As filed with the Securities and Exchange Commission April 19, 2000
File No. 333-17391
811-07959
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 61 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 63 [X]
ADVISORS SERIES TRUST
(Exact name of registrant as specified in charter)
4455 E. Camelback Road, Suite 261E
Phoenix, Az 85018
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (Including Area Code): (602) 952-1100
Robert H. Wadsworth
Advisors Series Trust
4455 E. Camelback Road, Suite 261E
Phoenix, Az 85018
(Name and address of agent for service of process)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the
effective date of the registration statement.
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
================================================================================
<PAGE>
[EDGAR LOMAX VALUE FUND LOGO]
EDGAR LOMAX VALUE FUND
PROSPECTUS
MARCH 1, 2000
<PAGE>
EDGAR LOMAX VALUE FUND
PROSPECTUS
The EDGAR LOMAX VALUE FUND invests in value stocks for growth of capital,
with a secondary objective of providing income.
This Prospectus contains basic information that you should know before you
invest. Please read it and keep it for future reference.
TABLE OF CONTENTS
Goal and Strategy............................................ 2
Fund Performance............................................. 2
Expense Table................................................ 3
Management of the Fund....................................... 4
Investor Guide............................................... 6
Services Available to Shareholders........................... 8
How to Redeem Your Shares.................................... 8
Distributions and Taxes...................................... 10
Financial Highlights......................................... 11
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
March 1, 2000
<PAGE>
GOAL AND STRATEGY
WHAT IS THE FUND'S GOAL?
The Fund seeks growth of capital, with a secondary objective of providing
income.
HOW WILL THE FUND TRY TO REACH ITS GOAL?
The Edgar Lomax Company (the "Advisor") uses a disciplined approach to select
stocks for the Fund's portfolio that it believes are undervalued, reasonably
priced and have prospects for continued consistent growth. The Advisor uses
fundamental analysis of financial statements to select stocks of issuers which
have low price/earnings and price/book ratios as well as strong balance sheet
ratios and high and/or stable dividend yields.
The Fund will invest primarily in large, well-recognized companies. Currently,
the Advisor expects the Fund's portfolio to hold at least 20% of the stocks
comprising the Standard & Poor's 100 Index, a capitalization-weighted index of
100 stocks from a broad range of industries. The advisor does not expect the
Fund's annual turnover rate to exceed 50%.
Normally, the Fund will invest at least 85% of its total assets in equity
securities, consisting of common stocks and securities having the
characteristics of common stocks, such as convertible securities, Standard &
Poor's Depositary Receipts ("SPDRs"), rights and warrants. If the Advisor
believes that market conditions warrant a temporary defensive posture, the Fund
may invest without limit in high quality, short-term debt securities and money
market instruments. At such times, the Fund would not be seeking growth of
capital.
WHAT ARE THE PRINCIPLE RISKS OF INVESTING IN THE FUND?
The value of your investment in the Fund will go up and down as the stocks in
the Fund's portfolio change in price. The prices of the stocks the Advisor
selects may fall. Also, the stock market may decline suddenly and for extended
periods.
By itself, the Fund is not a complete, balanced investment plan. And no fund can
guarantee that it will achieve its goal. When you sell your shares, you may lose
money. An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
FUND PERFORMANCE
The following performance information indicates some of the risk and returns of
investing in the Fund. The bar chart shows how the Fund's total return has
varied from year to year. The table shows the Fund's average return over time
compared with a broad-based market index. This past performance is no guarantee
of future results.
CALENDAR YEAR TOTAL RETURNS
During the period of time displayed in the bar chart, the Fund's best quarter
was second quarter 1999, up 16.23% and its worst quarter was third quarter 1999,
down 8.31%.
2
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999
Since Inception
1 Year December 12, 1997
------ -----------------
Edgar Lomax Value Fund 5.47% 8.80%
S&P 500 Index 21.02% 25.18%
S&P/Barra Value Index 12.33% 14.16%
The S&P 500 Index is an unmanaged market value weighted index of 500 stocks
designed to represent the broad domestic economy.
The S&P/Barra Value Index is an unmanaged capitalization-weighted index that
contains approximately 80% of the stocks in the S&P 500 with lower price-to-book
ratios.
EXPENSE TABLE
You pay certain fees and expenses as an investor in the Fund. There are two
types of expenses involved: shareholder transaction expenses, such as sales
loads, and annual operating expenses, such as investment advisory fees. THE FUND
IS A NO-LOAD MUTUAL FUND AND HAS NO SHAREHOLDER TRANSACTION EXPENSES.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment Advisory Fees .............................................. 1.00%
Other Expenses ........................................................ 2.63%
-----
Total Annual Fund Operating Expenses .................................. 3.63%
Expense reimbursements (1) ............................................ (1.88)%
-----
Actual operating expenses ............................................. 1.75%
=====
- ----------
(1) The Advisor has contractually agreed to waive its fees and/or reimburse
expenses in order to limit the Fund's total annual operating expenses
(excluding interest and tax expenses) to 1.75%. The Advisor has also agreed
to limit the Fund's expenses to 1.50% once the Fund's total net assets
reach $7 million, and to 1.25% once total net assets reach $12 million.
This contract has a one-year term, renewable at the end of each fiscal
year.
EXPENSE EXAMPLE
This Example will help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds. It is based on the annual operating
expenses shown above, and it assumes that these expenses will remain the same
over the time periods shown. It also assumes that you make a single $10,000
investment in the Fund to start with and that you earn a 5% return each year.
Finally, it assumes that you redeem all of your shares at the end of each of the
time periods. Again, this Example is hypothetical, and your actual expenses may
be higher or lower.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$177 $550 $946 $2,054
3
<PAGE>
MANAGEMENT OF THE FUND
THE ADVISOR
The Fund's Advisor, The Edgar Lomax Company, 6564 Loisdale Court, Suite 310,
Springfield, Virginia 22150, has provided asset management services to
individuals and institutional investors since 1986. Randall R. Eley is
principally responsible for the management of the Fund's portfolio. Mr. Eley
(who controls the Advisor) is the President and Chief Investment Officer of the
Advisor and has been active in investment management with the Advisor since its
founding.
The Advisor provides the Fund with advice on buying and selling securities,
manages the investments of the Fund, furnishes the Fund with office space and
certain administrative services, and provides most of the personnel needed by
the Fund. As compensation, the Fund pays the Advisor a monthly management fee.
The Advisor's management fee as a percentage of average net assets is 1.00%.
During the last fiscal period the Advisor waived its entire management fee.
YEAR 2000 RISK
As the year 2000 began, the Fund did not experience any notable problems arising
from the inability of computer systems used by the Manager and other service
providers to properly process and calculate information related to dates
beginning January 1, 2000. This is commonly known as the "Year 2000 Issue."
There can be no assurance that some computer systems will not malfunction in the
future as a result of the Year 2000 Issue. Although the Manager does not
anticipate that its services or the services of the Fund's other service
providers will be adversely affected as a result of the Year 2000 Issue, it will
continue to monitor the situation. If malfunctions related to the Year 2000
Issue do arise, the Fund and its investments could be adversely affected, as
well as companies in which the Fund invests.
PRIOR PERFORMANCE OF THE ADVISOR
The following table sets forth composite performance data relating to the
historical performance of private accounts, each of which exceeds $1 million in
market value, managed by the Advisor for the periods indicated, that have
investment objectives, policies, strategies and risks substantially similar to
those of the Fund. The data is provided to illustrate the past performance of
the Advisor in managing substantially similar accounts as measured against a
market index and does not represent the performance of the Fund. You should not
consider this performance data as an indication of future performance of the
Fund or of the Advisor.
The composite performance data shown below were calculated in accordance with
recommended standards of the Association for Investment Management and Research
(AIMR*), retroactively applied to all time periods. All returns presented were
calculated on a total return basis and include all dividends and interest,
accrued income and realized and unrealized gains and losses. All returns reflect
the deduction of investment advisory fees, brokerage commissions and execution
costs paid by private accounts of the Advisor without provision for federal or
state income taxes. Custodial fees, if any, were generally not included in the
calculation. The Advisor's composite includes all actual, fee-paying,
discretionary private accounts with assets in excess of $1 million managed by
the Advisor that have investment objectives, policies, strategies and risks
substantially similar to those of the Fund.
- ----------
* AIMR is a non-profit membership and education organization with more than
60,000 members worldwide that, among other things, has formulated a set of
performance presentation standards for investment advisers. These AIMR
performance presentation standards are intended to (i) promote full and fair
presentations by investment advisers of their performance results, and (ii)
ensure uniformity in reporting so that performance results of investment
advisers are directly comparable.
4
<PAGE>
Securities transactions are accounted for on the trade date and accrual
accounting is used. Cash and equivalents are included in performance returns.
The monthly returns of the Advisor's composite combine the individual accounts'
returns (calculated on a time-weighted rate of return that is revalued whenever
cash flows exceed 10% of an account's value at the beginning of the period) by
asset-weighting each individual account's asset value as of the beginning of the
month. Quarterly and yearly returns are calculated by geometrically linking the
monthly and quarterly returns, respectively.
The private accounts that are included in the Advisor's composite are not
subject to the same types of expenses to which the Fund is subject nor to the
diversification requirements, specific tax restrictions and investment
limitations imposed on the Fund by the Investment Company Act or the Internal
Revenue Code. Consequently, the performance results for the Advisor's composite
could have been adversely affected if the private accounts included in the
composite had been regulated as investment companies.
The investment results of the Advisor's composite presented below have been
reviewed and verified (for an AIMR Level II examination) by an independent
auditing firm, to be computed in accordance with Performance Presentation
Standards of AIMR, but they are not intended to predict or suggest the returns
that might by experienced by the Fund or an individual investing in the Fund.
Investors should also be aware that the use of a methodology different from that
used below to calculate performance could result in different performance data.
ANNUALIZED TOTAL RETURN:
For Year Ended Advisor's Composite S&p 500*
- -------------- ------------------- --------
December 31, 1994 3.38% 1.30%
December 31, 1995 45.74% 37.53%
December 31, 1996 22.04% 22.99%
December 31, 1997 24.18% 33.34%
December 31, 1998 12.36% 28.57%
For the Period
- --------------
January 1 - December 31, 1999** 6.63% 21.03%
January 1, 1994 - December 31, 1999
Annualized Return 18.26% 23.54%
Cumulative 173.58% 255.54%
- ----------
* The Standard & Poor's 500 Composite Stock Price Index, known as the S&P 500,
is an unmanaged market value-weighted index consisting of representative
samples of stocks within important industry groups within the U.S. economy.
It includes dividends and distributions, but does not reflect fees, brokerage
commissions or other expenses of investing.
** Unaudited.
5
<PAGE>
INVESTOR GUIDE
HOW TO PURCHASE SHARES OF THE FUND
There are several ways to purchase shares of the Fund. An Application Form,
which accompanies this Prospectus, is used if you send money directly to the
Fund by mail or by wire. If you have questions about how to invest, or about how
to complete the Application Form, please call an account representative at (888)
263-6438.
YOU MAY SEND MONEY TO THE FUND BY MAIL
If you wish to invest by mail, simply complete the Application Form and mail it
with a check (made payable to Edgar Lomax Value Fund) to the Fund's Shareholder
Servicing Agent, American Data Services, Inc., at the following address:
Edgar Lomax Value Fund
P.O. Box 640947
Cincinnati, OH 45264-0947
If you wish to send your Application Form and check via an overnight delivery
service (such as Federal Express), you should use the following address:
Edgar Lomax Value Fund
c/o Firstar Bank, N.A.
Mutual Fund Custody Department
425 Walnut Street, M/L 6118,
Sixth Floor
Cincinnati, OH 45202
YOU MAY WIRE MONEY TO THE FUND
Before sending a wire, you should call the Fund at (888) 263-6438 between 9:00
a.m. and 5:00 p.m., Eastern time, on a day when the New York Stock Exchange
("NYSE") is open for trading, in order to receive an account number. It is
important to call and receive this account number, because if your wire is sent
without it or without the name of the Fund, there may be a delay in investing
the money you wire. You should then ask your bank to wire money to:
Firstar Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
for credit to Edgar Lomax Value Fund
DDA #488840257
for further credit to [your name and account number]
Your bank may charge you a fee for sending a wire to the Fund.
YOU MAY PURCHASE SHARES THROUGH AN INVESTMENT BROKER OR DEALER
You may be able to invest in and redeem shares of the Fund through an investment
broker or dealer, if the broker/dealer has made arrangements with the
Distributor. The broker/dealer is authorized to designate intermediaries to
accept orders on the Fund's behalf. The broker/dealer or the authorized designee
may place an order for you with the Fund and the Fund will be deemed to have
received the order when the authorized broker/dealer or authorized designee
6
<PAGE>
accepts the order. The price you will pay will be the net asset value which is
next calculated after the acceptance of the order by the authorized
broker/dealer or the authorized designee. A broker/dealer may charge you a fee
for placing your order, but you could avoid paying such a fee by sending an
Application Form and payment directly to the Fund. The broker/dealer may also
hold the shares you purchase in its omnibus account rather than in your name in
the records of the Fund's transfer agent. The Fund may reimburse the dealer for
maintaining records of your account as well as for other services provided to
you.
Your broker/dealer is responsible for sending your money to the Fund promptly
after placing the order to purchase shares, and the Fund may cancel the order if
payment is not received from the dealer promptly.
MINIMUM INVESTMENTS
The minimum initial investment in the Fund is $2,500. The minimum subsequent
investment is $100. However, if you are investing in an Individual Retirement
Account ("IRA"), or you are starting an Automatic Investment Plan (see below),
the minimum initial and subsequent investments are $1,000 and $100,
respectively.
