ 128,453
2,680 Champion International Corporation.................. 176,210
2,440 E. I. du Pont de Nemours and Company................ 115,748
3,480 Praxair, Inc........................................ 154,643
3,550 Williamette Industries, Inc......................... 135,566
-----------
710,620
-----------
CAPITAL GOODS: 10.00%
2,650 Caterpillar Inc..................................... 104,509
4,510 Deere & Company..................................... 182,090
2,234 General Electric Company............................ 351,297
3,820 Ingersoll-Rand Company.............................. 179,301
3,500 Pitney Bowes Inc.................................... 143,063
910 SPX Corporation*.................................... 99,986
-----------
1,060,246
-----------
COMMUNICATION: 4.38%
4,105 WorldCom Incorporated*.............................. 186,521
2,860 SBC Communications Inc.............................. 125,304
2,780 Tellabs, Inc.*...................................... 152,379
-----------
464,204
-----------
CONSUMER CYCLICAL: 12.10%
340 Centex Corporation.................................. 8,203
2,620 Cintas Corporation.................................. 103,818
3,130 Costco Companies, Inc.*............................. 169,216
7,560 Masco Corporation................................... 169,628
3,040 Target Corporation.................................. 202,350
4,756 The Home Depot, Inc................................. 266,633
3,830 The Interpublic Group of Companies, Inc............. 157,030
3,722 Wal-Mart Stores, Inc................................ 206,106
-----------
1,282,984
-----------
CONSUMER STAPLES: 4.70%
3,720 CVS Corporation..................................... 161,820
2,960 Safeway Inc.*....................................... 130,610
870 The Coca-Cola Company............................... 40,944
5,880 Walgreen Co......................................... 165,375
-----------
498,749
-----------
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
ENERGY: 7.86%
1,760 Chevron Corporation................................. $ 149,820
1 Conoco Inc. - Class B............................... 12
4,961 Exxon Mobil Corporation............................. 385,408
2,340 Schlumberger Limited................................ 179,156
2,230 Texaco Inc.......................................... 110,385
187 Transocean Sedco Forex Inc.......................... 8,789
-----------
833,570
-----------
FINANCE: 14.23%
1,900 American General Corporation........................ 106,400
3,005 American International Group, Inc................... 329,611
3,288 Associates First Capital Corporation................ 72,952
3,060 Citigroup Inc....................................... 181,879
1,650 Comerica Incorporated............................... 69,919
2,240 Commerce Bancshares, Inc............................ 69,160
3,060 Fannie Mae.......................................... 184,556
430 Marsh & McLennan Companies, Inc..................... 42,382
2,000 MGIC Investment Corporation......................... 95,625
3,210 Radian Group Inc.................................... 163,509
1,620 The Chase Manhattan Corporation..................... 116,741
1,575 The PMI Group, Inc.................................. 76,289
-----------
1,509,023
-----------
HEALTHCARE: 9.53%
3,446 Bristol-Myers Squibb Company........................ 180,700
2,060 Johnson & Johnson................................... 169,950
4,940 Medtronic, Inc...................................... 256,570
3,403 Merck & Co, Inc..................................... 236,509
3,960 Pfizer, Inc......................................... 166,815
-----------
1,010,544
-----------
SERVICES: 6.47%
6,153 Automatic Data Processing........................... 331,108
2,359 Computer Sciences Corporation*...................... 192,406
3,550 Fiserv, Inc.*....................................... 163,078
-----------
686,592
-----------
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT APRIL 30, 2000, CONTINUED
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
TECHNOLOGY: 23.90%
3,210 Altera Corporation*................................. $ 328,223
2,990 Applied Materials, Inc.*............................ 304,419
1,400 Applied Micro Circuits Corporation*................. 180,425
6,742 Cisco Systems, Inc.*................................ 467,410
3,160 Intel Corporation................................... 400,728
1,140 Lexmark International, Inc.*........................ 134,520
3,490 Maxim Integrated Products, Inc*..................... 226,196
4,145 Microsoft Corporation*.............................. 289,114
790 Siebel Systems, Inc.*............................... 97,070
1,570 Vitesse Semiconductor Corporation*.................. 106,858
-----------
2,534,963
-----------
TOTAL COMMON STOCKS
(COST $10,198,071): 99.87%........................ 10,591,495
-----------
Principal
Amount SHORT-TERM INVESTMENTS: 0.27%
--------------------------------------------------------------------------------
$28,863 Firstar Stellar Treasury Fund
(Cost $28,863).................................... 28,863
-----------
Total Investments in Securities
(Cost $10,226,934+): 100.14%...................... 10,620,358
Liabilities in Excess of
Other Assets: (0.14%)............................. (14,503)
-----------
TOTAL NET ASSETS: 100.00%........................... $10,605,855
===========
* Non-income producing security.
