CHASE
GROWTH
FUND
ANNUAL REPORT
DATED SEPTEMBER 30, 2000
----------
Chase Investment Counsel Corp.
300 Preston Avenue
Suite 403
Charlottesville, Virginia 22902-5091
Advisor: 804-293-9104
Shareholder Servicing: 888-861-7556
<PAGE>
CHASE GROWTH FUND
[Photo of Derwood S. Chase, Jr.]
November 13, 2000
Dear Fellow Shareholders:
As I write this annual review, 304 shareholders have $25 million invested
in our Chase Growth Fund (NASDAQ: CHASX). We appreciate the trust all of you
have placed in our management and I want to extend a special welcome to the 56
new shareholders since my May 15th letter.
For the year ended September 30, 2000, our Fund enjoyed a (before and after
tax, assuming shares are not sold) total return of 29.5% compared with 13.3% for
the fully invested Standard & Poor's "500" Composite Stock Price Index (the "S&P
500"), 23.7% for the Lipper Large-Cap Growth Fund Index, and 17.7% for the
Lipper Large-Cap Core Fund Index. We continued to cushion your portfolio against
the risks and volatility of this stock market by investing 18.6% on average in
interest bearing cash equivalents. On September 30, our Fund was invested in 41
stocks. During the last twelve months our eight best performing stocks were
Oracle Corp. +246%, EMC Corp. +178%, Harley Davidson +91%, Nokia ADR +77%, Amgen
+71%, American International Group +65%, Cisco Systems +61%, and Southwest
Airlines Co. +60%. A few new purchases made during the year also helped
performance with Waters Corp. +174%, CDW Computer Ctrs. +115%, Adobe Systems
+64%, and Allergan +53%.
Our investment process combines fundamental, quantitative, and technical
research. We seek good quality companies that are leaders in their industries
and enjoy above average, sustainable earnings growth with strong balance sheets.
The Chase Growth Fund (CGF) portfolio includes a diversified group of companies
that we believe represent relatively outstanding investment opportunities. As
shown in the accompanying charts, we compare the characteristics of our Fund's
stocks to the S&P "500". Your CGF stocks have enjoyed more consistent and
substantially higher five year average annual earnings per share growth rates of
24% vs. 12% for the S&P. They are significantly more profitable with a Return on
Equity of 31% vs. 22%, and have stronger balance sheets with Debt to Total
Capital of 21% vs. 35%; yet they sell at only a moderate 32% premium to the S&P
"500"'s price/earnings multiple based on year 2001 estimated reported earnings.
Though pricey, our stocks are selling at only 1.40 times their five year
historical growth rates compared to 2.20 times for the S&P "500". Similarly they
sell at 1.31 times their projected reinvestment rates compared to 1.78 times for
the S&P "500".
CHASE GROWTH FUND STOCKS VS. S&P 500 SEPTEMBER 30, 2000
CHASE GROWTH
FUND STOCKS S&P 500
----------- -------
Last 5 Year Earnings Growth 24% 12%
Return on Equity 31% 22%
Reinvestment Rate 26% 14%
Debt/Total Capital 21% 35%
Weighted Avg. Cap. (Billion) 100.1 134.0
Weighted Avg. Beta (Volatility) 1.11 1.00
Price/Earnings Estimated 2001 33.8 25.7
Source: Chase Investment Counsel. This information is base on certain
assumptions and historical data and is not a prediction of futurs results for
the Fund or companies held in the Fund's portfolio. S&P 500 Earnings are based
on reported figures after write-offs.
<PAGE>
2
CHASE GROWTH FUND
During the six months ended September 30th and since then we have reduced
the emphasis on the technology sector from 31% to about 16% recently in favor of
more reasonably priced growth stocks which we believe have better defensive
characteristics. Those changes helped us show a positive 4.49% total return in
the September quarter when the S&P and Lipper Large-Cap Growth indexes were down
-1.24% and -1.67%, respectively.
Supply and demand for equities remains favorable even though during the
last year there have been numerous characteristics of a rotating market
correction. As of November 1st, year-to-date U.S. equity mutual fund net inflows
were $227 billion compared to 1999 YTD net inflows of $143 billion. Moreover,
the $236 billion YTD of stock retired through corporate repurchases and cash
acquisitions more than offset the record $176 billion YTD supply of new equity
offerings. That results in a net demand of $287 billion or substantially more
net demand than the prior three years, which were YTD $214, $133 and $147
billion, respectively (Source: Leuthold/Weeden & Co. Research).
