[UNITY FUND LOGO]
SEMI-ANNUAL REPORT
FOR THE PERIOD ENDED
NOVEMBER 30, 1999
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Dear Shareholder:
The past six months have been quite a tale of two markets. The NASDAQ has gained
significantly as it has been driven by technology stocks to heights not seen
before. The S&P 500 has also enjoyed a period of solid returns as the larger
technology companies are now included in that index. The glamour of the
technology sector, and its returns, has been detrimental to the demand level for
value stocks. While our portfolio remains rooted in the strongest, most stable
corporations, their relative performance pales in comparison to the technology
sector. However, our Fund's performance is measured against the S&P 500 Barra
Value Index which returned (1.00%) during the six-month period ending November
30, 1999.
As we move forward, we will stay the course and adhere to our investment
philosophy which seeks to maximize value while minimizing risk.
Cordially,
/s/ Gregory M. St. Etienne
Gregory M. St. Etienne
Advisor
Footnotes:
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 investment.
The S&P Barra Value Index is an unmanaged capitalization-weighted index that
contains approximately 50% of the stocks in the S&P 500 lower price-to-book
ratios.
This report is authorized for use only when proceeded or accompanied by a
current prospectus for the Fund.
The Fund is distributed by First Fund Distributors, Inc., Phoenix, AZ.
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UNITY FUND
SCHEDULE OF INVESTMENTS AT NOVEMBER 30, 1999 (UNAUDITED)
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Shares COMMON STOCKS: 98.58% Market Value
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AEROSPACE / DEFENSE: 2.75%
1,900 General Dynamics Corporation.......................... $ 97,969
-----------
AUTOMOBILES: 4.05%
2,000 General Motors Corporation............................ 144,000
-----------
AUTO PARTS & EQUIPMENT: 3.66%
1,397 Delphi Automotive Systems Corporation................. 22,003
3,200 The Goodyear Tire & Rubber Company.................... 108,000
-----------
130,003
-----------
BANKS - MAJOR CENTER: 4.80%
1,300 J.P. Morgan & Co., Incorporated....................... 170,950
-----------
BANKS - MAJOR REGIONAL: 3.27%
2,500 Wells Fargo & Company................................. 116,250
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CHEMICALS: 9.09%
1,200 The Dow Chemical Company.............................. 140,550
2,138 E. I. du Pont de Nemours and Company.................. 127,077
950 Union Carbide Corporation............................. 55,575
-----------
323,202
-----------
CHEMICALS - SPECIALTY: 2.38%
2,300 International Flavors & Fragrances, Inc............... 84,669
-----------
COMMUNICATIONS EQUIPMENT: 1.62%
2,750 Harris Corporation.................................... 57,750
-----------
ELECTRIC COMPANIES: 4.12%
2,100 American Electric Power Company, Inc.................. 65,888
3,450 The Southern Company.................................. 80,644
-----------
146,532
-----------
ELECTRICAL EQUIPMENT: 4.72%
1,500 Honeywell, Inc........................................ 167,906
-----------
2
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UNITY FUND
SCHEDULE OF INVESTMENTS AT NOVEMBER 30, 1999 (UNAUDITED), CONTINUED
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Shares Market Value
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ENGINEERING AND CONSTRUCTION: 2.78%
2,350 Fluor Corporation..................................... $ 98,847
-----------
FINANCIAL - DIVERSIFIED: 9.23%
1,100 American Express Company.............................. 166,444
3,000 Citigroup Inc......................................... 161,625
-----------
328,069
-----------
INSURANCE - MULTI-LINE: 6.16%
1,500 CIGNA Corporation..................................... 123,375
2,050 The Hartford Financial Services Group, Inc............ 95,709
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219,084
-----------
LEISURE TIME - PRODUCTS: 2.57%
4,200 Brunswick Corporation................................. 91,613
-----------
MACHINERY - DIVERSIFIED: 3.39%
2,600 Caterpillar Inc....................................... 120,575
-----------
MANUFACTURING - DIVERSIFIED: 4.97%