SUBSEQUENT INVESTMENTS
You may purchase additional shares of the Fund by sending a check, with the stub
from an account statement, to the Fund at the address above. Please also write
your account number on the check. If you do not have a stub from an account
statement, you can write your name, address and account number on a separate
piece of paper and enclose it with your check. If you want to send additional
money for investment by wire, it is important for you to call the Fund at (888)
263-6438. You may also make additional purchases through an investment broker or
dealer, as described above.
WHEN IS MONEY INVESTED IN THE FUND?
Any money received for investment in the Fund from an investor, whether sent by
check or by wire, is invested at the net asset value of the Fund which is next
calculated after the money is received (assuming the check or wire correctly
identifies the Fund and account). Orders received from dealers are invested at
the net asset value next calculated after the order is received. The net asset
value is calculated at the close of regular trading of the NYSE, generally 4:00
p.m., Eastern time. A check or wire received after the NYSE closes is invested
at the next calculated net asset value of the Fund.
HOW DOES THE FUND PRICE ITS SHARES?
The price of the Fund's shares is its net asset value. In calculating this, the
Fund values its portfolio securities at current market values, if available.
When market quotations are not readily available, securities are valued at fair
value as determined by the Fund's Board of Trustees. The Fund does not price its
shares on days during which the NYSE is closed for trading.
OTHER INFORMATION
The Fund's distributor may waive the minimum investment requirements for
purchases by certain group or retirement plans. All investments must be made in
U.S. dollars, and checks must be drawn on U.S. banks. Third party checks will
not be accepted. A charge may be imposed if a check used to make an investment
does not clear. The Fund and its distributor reserve the right to reject any
investment, in whole or in part. Federal tax law requires that investors provide
a certified taxpayer identification number and other certifications on opening
an account in order to avoid backup withholding of taxes. See the Application
Form for more information about backup withholding. The Fund is not required to
7
<PAGE>
issue share certificates. All shares are normally held in non-certificated form
on the books of the Fund, for the account of the shareholder. The Fund, under
certain circumstances, may accept investments of securities appropriate for the
Fund's portfolio, in lieu of cash. Prior to making such a purchase, you should
call the Advisor to determine if such an investment may be made.
SERVICES AVAILABLE TO SHAREHOLDERS
RETIREMENT PLANS
You may obtain prototype IRA plans from the Fund. Shares of the Fund are also
eligible investments for other types of retirement plans.
AUTOMATIC INVESTING BY CHECK
You may make regular monthly investments in the Fund using the "Automatic
Investment Plan." A check is automatically drawn on your personal checking
account each month for a predetermined amount (but not less than $100), as if
you had written it directly. Upon receipt of the withdrawn funds, the Fund
automatically invests the money in additional shares of the Fund at the current
net asset value. Applications for this service are available from the Fund.
There is no charge by the Fund for this service. The Fund may terminate or
modify this privilege at any time, and shareholders may terminate their
participation by notifying the Shareholder Servicing Agent in writing,
sufficiently in advance of the next withdrawal.
AUTOMATIC WITHDRAWALS
The Fund offers a Systematic Withdrawal Program whereby shareholders may request
that a check drawn in a predetermined amount be sent to them each month or
calendar quarter. To start this Program, your account must have Fund shares with
a value of at least $10,000, and the minimum amount that may be withdrawn each
month or quarter is $50. This Program may be terminated or modified by a
shareholder or the Fund at any time without charge or penalty. A withdrawal
under the Systematic Withdrawal Program involves a redemption of shares of the
Fund, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to your
account, the account ultimately may be depleted.
HOW TO REDEEM YOUR SHARES
You have the right to redeem all or any portion of your shares of the Fund at
their next calculated net asset value on each day the NYSE is open for trading.
REDEMPTION IN WRITING
You may redeem your shares by simply sending a written request to the Fund. You
should give your account number and state whether you want all or part of your
shares redeemed. The letter should be signed by all of the shareholders whose
names appear in the account registration. You should send your redemption
request to:
Edgar Lomax Value Fund
150 Motor Parkway, Suite 109
Hauppauge, NY 11788-0132
8
<PAGE>
SIGNATURE GUARANTEE
If the value of the shares you wish to redeem exceeds $100,000, the signatures
on the redemption request must be guaranteed by an "eligible guarantor
institution." These institutions include banks, broker-dealers, credit unions
and savings institutions. A broker-dealer guaranteeing a signature must be a
member of a clearing corporation or maintain net capital of at least $100,000.
Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program. A notary public is not an
acceptable guarantor.
REDEMPTION BY TELEPHONE
If you complete the Redemption by Telephone portion of the Fund's Application
Form, you may redeem shares on any business day the NYSE is open by calling the
Fund's Shareholder Servicing Agent at (888) 263-6438 before 4:00 p.m. Eastern
time. Redemption proceeds will be mailed or wired, at your direction, on the
next business day to the bank account you designated on the Application Form.
The minimum amount that may be wired is $1,000 (wire charges, if any, will be
deducted from redemption proceeds). Telephone redemptions cannot be made for IRA
accounts.
By establishing telephone redemption privileges, you authorize the Fund and its
Shareholder Servicing Agent to act upon the instruction of any person who makes
the telephone call to redeem shares from your account and transfer the proceeds
to the bank account designated in the Application Form. The Fund and the
Shareholder Servicing Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
these instructions. If these normal identification procedures are followed,
neither the Fund nor the Shareholder Servicing Agent will be liable for any
loss, liability, or cost which results from acting upon instructions of a person
believed to be a shareholder with respect to the telephone redemption privilege.
The Fund may change, modify, or terminate these privileges at any time upon at
least 60-days notice to shareholders.
You may request telephone redemption privileges after your account is opened.
However, the authorization form will require a separate signature guarantee.
Shareholders may experience delays in exercising telephone redemption privileges
during periods of abnormal market activity.
WHAT PRICE IS USED FOR A REDEMPTION?
The redemption price is the net asset value of the Fund's shares, next
determined after shares are validly tendered for redemption. All signatures of
account holders must be included in the request, and a signature guarantee, if
required, must also be included for the request to be valid.
WHEN ARE REDEMPTION PAYMENTS MADE?
As noted above, redemption payments for telephone redemptions are sent on the
day after the telephone call is received. Payments for redemptions sent in
writing are normally made promptly, but no later than seven days after the
receipt of a request that meets requirements described above. However, the Fund
may suspend the right of redemption under certain extraordinary circumstances in
accordance with rules of the Securities and Exchange Commission.
If shares were purchased by wire, they cannot be redeemed until the day after
the Application Form is received. If shares were purchased by check and then
redeemed shortly after the check is received, the Fund may delay sending the
9
<PAGE>
redemption proceeds until it has been notified that the check used to purchase
the shares has been collected, a process which may take up to 15 days. This
delay may be avoided by investing by wire or by using a certified or official
bank check to make the purchase.
REPURCHASES FROM DEALERS
The Fund may accept orders to repurchase shares from an investment dealer on
behalf of a dealer's customers. The net asset value for a repurchase is that
next calculated after receipt of the order from the dealer. The dealer is
responsible for forwarding any documents required in connection with a
redemption, including a signature guarantee, promptly, and the Fund may cancel
the order if these documents are not received promptly.
OTHER INFORMATION ABOUT REDEMPTIONS
A redemption may result in recognition of a gain or loss for income tax
purposes. Due to the relatively high cost of maintaining smaller accounts, the
shares in your account may be redeemed by the Fund, and the proceeds sent to
you, if, due to redemptions you have made, the total value of your account is
reduced to less than $500. This does not apply to retirement plans or Uniform
Gifts or Transfers to Minors accounts. If the Fund determines to make such an
involuntary redemption, you will first be notified that the value of your
account is less than $500, and you will be allowed 30 days to make an additional
investment to bring the value of your account to at least $500 before the Fund
takes any action.
DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS
Dividends from net investment income, if any, are normally declared and paid by
the Fund in December. Capital gains distributions, if any, are also normally
made in December, but the Fund may make an additional payment of dividends or
distributions if it deems it desirable at another time during any year.
Dividends and capital gain distributions (net of any required tax withholding)
are automatically reinvested in additional shares of the Fund at the net asset
value per share on the reinvestment date unless you have previously requested in
writing to the Shareholder Servicing Agent that payment be made in cash.
Any dividend or distribution paid by the Fund has the effect of reducing the net
asset value per share on the record date by the amount of the dividend or
distribution. You should note that a dividend or distribution paid on shares
purchased shortly before that dividend or distribution was declared will be
subject to income taxes even though the dividend or distribution represents, in
substance, a partial return of capital to you.
TAXES
Distributions made by the Fund will be taxable to shareholders whether received
in shares (through dividend reinvestment) or in cash. Distributions derived from
net investment income, including net short-term capital gains, are taxable to
shareholders as ordinary income. Distributions designated as capital gains
dividends are taxable as long-term capital gains regardless of the length of
time you have owned your Fund shares. The maximum capital gains rate for
corporate shareholders is the same as the maximum tax rate for ordinary income.
Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December. You
will be informed annually of the amount and nature of the Fund's distributions.
You should consult your own tax advisers concerning federal, state and local
taxation of distributions from the Fund.
10
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance during its past fiscal periods. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). The
information for the year ended October 31, 1999 has been audited by
PricewaterhouseCoopers LLP, and by other independent accountants for periods
prior to October 31, 1999. PricewaterhouseCoopers LLP's report and the Fund's
financial statements are included in the Fund's annual report which is available
upon request.
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
Year December 12, 1997*
Ended through
October 31, 1999 October 31, 1998
---------------- ----------------
Net asset value, beginning of period......... $10.78 $10.00
------ ------
Income from investment operations:
Net investment income...................... 0.08 0.07
Net realized and unrealized gain on
investments.............................. 1.10 0.72
------ ------
Total from investment operations............. 1.18 0.79
------ ------
Less distributions:
From net investment income................. (0.07) (0.01)
From net realized gains.................... (0.04) 0.00
------ ------
Total distributions.......................... (0.11) (0.01)
------ ------
Net asset value, end of period............... $11.85 $10.78
====== ======
TOTAL RETURN ................................ 11.05% 7.89%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands)........ $4,267 $3,294
Ratio of expenses to average net assets:
Before expense reimbursement............... 3.63% 4.67%+
After expense reimbursement................ 1.75% 1.75%+
Ratio of net investment income to
average net assets
After expense reimbursement................ 0.81% 0.81%+
Portfolio turnover rate...................... 41.85% 32.71%
- ----------
* Commencement of operations.
+ Annualized.
++ Not Annualized.
11
<PAGE>
FOR MORE INFORMATION
The Statement of Additional Information (SAI) includes additional information
about the Fund.
The Fund's annual and semi-annual reports to shareholders contain additional
information about the Fund's investments. The annual report includes a
discussion of the market conditions and investment strategies which
significantly affected the Fund's performance during its last fiscal year.
The SAI and shareholder reports are available free upon request. To request them
or other information, or to ask any questions, please call or write:
1-888-263-6438
Edgar Lomax Value Fund
P.O. Box 640947
Cincinnati, OH 45264-0947
www.edgarlomax.cihost.com
The SAI and other Fund information may also be reviewed and copied at the SEC's
Public Reference Room in Washington, DC. Call 1-800-SEC-0330 for information
about its operations.
Reports and other Fund information are also available on the SEC's Internet site
at http://www.sec.gov. Copies of this information may be obtained, upon payment
of the proper duplicating fees, by writing to the SEC's Public Reference
Section, Washington, DC 20549-6009.
The Fund's SEC File Number is 811-07959.
<PAGE>
EDGAR LOMAX VALUE FUND
Statement of Additional Information
Dated March 1, 2000
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the prospectus dated March 1, 2000, as may be amended from
time to time, of the Edgar Lomax Value Fund (the "Fund"), a series of Advisors
Series Trust (the "Trust"). The Edgar Lomax Company (the "Advisor") is the
Advisor to the Fund. A copy of the prospectus may be obtained from the Fund at
6564 Loisdale Court, Suite 310, Springfield, VA 22150; telephone (888) 263-6438.
TABLE OF CONTENTS
Page
----
Investment Policies.......................... B-2
Management................................... B-7
Portfolio Transactions and Brokerage......... B-10
Net Asset Value.............................. B-11
Taxation..................................... B-11
Dividends and Distributions.................. B-14
Performance Information...................... B-15
General Information.......................... B-16
B-1
<PAGE>
INVESTMENT POLICIES
This discussion supplements information contained in the prospectus as to
investment policies of the Fund.
CONVERTIBLE SECURITIES, EQUITY-LINKED DERIVATIVES AND WARRANTS
The Fund may invest in convertible securities, equity-linked derivatives
and warrants. A convertible security is a fixed income security (a debt
instrument or a preferred stock) which may be converted at a stated price within
a specified period of time into a certain quantity of the common stock of the
same or a different issuer. Convertible securities are senior to common stocks
in an issuer's capital structure, but are usually subordinated to similar
non-convertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from common stock but lower than that
afforded by a similar nonconvertible security), a convertible security also
gives an investor the opportunity, through its conversion feature, to
participate in the capital appreciation of the issuing company depending upon a
market price advance in the convertible security's underlying common stock.
Standard & Poor's ("S&P") Depository Receipts ("SPDRs") and S&P's MidCap
400 Depository Receipts ("MidCap SPDRs") are considered Equity-Linked
Derivatives. Each of these instruments are derivative securities whose value
follows a well-known securities index or basket of securities.
SPDRs and MidCap SPDRs are designed to follow the performance of S&P 500
Index and the S&P MidCap 400 Index, respectively. Because the prices of SPDRs
and MidCap SPDRs are correlated to diversified portfolios, they are subject to
the risk that the general level of stock prices may decline or that the
underlying indices decline. In addition, because SPDRs, MidCap SPDRs will
continue to be traded even when trading is halted in component stocks of the
underlying indices, price quotations for these securities may, at times, be
based upon non-current price information with respect to some or even all of the
stocks in the underlying indices.
