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NATIONAL ASSET
MANAGEMENT CORE
EQUITY FUND
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED
OCTOBER 31, 2000
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
December 15, 2000
Dear Fellow Shareholder:
We are pleased to provide you with this shareholder update on the performance of
the National Asset Management Core Equity Fund. The Fund continues to perform
well even though the broad equity market has been weak this year. During the
first ten months of 2000, the Fund produced a cumulative total return of 3.25%,
while the S&P 500 Index has declined by 1.79%. The Fund started June 2, 1999 and
since it's inception has earned an annualized total return of 12.03%, while the
S&P 500 Index gained 8.09%.
The goal of the Fund is to earn a high total investment return. This goal is
pursued by staying fully invested in the stock market and by using two classic
investment approaches, value and growth investing, in the portfolio. This
philosophy is implemented by diversifying the portfolio with investments in
three different types of stocks: growth, yield, and low P/E. Each performs
differently during different economic conditions. The Fund invests in stocks
with these attributes because they each have performed quite well over the long
term.
The market environment has been quite volatile, with the tug of war between
growth stocks and value stocks intensifying. Large capitalization growth stocks,
which had been favored by investors during the period of strong economic growth,
finally succumbed to the double whammy of the Federal Reserve interest rate
hikes and rising inflationary fears of the summer. Many of the market's favorite
technology stocks, which had led the market up in 1999, began to announce
disappointing revenue growth. Investors punished each of these companies by
immediately selling the stock in such large volume that many times prices fell
by 30% or more after the announcement. Investors began to seek the safety of
traditional value stocks such as energy companies and utilities that were
trading at bargain prices after having been ignored by investors for several
years. The Fund did not hold the worst performing technology stocks and has
benefited from a slight preference for value stocks. This is how the Fund has
continued to produce a positive rate of return while the equity market declined
during the first ten months of the year.
The Fund is broadly diversified across the major economic sectors of the large
capitalization equity market. The largest sector weighting is in technology
stocks that compose 21% of the portfolio. This is very similar to the technology
weighting in the S&P 500 Index. Financial stocks also represent a significant
portion of the portfolio at 20%. These two sectors illustrate the balance
between growth and value stocks currently in the portfolio.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
The period of sharp volatility in the stock market, brought on by the string of
Federal Reserve rate hikes, has now been prolonged by a steady string of
corporations announcing disappointing revenue and earnings outlooks. This
volatility is likely to continue until investors become accustomed to weaker
economic news. We believe the portfolio currently owns enough conservative
holdings to defend its value somewhat from additional market weakness associated
with a modest slowing in economic activity.
We thank you for your support and the trust you have expressed is in us by
investing in the Fund. We look forward to a long and mutually rewarding
relationship.
Sincerely,
National Asset Management Equity Team
Past performance of the Fund and the S&P 500 Index is not predictive of future
performance. Fund share values will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original investment. The S&P 500
Index is an unmanaged capitalization-weighted index of 500 stocks designed to
represent the broad domestic economy. Indexes are not available for direct
investment and do not incur expenses.
