________________________________________________________________________________
BLUE RIDGE TOTAL RETURN FUND
________________________________________________________________________________
a series of the Blue Ridge Funds Trust
Semi-Annual Report 1999
FOR THE PERIOD ENDED MAY 31,
INVESTMENT ADVISOR
Colonial Asset Management, Inc.
359 South Pine Street
P.O. Box 1724
Spartanburg, SC 29304
BLUE RIDGE TOTAL RETURN FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-800-525-3863
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BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 66.60%
Aerospace & Defense - 1.38%
The Boeing Company .................................................... 1,500 $ 63,094
----------
Beverages - 3.06%
PepsiCo, Inc. ......................................................... 2,000 71,000
The Coca-Cola Company ................................................. 1,000 68,500
----------
139,500
----------
Brewery - 1.60%
Anheuser-Busch Companies, Inc. ........................................ 1,000 73,063
----------
Chemicals - 1.35%
Air Products and Chemicals, Inc. ...................................... 1,500 61,500
----------
Computer Software and Services - 5.23%
(a)America Online, Inc. .................................................. 500 59,750
(a)Cisco Systems, Inc. ................................................... 900 97,987
(a)Microsoft Corporation ................................................. 1,000 80,688
----------
238,425
----------
Cosmetics & Personal Care - 2.99%
Colgate-Palmolive Company ............................................. 700 69,913
The Gillette Company .................................................. 1,300 66,300
----------
136,213
----------
Electronics - 3.23%
General Electric Company .............................................. 800 81,350
Hewlett-Packard Company ............................................... 700 66,019
----------
147,369
----------
Electronics - Semiconductor - 3.78%
Intel Corporation ..................................................... 1,200 64,875
Motorola, Inc. ........................................................ 1,300 107,656
----------
172,531
----------
Entertainment - 1.28%
The Walt Disney Company ............................................... 2,000 58,500
----------
Financial - Banks, Commercial - 1.16%
Wachovia Corporation .................................................. 600 52,950
----------
Financial - Banks, Money Center - 2.87%
Bank of America ....................................................... 1,000 64,688
Citigroup Inc. ........................................................ 1,000 66,250
----------
130,938
----------
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Financial Services - 1.39%
The Charles Schwab Corporation ........................................ 600 $ 63,450
----------
Food - Processing - 2.57%
Campbell Soup Company ................................................. 1,300 57,363
Sara Lee Corporation .................................................. 2,500 60,000
----------
117,363
----------
Food - Wholesale - 2.38%
Best Foods ............................................................ 1,300 65,000
Wm. Wrigley Jr. Company ............................................... 500 43,531
----------
108,531
----------
Foreign Securities - 2.55%
Koninklijke (Royal) Philips Electronics N.V. - ADR .................... 600 51,600
Telefonaktiebolaget LM Ericsson - ADR ................................. 2,400 64,650
----------
116,250
----------
Household Products & Housewares - 2.15%
The Procter & Gamble Company .......................................... 1,050 98,044
----------
Insurance - Multiline - 1.50%
American International Group, Inc. .................................... 600 68,587
----------
Medical - Biotechnology - 1.64%
Pfizer, Inc. .......................................................... 700 74,900
----------
Medical - Hospital Management & Services - 1.28%
United HealthCare Corporation ......................................... 1,000 58,250
----------
Medical Supplies - 1.42%
Johnson & Johnson ..................................................... 700 64,837
----------
Miscellaneous - Manufacturing - 1.50%
Minnesota Mining and Manufacturing Company ............................ 800 68,600
----------
Office & Business Equipment - 1.97%
Xerox Corporation ..................................................... 1,600 89,900
----------
Oil & Gas - Equipment & Services - 1.32%
Schlumberger Limited .................................................. 1,000 60,187
----------
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Oil & Gas - International - 1.57%
Exxon Corporation ..................................................... 900 $ 71,775
----------
Pharmaceuticals - 3.28%
Bristol-Myers Squibb Company .......................................... 1,000 68,750
Merck & Co., Inc. ..................................................... 1,200 81,000
----------
149,750
----------
Restaurants & Food Services - 1.52%
McDonald's Corporation ................................................ 1,800 69,300
----------
Retail - Apparel - 0.72%
(a)Venator Group, Inc. ................................................... 3,000 32,812
----------
Retail - Department Stores - 1.12%
Wal-Mart Stores, Inc. ................................................. 1,200 51,150
----------
Retail - Specialty Line - 1.50%
The Home Depot, Inc. .................................................. 1,200 68,250
----------
Telecommunications Equipment - 1.50%
Lucent Technologies, Inc. ............................................. 1,200 68,250
----------
Transportation - Air - 1.45%
(a)FDX Corporation ....................................................... 1,200 66,075