A warrant gives the holder a right to purchase at any time during a
specified period a predetermined number of shares of common stock at a fixed
price. Unlike convertible debt securities or preferred stock, warrants do not
pay a fixed dividend. Investments in warrants involve certain risks, including
the possible lack of a liquid market for resale of the warrants, potential price
fluctuations as a result of speculation or other factors, and failure of the
price of the underlying security to reach or have reasonable prospects of
reaching a level at which the warrant can be prudently exercised (in which event
the warrant may expire without being exercised, resulting in a loss of the
Fund's entire investment therein).
SHORT-TERM INVESTMENTS
The Fund may invest in any of the following securities and instruments:
BANK CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES AND TIME DEPOSITS. The
Fund may acquire certificates of deposit, bankers' acceptances and time
deposits. Certificates of deposit are negotiable certificates issued against
funds deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Certificates of deposit and bankers' acceptances acquired by the Fund will be
dollar-denominated obligations of domestic or foreign banks or financial
institutions which at the time of purchase have capital, surplus and undivided
profits in excess of $100 million (including assets of both domestic and foreign
branches), based on latest published reports, or less than $100 million if the
principal amount of such bank obligations are fully insured by the U.S.
Government. If the Fund holds instruments of foreign banks or financial
institutions, it may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only in
debt obligations of U.S. domestic issuers. See "Foreign Investments" below. Such
risks include future political and economic developments, the possible
imposition of withholding taxes by the particular country in which the issuer is
located on interest income payable on the securities, the possible seizure or
nationalization of foreign deposits, the possible establishment of exchange
controls, or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on these securities.
Domestic banks and foreign banks are subject to different governmental
regulations with respect to the amount and types of loans which may be made and
interest rates which may be charged. In addition, the profitability of the
banking industry depends largely upon the availability and cost of funds for the
purpose of financing lending operations under prevailing money market
conditions. General economic conditions as well as exposure to credit losses
B-2
<PAGE>
arising from possible financial difficulties of borrowers play an important part
in the operations of the banking industry.
As a result of federal and state laws and regulations, domestic banks are,
among other things, required to maintain specified levels of reserves, limited
in the amount which they can loan to a single borrower, and subject to other
regulations designed to promote financial soundness. However, such laws and
regulations do not necessarily apply to foreign bank obligations that the Fund
may acquire.
In addition to purchasing certificates of deposit and bankers' acceptances,
to the extent permitted under its investment objectives and policies stated
above and in its prospectus, the Fund may make interest-bearing time or other
interest-bearing deposits in commercial or savings banks. Time deposits are
non-negotiable deposits maintained at a banking institution for a specified
period of time at a specified interest rate.
SAVINGS ASSOCIATION OBLIGATIONS. The Fund may invest in certificates of
deposit (interest-bearing time deposits) issued by savings banks or savings and
loan associations that have capital, surplus and undivided profits in excess of
$100 million, based on latest published reports, or less than $100 million if
the principal amount of such obligations is fully insured by the U.S.
Government.
COMMERCIAL PAPER, SHORT-TERM NOTES AND OTHER CORPORATE OBLIGATIONS. The
Fund may invest a portion of its assets in commercial paper and short-term
notes. Commercial paper consists of unsecured promissory notes issued by
corporations. Issues of commercial paper and short-term notes will normally have
maturities of less than nine months and fixed rates of return, although such
instruments may have maturities of up to one year.
Commercial paper and short-term notes will consist of issues rated at the
time of purchase "A-2" or higher by S&P, "Prime-1" or "Prime-2" by Moody's, or
similarly rated by another nationally recognized statistical rating organization
or, if unrated, will be determined by the Advisor to be of comparable quality.
These rating symbols are described in the Appendix.
Corporate obligations include bonds and notes issued by corporations to
finance longer-term credit needs than supported by commercial paper. While such
obligations generally have maturities of ten years or more, the Fund may
purchase corporate obligations which have remaining maturities of one year or
less from the date of purchase and which are rated "AA" or higher by S&P or "Aa"
or higher by Moody's.
INVESTMENT COMPANY SECURITIES. The Fund may invest in shares of other
investment companies. The Fund may invest in money market mutual funds in
connection with its management of daily cash positions. In addition to the
advisory and operational fees a Fund bears directly in connection with its own
operation, the Fund would also bear its pro rata portions of each other
investment company's advisory and operational expenses.
GOVERNMENT OBLIGATIONS. The Fund may make short-term investments in U.S.
Government obligations. Such obligations include Treasury bills, certificates of
indebtedness, notes and bonds, and issues of such entities as the Government
National Mortgage Association ("GNMA"), Export-Import Bank of the United States,
Tennessee Valley Authority, Resolution Funding Corporation, Farmers Home
Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Farm Credit Banks, Federal Land Banks, Federal Housing Administration,
Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage
Corporation, and the Student Loan Marketing Association.
Some of these obligations, such as those of the GNMA, are supported by the
full faith and credit of the U.S. Treasury; others, such as those of the
Export-Import Bank of United States, are supported by the right of the issuer to
borrow from the Treasury; others, such as those of the FNMA, are supported by
the discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored instrumentalities if it is not obligated to do so
by law.
The Fund may invest in sovereign debt obligations of foreign countries. A
sovereign debtor's willingness or ability to repay principal and interest in a
timely manner may be affected by a number of factors, including its cash flow
situation, the extent of its foreign reserves, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of the debt
service burden to the economy as a whole, the sovereign debtor's policy toward
principal international lenders and the political constraints to which it may be
B-3
<PAGE>
subject. Emerging market governments could default on their sovereign debt. Such
sovereign debtors also may be dependent on expected disbursements from foreign
governments, multilateral agencies and other entities abroad to reduce principal
and interest arrearages on their debt. The commitments on the part of these
governments, agencies and others to make such disbursements may be conditioned
on a sovereign debtor's implementation of economic reforms and/or economic
performance and the timely service of such debtor's obligations. Failure to meet
such conditions could result in the cancellation of such third parties'
commitments to lend funds to the sovereign debtor, which may further impair such
debtor's ability or willingness to service its debt in a timely manner.
FOREIGN INVESTMENTS AND CURRENCIES. The Fund may invest in securities of
foreign issuers, provided that they are publicly traded in the United States.
DEPOSITARY RECEIPTS. Depositary Receipts ("DRs") include American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts ("GDRs") or other forms of depositary receipts. DRs are
receipts typically issued in connection with a U.S. or foreign bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation.
RISKS OF INVESTING IN FOREIGN SECURITIES. Investments in foreign securities
involve certain inherent risks, including the following:
POLITICAL AND ECONOMIC FACTORS. Individual foreign economies of certain
countries may differ favorably or unfavorably from the United States' economy in
such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, diversification and balance of payments
position. The internal politics of certain foreign countries may not be as
stable as those of the United States. Governments in certain foreign countries
also continue to participate to a significant degree, through ownership interest
or regulation, in their respective economies. Action by these governments could
include restrictions on foreign investment, nationalization, expropriation of
goods or imposition of taxes, and could have a significant effect on market
prices of securities and payment of interest. The economies of many foreign
countries are heavily dependent upon international trade and are accordingly
affected by the trade policies and economic conditions of their trading
partners. Enactment by these trading partners of protectionist trade legislation
could have a significant adverse effect upon the securities markets of such
countries.
CURRENCY FLUCTUATIONS. The Fund may invest in securities denominated in
foreign currencies. Accordingly, a change in the value of any such currency
against the U.S. dollar will result in a corresponding change in the U.S. dollar
value of the Fund's assets denominated in that currency. Such changes will also
affect the Fund's income. The value of the Fund's assets may also be affected
significantly by currency restrictions and exchange control regulations enacted
from time to time.
TAXES. The interest and dividends payable on certain of the Fund's foreign
portfolio securities may be subject to foreign withholding taxes, thus reducing
the net amount of income available for distribution to the Fund's shareholders.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
respect to its portfolio securities. Pursuant to such agreements, the Fund
acquires securities from financial institutions such as banks and broker-dealers
as are deemed to be creditworthy by the Advisor, subject to the seller's
agreement to repurchase and the Fund's agreement to resell such securities at a
mutually agreed upon date and price. The repurchase price generally equals the
price paid by the Fund plus interest negotiated on the basis of current
short-term rates (which may be more or less than the rate on the underlying
portfolio security). Securities subject to repurchase agreements will be held by
the Custodian or in the Federal Reserve/Treasury Book-Entry System or an
equivalent foreign system. The seller under a repurchase agreement will be
required to maintain the value of the underlying securities at not less than
102% of the repurchase price under the agreement. If the seller defaults on its
repurchase obligation, the Fund will suffer a loss to the extent that the
proceeds from a sale of the underlying securities are less than the repurchase
price under the agreement. Bankruptcy or insolvency of such a defaulting seller
may cause the Fund's rights with respect to such securities to be delayed or
limited. Repurchase agreements are considered to be loans under the 1940 Act.
WHEN-ISSUED SECURITIES, FORWARD COMMITMENTS AND DELAYED SETTLEMENTS. The
Fund may purchase securities on a "when-issued," forward commitment or delayed
settlement basis. In this event, the Custodian will segregate liquid assets
equal to the amount of the commitment in a separate account. Normally, the
Custodian will set aside portfolio securities to satisfy a purchase commitment.
B-4
<PAGE>
In such a case, the Fund may be required subsequently to segregate additional
assets in order to assure that the value of the account remains equal to the
amount of the Fund's commitment. It may be expected that the Fund's net assets
will fluctuate to a greater degree when it sets aside portfolio securities to
cover such purchase commitments than when it sets aside cash.
The Fund does not intend to engage in these transactions for speculative
purposes but only in furtherance of its investment objectives. Because the Fund
will segregate liquid assets to satisfy its purchase commitments in the manner
described, the Fund's liquidity and the ability of the Advisor to manage it may
be affected in the event the Fund's forward commitments, commitments to purchase
when-issued securities and delayed settlements ever exceeded 15% of the value of
its net assets.
The Fund will purchase securities on a when-issued, forward commitment or
delayed settlement basis only with the intention of completing the transaction.
If deemed advisable as a matter of investment strategy, however, the Fund may
dispose of or renegotiate a commitment after it is entered into, and may sell
securities it has committed to purchase before those securities are delivered to
the Fund on the settlement date. In these cases the Fund may realize a taxable
capital gain or loss. When the Fund engages in when-issued, forward commitment
and delayed settlement transactions, it relies on the other party to consummate
the trade. Failure of such party to do so may result in the Fund's incurring a
loss or missing an opportunity to obtain a price credited to be advantageous.
The market value of the securities underlying a when-issued purchase,
forward commitment to purchase securities, or a delayed settlement and any
subsequent fluctuations in their market value is taken into account when
determining the market value of the Fund starting on the day the Fund agrees to
purchase the securities. The Fund does not earn interest on the securities it
has committed to purchase until they are paid for and delivered on the
settlement date.
ILLIQUID SECURITIES. The Fund may not invest more than 15% of the value of
its net assets in securities that at the time of purchase have legal or
contractual restrictions on resale or are otherwise illiquid. The Advisor will
monitor the amount of illiquid securities in the Fund's portfolio, under the
supervision of the Trust's Board of Trustees, to ensure compliance with the
Fund's investment restrictions.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933 (the "Securities Act"), securities
which are otherwise not readily marketable and repurchase agreements having a
maturity of longer than seven days. Securities which have not been registered
under the Securities Act are referred to as private placement or restricted
securities and are purchased directly from the issuer or in the secondary
market. Mutual funds do not typically hold a significant amount of these
restricted or other illiquid securities because of the potential for delays on
resale and uncertainty in valuation. Limitations on resale may have an adverse
effect on the marketability of portfolio securities and the Fund might be unable
to dispose of restricted or other illiquid securities promptly or at reasonable
prices and might thereby experience difficulty satisfying redemption requests
within seven days. The Fund might also have to register such restricted
securities in order to dispose of them, resulting in additional expense and
delay. Adverse market conditions could impede such a public offering of
securities.
In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments. If such securities are subject to purchase by institutional buyers
in accordance with Rule 144A promulgated by the Commission under the Securities
Act, the Trust's Board of Trustees may determine that such securities are not
illiquid securities notwithstanding their legal or contractual restrictions on
resale. In all other cases, however, securities subject to restrictions on
resale will be deemed illiquid.
INVESTMENT RESTRICTIONS
The Trust (on behalf of the Fund) has adopted the following restrictions as
fundamental policies, which may not be changed without the favorable vote of the
holders of a "majority," as defined in the 1940 Act, of the outstanding voting
securities of the Fund. Under the 1940 Act, the "vote of the holders of a
majority of the outstanding voting securities" means the vote of the holders of
B-5
<PAGE>
the lesser of (i) 67% of the shares of the Fund represented at a meeting at
which the holders of more than 50% of its outstanding shares are represented or
(ii) more than 50% of the outstanding shares of the Fund.
As a matter of fundamental policy, the Fund is diversified. The Fund's
investment objective is also fundamental.
In addition, the Fund may not:
1. Issue senior securities, borrow money or pledge its assets, except that
(i) the Fund may borrow from banks in amounts not exceeding one-third of its
total assets (not including the amount borrowed); and (ii) this restriction
shall not prohibit the Fund from engaging in options transactions;
2. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of transactions and except that the Fund may borrow
money from banks to purchase securities;
3. Act as underwriter (except to the extent the Fund may be deemed to be an
underwriter in connection with the sale of securities in its investment
portfolio);
4. Invest 25% or more of its total assets, calculated at the time of
purchase and taken at market value, in any one industry (other than U.S.