Valuation remains excessive by historical norms. On September 30th, the
market value of the combined NYSE and NASDAQ stocks as a percentage of nominal
GDP stood at 158.8%. For comparison, that ratio was only 79.2% at the 1973 peak
(86.5% at the 8/31/29 peak). Part of that higher valuation is justified by the
New Paradigm of a more technology oriented economy which is reducing costs and
driving a more rapidly growing, more efficient, less inflationary economy. For
instance, New Paradigm perspective is provided in the 1999 Annual Report of the
Dallas Federal Reserve Bank. Automobiles now contain upward of 120 microchips
that yield more computing power than was contained in the 1968-70 Apollo lunar
space modules. Aircraft manufacturers now design airplanes digitally, decreasing
rework time 60-90% and repair time 80%. Today's average refrigerator, using
chips, etc., requires less than a third of what it cost to run in 1972 or
approximately the energy equivalent of a 75-watt bulb! The costs to both the
providing company and to consumers has declined dramatically as a result of
technology. In 1985 long-distance calls averaged about $9 when less than 20
million calls were being made. Today, that average is between $1 and $2 as we
approach 100 million calls. Just over a decade ago wireless calls cost the
average user almost $140 per month. Today that cost has declined to around $40
while subscribers have risen from about 1 million to almost 80 million. It is
extraordinary that in the 10th year of an expansion the recent 12-month 5.1%
productivity gain is the best year-over-year gain in 17 years. The resulting
0.4% decline in unit labor costs is the first annualized decline since 1984!
U.S. companies invested $2.5 trillion in technology during the 1990's ($540
billion in 1999 alone) and that huge investment is really paying off.
U.S. economic growth slowed sharply in the third quarter to a 2.4% real
(inflation adjusted) annual rate, down from 4.8% and 5.6% during the two prior
quarters. Moreover inventories rose again in the third quarter which increases
the likelihood of production cutbacks in the current quarter. We believe the
Federal Reserve is finished raising interest rates. However, the big worry is
whether the Fed will slow money supply growth too much or continue to increase
the money supply faster than economic growth providing excess liquidity to buy
stocks. Money supply growth and stock price gains correlate pretty well.
In selecting growth stocks we adhere to significant valuation parameters as
we seek growth at a reasonable price. We believe investing in reasonably priced
growing companies and taking advantage of weakness in good quality growth stocks
is sounder long term strategy than buying "value" stocks with little or no
growth, many of which are cyclical and face rough competition from worldwide
excess capacity. As this report goes to print, perhaps the most controversial
U.S. presidential election in history remains undecided. The recent stock market
volatility that has resulted from this uncertainty demonstrates once again why
it is so important to follow a well defined investment process.
<PAGE>
3
CHASE GROWTH FUND
FUNDAMENTALS AND RATIOS AS OF 9/30/00
P/E TO FIVE-YEAR P/E TO PROJECTED
HISTORICAL GROWTH REINVESTMENT RATE
----------------- -----------------
CHASE GROWTH FUND 1.40 1.31
RUSSELL 1000 GROWTH 2.01 2.02
S&P 500 2.20 1.78
We suspect that over the longer term the new economy paradigm, with the
global spread of information technology and the importance of intellectual
property, will prevail and higher than historical multiples will be justified,
but we don't think that paradigm has repealed the excesses of human nature. We
still believe this is a period for caution, substantial emphasis on capital
preservation, and very careful stock selection.
We manage $1 billion for 86 clients in twenty states. The Chase Growth Fund
is managed by the same senior portfolio managers, David Scott and myself, that
manage our large separate accounts. As a smaller fund managed by a moderate size
management firm, we have much more flexibility in buying and selling large and
mid-cap stocks without a significant market impact. Moreover, as a newer Fund,
the portfolio does not have as large accumulated capital gain tax liabilities on
gains that new shareholders have not enjoyed. We are tax sensitive and we expect
most established capital gains will be net long term. There were no net taxable
capital gains or taxable income for 1999 and we expect only a modest (about
25(cent) per share) long term capital gain distribution for calendar 2000
reflecting changes through October 31st.
As the largest individual CGF shareholder, I assure you that we will be
working very hard to find, analyze and invest in relatively attractive stocks.