+ At April 30, 2000, the cost of securities for federal tax purposes was
$10,232,888. Gross unrealized appreciation and depreciation of securities is as
follows:
Gross unrealized appreciation....................... $ 730,229
Gross unrealized depreciation....................... (342,759)
-----------
Net unrealized appreciation......................... $ 387,470
===========
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 2000
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at value
(identified cost $10,226,934)............................... $10,620,358
Receivables
Due from Advisor............................................ 572
Securities Sold............................................. 8,370
Dividends and interest ..................................... 8,265
Prepaid expenses ............................................. 2,329
-----------
Total assets............................................ 10,639,894
-----------
LIABILITIES
Payables
Due to administrator........................................ 2,466
Securities Purchased........................................ 9,275
Accrued expenses.............................................. 22,298
-----------
Total liabilities....................................... 34,039
-----------
NET ASSETS...................................................... $10,605,855
===========
Net asset value, offering and redemption price per share
($10,605,855 / 928,917 shares outstanding; unlimited
number of shares authorized, par value $0.01)................. $ 11.42
===========
COMPONENTS OF NET ASSETS
Paid-in capital............................................... $10,206,662
Undistributed net investment income........................... 2,555
Accumulated net realized gain on investments.................. 3,214
Net unrealized appreciation on investments.................... 393,424
-----------
Net assets.................................................... $10,605,855
===========
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 2, 1999* THROUGH APRIL 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends................................................... $ 19,140
Interest.................................................... 7,559
-----------
Total income........................................... 26,699
-----------
Expenses
Organization expense........................................ 30,000
Administration fee (Note 3)................................. 27,369
Professional fees........................................... 20,954
Fund accounting fees........................................ 12,724
Advisory fees (Note 3)...................................... 12,077
Transfer agent fees......................................... 10,711
Custodian fees.............................................. 10,387
Other....................................................... 3,331
Reports to shareholders..................................... 2,737
Trustees' fees.............................................. 2,616
Registration fees........................................... 729
-----------
Total expenses......................................... 133,635
Less, advisory fee waiver and
absorption (Note 3)................................. (110,407)
-----------
Net expenses........................................... 23,228
-----------
Net investment income.............................. 3,471
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions.................. 3,214
Net change in unrealized appreciation on investments.......... 393,424
-----------
Net realized and unrealized gain on investments............. 396,638
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $ 400,109
===========
* Commencement of operations.
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
June 2, 1999*
through
April 30, 2000
--------------
INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income......................................... $ 3,471
Net realized gain from security transactions.................. 3,214
Net change in unrealized appreciation on investments.......... 393,424
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... 400,109
-----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.................................... (916)
-----------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a)..................................... 10,206,662
-----------
TOTAL INCREASE IN NET ASSETS............................... 10,605,855
-----------
NET ASSETS
Beginning of period........................................... --
-----------
END OF PERIOD................................................... $10,605,855
===========
(a) A summary of capital shares transactions is as follows:
June 2, 1999*
through
April 30, 2000
-----------------------------
Shares Paid in Capital
--------- ---------------
Shares sold ................................ 930,366 $10,222,815
Shares redeemed............................. (1,449) (16,153)
--------- -----------
Net increase................................ 928,917 $10,206,662
========= ===========
* Commencement of operations.
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD
--------------------------------------------------------------------------------
June 2, 1999*
through
April 30, 2000
--------------
Net asset value, beginning of period.......................... $ 10.00
--------
Income from investment operations:
Net investment income....................................... 0.01
Net realized and unrealized gain on investments............. 1.42
--------
Total from investment operations.............................. 1.43
--------
Less distributions:
Dividends from net investment income........................ (0.01)
--------
Net asset value, end of period................................ $ 11.42
========
Total return.................................................. 14.26%++
Ratios/supplemental data:
Net assets, end of period (000)............................... $ 10,606
Ratio of expenses to average net assets:
Before expense reimbursement................................ 5.47%+
After expense reimbursement................................. 0.95%+
Ratio of net investment income to average net assets:
After expense reimbursement................................. 0.14%+
Portfolio turnover rate....................................... 20.80%
* Commencement of operations.
+ Annualized.
++ Not Annualized.
See accompanying Notes to Financial Statements.
11
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS AT APRIL 30, 2000
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The National Asset Management Core Equity Fund (the "Fund") is a series of
shares of beneficial interest of Advisors Series Trust (the "Trust"), which is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund began operations on June 2, 1999. The
investment objective of the Fund is to earn a high total return consisting of
capital appreciation and current income by investing in common stocks of large
and middle capitalization U. S. companies.
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
12
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------------------------------------
distributions to shareholders, which are determined in accordance with
income tax regulations, 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, 2000, 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 April 30, 2000, the Fund incurred $12,077 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
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------------------------------------
the Fund's payment of current ordinary operating expenses. For the period ended
April 30, 2000, the Advisor reduced its fees and absorbed Fund expenses in the
amount of $110,407; 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 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 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. Trustees unaffiliated with the Advisor or
Administrator are compensated by the Trust at $4,500 per meeting. These fees are
allocated to the Fund equally based on the number of Funds in the Trust.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the period ended April 30, 2000, the cost of purchases and the proceeds
from sales of securities, excluding short-term securities, were $10,781,375 and
$586,752, respectively.
14
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REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Trustees and Shareholders
National Asset Management Core Equity Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule 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 the National Asset Management Core
Equity Fund, series of Advisor Series Trust (the "Fund") at April 30, 2000, and
the results of its operations, the changes in its net assets and the financial
highlights for the period from June 2, 1999 (commencement of operations) through
April 30, 2000, in conformity with accounting principles generally accepted in
the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's 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, 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 April 30, 2000 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 23, 2000
15
<PAGE>
ADVISOR
National Asset Management Corporation
Aegon Center
400 West Market Street, Ste. 2500
Louisville, KY 40202
AUDITOR
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Rd., Ste. 261E
Phoenix, AZ 85018
CUSTODIAN
Firstar Institutional Custody Services
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