Government securities);
5. Purchase or sell real estate or interests in real estate or real estate
limited partnerships (although the Fund may purchase and sell securities which
are secured by real estate and securities of companies which invest or deal in
real estate);
6. Purchase or sell commodities or commodity futures contracts;
7. Make loans of money (except for purchases of debt securities consistent
with the investment policies of the Fund and except for repurchase agreements);
or
8. Make investments for the purpose of exercising control or management.
The Fund observes the following restrictions as a matter of operating but
not fundamental policy, pursuant to positions taken by federal regulatory
authorities:
The Fund may not:
1. Invest in the securities of other investment companies or purchase any
other investment company's voting securities or make any other investment in
other investment companies except to the extent permitted by federal law;
2. Invest more than 15% of its assets in securities which are restricted as
to disposition or otherwise are illiquid or have no readily available market
(except for securities which are determined by the Board of Trustees to be
liquid);
3. Sell securities short;
4. Make loans of securities; or
5. Notwithstanding fundamental restriction 1 above, borrow money, except
from banks for temporary or emergency purposes, and in amounts not to exceed 5%
of total net assets, and subject to the further restriction that no additional
investment in securities will be made while any such loan is outstanding.
B-6
<PAGE>
MANAGEMENT
The overall management of the business and affairs of the Trust is vested
with its Board of Trustees. The Board approves all significant agreements
between the Trust and persons or companies furnishing services to it, including
the agreements with the Advisor, Administrator, Custodian and Transfer Agent.
The day to day operations of the Trust are delegated to its officers, subject to
the Fund's investment objectives and policies and to general supervision by the
Board of Trustees.
The Trustees and officers of the Trust, their ages and positions with the
Trust, their business addresses and principal occupations during the past five
years are:
<TABLE>
<CAPTION>
Name, Address and Age Position Principal Occupation During Past Five Years
- --------------------- -------- -------------------------------------------
<S> <C> <C>
Walter Auch, Sr. (Born 1921) Trustee Director, Nicholas-Applegate
6001 N. 62d Place Mutual Funds, Brinson Funds
Paradise Valley, AZ 85253 (since 1994), Smith Barney Trak
Fund, Pimco Advisors L.P., Banyan
Realty Trust, Banyan Land Fund II
and Legend Properties.
Eric Banhazl (Born 1957)* Trustee, Senior Vice President, Investment
2025 E. Financial Way President and Company Administration, LLC; Vice
Glendora, CA 91740 Treasurer President, First Fund
Distributors; Assistant,
Treasurer, RNC Mutual Fund Group;
Treasurer, Guinness Flight
Investment Funds, Inc. and
Professionally Managed
Portfolios.
Donald O'Connor (Born 1936) Trustee Retired; formerly Executive Vice
1700 Taylor Avenue President and Chief Operating
Fort Washington, MD 20744 Officer of ICI Mutual Insurance
Company (until January, 1997),
Vice President, Operations,
Investment Company Institute
(until June, 1993).
George Wofford III (Born 1939) Trustee Vice President, Information
305 Glendora Circle Services, Federal Home Loan Bank
Danville, CA 94526 of San Francisco (since March,
1993); formerly Director of
Management Information Services,
Morrison & Foerster (law firm).
Steven Paggioli (Born 1950) Vice Executive Vice President, Robert
479 W. 22nd Street President H. Wadsworth & Associates, Inc.
New York, NY 10011 and Investment Company
Administration, LLC; Vice
President First Fund
Distributors, Inc.; President and
Trustee, Professionally Managed
Portfolios; Director, Managers
Funds, Inc.
Robert Wadsworth (Born 1940) Vice President, Robert H. Wadsworth &
4455 E. Camelback Road President Associates, Inc., Investment
Suite 261E Company Administration, LLC and
Phoenix, AZ 85018 First Fund Distributors, Inc.;
Vice President, Professionally
Managed Portfolios; President,
Guinness Flight Investment Funds,
Inc.; Director, Germany Fund,
Inc., New Germany Fund., Central
European Equity Fund, Inc. and
Deutsche Funds, Inc.
Chris Moser (Born 1949) Secretary Employed by Investment Company
4455 E. Camelback Road Administration, LLC (since July,
Suite 261E 1996); formerly employed by Bank
Phoenix, AZ 85018 One, N.A. (from August until
July, 1996); O'Connor, Cavanagh,
Anderson, Killingsworth and
Beshears (law firm) (until
August, 1995).
</TABLE>
* denotes Trustee who is an "interested person" of the Trust under the 1940 Act.
B-7
<PAGE>
Name and Position Aggregate Compensation From the Trust*
- ----------------- --------------------------------------
Walter E. Auch, Sr., Trustee $12,000
Donald E. O'Connor, Trustee $12,000
George T. Wofford III, Trustee $12,000
*For the calendar-year ended December 31, 1999. The Trust has no pension or
retirement plan. No other entity affiliated with the Trust pays any compensation
to the Trustees. In addition, each independent Trustee will receive a $1,500 fee
per meeting attended. The Trust has no pension or retirement plan. No other
entity affiliated with the Trust pays any compensation to the Trustees.
THE ADVISOR
Subject to the supervision of the Board of Trustees, investment management
and related services are provided by the Advisor, pursuant to an Investment
Advisory Agreement (the "Advisory Agreement").
Under the Advisory Agreement, the Advisor agrees to invest the assets of
the Fund in accordance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's and Trust's governing documents,
including, without limitation, the Trust's Agreement and Declaration of Trust
and By-Laws; the Fund's prospectus, statement of additional information, and
undertakings; and such other limitations, policies and procedures as the
Trustees of the Trust may impose from time to time in writing to the Advisor. In
providing such services, the Advisor shall at all times adhere to the provisions
and restrictions contained in the federal securities laws, applicable state
securities laws, the Code, and other applicable law.
Without limiting the generality of the foregoing, the Advisor has agreed to
(i) furnish the Fund with advice and recommendations with respect to the
investment of the Fund's assets, (ii) effect the purchase and sale of portfolio
securities; (iii) manage and oversee the investments of the Fund, subject to the
ultimate supervision and direction of the Trust's Board of Trustees; (iv) vote
proxies and take other actions with respect to the Fund's securities; (v)
maintain the books and records required to be maintained with respect to the
securities in the Fund's portfolio; (vi) furnish reports, statements and other
data on securities, economic conditions and other matters related to the
investment of the Fund's assets which the Trustees or the officers of the Trust
may reasonably request; and (vii) render to the Trust's Board of Trustees such
periodic and special reports as the Board may reasonably request. The Advisor
has also agreed, at its own expense, to maintain such staff and employ or retain
such personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under the
Advisory Agreement. Personnel of the Advisor may serve as officers of the Trust
provided they do so without compensation from the Trust. Without limiting the
generality of the foregoing, the staff and personnel of the Advisor shall be
deemed to include persons employed or retained by the Advisor to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Advisor or the Trust's Board of Trustees may desire and reasonably request.
With respect to the operation of the Fund, the Advisor has agreed to be
responsible for the expenses of printing and distributing extra copies of the
Fund's prospectus, statement of additional information, and sales and
advertising materials (but not the legal, auditing or accounting fees attendant
thereto) to prospective investors (but not to existing shareholders); and the
costs of any special Board of Trustees meetings or shareholder meetings convened
for the primary benefit of the Advisor.
As compensation for the Advisor's services, the Fund pays it an advisory
fee at the rate specified in the prospectus. In addition to the fees payable to
the Advisor and the Administrator, the Trust is responsible for its operating
expenses, including: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses; all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Fund
B-8
<PAGE>
including all fees and expenses of its custodian, shareholder services agent and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the 1940 Act; taxes, if any; a pro rata
portion of expenditures in connection with meetings of the Fund's shareholders
and the Trust's Board of Trustees that are properly payable by the Fund;
salaries and expenses of officers and fees and expenses of members of the
Trust's Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Advisor or
Administrator; insurance premiums on property or personnel of the Fund which
inure to its benefit, including liability and fidelity bond insurance; the cost
of preparing and printing reports, proxy statements, prospectuses and statements
of additional information of the Fund or other communications for distribution
to existing shareholders; legal, auditing and accounting fees; trade association
dues; fees and expenses (including legal fees) of registering and maintaining
registration of its shares for sale under federal and applicable state and
foreign securities laws; all expenses of maintaining and servicing shareholder
accounts, including all charges for transfer, shareholder recordkeeping,
dividend disbursing, redemption, and other agents for the benefit of the Fund,
if any; and all other charges and costs of its operation plus any extraordinary
and non-recurring expenses, except as otherwise prescribed in the Advisory
Agreement.
The Fund is responsible for its own operating expenses. The Advisor has
contractually 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 (excluding interest and tax expenses) to the limit set forth
in the Expense Table (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' subsequent review and ratification of the reimbursed
amounts. Such reimbursement may not be paid prior to the Fund's payment of
current ordinary operating expenses.
Under the Advisory Agreement, the Advisor will not be liable to the Trust
or the Fund or any shareholder for any act or omission in the course of, or
connected with, rendering services or for any loss sustained by the Trust except
in the case of a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages will be limited as
provided in the 1940 Act) or of willful misfeasance, bad faith or gross
negligence, or reckless disregard of its obligations and duties under the
Agreement.
The Advisory Agreement will remain in effect for a period not to exceed two
years. Thereafter, if not terminated, the Advisory Agreement will continue
automatically for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by a majority vote of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund.
The Advisory Agreement is terminable by vote of the Board of Trustees or by
the holders of a majority of the outstanding voting securities of the Fund at
any time without penalty, on 60 days written notice to the Advisor. The Advisory
Agreement also may be terminated by the Advisor on 60 days written notice to the
Trust. The Advisory Agreement terminates automatically upon its assignment (as
defined in the 1940 Act).
The Advisor has adopted a Code of Ethics under Rule 17j-1 of the Investment
Company Act The code of ethics permits, subject to certain conditions, personnel
of the Advisor to invest in securities that may be purchased or held by the
Fund.
During the period beginning December 12, 1997 and ending October 31, 1998,
the Advisor earned $23,571 in advisory fees. The Advisor has contractually
agreed to limit total fund operating expenses to 1.75% of average net assets
annually. As a result of that limitation, the Advisor waived the full amount of
its fee and paid Fund operating expenses in the amount of $45,516. During the
period beginning November 1, 1998 and ending October 31, 1999, the Advisor
earned $37,229 in advisory fees. The Advisor waived the full amount of its fee
and paid Fund operating expenses in the amount of $32,733.
B-9
<PAGE>
THE ADMINISTRATOR. The Administrator has agreed to be responsible for
providing such services as the Trustees may reasonably request, including but
not limited to (i) maintaining the Trust's books and records (other than
financial or accounting books and records maintained by any custodian, transfer
agent or accounting services agent); (ii) overseeing the Trust's insurance
relationships; (iii) preparing for the Trust (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy statements and
reports to the Trust's shareholders and Trustees and reports to and other
filings with the Commission and any other governmental agency (the Trust
agreeing to supply or cause to be supplied to the Administrator all necessary
financial and other information in connection with the foregoing); (iv)
preparing such applications and reports as may be necessary to permit the offer
and sale of the shares of the Trust under the securities or "blue sky" laws of
the various states selected by the Trust (the Trust agreeing to pay all filing
fees or other similar fees in connection therewith); (v) responding to all
inquiries or other communications of shareholders, if any, which are directed to
the Administrator, or if any such inquiry or communication is more properly to
be responded to by the Trust's custodian, transfer agent or accounting services
agent, overseeing their response thereto; (vi) overseeing all relationships
between the Trust and any custodian(s), transfer agent(s) and accounting
services agent(s), including the negotiation of agreements and the supervision
of the performance of such agreements; and (vii) authorizing and directing any
of the Administrator's directors, officers and employees who may be elected as
Trustees or officers of the Trust to serve in the capacities in which they are
elected. All services to be furnished by the Administrator under this Agreement
may be furnished through the medium of any such directors, officers or employees
of the Administrator. For its services, the Administrator receives a fee monthly
at the following annual rate, subject to a $30,000 minimum:
Fund Asset Level Fee Rate
- ---------------- --------
First $50 million 0.20% of average daily net assets
Next $50 million 0.15% of average daily net assets
Next $50 million 0.10% of average daily net assets
Next $50 million, and thereafter 0.05% of average daily net assets
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Advisory Agreement states that the Advisor shall be responsible for
broker-dealer selection and for negotiation of brokerage commission rates,
provided that the Advisor shall not direct orders to an affiliated person of the
Advisor without general prior authorization to use such affiliated broker or
dealer by the Trust's Board of Trustees. The Advisor's primary consideration in
effecting a securities transaction will be execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction, the
Advisor may take the following into consideration: the best net price available;
the reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund on a
continuing basis. The price to the Fund in any transaction may be less favorable
than that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
Subject to such policies as the Advisor and the Board of Trustees of the
Trust may determine, the Advisor shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Fund to pay a broker or dealer that provides
(directly or indirectly) brokerage or research services to the Advisor an amount
of commission for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall responsibilities with respect to
the Fund. The Advisor is further authorized to allocate the orders placed by it
on behalf of the Fund to such brokers or dealers who also provide research or
statistical material, or other services, to the Trust, the Advisor, or any
affiliate of either. Such allocation shall be in such amounts and proportions as
the Advisor shall determine, and the Advisor shall report on such allocations
regularly to the Advisor and the Trust, indicating the broker-dealers to whom
such allocations have been made and the basis therefore. The Advisor is also
authorized to consider sales of shares of the Fund as a factor in the selection
of brokers or dealers to execute portfolio transactions, subject to the
requirements of best execution, I.E., that such brokers or dealers are able to
execute the order promptly and at the best obtainable securities price.
B-10
<PAGE>
On occasions when the Advisor deems the purchase or sale of a security to
be in the best interest of the Fund as well as other clients of the Advisor, the
Advisor, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and the most efficient execution.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
Brokerage commissions paid during the period beginning December 12, 1997,
and ending October 31, 1998. totaled $5,438. Brokerage commissions paid during
the period beginning November 1, 1998, and ending October 31, 1999 totaled
$4,419.