The officers and employees of Chase Investment Counsel Corp., most of whom are
fellow shareholders, appreciate your confidence and we look forward to a long
investment relationship together.
TOP 10 HOLDINGS
1. EMC Corp. 6. CDW Computer Ctrs Inc.
2. Citigroup Inc. 7. General Electric
3. Sysco 8. Harley Davidson
4. Tyco Int'l Ltd. 9. Coastal Corp.
5. UnitedHealth Group 10. Cardinal Health Inc.
/s/ Derwood S. Chase, Jr., President
Chase Investment Counsel Corporation
Performance Figures of the fund and indexes referenced represent past
performance and are not indicative of future performance of the fund or the
indexes. Share value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original investment. Indexes do not incur
expenses and are not available for investment.
<PAGE>
4
CHASE GROWTH FUND
Average Annual Total Return(1)
One Year .................................... 29.50%
Since inception (12/2/97) ................... 22.37%
S & P 500 COMPOSITE LIPPER LARGE CAP
CHASE GROWTH FUND STOCK PRICE INDEX GROWTH FUND INDEX
----------------- ----------------- -----------------
2-Dec-97 $10,000 $10,000 $10,000
31-Dec-97 $10,201 $10,000 $10,136
31-Mar-98 $11,432 $11,393 $11,620
30-Jun-98 $11,602 $11,769 $12,212
30-Sep-98 $10,691 $10,598 $10,956
31-Dec-98 $13,224 $12,859 $13,833
31-Mar-99 $13,884 $13,495 $14,930
30-Jun-99 $14,155 $14,443 $15,491
30-Sep-99 $13,674 $13,540 $14,856
31-Dec-99 $16,747 $15,562 $18,650
31-Mar-00 $17,478 $15,035 $20,165
30-Jun-00 $16,948 $14,636 $18,693
30-Sep-00 $17,708 $14,494 $17,409
Past performance is not predictive of future performance.
(1) Average Annual Total Return represents the average change in account value
over the periods indicated.
* The S&P 500 Index is an unmanaged capitalization-weighted index of 500
stocks designed to represent the broad domestic economy.
* The Lipper Large-Cap Growth Fund Index is comprised of funds that invest at
least 75% of their equity assets in companies with market capitalizations
(on a three-year weighted basis) of greater than 300% of the
dollar-weighted median market capitalization of the S&P Mid-Cap 400 Index.
Large-Cap Growth funds normally invest in companies with long-term earnings
expected to grow signicantly faster than the earnings of the stocks
represented in a moajor unmanaged stock index. These funds will normally
have an above-average price-to-earnings ratio, price-to-book ratio, and
three-year earnings growth figure, compared to the U.S. diversifed
large-cap funds universe average. The funds in this index have a similar
investment objective as the Chase Growth Fund.
<PAGE>
5
CHASE GROWTH FUND
SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
Shares COMMON STOCKS: 81.38% Market Value
--------------------------------------------------------------------------------
AIRLINES: 1.34%
12,800 Southwest Airlines Co........................... $ 310,400
-----------
BIOTECHNOLOGY: 2.17%
7,200 Amgen Inc.*..................................... 502,762
-----------
BUILDING: 2.08%
9,056 The Home Depot, Inc............................. 480,534
-----------
BUSINESS SERVICES: 1.73%
8,900 Expeditors International of Washington, Inc..... 401,056
-----------
COMPUTER - NETWORKING: 2.62%
8,100 Cable Design Technologies Corp.*................ 196,931
7,400 Cisco Systems, Inc.*............................ 408,850
-----------
605,781
-----------
COMPUTER - SEMICONDUCTORS: 2.97%
6,000 Altera Corp.*................................... 286,500
9,600 Intel Corp...................................... 399,600
-----------
686,100
-----------
COMPUTER HARDWARE: 4.46%
10,400 EMC Corp.*...................................... 1,030,900
-----------
COMPUTER SOFTWARE AND SERVICES: 4.73%
3,600 Adobe Systems, Inc.............................. 558,900
6,800 Oracle Corp.*................................... 535,500
-----------
1,094,400
-----------
CONGLOMERATES: 8.00%
9,700 Dover Corp...................................... 455,294
11,400 General Electric Co............................. 657,637
14,200 Tyco International Ltd.......................... 736,625
-----------
1,849,556