The information contained in this report is authorized for use when proceeded or
accompanied by a prospectus for the Fund. The Fund is distributed by First Fund
Distributors, Inc., 4455 E. Camelback Rd., Suite 261E, Phoenix, AZ 85018.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Shares COMMON STOCKS: 98.89% Market Value
--------------------------------------------------------------------------------
BASIC INDUSTRY: 4.23%
4,360 Alcoa Inc...................................... $ 125,078
2,740 E. I. du Pont de Nemours and Company .......... 124,328
4,280 Praxair, Inc................................... 159,430
3,950 Williamette Industries, Inc.................... 143,434
-----------
552,269
-----------
CAPITAL GOODS: 8.62%
2,950 Caterpillar Inc................................ 103,434
5,210 Deere & Company................................ 191,793
8,002 General Electric Company....................... 438,610
4,620 Ingersoll-Rand Company......................... 174,405
1,300 Pitney Bowes Inc............................... 38,594
1,450 SPX Corporation*............................... 179,256
-----------
1,126,092
-----------
COMMUNICATION: 3.12%
4,805 MCI Worldcom Incorporated*..................... 114,119
3,160 SBC Communications Inc......................... 182,293
2,220 Tellabs, Inc.*................................. 110,861
-----------
407,273
-----------
CONSUMER CYCLICAL: 9.54%
1,160 Cintas Corporation*............................ 53,795
3,530 Costco Companies, Inc.*........................ 129,286
9,060 Masco Corporation.............................. 169,309
7,080 Target Corporation............................. 195,585
5,556 The Home Depot, Inc............................ 238,908
4,630 The Interpublic Group of Companies, Inc........ 198,801
5,752 Wal-Mart Stores, Inc........................... 260,997
-----------
1,246,681
-----------
CONSUMER STAPLES: 5.64%
4,320 CVS Corporation................................ 228,690
3,460 Safeway Inc.*.................................. 189,219
6,980 Walgreen Co.................................... 318,463
-----------
736,371
-----------
ENERGY: 8.04%
1,960 Chevron Corporation............................ 160,965
5,961 Exxon Mobil Corporation*....................... 531,647
2,740 Schlumberger Limited........................... 208,583
2,530 Texaco Inc..................................... 149,428
-----------
1,050,622
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED), CONT.
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Shares Market Value
--------------------------------------------------------------------------------
FINANCE: 20.23%
2,000 American General Corporation................... 161,000
5,357 American International Group, Inc.............. 524,986
4,746 Citigroup Inc.................................. 249,758
2,250 Comerica Incorporated.......................... 135,703
3,056 Commerce Bancshares, Inc....................... 109,825
3,560 Fannie Mae..................................... 274,120
5,230 Freddie Mac.................................... 313,800
630 Marsh & McLennan Companies, Inc................ 82,373
2,300 MGIC Investment Corporation.................... 156,688
3,810 Radian Group Inc............................... 270,034
4,665 The Chase Manhattan Bank....................... 212,258
2,075 The PMI Group, Inc............................. 153,291
-----------
2,643,834
-----------
HEALTHCARE: 11.91%
4,146 Bristol-Myers Squibb Company................... 252,647
2,360 Johnson & Johnson.............................. 217,415
5,840 Medtronic, Inc................................. 317,185
4,103 Merck & Co, Inc................................ 369,014
4,660 Pfizer, Inc.................................... 201,254
5,010 Tenet Healthcare Corporation*.................. 196,956
-----------
1,554,470
-----------
SERVICES: 6.56%
7,123 Automatic Data Processing...................... 465,221
2,759 Computer Sciences Corporation*................. 173,817
4,150 Fiserv, Inc.*.................................. 217,616
-----------
856,654
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TECHNOLOGY: 21.00%
5,620 Altera Corporation............................. 230,069
3,200 Applied Micro Circuits Corporation............. 244,400
7,842 Cisco Systems, Inc.*........................... 422,488
3,120 Dell Computer Corporation*..................... 92,040
1,770 EMC Corporation................................ 157,641
6,088 Intel Corporation*............................. 273,960
200 JDS Uniphase Corporation*...................... 16,275
2,080 Kimberly-Clark Corporation..................... 137,280
2,890 Maxim Integrated Products, Inc*................ 191,643
4,845 Microsoft Corporation*......................... 333,699
4,140 Oracle Corporation............................. 136,620
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED), CONT.
--------------------------------------------------------------------------------
Shares Market Value
--------------------------------------------------------------------------------
TECHNOLOGY, CONT.
2,080 Siebel Systems, Inc............................ 218,270
1,440 Sun Microsystems, Inc.*........................ 159,660
1,870 Vitesse Semiconductor Corporation*............. 130,783
-----------
2,744,828
-----------
Total Common Stocks (Cost $12,295,297+)........ 12,919,094
-----------
Principal Amount SHORT-TERM INVESTMENTS: 1.10% Market Value
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$144,606 Firstar Stellar Treasury Fund
(Cost $144,606).............................. 144,606
-----------
Total Investment in Securities
(Cost $12,439,902): 99.99%.................. 13,063,699
Asset in Excess of Liabilities: 0.01%......... 1,007
-----------
Net Assets: 100%............................... $13,064,706
===========
* Non-income producing security.