NET ASSET VALUE
The net asset value of the Fund's shares will fluctuate and is determined
as of the close of trading on the New York Stock Exchange (the "NYSE")
(generally 4:00 p.m. Eastern time) each business day. The NYSE annually
announces the days on which it will not be open for trading. The most recent
announcement indicates that it will not be open on the following days: New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. However,
the NYSE may close on days not included in that announcement.
The net asset value per share is computed by dividing the value of the
securities held by the Fund plus any cash or other assets (including interest
and dividends accrued but not yet received) minus all liabilities (including
accrued expenses) by the total number of shares in the Fund outstanding at such
time.
Generally, the Fund's investments are valued at market value or, in the
absence of a market value, at fair value as determined in good faith by the
Advisor and the Trust's Valuation Committee pursuant to procedures approved by
or under the direction of the Board.
The Fund's securities, including ADRs, EDRs and GDRs, which are traded on
securities exchanges are valued at the last sale price on the exchange on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any reported sales, at the mean between
the last available bid and asked price. Securities that are traded on more than
one exchange are valued on the exchange determined by the Advisor to be the
primary market. 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 and assets for which market quotations are
not readily available (including restricted securities which are subject to
limitations as to their sale) are valued at fair value as determined in good
faith by or under the direction of the Board.
Short-term debt obligations with remaining maturities in excess of 60 days
are valued at current market prices, as discussed above. Short-term securities
with 60 days or less remaining to maturity are, unless conditions indicate
otherwise, amortized to maturity based on their cost to the Fund if acquired
within 60 days of maturity or, if already held by the Fund on the 60th day,
based on the value determined on the 61st day.
All other assets of the Fund are valued in such manner as the Board in good
faith deems appropriate to reflect their fair value.
TAXATION
The Fund intends to continue to qualify and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, (the "Code"), for each taxable year by complying with all applicable
requirements regarding the source of its income, the diversification of its
assets, and the timing of its distributions. The Fund's policy is to distribute
to its shareholders all of its investment company taxable income and any net
realized capital gains for each fiscal year in a manner that complies with the
distribution requirements of the Code, so that the Fund will not be subject to
any federal income or excise taxes based on net income. However, the Board may
elect to pay such excise taxes if it determines that payment is, under the
circumstances, in the best interests of the Fund.
B-11
<PAGE>
In order to qualify as a regulated investment company, the Fund must, among
other things, (a) derive at least 90% of its gross income each year from
dividends, interest, payments with respect to loans of stock and securities,
gains from the sale or other disposition of stock or securities or foreign
currency gains related to investments in stock or securities, or other income
(generally including gains from options, futures or forward contracts) derived
with respect to the business of investing in stock, securities or currency, and
(b) diversify its holdings so that, at the end of each fiscal quarter, (i) at
least 50% of the market value of its assets is represented by cash, cash items,
U.S. Government securities, securities of other regulated investment companies
and other securities limited, for purposes of this calculation, in the case of
other securities of any one issuer to an amount not greater than 5% of the
Fund's assets or 10% of the voting securities of the issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than U.S. Government securities or securities of other regulated
investment companies). As such, and by complying with the applicable provisions
of the Code, the Fund will not be subject to federal income tax on taxable
income (including realized capital gains) that is distributed to shareholders in
accordance with the timing requirements of the Code. If the Fund is unable to
meet certain requirements of the Code, it may be subject to taxation as a
corporation.
Distributions of net investment income and net realized capital gains by
the Fund will be taxable to shareholders whether made in cash or reinvested by
the Fund in shares. In determining amounts of net realized capital gains to be
distributed, any capital loss carry-overs from the eight prior taxable years
will be applied against capital gains. Shareholders receiving a distribution
from the Fund in the form of additional shares will have a cost
basis for federal income tax purposes in each share so received equal to the net
asset value of a share of the Fund on the reinvestment date. Fund distributions
also will be included in individual and corporate shareholders' income on which
the alternative minimum tax may be imposed.
The Fund or the securities dealer effecting a redemption of the Fund's
shares by a shareholder will be required to file information reports with the
Internal Revenue Service ("IRS") with respect to distributions and payments made
to the shareholder. In addition, the Fund will be required to withhold federal
income tax at the rate of 31% on taxable dividends, redemptions and other
payments made to accounts of individual or other non-exempt shareholders who
have not furnished their correct taxpayer identification numbers and certain
required certifications on the New Account application or with respect to which
the Fund or the securities dealer has been notified by the IRS that the number
furnished is incorrect or that the account is otherwise subject to withholding.
The Fund intends to declare and pay dividends and other distributions, as
stated in the prospectuses. In order to avoid the payment of any federal excise
tax based on net income, the Fund must declare on or before December 31 of each
year, and pay on or before January 31 of the following year, distributions at
least equal to 98% of its ordinary income for that calendar year and at least
98% of the excess of any capital gains over any capital losses realized in the
one-year period ending October 31 of that year, together with any undistributed
amounts of ordinary income and capital gains (in excess of capital losses) from
the previous calendar year.
The Fund may receive dividend distributions from U.S. corporations. To the
extent that the Fund receives such dividends and distributes them to its
shareholders, and meets certain other requirements of the Code, corporate
shareholders of the Fund may be entitled to the "dividends received" deduction.
Availability of the deduction is subject to certain holding period and
debt-financing limitations.
If more than 50% in value of the total assets of the Fund at the end of its
fiscal year is invested in stock or securities of foreign corporations, the Fund
may elect to pass through to its shareholders the pro rata share of all foreign
income taxes paid by the Fund. If this election is made, shareholders will be
(i) required to include in their gross income their pro rata share of the Fund's
foreign source income (including any foreign income taxes paid by the Fund), and
(ii) entitled either to deduct their share of such foreign taxes in computing
B-12
<PAGE>
their taxable income or to claim a credit for such taxes against their U.S.
income tax, subject to certain limitations under the Code, including certain
holding period requirements. In this case, shareholders will be informed in
writing by the Fund at the end of each calendar year regarding the availability
of any credits on and the amount of foreign source income (including or
excluding foreign income taxes paid by the Fund) to be included in their income
tax returns. If not more than 50% in value of the Fund's total assets at the end
of its fiscal year is invested in stock or securities of foreign corporations,
the Fund will not be entitled under the Code to pass through to its shareholders
their pro rata share of the foreign taxes paid by the Fund. In this case, these
taxes will be taken as a deduction by the Fund.
The Fund may be subject to foreign withholding taxes on dividends and
interest earned with respect to securities of foreign corporations.
The use of hedging strategies, such as entering into futures contracts and
forward contracts and purchasing options, involves complex rules that will
determine the character and timing of recognition of the income received in
connection therewith by the Fund. Income from foreign currencies (except certain
gains therefrom that may be excluded by future regulations) and income from
transactions in options, futures contracts and forward contracts derived by the
Fund with respect to its business of investing in securities or foreign
currencies will qualify as permissible income under Subchapter M of the Code.
For accounting purposes, when the Fund purchases an option, the premium
paid by the Fund is recorded as an asset and is subsequently adjusted to the
current market value of the option. Any gain or loss realized by the Fund upon
the expiration or sale of such options held by the Fund generally will be
capital gain or loss.
Any security, option, or other position entered into or held by the Fund
that substantially diminishes the Fund's risk of loss from any other position
held by the Fund may constitute a "straddle" for federal income tax purposes. In
general, straddles are subject to certain rules that may affect the amount,
character and timing of the Fund's gains and losses with respect to straddle
positions by requiring, among other things, that the loss realized on
disposition of one position of a straddle be deferred until gain is realized on
disposition of the offsetting position; that the Fund's holding period in
certain straddle positions not begin until the straddle is terminated (possibly
resulting in the gain being treated as short-term capital gain rather than
long-term capital gain); and that losses recognized with respect to certain
straddle positions, which would otherwise constitute short-term capital losses,
be treated as long-term capital losses. Different elections are available to the
Fund that may mitigate the effects of the straddle rules.
Certain options, futures contracts and forward contracts that are subject
to Section 1256 of the Code ("Section 1256 Contracts") and that are held by the
Fund at the end of its taxable year generally will be required to be "marked to
market" for federal income tax purposes, that is, deemed to have been sold at
market value. Sixty percent of any net gain or loss recognized on these deemed
sales and 60% of any net gain or loss realized from any actual sales of Section
1256 Contracts will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss.
Section 988 of the Code contains special tax rules applicable to certain
foreign currency transactions that may affect the amount, timing and character
of income, gain or loss recognized by the Fund. Under these rules, foreign
exchange gain or loss realized with respect to foreign currency-denominated debt
instruments, foreign currency forward contracts, foreign currency denominated
payables and receivables and foreign currency options and futures contracts
(other than options and futures contracts that are governed by the
mark-to-market and 60/40 rules of Section 1256 of the Code and for which no
election is made) is treated as ordinary income or loss. Some part of the Fund's
gain or loss on the sale or other disposition of shares of a foreign corporation
may, because of changes in foreign currency exchange rates, be treated as
ordinary income or loss under Section 988 of the Code rather than as capital
gain or loss.
B-13
<PAGE>
A shareholder who purchases shares of the Fund by tendering payment for the
shares in the form of other securities may be required to recognize gain or loss
for income tax purposes on the difference, if any, between the adjusted basis of
the securities tendered to the fund and the purchase price of the Fund's shares
acquired by the shareholder.
Section 475 of the Code requires that a "dealer" in securities must
generally "mark to market" at the end of its taxable year all securities which
it owns. The resulting gain or loss is treated as ordinary (and not capital)
gain or loss, except to the extent allocable to periods during which the dealer
held the security for investment. The "mark to market" rules do not apply,
however, to a security held for investment which is clearly identified in the
dealer's records as being held for investment before the end of the day in which
the security was acquired. The IRS has issued guidance under Section 475 that
provides that, for example, a bank that regularly originates and sells loans is
a dealer in securities, and subject to the "mark to market" rules. Shares of the
Fund held by a dealer in securities will be subject to the "mark to market"
rules unless they are held by the dealer for investment and the dealer property
identifies the shares as held for investment.
Redemptions and exchanges of shares of the Fund will result in gains or
losses for tax purposes to the extent of the difference between the proceeds and
the shareholder's adjusted tax basis for the shares. Any loss realized upon the
redemption or exchange of shares within six months from their date of purchase
will be treated as a long-term capital loss to the extent of distributions of
long-term capital gain dividends during such six-month period. All or a portion
of a loss realized upon the redemption of shares may be disallowed to the extent
shares are purchased (including shares acquired by means of reinvested
dividends) within 30 days before or after such redemption.
Distributions and redemptions may be subject to state and local income
taxes, and the treatment thereof may differ from the federal income tax
treatment. Foreign taxes may apply to non-U.S. investors.
The above discussion and the related discussion in the prospectuses are not
intended to be complete discussions of all applicable federal tax consequences
of an investment in the Fund. The law firm of Paul, Hastings, Janofsky & Walker
LLP has expressed no opinion in respect thereof. Nonresident aliens and foreign
persons are subject to different tax rules, and may be subject to withholding of
up to 30% on certain payments received from the Fund. Shareholders are advised
to consult with their own tax advisers concerning the application of foreign,
federal, state and local taxes to an investment in the Fund.
DIVIDENDS AND DISTRIBUTIONS
The Fund will receive income in the form of dividends and interest earned
on its investments in securities. This income, less the expenses incurred in its
operations, is the Fund's net investment income, substantially all of which will
be declared as dividends to the Fund's shareholders.
The amount of income dividend payments by the Fund is dependent upon the
amount of net investment income received by the Fund from its portfolio
holdings, is not guaranteed and is subject to the discretion of the Board. The
Fund does not pay "interest" or guarantee any fixed rate of return on an
investment in its shares.
The Fund also may derive capital gains or losses in connection with sales
or other dispositions of its portfolio securities. Any net gain the Fund may
realize from transactions involving investments held less than the period
required for long-term capital gain or loss recognition or otherwise producing
short-term capital gains and losses (taking into account any carryover of
capital losses from the eight previous taxable years), although a distribution
from capital gains, will be distributed to shareholders with and as a part of
dividends giving rise to ordinary income. If during any year the Fund realizes a
net gain on transactions involving investments held more than the period
required for long-term capital gain or loss recognition or otherwise producing
long-term capital gains and losses, the Fund will have a net long-term capital
gain. After deduction of the amount of any net short-term capital loss, the
balance (to the extent not offset by any capital losses carried over from the
eight previous taxable years) will be distributed and treated as long-term
capital gains in the hands of the shareholders regardless of the length of time
the Fund's shares may have been held by the shareholders. For more information
concerning applicable capital gains tax rates, see your tax advisor.
B-14
<PAGE>
Any dividend or distribution paid by the Fund reduces the Fund's net asset
value per share on the date paid by the amount of the dividend or distribution
per share. Accordingly, a dividend or distribution paid shortly after a purchase
of shares by a shareholder would represent, in substance, a partial return of
capital (to the extent it is paid on the shares so purchased), even though it
would be subject to income taxes.
Dividends and other distributions will be made in the form of additional
shares of the Fund unless the shareholder has otherwise indicated. Investors
have the right to change their elections with respect to the reinvestment of
dividends and distributions by notifying the Transfer Agent in writing, but any
such change will be effective only as to dividends and other distributions for
which the record date is seven or more business days after the Transfer Agent
has received the written request.
PERFORMANCE INFORMATION
TOTAL RETURN
Average annual total return quotations used in the Fund's advertising and
promotional materials are calculated according to the following formula:
n
P(1 + T) = ERV
where "P" equals a hypothetical initial payment of $1,000; "T" equals average
annual total return; "n" equals the number of years; and "ERV" equals the ending
redeemable value at the end of the period of a hypothetical $1000 payment made
at the beginning of the period.