-----------
<PAGE>
6
CHASE GROWTH FUND
SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2000, Continued
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
DEFENSE: 1.79%
6,600 General Dynamics Corp........................... $ 414,563
-----------
DRUGS: 3.83%
3,800 Allergan, Inc................................... 320,862
12,550 Pfizer, Inc..................................... 563,966
-----------
884,828
-----------
ELECTRICAL INSTRUMENTS: 1.85%
4,800 Waters Corp.*................................... 427,200
-----------
ENERGY/OIL/GAS/COAL: 4.83%
8,000 Phillips Petroleum Co........................... 502,000
8,300 The Coastal Corp................................ 615,238
-----------
1,117,238
-----------
FINANCIAL SERVICES: 5.88%
4,100 A.G. Edwards, Inc............................... 214,481
17,466 Citigroup, Inc.................................. 944,256
3,300 MGIC Investment Corp............................ 201,712
-----------
1,360,449
-----------
FOOD: 3.20%
16,000 Sysco Corp...................................... 741,000
-----------
HEALTH CARE BENEFITS: 4.19%
9,200 First Health Group Corp.*....................... 296,700
6,800 United HealthCare Corp.......................... 671,500
-----------
968,200
-----------
HOUSEHOLD PRODUCTS: 2.32%
8,000 The Procter & Gamble Co......................... 536,000
-----------
INSURANCE - LIFE / HEALTH: 0.35%
2,730 Protective Life Corp............................ 81,559
-----------
INSURANCE - PROPERTY / CASUALTY: 1.92%
4,650 American International Group, Inc............... 444,947
-----------
<PAGE>
7
CHASE GROWTH FUND
SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2000, Continued
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
LEISURE TIME: 4.23%
13,700 Carnival Corporation, Class A................... $ 337,363
13,400 Harley-Davidson, Inc............................ 641,525
-----------
978,888
-----------
MEDICAL SUPPLIES: 4.13%
10,150 Biomet, Inc..................................... 355,250
6,800 Cardinal Health, Inc............................ 599,675
-----------
954,925
-----------
PRINTING/PUBLISHING: 1.79%
6,500 The McGraw-Hill Companies, Inc.................. 413,156
-----------
REAL ESTATE: 2.85%
4,600 Cousins Properties, Inc........................ 198,088
8,000 Spieker Properties, Inc......................... 460,500
-----------
658,588
-----------
RETAIL - DISCOUNT: 1.14%
6,500 Dollar Tree Stores, Inc.*....................... 263,656
-----------
RETAIL - SPECIALTY: 2.86%
9,600 CDW Computer Centers, Inc.*..................... 662,400
-----------
SERVICE COMPANIES: 2.40%
8,200 Dycom Industries, Inc.*......................... 341,325
6,200 Robert Half International, Inc.*................ 215,063
-----------
556,388
-----------
TELECOMMUNICATIONS EQUIPMENT: 1.72%
10,000 Nokia Corporation, ADR, Class A................. 398,125
-----------
Total Common Stocks (Cost $14,152,693).......... 18,823,599
-----------
<PAGE>
8
CHASE GROWTH FUND
SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2000, Continued
--------------------------------------------------------------------------------
Principal Amount SHORT-TERM INVESTMENTS: 17.26%
--------------------------------------------------------------------------------
$3,993,522 Firstar Stellar Treasury Fund
(Cost $3,993,522)................................ $ 3,993,522
-----------
Total Investments in Securities
(Cost $18,146,215+): 98.64%.................... 22,817,121
Other Assets in Excess of Liabilities: 1.36%.... 314,238
-----------
Net Assets: 100%................................ $23,131,359
===========
* Non-income producing security.
+ At September 30, 2000, the cost of securities for Federal income tax
purposes is the same as the basis for financial reporting. Gross unrealized
appreciation and depreciation of securities is as follows:
Gross unrealized appreciation..................... $ 4,799,368
Gross unrealized depreciation..................... (128,462)
-----------
Net unrealized appreciation.................... $ 4,670,906
===========
See accompanying Notes to Financial Statements.