+ Gross unrealized appreciation and depreciation of securities is as follows:
Gross unrealized appreciation.................. $ 1,591,651
Gross unrealized depreciation.................. (967,854)
-----------
Net unrealized appreciation............... $ 623,797
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
AT OCTOBER 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at value
(identified cost $12,439,902)............................. $13,063,699
Receivables
Receivable for Securities Sold............................ 51,702
Dividends and interest ................................... 7,482
Fund shares sold.......................................... 3,153
Prepaid expenses ............................................ 3,911
-----------
Total assets........................................... 13,129,947
-----------
LIABILITIES
Payables
Due to Advisor............................................ 797
Securities Purchased...................................... 46,748
Accrued expenses............................................. 17,696
-----------
Total liabilities...................................... 65,241
-----------
NET ASSETS....................................................... $13,064,706
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
[$13,064,706 / 1,112,489 shares outstanding;
unlimited number of shares (par value $0.01) authorized]..... $ 11.74
===========
COMPONENTS OF NET ASSETS
Paid-in capital.............................................. $12,322,031
Undistributed net investment income.......................... 1,331
Accumulated net realized gain on investments................. 117,547
Net unrealized appreciation on investments .................. 623,797
-----------
Net assets................................................ $13,064,706
===========
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends................................................. $ 52,565
Interest.................................................. 3,760
-----------
Total income........................................... 56,325
-----------
Expenses
Administration fee (Note 3)............................... 15,123
Professional fees......................................... 9,579
Fund accounting fees...................................... 9,075
Advisory fees (Note 3).................................... 28,944
Transfer agent fees....................................... 8,571
Custodian fees............................................ 4,828
D&O/Fidelity Insurance.................................... 875
Other .................................................... 1,008
Reports to shareholders................................... 2,811
Trustees' fees............................................ 2,168
Registration fees......................................... 403
-----------
Total expenses......................................... 83,385
Less, advisory fee waiver and absorption (Note 3)...... (28,391)
-----------
Net expenses........................................... 54,994
-----------
Net investment income.............................. $ 1,331
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions................. 111,559
Net change in unrealized appreciation on investments......... 232,538
-----------
Net realized and unrealized gain on investments........... 344,097
-----------
Net Increase in Net Assets Resulting from
Operations...................................... $ 345,428
===========
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
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Six Months ended June 2, 1999* to
October 31, 2000# April 30, 1999
----------------- --------------
INCREASE / (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income................... $ 1,331 $ 3,471
Net realized gain on security
transactions .......................... 111,559 3,214
Net change in unrealized appreciation
on investments......................... 232,538 391,259
----------- -----------
Net increase in net assets resulting
from operations.................... 345,428 397,944
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net realized gain on security transactions -- (916)
----------- -----------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase in net assets derived
from net change in outstanding
shares (a)............................. 2,115,588 10,206,662
----------- -----------
Total increase in net assets............ 2,461,016 10,603,690
NET ASSETS
Beginning of period........................ 10,603,690 --
----------- -----------
End of period.............................. $13,064,706 $10,603,690
=========== ===========
(a) A summary of shares transactions is as follows:
Six Months ended June 2, 1999* to
October 31, 2000# April 30, 2000
----------------------- -----------------------
Shares Value Shares Value
--------- ----------- --------- -----------
Shares sold ............... 215,511 $ 2,486,784 930,366 $10,222,815
Shares redeemed............ (31,939) (371,196) (1,449) (16,153)
--------- ----------- --------- -----------
Net increase............... 183,572 $ 2,115,588 928,917 $10,206,662
========= =========== ========= ===========
* Commencement of operations.