Under the foregoing formula, the time periods used in advertising will be
based on rolling calendar quarters, updated to the last day of the most recent
quarter prior to submission of the advertising for publication. Average annual
total return, or "T" in the above formula, is computed by finding the average
annual compounded rates of return over the period that would equate the initial
amount invested to the ending redeemable value. Average annual total return
assumes the reinvestment of all dividends and distributions.
For the period from December 12, 1997, (commencement of operations) through
October 31, 1998, the Fund had a total return of 7.89%. For the period from
November 1, 1998 through October 31, 1999, the Fund had a total return of
11.05%.
YIELD
Annualized yield quotations used in the Fund's advertising and promotional
materials are calculated by dividing the Fund's investment income for a
specified thirty-day period, net of expenses, by the average number of shares
outstanding during the period, and expressing the result as an annualized
percentage (assuming semi-annual compounding) of the net asset value per share
at the end of the period. Yield quotations are calculated according to the
following formula:
YIELD = 2 [(a-b + 1)6 - 1]
---
cd
where "a" equals dividends and interest earned during the period; "b" equals
expenses accrued for the period, net of reimbursements; "c" equals the average
daily number of shares outstanding during the period that are entitled to
receive dividends and "d" equals the maximum offering price per share on the
last day of the period.
B-15
<PAGE>
Except as noted below, in determining net investment income earned during
the period ("a" in the above formula), the Fund calculates interest earned on
each debt obligation held by it during the period by (1) computing the
obligation's yield to maturity, based on the market value of the obligation
(including actual accrued interest) on the last business day of the period or,
if the obligation was purchased during the period, the purchase price plus
accrued interest; (2) dividing the yield to maturity by 360 and multiplying the
resulting quotient by the market value of the obligation (including actual
accrued interest). Once interest earned is calculated in this fashion for each
debt obligation held by the Fund, net investment income is then determined by
totaling all such interest earned.
For purposes of these calculations, the maturity of an obligation with one
or more call provisions is assumed to be the next date on which the obligation
reasonably can be expected to be called or, if none, the maturity date.
OTHER INFORMATION
Performance data of the Fund quoted in advertising and other promotional
materials represents past performance and is not intended to predict or
guarantee future results. The return and principal value of an investment in the
Fund will fluctuate, and an investor's redemption proceeds may be more or less
than the original investment amount. In advertising and promotional materials
the Fund may compare its performance with data published by Lipper Analytical
Services, Inc. ("Lipper"), Morningstar, Inc. or CDA Investment Technologies,
Inc. ("CDA"). The Fund also may refer in such materials to mutual fund
performance rankings and other data, such as comparative asset, expense and fee
levels, published by Lipper or CDA. Advertising and promotional materials also
may refer to discussions of the Fund and comparative mutual fund data and
ratings reported in independent periodicals including, but not limited to, THE
WALL STREET JOURNAL, MONEY Magazine, FORBES, BUSINESS WEEK, FINANCIAL WORLD and
BARRON'S.
GENERAL INFORMATION
Advisors Series Trust is an open-end, diversified, management investment
company organized as a Delaware business trust under the laws of the State of
Delaware on October 3, 1996. The Trust currently consists of 17 effective series
of shares of beneficial interest, par value of $0.01 per share. The Declaration
of Trust permits the Trustees to issue an unlimited number of full and
fractional shares of beneficial interest and to divide or combine the shares
into a greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Fund. Each share represents an interest
in the Fund proportionately equal to the interest of each other share. Upon the
Fund's liquidation, all shareholders would share pro rata in the net assets of
the Fund available for distribution to shareholders.
The Declaration of Trust does not require the issuance of stock
certificates. If stock certificates are issued, they must be returned by the
registered owners prior to the transfer or redemption of shares represented by
such certificates.
If they deem it advisable and in the best interest of shareholders, the
Board of Trustees may create additional series of shares which differ from each
other only as to dividends. The Board of Trustees has created several series of
shares, and may create additional series in the future, which have separate
assets and liabilities. Income and operating expenses not specifically
attributable to a particular Fund are be allocated fairly among the Funds by the
Trustees, generally on the basis of the relative net assets of each Fund.
The Fund intends to pay cash (U.S. dollars) for all shares redeemed, but,
under abnormal conditions that make payment in cash unwise, the Fund may make
payment partly in its portfolio securities with a current amortized cost or
market value, as appropriate, equal to the redemption price. Although the Fund
does not anticipate that it will make any part of a redemption payment in
securities, if such payment were made, an investor may incur brokerage costs in
converting such securities to cash. The Trust has elected to be governed by the
provisions of Rule 18f-1 under the Investment Company Act, which require that
the Fund pay in cash all requests for redemption by any shareholder of record
limited in amount, however, during any 90-day period to the lesser of $250,000
or 1% of the value of the Fund's net assets at the beginning of such period.
B-16
<PAGE>
Rule 18f-2 under the 1940 Act provides that as to any investment company
which has two or more series outstanding and as to any matter required to be
submitted to shareholder vote, such matter is not deemed to have been
effectively acted upon unless approved by the holders of a "majority" (as
defined in the Rule) of the voting securities of each series affected by the
matter. Such separate voting requirements do not apply to the election of
Trustees or the ratification of the selection of accountants. The Rule contains
special provisions for cases in which an advisory contract is approved by one or
more, but not all, series. A change in investment policy may go into effect as
to one or more series whose holders so approve the change even though the
required vote is not obtained as to the holders of other affected series.
The Fund's principal underwriter is First Fund Distributors, Inc., 4455 E.
Camelback Road, Suite 261E, Phoenix, AZ 85018.
The Fund's custodian, Firstar Bank N.A., 425 Walnut Street, Cincinnati,
Ohio 45202 is responsible for holding the Funds' assets. American Data Services,
P.O. Box 5536, Hauppauge NY 11788 acts as the Fund's transfer agent. ICA Fund
Services Corp., 4455 E. Camelback Rd., Suite 261-E, Phoenix, AZ 85018, acts as
the Fund's accounting services agent. The Fund's independent accountants,
PricewaterhouseCoopers LLP, 1177 Avenue of The Americas, New York, NY 10036,
assist in the preparation of certain reports to the Securities and Exchange
Commission and the Fund's tax returns.
Shares of the Fund owned by the Trustees and officers of the Fund, as a
group, were less than 1% at March 31, 2000. On March 31, 2000, the following
persons owned of record and/or beneficially more than 5% of the Fund's
outstanding voting securities:
The Edgar Lomax Co., DTD: 09-01-1986, Randall R. Eley, President, 6564
Loisdale CT, Suite #310, Springfield, VA 22150; 21.88% of record.
Lomax Investment Limited Partnership, DTD 06-25-1990, Randall R. Eley, Gen.
Partner, 6564 Loisdale CT, Suite #310, Springfield, VA 22150; 7.94% of record.
B-17
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Agreement and Declaration of Trust (1)
(b) By-Laws (1)
(c) Not applicable
(d) (i) Form of Investment Advisory Agreement (4)
(ii) Form of Amendment to Investment Advisory Agreement (5)
(e) Distribution Agreement (2)
(f) Not applicable
(g) Custodian Agreement (3)
(h) (i) Administration Agreement with Investment Company
Administration Corporation (2)
(ii) Fund Accounting Service Agreement (2)
(iii) Transfer Agency and Service Agreement (2)
(i) Not applicable
(j) Consent of PricewaterhouseCoopers LLP and McGladrey & Pullen LLP
(k) Not applicable
(l) Investment letters (3)
(m) Form of Rule 12b-1 Plan (4)
(n) Not applicable
(o) Not applicable
(p) Code of Ethics
- ----------
(1) Previously filed with the Registration Statement on Form N-1A (File No.
333-17391) on December 6, 1996 and incorporated herein by reference.
(2) Previously filed with Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A (File No. 333-17391) on January 29, 1997 and incorporated
herein by reference.
(3) Previously filed with Pre-Effective Amendment No. 2 to the Registration
Statement on Form N-1A (File No. 333-17391) on February 28, 1997 and
incorporated herein by reference.
(4) Previously filed with Post-Effective Amendment No. 37 to the
Registration Statement on Form N-1A (File No. 333-17391) on January 15, 1999 and
incorporated herein by reference.
(5) Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement on Form N-1A (File No. 333-17391) on June 30, 1999 and
incorporated herein by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
Article VI of Registrant's By-Laws states as follows:
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
<PAGE>
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed:
(a) in the case of conduct in his official capacity as a Trustee of the
Trust, that his conduct was in the Trust's best interests, and
(b) in all other cases, that his conduct was at least not opposed to the
Trust's best interests, and
(c) in the case of a criminal proceeding, that he had no reasonable cause
to believe the conduct of that person was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best interests of this
Trust or that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action by or in the right of this Trust to procure a judgment in
its favor by reason of the fact that that person is or was an agent of this
Trust, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action if that person acted in
good faith, in a manner that person believed to be in the best interests of this
Trust and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue, or matter as to which that person
shall have been adjudged to be liable on the basis that personal
benefit was improperly received by him, whether or not the benefit
resulted from an action taken in the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of that person's
duty to this Trust, unless and only to the extent that the court in
which that action was brought shall determine upon application that in
view of all the circumstances of the case, that person was not liable
by reason of the disabling conduct set forth in the preceding
paragraph and is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; or
<PAGE>
(c) of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses
incurred in defending a threatened or pending action which is settled
or otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
Trust has been successful on the merits in defense of any proceeding referred to
in Sections 2 or 3 of this Article or in defense of any claim, issue or matter
therein, before the court or other body before whom the proceeding was brought,
the agent shall be indemnified against expenses actually and reasonably incurred
by the agent in connection therewith, provided that the Board of Trustees,
including a majority who are disinterested, non-party Trustees, also determines
that based upon a review of the facts, the agent was not liable by reason of the
disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not parties
to the proceeding and are not interested persons of the Trust (as
defined in the Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding upon a written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at least one of the following as a
condition to the advance: (i)security for the undertaking; or (ii) the existence
of insurance protecting the Trust against losses arising by reason of any lawful
advances; or (iii) a determination by a majority of a quorum of Trustees who are
not parties to the proceeding and are not interested persons of the Trust, or by
an independent legal counsel in a written opinion, based on a review of readily
available facts that there is reason to believe that the agent ultimately will
be found entitled to indemnification. Determinations and authorizations of
payments under this Section must be made in the manner specified in Section 6 of
this Article for determining that the indemnification is permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6 in any circumstances where
it appears:
(a) that it would be inconsistent with a provision of the Agreement and
Declaration of Trust of the Trust, a resolution of the shareholders,
or an agreement in effect at the time of accrual of the alleged cause
of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or otherwise
limits indemnification; or
(b) that it would be inconsistent with any condition expressly imposed by
a court in approving a settlement.
<PAGE>
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article and the Agreement and Declaration of Trust of the
Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The information required by this item with respect to American Trust
Company is as follows:
American Trust Company is a trust company chartered under the laws of the
State of New Hampshire. Its President and Director, Paul H. Collins, is a
director of:
MacKenzie-Childs, Ltd.
360 State Road 90
Aurora, NY 13026
Great Northern Arts
Castle Music, Inc.
World Family Foundation
all with an address at
Gordon Road, Middletown, NY
Robert E. Moses, a Director of American Trust Company, is a director of:
Mascoma Mutual Hold Corp.
On The Green
Lebanon, NH 03766
Information required by this item is contained in the Form ADV of the
following entities and is incorporated herein by reference:
Name of Investment Adviser File No.
-------------------------- --------
Rockhaven Asset Management, LLC 801-54084
Capital Advisors, Inc. 801-14050
Chase Investment Counsel Corp. 801-3396
Avatar Investors Associates Corp. 801-7061
The Edgar Lomax Company 801-19358
AF Holdings, Inc. 801-30528
Heritage West Advisors, LLC 801-55233
Howard Capital Management 801-10188
Segall Bryant & Hamill 801-47232
National Asset Management Corporation 801-14666
Charter Financial Group, Inc. 801-50956
Chartwell Investment Partners 801-54124
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) The Registrant's principal underwriter also acts as principal
underwriter for the following investment companies:
Guinness Flight Investment Funds
Fleming Capital Mutual Fund Group, Inc.
Fremont Mutual Funds, Inc.
Jurika & Voyles Fund Group
Kayne Anderson Mutual Funds
Masters' Select Investment Trust
O'Shaughnessy Funds, Inc.
PIC Investment Trust
The Purisima Funds
Professionally Managed Portfolios
Rainier Investment Management Mutual Funds
RNC Mutual Fund Group, Inc.
Brandes Investment Trust
Allegiance Investment Trust
The Dessauer Global Equity Fund
Puget Sound Alternative Investment Trust
UBS Private Investor Funds
FFTW Funds, Inc.
Investors Research Fund, Inc.
Harding, Loevner Funds, Inc.
Samco Funds, Inc.
TIFF Investment Program
Trust for Investment Managers
(b) The following information is furnished with respect to the officers and
directors of First Fund Distributors, Inc.:
Position and Offices Position and
Name and Principal with Principal Offices with
Business Address Underwriter Registrant
- ---------------- ----------- ----------
Robert H. Wadsworth President and Vice President
4455 E. Camelback Road Treasurer
Suite 261E
Phoenix, AZ 85018
Eric M. Banhazl Vice President President,
2020 E. Financial Way, Ste. 100 Treasurer
Glendora, CA 91741 and Trustee
Steven J. Paggioli Vice President and Vice President
915 Broadway, Ste. 1605 Secretary
New York, New York 10010
(c) Not applicable.