<PAGE>
9
CHASE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES AT SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at value
(identified cost $18,146,215)............................... $22,817,121
Receivables
Fund shares sold............................................ 16,081
Dividends and interest...................................... 27,483
Securities sold............................................. 292,171
Prepaid expenses ............................................. 4,557
-----------
Total assets............................................. 23,157,413
-----------
LIABILITIES
Payables
Due to advisor.............................................. 16,656
Administration fees......................................... 3,709
Accrued expenses.............................................. 5,689
-----------
Total liabilities........................................ 26,054
-----------
NET ASSETS .................................................... $23,131,359
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
[$23,131,359 / 1,307,310 shares outstanding;
unlimited number of shares (par value $0.01) authorized]...... $17.69
===========
COMPONENTS OF NET ASSETS
Paid-in capital............................................... $18,452,446
Accumulated net realized gain on investments.................. 8,007
Net unrealized appreciation on investments ................... 4,670,906
-----------
Net assets............................................... $23,131,359
===========
See accompanying Notes to Financial Statements.
<PAGE>
10
CHASE GROWTH FUND
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends................................................... $ 68,010
Interest.................................................... 151,781
-----------
Total income.......................................... 219,791
-----------
Expenses
Advisory fees (Note 3)...................................... 154,393
Administration fees (Note 3)................................ 32,733
Professional fees........................................... 26,127
Fund accounting fees........................................ 14,900
Transfer agent fees......................................... 9,871
Other ...................................................... 6,416
Custody fees................................................ 5,516
Registration fees........................................... 5,014
Trustee fees................................................ 3,518
Reports to shareholders..................................... 3,009
-----------
Total expenses........................................ 261,497
Less: advisory fee waiver and absorption (Note 3)..... (32,567)
-----------
Net expenses.......................................... 228,930
-----------
NET INVESTMENT LOSS .................................. (9,139)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions.................. 292,804
Net change in unrealized appreciation on investments.......... 3,141,446
-----------
Net realized and unrealized gain on investments............. 3,434,250
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $ 3,425,111
===========
See accompanying Notes to Financial Statements.
<PAGE>
11
CHASE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPT. 30, 2000 SEPT. 30, 1999
-------------- --------------
<S> <C> <C>
NET INCREASE/(DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss ........................................ $ (9,139) $ (39,492)
Net realized gain / (loss) on security transactions ........ 292,804 (93,150)
Net change in unrealized appreciation on investments ....... 3,141,446 1,276,797
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ... 3,425,111 1,144,155
------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase in net assets derived
from net change in outstanding shares (a) ................. 10,566,654 3,985,457
------------ ------------
TOTAL INCREASE IN NET ASSETS ........................... 13,991,765 5,129,612
------------ ------------
NET ASSETS
Beginning of year ............................................ 9,139,594 4,009,982
------------ ------------
END OF YEAR .................................................. $ 23,131,359 $ 9,139,594
============ ============
</TABLE>
(a) A summary of share transactions is as follows:
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------------ ------------------------
SHARES PAID IN CAPITAL SHARES PAID IN CAPITAL
------ --------------- ------ ---------------
Shares sold ......... 678,243 $11,265,849 347,038 $4,725,105
Shares redeemed...... (39,935) (699,195) (53,379) (739,648)
------- ----------- ------- ----------
Net increase......... 638,308 $10,566,654 293,659 $3,985,457
======= =========== ======= ==========
See accompanying Notes to Financial Statements.
<PAGE>
12
CHASE GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 2, 1997*
YEAR ENDED YEAR ENDED THROUGH
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Net asset value, beginning of period .............. $ 13.66 $ 10.68 $ 10.00
Income from investment operations:
Net investment loss ............................. (0.01) (0.05) (0.01)
Net realized and unrealized gain on
investments .................................... 4.04 3.03 0.70
---------- ---------- ----------
Total from investment operations .................. 4.03 2.98 0.69
---------- ---------- ----------
Less distributions:
From net investment income ...................... -- -- (0.01)
---------- ---------- ----------
Total distributions ............................... -- -- (0.01)
---------- ---------- ----------
Net asset value, end of period .................... $ 17.69 $ 13.66 $ 10.68
========== ========== ==========
TOTAL RETURN ...................................... 29.50% 27.90% 6.91%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ............. $ 23,131 $ 9,140 $ 4,010
Ratio of expenses to average net assets:
Before expense reimbursement .................... 1.70% 2.37% 3.98%+
After expense reimbursement ..................... 1.48% 1.48% 1.47%+
Ratio of net investment loss to average net assets:
After expense reimbursement ..................... (0.06%) (0.59%) (0.17%)+
Portfolio turnover rate ........................... 73.94% 62.49% 54.49%
</TABLE>
* Commencement of operations.