1,850 Minnesota Mining and Manufacturing Company............ 176,791
-----------
OIL - DOMESTIC INTEGRATED: 5.09%
1,750 Atlantic Richfield Company............................ 168,656
477 Conoco Inc. - Class B................................. 12,521
-----------
181,177
-----------
OIL - INTERNATIONAL INTEGRATED: 6.33%
1,200 Chevron Corporation................................... 106,275
1,500 Exxon Mobil Corporation............................... 118,969
-----------
225,244
-----------
PHOTOGRAPHY / IMAGING: 2.43%
1,400 Eastman Kodak Company................................. 86,625
-----------
RAILROADS: 1.89%
3,150 Norfolk Southern Corporation.......................... 67,331
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3
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UNITY FUND
SCHEDULE OF INVESTMENTS AT NOVEMBER 30, 1999 (UNAUDITED), CONTINUED
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Shares Market Value
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RETAIL - GENERAL MERCHANDISE: 2.88%
3,000 Sears, Roebuck and Co................................. $ 102,563
-----------
RETAIL - SPECIALTY / APPAREL: 4.40%
3,450 The Limited, Inc...................................... 146,409
550 Too, Inc.............................................. 10,173
-----------
156,582
-----------
TELEPHONE: 3.74%
2,100 Bell Atlantic Corporation............................. 132,956
-----------
TOBACCO: 2.26%
3,000 Philip Morris Companies Inc........................... 78,938
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Total common stocks (cost $3,426,339)................. 3,505,626
-----------
Principal
Amount SHORT-TERM INVESTMENTS: 0.82%
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$29,024 Firstar Stellar Treasury Fund......................... 29,024
-----------
Total Investments in Securities
(cost $3,455,363+): 99.40%.......................... 3,534,650
Other Assets less Liabilities: 0.60%.................. 21,415
-----------
TOTAL NET ASSETS: 100.00% ............................ $ 3,556,065
===========
- ----------
+ At November 30, 1999, the cost of securities for Federal tax purposes was
$3,426,339. Gross unrealized appreciation and depreciation of securities were
as follows:
Gross unrealized appreciation......................... $ 496,621
Gross unrealized depreciation......................... (417,334)
-----------
Net unrealized appreciation........................... $ 79,287
===========
4
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UNITY FUND
STATEMENT OF ASSETS AND LIABILITIES AT NOVEMBER 30, 1999 (UNAUDITED)
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ASSETS
Investments in securities, at value
(identified cost $3,455,363) ................................ $3,534,650
Receivables
Due from Advisor ............................................ 8,522
Dividends and interest ...................................... 13,107
Deferred Organization Cost .................................... 28,645
Prepaid expenses .............................................. 8,549
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Total assets ......................................... 3,593,474
----------
LIABILITIES
Payables
Administration fees ......................................... 2,466
Accrued expenses .............................................. 34,943
----------
Total liabilities ................................. 37,408
----------
NET ASSETS ...................................................... $3,556,065
==========
CLASS A - NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
$3,556,065 / 335,527 shares outstanding;
unlimited number of shares (par value $0.01) authorized ....... $ 10.60
==========
CLASS A - OFFERING PRICE PER SHARE ($10.60 / 0.965) ............. $ 10.98
==========
COMPONENTS OF NET ASSETS
Paid-in capital ............................................... $3,353,692
Accumulated net investment income ............................. 6,179
Accumulated net realized gain on investments .................. 111,231
Net unrealized appreciation on investments .................... 84,963
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Net assets .............................................. $3,556,065
==========
See accompanying Notes to Financial Statements.