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession of the following persons:
(a) the documents required to be maintained by paragraph (4) of Rule
31a-1(b) will be maintained by the Registrant;
(b) the documents required to be maintained by paragraphs (5), (6), (10)
and (11) of Rule 31a-1(b) will be maintained by the respective investment
advisors:
American Trust Company, One Court Street, Lebanon, NH 03766
Rockhaven Asset Management, 100 First Avenue, Suite 1050,
Pittsburgh, PA 15222
Chase Investment Counsel Corp., 300 Preston Avenue, Charlottesville,
VA 22902
Avatar Associates Investment Corp., 900 Third Avenue, New York, NY 10022
The Edgar Lomax Company, 6564 Loisdale Court, Springfield, VA 22150
AF Holdings, Inc. 465 Forest Avenue, Suite I, Laguna Beach, CA 92651
Heritage West Advisors, LLC, 1850 North Central Ave., Suite 610,
Phoenix, AZ 85004
Liberty Bank and Trust Company, 4101 Pauger St., Suite 105,
New Orleans, LA 70122
Howard Capital Management, 45 Rockefeller Plaza, Suite 1440, New York,
New York 10111
Segall Bryant & Hamill, 10 South Wacker Drive, Suite 2150,
Chicago, IL 60606
National Asset Management Corporation, 101 South Fifth Street,
Louisville, KY 40202
Charter Financial Group, Inc., 1401 I Street N.W., Suite 505,
Washington, DC 20005
Chartwell Investment Partners, 1235 Westlakes Drive, Suite 330,
Berwyn, PA 19312
Capital Advisors, Inc. 3205 S. Boston Ave., Suite 1300, Tulsa, OK 74013
(c) with respect to The Heritage West Preferred Securities Income Fund
series of the Registrant, all other records will be maintained by the
Registrant; and
(d) all other documents will be maintained by Registrant's custodian,
Firstar Bank, 425 Walnut Street, Cincinnati, OH 45202.
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Registrant hereby undertakes to:
(a) Furnish each person to whom a Prospectus is delivered a copy of the
applicable latest annual report to shareholders, upon request and
without charge.
(b) If requested to do so by the holders of at least 10% of the Trust's
outstanding shares, call a meeting of shareholders for the purposes of
voting upon the question of removal of a trustee and assist in
communications with other shareholders.
(c) On behalf of each of its series, to change any disclosure of past
performance of an Advisor to a series to conform to changes in the
position of the staff of the Commission with respect to such
presentation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to
the Registration Statement on Form N-1A of Advisors Series Trust to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Phoenix
and State of Arizona on the 19th day of April, 2000
ADVISORS SERIES TRUST
By /s/ Eric M. Banhazl*
------------------------------
Eric M. Banhazl
President
This Amendment to the Registration Statement on Form N-1A of Advisors
Series Trust has been signed below by the following persons in the capacities
indicated on April 19, 2000
/s/ Eric M. Banhazl* President, Principal Financial
- ------------------------------ and Accounting Officer, and Trustee
Eric M. Banhazl
/s/ Walter E. Auch Sr.* Trustee
- ------------------------------
Walter E. Auch, Sr.
/s/ Donald E. O'Connor* Trustee
- ------------------------------
Donald E. O'Connor
/s/ George T. Wofford III* Trustee
- ------------------------------
George T. Wofford III
* /s/ Robert H. Wadsworth
----------------------------
By: Robert H. Wadsworth
Attorney in Fact
<PAGE>
EXHIBITS
Exhibit Number Description
-------------- -----------
99B.j Independent Accountants consent
99B.p Code of Ethics
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form N-1A of our report dated December 2, 1999, relating to the
financial statements and financial highlights which appears in the October 31,
1999 Annual Report to Shareholders of Edgar Lomax Value Fund which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights", "Financial
Statements", and "Counsel and Independent Accountants" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
April 17, 2000
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated December 4, 1998 on the financial
statements of Advisors Series Trust -- Edgar Lomax Value Fund referred to
in the Post-Effective Amendment. No. 61 to the Registration Statement on
Form N-1A as filed with the Securities and Exchange Commission.
/s/ McGladrey & Pullen, LLP
New York, New York
April 17, 2000
Advisors Series Trust
Undertaking Regarding Code of Ethics
ADVISORS SERIES TRUST
UNDERTAKING REGARDING CODE OF ETHICS
1. BACKGROUND
Rule 17j-1 (the "Rule") under the Investment Company Act of 1940 (the
"Investment Company Act") requires Advisors Series Trust (the "Trust"), as
a registered investment company, to adopt a written Code of Ethics. The
Rule also requires investment advisers to and principal underwriters for
(each a "Fund Organization") the Trust to adopt a written Code of Ethics
and to report to the Board of Trustees of the Trust (the "Board") any
material compliance violations. The Board may only approve a Code of Ethics
after it has made a determination that the Code of Ethics contains
provisions designed to prevent "access persons" (as the term is explained
below) from engaging in fraud. In addition, certain key "investment
personnel" (as the term is explained below) of a Fund Organization are
subject to further pre-clearance procedures with respect to their
investment in securities offered through an initial public offering (an
"IPO") or private placements (a "Limited Offerings").
2. KEY DEFINITIONS
The term "Access Person" is generally defined by the Rule to include: (i)
any director, officer, general partner or key investment personnel of the
Trust or an investment adviser to the Trust; and (ii) any director,
officer, or general partner of a principal underwriter who has knowledge of
the investment activities of a series of the Trust (a "Fund").
The term "Investment Personnel" is generally defined by the Rule to include
(i) any employee of the Trust or an investment adviser to the Trust who
regularly participates in making recommendations regarding the purchase or
sale of securities of a Fund; and (ii) any natural person who controls a
Fund or an investment adviser to the Fund who obtains information
concerning recommendations made to a Fund regarding the purchase or sale of
securities by a Fund. Investment Personnel are also Access Persons.
3. PROCEDURES IN PLACE
In order to meet the requirements of the Rule, a Code of Ethics should
provide a procedure for detecting and preventing material trading abuses
and, for each Fund, should require Access Persons to report personal
securities transactions on an initial, quarterly and annual basis. At least
two compliance officers should be designated within each Fund Organization
to receive and review these reports.
A Fund Organization may adopt its own Code of Ethics, subject to the review
and approval of the Board. Any subsequent material change to the Fund
Organization's Code of Ethics must be approved by the Board.
In the alternative, a Fund Organization may adopt the standard Code of
Ethics for the Trust which is attached to this Undertaking. An investment
adviser to a Fund should take care that its Form ADV properly reflects the
terms of its Code of Ethics.
<PAGE>
In the event a Fund Organization adopts its own Code of Ethics, the Board
will review that code to ensure that, at a minimum, the following
components are included:
* the appointment of a compliance officer and alternate to review
personal securities transactions of Access Persons;
* the maintenance by the compliance officer of a current list of all
Access Persons and Investment Personnel;
* an initial holdings report within ten days of the start of employment
of an Access Person;
* a requirement that all Access Person are to report quarterly
transactions within ten days of the end of each quarter;
* a requirement that all Access Persons report certain securities
holdings on an annual basis;
* a review procedure by the compliance officer of all Access Person
reports.
* a method by which Access Persons are disciplined and/or sanctioned for
failure to adhere to the Code of Ethics including the failure by an
Access Person to submit reports on a timely basis; and
* a procedure in place whereby Investment Personnel receive
pre-clearance for an investment in an IPO or a Limited Offering.
A Fund Organization may combine its Code of Ethics with other trading
policies and procedures. However, in the event the Code of Ethics conflicts
with the Fund Organization's trading policies and procedures, the terms of
the Code of Ethics shall prevail.
The Trust will file all Codes of Ethics with its registration statement.
4. ANNUAL ISSUES AND CERTIFICATION REPORT
A Fund Organization is required to periodically report to the Board on
issues raised under its Code of Ethics. Specifically, on an annual basis
(see paragraph 6 below), each Fund Organization must provide the Board (i)
a written report that describes issues that arose during the previous year
under the Code of Ethics including material code or procedure violations
and sanctions imposed in response to those material violations and (ii) a
certification that it has adopted procedures reasonably necessary to
prevent its Access Persons from violating its Code of Ethics.
- --------------------------------------------------------------------------------
2
Advisors Series Trust
Undertaking Regarding Code of Ethics
<PAGE>
5. INITIAL CERTIFICATION
On behalf of the undersigned Fund Organization, the following duly
authorized representative of the Fund Organization certifies that:
[ ] The Fund Organization has adopted the Trust's Code of Ethics and it
has adopted procedures reasonably necessary to prevent its Access
Persons from violating the Code of Ethics.
[ ] The Fund Organization has adopted its own Code of Ethics, which is
attached to this Certification. Further, the Fund Organization
acknowledges and certifies that it has adopted procedures reasonably
necessary to prevent its Access Persons from violating its Code of
Ethics.
Acknowledged and Certified:
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Name of Fund Organization:_________________________________________________
(the investment adviser or principal underwriter)
Name of Compliance Officer: _______________________________________________
Name of Alternate Officer: ________________________________________________
Name of Fund: _____________________________________________________________
(the series of Advisors Series Trust)
- --------------------------------------------------------------------------------
3
Advisors Series Trust
Undertaking Regarding Code of Ethics
<PAGE>
6. ANNUAL RE-CERTIFICATION
(to be certified before each annual review meeting of the Board of Trustees)
[ ] The Fund Organization has had no material violations of its Code of
Ethics or the procedures adopted to implement its Code of Ethics,
other than those specified on the attached report.
[ ] The Fund Organization acknowledges and certifies that it has
procedures in place reasonably necessary to prevent Access Persons
from violating its Code of Ethics.
[ ] The Fund Organization has materially changed its Code of Ethics, the
revised Code of Ethics was sent to the Board immediately for its
approval and the Board approved the revised Code of Ethics within six
months of the material change.
Acknowledged and Certified:
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Name of Fund Organization:_________________________________________________
(the investment adviser or principal underwriter)
Name of Compliance Officer: _______________________________________________
Name of Alternate Officer: ________________________________________________
Name of Fund: _____________________________________________________________
(the series of Advisors Series Trust)
- --------------------------------------------------------------------------------
3
Advisors Series Trust
Undertaking Regarding Code of Ethics
<PAGE>
ADVISORS SERIES TRUST
CODE OF ETHICS
REVISED FEBRUARY 2000
1. BACKGROUND
Rule 17j-1 (the "Rule") under the Investment Company Act of 1940 (the
"Investment Company Act") requires Advisors Series Trust (the "Trust"), as
a registered investment company, to adopt a written Code of Ethics. The
Rule also requires investment advisers to and principal underwriters for
(each a "Fund Organization") of the Trust to adopt a written Code of Ethics
and to report to the Board of Trustees of the Trust (the "Board") any
material compliance violations. The Board may only approve a Code of Ethics
after it has made a determination that the Code of Ethics contains
provisions designed to prevent "access persons" (summarized below and
further defined in Appendix 1) from engaging in fraud. In addition, certain
key "investment personnel" (summarized below and defined in Appendix 1) of
a Fund Organization are subject to further pre-clearance procedures with
respect to their investment in securities offered through an initial public
offering (an "IPO") or private placement (a "Limited Offering").
2. KEY DEFINITIONS
For other definitions, see APPENDIX 1
The term "Access Person" is generally defined by the Rule to include: (i)
any director, officer, general partner or key investment personnel of the
Trust or an investment adviser to the Trust; and (ii) any director,
officer, or general partner of a principal underwriter who has knowledge of
the investment activities of a series of the Trust. The Fund Compliance
Officer (defined below) will notify an employee if that person fits the
above definition and maintain a list of all Access Persons (see APPENDIX 2)
The term "Investment Personnel" is generally defined by the Rule to include
(i) any employee of the Trust or an investment adviser to the Trust who
regular participates in making recommendations regarding the purchase or
sale of securities of a series of the Trust (a "Fund"); and (ii) any
natural person who controls the Trust or an investment adviser to the Trust
who obtains information concerning recommendations made to a Fund regarding
the purchase or sale of securities by a Fund. The Fund Compliance Officer
(defined below) will notify an employee if that person fits the above
definition and maintain a list of all Investment Personnel. (see Appendix
2). Investment Personnel are also Access Persons.
3. GENERAL PROHIBITIONS UNDER THE RULE
The Rule prohibits fraudulent activities by affiliated persons of Trust or
Fund Organization. Specifically, it is unlawful for any of these persons
to:
(a) employ any device, scheme or artifice to defraud a Fund;
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics
<PAGE>
(b) make any untrue statement of a material fact to a Fund or omit to
state a material fact necessary in order to make the statements made
to a Fund, in light of the circumstances under which they are made,
not misleading;
(c) to engage in any act, practice or course of business that operates or
would operate as a fraud or deceit on a Fund; or
(d) to engage in any manipulative practice with respect to a Fund.
4. COMPLIANCE OFFICERS
In order to meet the requirements of the Rule, the Code of Ethics includes
a procedure for detecting and preventing material trading abuses and
requires all Access Persons to report personal securities transactions on
an initial, quarterly and annual basis (the "Reports"). The officers of the
Trust will appoint a compliance officer for each Fund Organization (a "Fund
Compliance Officer") to receive and review Reports delivered to a Fund
Compliance Officer in accordance with Section 5 below. In turn, the
officers of the Trust will report to the Board any material violations of
the Code of Ethics in accordance with Section 7 below.
5. ACCESS PERSON REPORTS
All Access Persons of Fund Organizations are required to submit the
following reports to the Fund Compliance Officer for THEMSELVES AND ANY
IMMEDIATE FAMILY MEMBER residing at the same address. In lieu of providing
the Reports, an Access Person may submit brokerage statements or
transaction confirmations that contain duplicate information. The Access
Person should arrange to have brokerage statements and transaction
confirmations sent directly to the Fund Compliance Officer (see Appendix 3
for the form of an Authorization Letter):
(a) INITIAL HOLDINGS REPORT. Within ten days of beginning employment, each
Access Person must report the following information:
(1) The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial ownership when the person became an Access Person;
(2) The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held
for the direct or indirect benefit of the Access Person; and
(3) The date the report is submitted by the Access Person.