----------
Utilities - Telecommunications - 4.34%
AT&T Corporation ...................................................... 1,200 66,750
Bell South Corporation ................................................ 1,500 70,781
MCI WorldCom, Inc. .................................................... 700 60,463
----------
197,994
----------
Total Common Stocks (Cost $3,039,183) ................................. 3,038,338
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Maturity
Principal Rate Date
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 14.13%
Bank of America .......................... $ 50,000 6.875 % 02/15/2005 50,717
Bank of America .......................... 50,000 6.125 % 07/15/2004 49,254
Commercial Credit Company ................ 50,000 6.250 % 01/01/2008 48,758
Duke Capital Corporation ................. 100,000 6.250 % 07/15/2005 97,390
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Maturity Value
Principal Rate Date (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (Continued)
Ford Motor Credit Company ................ $ 50,000 6.375 % 10/06/2000 $ 50,330
Ford Motor Credit Company ................ 50,000 6.000 % 01/14/2003 49,435
General Motors Acceptance Corporation .... 50,000 6.150 % 04/05/2007 48,675
General Motors Acceptance Corporation .... 50,000 6.000 % 02/01/2002 49,875
Merrill Lynch & Company .................. 50,000 6.000 % 11/15/2004 48,926
SBC Communications ....................... 50,000 6.250 % 03/01/2005 49,875
The Walt Disney Company .................. 50,000 6.375 % 03/30/2001 50,500
Wal-Mart Stores, Inc. .................... 50,000 6.500 % 06/01/2003 50,695
----------
Total Corporate Obligations (Cost $655,151) ........................................................ 644,430
----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 9.93%
United States Treasury Note .............. 50,000 5.625 % 02/15/2006 49,594
United States Treasury Note .............. 50,000 6.250 % 02/15/2007 51,359
United States Treasury Note .............. 50,000 5.500 % 03/31/2003 49,734
United States Treasury Note .............. 50,000 5.250 % 05/15/2004 49,293
United States Treasury Note .............. 50,000 6.000 % 07/31/2002 50,578
United States Treasury Note .............. 50,000 5.750 % 08/15/2003 50,141
United States Treasury Note .............. 50,000 6.500 % 10/15/2006 52,000
United States Treasury Note .............. 50,000 5.875 % 11/15/2005 50,281
United States Treasury Note .............. 50,000 5.625 % 12/31/2002 49,984
----------
Total U.S. Government and Agency Obligations (Cost $458,968) ....................................... 452,964
----------
----------
INVESTMENT COMPANIES - 6.48% Shares
----------
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ................................. 198,432 198,432
Evergreen Money Market Treasury Institutional Treasury
Money Market Fund Institutional Service Shares ........................... 97,228 97,228
----------
Total Investment Companies (Cost $295,660) ............................... 295,660
----------
Total Value of Investments (Cost $4,448,962 (b)) .................................... 97.14% $4,431,392
Other Assets Less Liabilities ....................................................... 2.86% 130,565
------ ----------
Net Assets ..................................................................... 100.00% $4,561,957
====== ==========
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ............................................................................. $ 114,929
Unrealized depreciation ............................................................................. (132,499)
----------
Net unrealized depreciation .......................................................... $ (17,570)
==========
The following acronym is used in this portfolio:
ADR - American Depository Receipt
See accompanying notes to financial statements
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BLUE RIDGE TOTAL RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
(Unaudited)
ASSETS
Investments, at value (cost $4,448,962) ......................................................... $ 4,431,392
Cash ............................................................................................ 110,030
Income receivable ............................................................................... 21,210
Prepaid expenses ................................................................................ 981
Due from advisor (note 2) ....................................................................... 3,742
-----------
Total assets ............................................................................... 4,567,355
-----------
LIABILITIES
Accrued expenses ................................................................................ 5,398
-----------
NET ASSETS
(applicable to 410,311 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ......................................... $ 4,561,957
===========
NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE
($4,561,957 / 410,311 shares) ................................................................... $ 11.12
===========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................. $ 4,553,255
Undistributed net investment income ............................................................. 754
Undistributed net realized gain on investments .................................................. 25,518
Net unrealized depreciation on investments ...................................................... (17,570)
-----------
$ 4,561,957
===========
See accompanying notes to financial statements
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BLUE RIDGE TOTAL RETURN FUND