5
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UNITY FUND
STATEMENT OF OPERATIONS - AT NOVEMBER 30, 1999 (UNAUDITED)
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INVESTMENT INCOME
Income
Dividends .................................................... $ 46,311
Interest ..................................................... 1,197
---------
Total income ............................................... 47,508
---------
Expenses
Advisory fees ................................................ 16,732
Administration fees .......................................... 15,041
Custodian and accounting fees ................................ 11,039
Professional fees ............................................ 10,242
Distribution fees (Class A) .................................. 9,842
Transfer agent fees .......................................... 9,000
Shareholder servicing fees (Class A) ......................... 4,939
Amortization of deferred organization costs .................. 4,011
Registration fees ............................................ 3,022
Reports to shareholders ...................................... 2,565
Trustees' fees ............................................... 1,254
Other ........................................................ 1,015
Insurance expense ............................................ 466
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Total expenses ............................................. 89,168
Less, advisory fee waiver and absorption ................... (47,839)
---------
Net expenses ............................................... 41,329
---------
Net investment income .................................... 6,179
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions ............... (409)
Net change in unrealized depreciation on investments ....... (289,817)
---------
Net realized and unrealized loss on investments .......... (290,226)
---------
Net Decrease in net assets resulting from operations ... $(284,047)
=========
See accompanying Notes to Financial Statements.
6
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UNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
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Six Months June 29, 1998*
Ended through
November 30, 1999# May 31, 1999
------------------ ------------
INCREASE IN NET ASSETS FROM
OPERATIONS
Net investment income ..................... $ 6,179 $ 16,466
Net realized gain (loss) from security
transactions ............................ (409) 100,667
Net change in unrealized appreciation
(depreciation) on investments ........... (289,817) 374,780
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Net increase (decrease) in net assets
resulting from operations ........... (284,047) 491,913
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DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ................ -- (3,199)
From net investment gain from security
transactions ............................ -- (2,703)
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Total Distributions ....................... -- (5,902)
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CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets
derived from net change in outstanding
shares (Class A) (a) .................... (215,754) 3,569,855
----------- -----------
Total increase (decrease) in net assets ... (499,801) 4,055,866
----------- -----------
NET ASSETS
Beginning of period .......................... 4,055,866 --
----------- -----------
End of period ................................ $ 3,556,065 $ 4,055,866
=========== ===========
(a) A summary of capital shares transactions is as follows:
For the Six Months June 29, 1998*
ended through
November 30, 1999# May 31, 1999
------------------- -----------------------
CLASS A Shares Value Shares Value
- ------- ------ ----- ------ -----
Shares sold ................. 25,886 $ 298,364 410,458 $ 4,116,516
Shares issued in reinvestment
of distributions ......... -- -- 565 5617
Shares redeemed ............. 45,273 (514,119) 56,110 (552,278)
------- --------- ------- -----------
Net increase (decrease) ..... (19,386) $(215,754) 354,913 $ 3,569,855
======= ========= ======= ===========
* Commencement of operations.
# Unaudited.
See accompanying Notes to Financial Statements.
7
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UNITY FUND
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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Six Months June 29, 1998*
Ended through
November 30, 1999# May 31, 1999
------------------ ------------
Net asset value, beginning of period............ $11.43 $10.00
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Income from investment operations:
Net investment income......................... 0.33 0.05
Net realized and unrealized gain
(loss) on investments...... (1.16) 1.40
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Total from investment operations................ (0.83) 1.45
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Less distributions:
From net investment income.................... -- (0.01)
From net investment gain from security
transactions......... -- (0.01)
------ ------
Total distributions............................. -- (0.02)
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Net asset value, end of period.................. $10.60 $11.43
====== ======
Total return (Sales charge not included)........ (7.26%) 14.55%
Ratios/supplemental data:
Net assets, end of period (thousands)........... $3,556 $4,056
Ratio of expenses to average net assets:
Before expense reimbursement.................. 4.52%+ 6.24%+
After expense reimbursement................... 2.10%+ 2.10%+
Ratio of net investment loss to average net
assets:
After expense reimbursement................... 0.31%+ 0.64%+
Portfolio turnover rate......................... 3.46% 54.69%
* Commencement of operations.
# Unaudited.
+ Annualized.