A form of the INITIAL HOLDINGS REPORT is attached as Appendix 4.
(b) QUARTERLY TRANSACTION REPORTS. Within ten days of the end of each
calendar quarter, each Access Person must report the following
information:
- --------------------------------------------------------------------------------
2
Advisors Series Trust
Code of Ethics
<PAGE>
(1) With respect to any transaction during the quarter in a Covered
Security in which the Access Person had any direct or indirect
beneficial ownership:
(i) The date of the transaction, the title, the interest rate
and maturity date (if applicable), the number of shares and
the principal amount of each Covered Security involved;
(ii) The nature of the transaction (I.E., purchase, sale);
(iii)The price of the Covered Security at which the transaction
was effected;
(iv) The name of the broker, dealer or bank with or through which
the transaction was effected; and
(v) The date that the report is submitted by the Access Person.
(2) With respect to any account established by the Access Person in
which any securities were held during the quarter for the direct
or indirect benefit of the Access Person:
(i) The name of the broker, dealer or bank with whom the Access
Person established the account;
(ii) The date the account was established; and
(iii) the date that the report is submitted by the Access Person.
A form of the QUARTERLY TRANSACTION REPORT is attached as Appendix 5.
(c) ANNUAL HOLDINGS REPORTS. Each year, the Access Person must report the
following information:
(1) The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial ownership;
(2) The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities were held for
the direct or indirect benefit of the Access Person; and
(3) The date the report is submitted by the Access Person.
A form of the ANNUAL HOLDINGS REPORT is attached as Appendix 6.
6. EXCEPTIONS TO REPORTING REQUIREMENTS
(a) PRINCIPAL UNDERWRITER. An Access Person of a Fund's principal
underwriter is not required to make any Reports under Section 5 above
if the principal underwriter:
- --------------------------------------------------------------------------------
3
Advisors Series Trust
Code of Ethics
<PAGE>
(1) is not an affiliated person of the Trust or any investment
adviser to a Fund.
(2) has no officer, director or general partner who serves as an
officer, director or general partner of the Trust or of any
investment adviser to a Fund.
(b) INDEPENDENT TRUSTEE. A trustee of the Trust who is not an "interested
person" of the Trust within the meaning of Section 2(a)(19) of the
Investment Company Act (an "Independent Trustee") is not required to:
(1) file an INITIAL HOLDINGS REPORT or ANNUAL HOLDINGS REPORT; and
(2) file a QUARTERLY TRANSACTION REPORT, unless the Independent
Trustee knew, or, in the ordinary course of fulfilling his or her
official duties as a trustee, should have known that during a 15
day period immediately before or after his or her transaction in
a Covered Security, that a Fund purchased or sold the Covered
Security, or a Fund or its investment adviser considered
purchasing or selling the Covered Security.
7. ADMINISTRATION OF THE CODE OF ETHICS - REPORTING VIOLATIONS AND CERTIFYING
COMPLIANCE
(a) Each Fund Organization must use reasonable diligence and institute
policies and procedures reasonably necessary to prevent its Access
Persons from violating this Code of Ethics;
(b) Each Fund Compliance Officer shall circulate the Code of Ethics and
receive an acknowledgement from each Access Person that the Code of
Ethics has been read and understood;
(c) Each Fund Compliance Officer shall compare all Reports with completed
and contemplated portfolio transactions of a Fund to determine whether
a possible violation of the Code of Ethics and/or other applicable
trading policies and procedures may have occurred.
No Access Person shall review his or her own Report(s). The Fund
Compliance Officer shall appoint an alternate to review his or her own
Reports if the Fund Compliance Officer is also an Access Person.
(d) On an annual basis, each Fund Compliance Officer shall prepare a
written report describing any issues arising under the Code of Ethics
or procedures, including information about any material violations of
the Code of Ethics or its underlying procedures and any sanctions
imposed due to such violations and submit the information to the
Compliance Officer for review by the Board; and
(e) On an annual basis, each Fund Organization shall certify to the Board
of Trustees that it has adopted procedures reasonably necessary to
prevent its Access Persons from violating the Code of Ethics.
- --------------------------------------------------------------------------------
4
Advisors Series Trust
Code of Ethics
<PAGE>
8. COMPLIANCE WITH OTHER SECURITIES LAWS
This Code of Ethics is not intended to cover all possible areas of
potential liability under the Investment Company Act or under the federal
securities laws in general. For example, other provisions of Section 17 of
the Investment Company Act prohibit various transactions between a
registered investment company and affiliated persons, including the knowing
sale or purchase of property to or from a registered investment company on
a principal basis, and joint transactions (I.E., combining to achieve a
substantial position in a security or commingling of funds) between an
investment company and an affiliated person. Access Persons covered by this
Code of Ethics are advised to seek advice before engaging in any
transactions involving securities held or under consideration for purchase
or sale by a Fund or if a transaction directly or indirectly involves
themselves and the Trust other than the purchase or redemption of shares of
a Fund or the performance of their normal business duties.
In addition, the Securities Exchange Act of 1934 may impose fiduciary
obligations and trading restrictions on access persons and others in
certain situations. It is expected that access persons will be sensitive to
these areas of potential conflict, even though this Code of Ethics does not
address specifically these other areas of fiduciary responsibility.
9. PROHIBITED TRADING PRACTICES
(a) No Access Person may purchase or sell directly or indirectly, any
security in which he or she has, or by reason of such transactions
acquires, any direct or indirect beneficial ownership if such security
to his or her actual knowledge at the time of such purchase or sale:
(i) is being considered for purchase or sale by a Fund;
(ii) is in the process of being purchased or sold by a Fund (except
that an access person may participate in a bunched transaction
with the Fund if the price terms are the same in accordance with
trading policies and procedures adopted by the Fund
Organization).; or
(b) Investment Personnel of a Fund or its investment adviser must obtain
approval from the Fund or the Fund's investment adviser before
directly or indirectly acquiring beneficial ownership in any
securities in an IPO or Limited Offering.
(c) No Access Person may trade ahead of a Fund - a practice known as
"frontrunning."
10. SANCTIONS
As to any material violation of this Code of Ethics, each Fund Organization
shall adopt trading policies and procedures that provide for sanctions of
the Access Persons. Such sanctions may include, but are not limited to: (1)
- --------------------------------------------------------------------------------
5
Advisors Series Trust
Code of Ethics
<PAGE>
a written reprimand in the Access Person's employment file; (2) a
suspension from employment; and/or (3) termination from employment.
The Board may also impose sanctions as it deems appropriate, including
sanctions against the Fund Organization or the Fund Compliance Officer for
failure to adequately supervise its Access Persons.
ACKNOWLEDGED AND AGREED:
I have read, and I understand the terms of, this Code of Ethics.
By: ____________________________________
Name:___________________________________
Title:__________________________________
Fund Organization:______________________
Date:___________________________________
- --------------------------------------------------------------------------------
6
Advisors Series Trust
Code of Ethics
<PAGE>
APPENDIX 1
DEFINITIONS
ACCESS PERSON
(i) any director, officer, general partner or Advisory Person of a Fund or
of a Fund's investment adviser; and (ii) any director, officer or general
partner of a principal underwriter who, in the ordinary course of business,
makes, participates in or obtains information regarding, the purchase or
sale of Covered Securities by the Fund for which the principal underwriter
acts, or whose functions or duties in the ordinary course of business
relate to the making of any recommendation to the Fund regarding the
purchase or Securities.
ADVISORY PERSON
(i) any employee of the Fund or investment adviser (or of any company in a
control relationship to the Fund or investment adviser) who, in connection
with his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of Covered Securities by
a Fund, or whose functions relate to the making of any recommendations with
respect to the purchases or sales; and (ii) any natural person in a control
relationship to the Fund or investment adviser who obtains information
concerning recommendations made to the Fund with regard to the purchase or
sale of Covered Securities by the Fund.
CONTROL
The power to exercise a controlling influence over the management or
policies of a company, unless such power is solely the result of an
official position with such company.
COVERED SECURITY
Includes any Security (see below) but does not include (i) direct
obligations of the Government of the United States; (ii) bankers'
acceptances, bank certificates of deposit, commercial paper and high
quality short-term debt instruments, including repurchase agreements; and
(iii) shares issued by open-end investment companies (I.E., mutual funds).
FUND
An investment company registered under the Investment Company Act.
INVESTMENT PERSONNEL
(i) any employee of the Fund or investment adviser (or of any company in a
control relationship to the Fund or investment adviser) who, in connection
with his or her regular functions or duties, makes or participates in
making recommendations regarding the purchase or sale of security by the
Fund; and (ii) any natural person who controls the Fund or investment
adviser and who obtains information concerning recommendations made to the
Fund regarding the purchase or sale of securities by the Fund.
LIMITED OFFERING
An offering that is exempt from registration under the Securities Act of
1933 (the "Securities Act") pursuant to Section 4(2) or Section 4(6) or
pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act.
PURCHASE OR SALE OF A COVERED SECURITY
Includes, among other things, the writing of an option to purchase or sell
a Covered Security.
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics
<PAGE>
SECURITY
Any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral trust certificate, preorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in
oil, gas, or other mineral rights, any put, call, straddle, option, or
privilege on any security (including a certificate of deposit) or on any
group or index of securities (including any interest therein or based on
the value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known as a
"security," or any certificate of interest or participation in, temporary
or interim certificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase, any of the foregoing.
SECURITY HELD OR TO BE ACQUIRED BY A FUND
(i) any Covered Security which, within the most recent 15 days: (a) is or
has been held by the Fund; or (b) is being or has been considered by the
Fund or its investment adviser for purchase by the Fund; and (ii) any
option to purchase or sell, and any security convertible into or
exchangeable for, a Covered Security described in paragraphs (a) or (b)
above.
- --------------------------------------------------------------------------- 2
Advisors Series Trust
Code of Ethics
<PAGE>
APPENDIX 2
LIST OF ACCESS PERSONS AND INVESTMENT PERSONNEL
- --------------------------------------------------------------------------------
IS THIS PERSON
ACKNOWLEDGEMENT ALSO AN
OF RECEIPT OF INVESTMENT
NAME TITLE CODE OF ETHICS PERSONNEL?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
Advisors Series Trust
Code of Ethics
<PAGE>
APPENDIX 3
FORM OF AUTHORIZATION LETTER
Date
Name of Broker
Address
Re: Brokerage Statements of [name of employee]
Ladies and Gentlemen:
The above referenced person is an employee of [name of Fund Organization].
Federal securities laws require that we monitor the personal securities
transactions of certain key personnel. By this Authorization Letter, and the
acknowledgement of the employee below, please forward duplicate copies of the
employee's brokerage statements and transaction confirmations to:
[Compliance Officer]
[Fund Organization]
[Address]
Should you have any questions, please contact the undersigned at [number].
Very truly yours,
AUTHORIZATION:
I hereby authorize you to release duplicate brokerage statements and
transaction confirmations to my employer.
Signature:__________________________________
Name:_______________________________________
SSN:________________________________________
Account Number:_____________________________
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics
<PAGE>
APPENDIX 4
INITIAL HOLDINGS REPORT
(complete within ten days of employment)
Date: ___________
NOTE: IN LIEU OF THIS REPORT, YOU MAY SUBMIT DUPLICATE COPIES OF YOUR BROKERAGE
STATEMENTS
1. HOLDINGS
- --------------------------------------------------------------------------------
NAME OF COVERED SECURITY NUMBER OF SHARES VALUE OF SECURITY
- --------------------------------------------------------------------------------
2. BROKERAGE ACCOUNTS
- --------------------------------------------------------------------------------
NAME OF INSTITUTION AND ACCOUNT HAVE YOU REQUESTED
ACCOUNT HOLDERS' NAME (I.E., YOU, SPOUSE, CHILD) NUMBER DUPLICATE STATEMENTS?
- --------------------------------------------------------------------------------
REVIEWED: __________________________________
(COMPLIANCE OFFICER SIGNATURE)
DATE: _______________________________________
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics
<PAGE>
APPENDIX 5
QUARTERLY TRANSACTION REPORT
(complete within ten days of the quarter)
Date: ___________
NOTE: IN LIEU OF THIS REPORT, YOU MAY SUBMIT DUPLICATE COPIES OF YOUR BROKERAGE
STATEMENTS
1. TRANSACTIONS
- --------------------------------------------------------------------------------
NATURE OF
NAME OF COVERED NUMBER OF TRANSACTION PURCHASE DATE OF
SECURITY BROKER SHARES (I.E, BUY, SALE) PRICE TRANSACTION
- --------------------------------------------------------------------------------
2. BROKERAGE ACCOUNTS OPENED DURING QUARTER
- --------------------------------------------------------------------------------
NAME OF INSTITUTION AND ACCOUNT HAVE YOU REQUESTED
ACCOUNT HOLDERS' NAME (I.E., YOU, SPOUSE, CHILD) NUMBER DUPLICATE STATEMENTS?
- --------------------------------------------------------------------------------
REVIEWED: _________________________________
(COMPLIANCE OFFICER SIGNATURE)
DATE:
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics
<PAGE>
- --------------------------------------------------------------------------------
NAME OF COVERED SECURITY NUMBER OF SHARES VALUE OF SECURITY
- --------------------------------------------------------------------------------
2. BROKERAGE ACCOUNTS
- --------------------------------------------------------------------------------
NAME OF INSTITUTION AND ACCOUNT HAVE YOU REQUESTED
ACCOUNT HOLDERS' NAME (I.E., YOU, SPOUSE, CHILD) NUMBER DUPLICATE STATEMENTS?
- --------------------------------------------------------------------------------
REVIEWED: __________________________________
(COMPLIANCE OFFICER SIGNATURE)
DATE: _______________________________________
- --------------------------------------------------------------------------------
1
Advisors Series Trust
Code of Ethics