+ Annualized.
++ Not Annualized.
See accompanying Notes to Financial Statements.
<PAGE>
13
CHASE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Chase Growth Fund (the "Fund") is a series of shares of beneficial
interest of Advisors Series Trust (the "Trust"), which is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund's investment objective is growth of capital and it intends to
achieve its objective by investing primarily in common stocks of domestic
companies with large market capitalizations of $10 billion and above. The Fund
began operations on December 2, 1997.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION: The Fund's investments are carried at fair value.
Securities that are primarily traded on a national securities exchange
are valued at the last sale price on the exchange on which they are
primarily traded on the day of valuation or, if there has been no sale
on such day, at the mean between the bid and asked prices. Securities
primarily traded in the NASDAQ National Market System for which market
quotations are readily available are valued at the last sale price on
the day of valuation, or if there has been no sale on such day, at the
mean between the bid and asked prices. Over-the-counter ("OTC")
securities which are not traded in the NASDAQ National Market System
shall be valued at the most recent trade price. Securities for which
market quotations are not readily available, if any, are valued
following procedures approved by the Board of Trustees. Short-term
investments are valued at amortized cost, which approximates market
value.
B. FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no federal income tax
provision is required.
C. SECURITY TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS: Security
transactions are accounted for on the trade date. Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Realized gains and losses on securities sold are determined on the
basis of identified cost.
D. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net
assets during the reporting period. Actual results could differ from
those estimates.
NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the year ended September 30, 2000, Chase Investment Counsel Corp. (the
"Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities, and provides most of the personnel needed by the
compensation Fund. As compensation for its services, the Advisor is entitled to
a monthly fee at the annual rate of 1.00% based upon the average daily net
<PAGE>
14
CHASE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
--------------------------------------------------------------------------------
assets of the Fund. For the year ended September 30, 2000, the Fund incurred
$154,393 in Advisory Fees.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund and to pay Fund operating
expenses to the extent necessary to limit the Fund's aggregate annual operating
expenses to 1.48% of average net assets (the "expense cap"). Any such reduction
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 Funds operations. Any such
reimbursement is also contingent upon Board of Trustees review and approval at
the time the reimbursement is made. Such reimbursement may not be paid prior to
the Fund's payment of current ordinary operating expenses. For the year ended
September 30, 2000, the Advisor reduced its fees and absorbed Fund expenses in
the amount of $32,567; no amounts were reimbursed to the Advisor. Cumulative
expenses subject to recapture pursuant to the aforementioned conditions amounted
to $152,856 at September 30, 2000.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of the Fund's expenses and reviews the
Fund's expense accruals. For its services, the Administrator receives a monthly
fee at the following annual rate:
FUND ASSET LEVEL FEE RATE
---------------- --------
Less than $15 million $30,000
$15 million to less than $50 million 0.20% of average daily net assets
$50 million to less than $100 million 0.15% of average daily net assets
$100 million to less than $150 million 0.10% of average daily net assets
More than $150 million 0.05% of average daily net assets
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also officers and/or directors of the
Administrator and the Distributor.
NOTE 4 - SECURITIES TRANSACTIONS
For the year ended September 30, 2000, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$17,307,983 and $9,287,433, respectively.
<PAGE>
15
REPORT OF INDEPENDENT ACCOUNTANTS
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To the Board of Trustees and Shareholders
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statement of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Chase Growth Fund, series of
Advisors Series Trust (the "Fund") at September 30, 2000, the results of its
operations for the year then ended and the changes in its net assets and the
financial highlights for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audit of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
The financial highlights for the periods prior to September 30, 1999, were
audited by other independent accountants whose report dated October 23, 1998
expressed an unqualified opinion on those financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
November 10, 2000
<PAGE>
ADVISOR
Chase Investment Counsel Corp.
300 Preston Avenue, Suite 403
Charlottesville, Virginia 22902-5091
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AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, Arizona 85018
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CUSTODIAN
Firstar Institutional Custody Services
425 Walnut Street, M/L 6118
Cincinnati, Ohio 45202
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TRANSFER AGENT
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
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LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker, LLP
345 California Street
San Francisco, California 94104
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