8
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UNITY FUND
NOTES TO FINANCIAL STATEMENTS at November 30, 1999 (Unaudited)
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NOTE 1 - ORGANIZATION
Unity Fund, formerly the Liberty Freedom 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 June 29, 1998.
Shares of beneficial interest of the Fund are currently divided into two
classes, designated Class A Shares and Class I Shares. Each Class represents an
interest in the same portfolio. During the period ended November 30, 1999, Class
I was inactive.
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. DEFERRED ORGANIZATION COSTS: The Fund has incurred expenses of $40,000
in connection with its organization. These costs have been deferred
and are being amortized on a straight-line basis over a period of
sixty months from the date the Fund commenced investment operations.
E. 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 November 30, 1999, Liberty Bank and Trust Company (the
"Advisor") maintained overall responsibility for the Fund's assets and was
responsible for monitoring the day-to-day activity of the Sub-Advisor, The Edgar
9
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UNITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited), continued
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Lomax Company. As compensation for its services, the Advisor is entitled to a
monthly fee at the annual rate of 0.25% based upon the average daily net assets
of the Fund. For the period ended November 30, 1999, The Edgar Lomax Company
(the "Sub-Advisor") provided the Fund with advice on buying and selling
securities and managing the investments of the Fund. As compensation for its
services, the Sub-Advisor is entitled to a monthly fee at the annual rate of
0.60% based upon the average daily net assets of the Fund.
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 Class A shares to an annual
operating expense of 2.10% 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
November 30, 1999, the Advisor reduced its fees and absorbed Fund expenses in
the amount of $47,839; 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 annual rate of 0.20% of average daily net assets, subject to a
minimum fee of $30,000 annually.
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also officers and/or directors of the
Administrator and the Distributor.
NOTE 4 - DISTRIBUTION AND SHAREHOLDER SERVICING ARRANGEMENTS
The Trust has adopted a Distribution Plan (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act. The Distribution Plan provides
that the Fund's Class A Shares pay a fee to the Advisor, acting as Distribution
Coordinator, at an annual rate of up to 0.50% of the average daily net assets of
the Fund. The expenses which the Fund may pay include the cost of preparing and
distributing prospectuses and other sales material, advertising and public
relations expenses, payments to financial intermediaries and compensation of
personnel involved in selling shares of the Fund. Payments made pursuant to the
Distribution Plan will represent compensation for distribution and service
activities, not reimbursement for specific expenses incurred. The Distribution
Plan allows excess distribution expenses to be carried forward for the following
three fiscal years. The Trust has also adopted a Shareholder Servicing Plan (the
10
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UNITY FUND
NOTES TO FINANCIAL STATEMENTS at November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
"Servicing Plan") which provides that the Fund's Class A Shares pay a fee to the
Advisor at an annual rate of up to 0.25% of the average daily net assets of the
Fund, as compensation for providing, or arranging for others to provide, certain
specified shareholders services to Class A shareholders. The Advisor will pay
certain banks, trust companies, broker-dealers and other financial
intermediaries (each a "Participating Organization") out of the fees the Advisor
receives from the Fund under the Servicing Plan to the extent that these
Participating Organizations perform shareholder servicing functions for Class A
shares owned from time to time by customers of the Participating Organization.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
For the period ended November 30, 1999, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$131,407 and $261,756, respectively.
11
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UNITY FUND
CHANGE IN INDEPENDENT ACCOUNTANT
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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.
The reports of McGladrey on the financial statements of the Fund during the
prior fiscal year contained no adverse opinion or disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audit for the period from June 29, 1998 (commencement of
operations) through May 31, 1999, there were no disagreements with McGladrey on
any matter of accounting principle or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report.
On September 10, 1999, the Fund, with the approval of its Board of Trustees and
its Audit Committee, engaged PwC as its independent auditors.
12
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ADVISOR
Liberty Bank and Trust Company
6600 Plaza Drive, Suite 310
New Orleans, LA 70122
SUB-ADVISOR
The Edgar Lomax Company
6564 Loisdale Court, Suite 310
Springfield, VA 22150
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