# Unaudited.
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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Six Months June 2, 1999*
ended through
October 31, 2000# April 30, 2000
----------------- --------------
Net asset value, beginning of period........... $ 11.42 $ 10.00
------- -------
Income from investment operations:
Net investment income..................... -- 0.01
Net realized and unrealized gain on
investments.............................. 0.32 1.42
------- -------
Total from investment operations............... 0.32 1.43
------- -------
Less distributions:
Dividends from net investment income...... -- (0.01)
------- -------
Net asset value, end of period................. $ 11.74 $ 11.42
======= =======
Total return ................................ 2.80%++ 14.26%++
Ratios/supplemental data:
Net assets, end of period (000)................ $13,065 $10,604
Ratio of expenses to average net assets:
Before expense reimbursement.............. 1.44%+ 5.47%+
After expense reimbursement............... 0.95%+ 0.95%+
Ratio of net investment income to
average net assets:
After expense reimbursement............... 0.02%+ 0.14%+
Portfolio turnover rate........................ 12.17% 20.80%
* Commencement of operations.
+ Annualized.
++ Not Annualized.
# Unaudited.
See accompanying Notes to Financial Statements.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1 - ORGANIZATION
The National Asset Management Core Equity Fund (the "Fund") is a series of
shares of beneficial interest of Advisors Series Trust (the "Trust"), which is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund began operations on June 2, 1999. The
investment objective of the Fund is to seek capital appreciation and current
income.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION: The Fund's investments are carried at fair value.
Securities that are primarily traded on a national securities exchange
shall be valued at the last sale price on the exchange on which they
are primarily traded on the day of valuation or, if there has been no
sale on such day, at the mean between the bid and asked prices.
Securities primarily traded in the NASDAQ National Market System for
which market quotations are readily available shall be valued at the
last sale price on the day of valuation, or if there has been no sale
on such day, at the mean between the bid and asked prices.
Over-the-counter ("OTC") securities which are not traded in the NASDAQ
National Market System shall be valued at the most recent trade price.
Securities for which market quotations are not readily available, if
any, are valued following procedures approved by the Board of
Trustees. Short-term investments are valued at amortized cost, which
approximates market value.
B. FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no federal income tax
provision is required.
C. SECURITY TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS: Security
transactions are accounted for on the trade date. Dividend income and
distributions to shareholders, which are determined in accordance with
income tax regulations, are recorded on the ex-dividend date. Realized
gains and losses on securities sold are determined on the basis of
identified cost.
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS, CONT.
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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 six months ended October 31, 2000, National Asset Management
Corporation (the "Advisor") provided the Fund with investment management
services under an Investment Advisory Agreement. The Advisor furnished all
investment advice, office space, facilities, and provides most of the personnel
needed by the Fund. As compensation for its services, the Advisor is entitled to
a monthly fee at the annual rate of 0.50% based upon the average daily net
assets of the Fund. For the six months ended October 31, 2000, the Fund incurred
$28,944 in Advisory Fees.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund and to pay Fund operating
expenses to the extent necessary to limit the Fund's aggregate annual operating
expenses to 0.95% of average net assets (the "expense cap"). Any such reductions
made by the Advisor in its fees or payment of expenses which are the Fund's
obligation are subject to reimbursement by the Fund to the Advisor, if so
requested by the Advisor, in subsequent fiscal years if the aggregate amount
actually paid by the Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. The Advisor is permitted to be reimbursed only for
fee reductions and expense payments made in the previous three fiscal years, but
is permitted to look back five years and four years, respectively, during the
initial six years and seventh year of the Fund's operations. Any such
reimbursement is also contingent upon Board of Trustees review and approval at
the time the reimbursement is made. Such reimbursement may not be paid prior to
the Fund's payment of current ordinary operating expenses. For the six months
ended October 31, 2000, the Advisor reduced its fees and absorbed Fund expenses
in the amount of $28,391; no amounts were reimbursed to the Advisor.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the Trustees;
12
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NATIONAL ASSET MANAGEMENT CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS, CONT.
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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 - PURCHASES AND SALES OF SECURITIES
For the six months ended October 31, 2000, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$3,372,990 and $1,387,308, respectively.
13
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ADVISOR
National Asset Management Corporation
Aegon Center, 400 West Market Street, Ste. 2500
Louisville, KY 40202
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Rd., Ste. 261E
Phoenix, AZ 85018
CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
TRANSFER AGENT
American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
(800) 385-7003
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 94104