STATEMENT OF OPERATIONS
Period ending May 31, 1999
(Unaudited)
INVESTMENT INCOME
Income
Interest ....................................................................................... $ 5,550
Dividends ...................................................................................... 13,624
--------
Total income ............................................................................. 19,174
--------
Expenses
Investment advisory fees (note 2) .............................................................. 14,604
Fund administration fees (note 2) .............................................................. 731
Legal fees ..................................................................................... 1,421
Audit fees ..................................................................................... 1,527
Fund accounting fees (note 2) .................................................................. 4,500
Custody fees ................................................................................... 1,000
Securities pricing fees ........................................................................ 562
Shareholder recordkeeping fees ................................................................. 1,500
Registration and filing administration fees .................................................... 288
Shareholder servicing expenses ................................................................. 895
Registration and filing expenses ............................................................... 1,515
Trustee fees and meeting expenses .............................................................. 268
Printing expenses .............................................................................. 585
Other operating expenses ....................................................................... 359
--------
Total expenses ........................................................................... 29,755
--------
Less:
Expense reimbursements (note 2) ..................................................... (6,914)
Investment advisory fees waived (note 2) ............................................ (4,421)
--------
Net expenses ............................................................................. 18,420
--------
Net investment income ............................................................... 754
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ...................................................... 28,061
Decrease in unrealized depreciation on investments .................................................. 38,290
--------
Net realized and unrealized gain on investments ................................................ 66,351
--------
Net increase in net assets resulting from operations ..................................... $ 67,105
========
See accompanying notes to financial statements
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BLUE RIDGE TOTAL RETURN FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Period ended
May 31, November 30,
1999 1998 (b)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ................................................................ $ 754 $ 1,229
Net realized gain (loss) from investment transactions ................................ 28,061 (2,543)
(Decrease) increase in unrealized depreciation on investments ........................ 38,290 (55,860)
----------- -----------
Net increase (decrease) in net assets resulting from operations ................. 67,105 (57,174)
----------- -----------
Distributions to shareholders from
Net investment income ................................................................ 0 (1,229)
----------- -----------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................. 2,862,445 1,690,810
----------- -----------
Total increase in net assets ............................................... 2,929,550 1,632,407
NET ASSETS
Beginning of period ...................................................................... 1,632,407 0
----------- -----------
End of period (including undistributed net investment income of $754 in 1999) ............ $ 4,561,957 $ 1,632,407
=========== ===========
(a) A summary of capital share activity follows:
------------------------------------------------------------------------------------
Period ended Period ended
May 31, 1999 November 30, 1998 (b)
Shares Value Shares Value
------------------------------------------------------------------------------------
Shares sold .................................... 273,478 $ 3,077,843 155,940 $ 1,690,441
Shares issued for reinvestment
of distributions .......................... 0 0 107 1,229
----------- ----------- ----------- -----------
273,478 3,077,843 156,047 1,691,670
Shares redeemed ................................ (19,138) (215,398) (77) (860)
----------- ----------- ----------- -----------
Net increase .............................. 254,340 $ 2,862,445 155,970 $ 1,690,810
=========== =========== =========== ===========
(b) For the period from December 1, 1997 (initial seed date) to November 30, 1998.
See accompanying notes to financial statements
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BLUE RIDGE TOTAL RETURN FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Period ended
May 31, November 30,
1999 1998 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .................................................... $ 10.47 $ 10.00
Income from investment operations
Net investment income ..................................................... 0.00 0.02
Net realized and unrealized gain on investments (c) ....................... 0.65 0.47
----------- -----------
Total from investment operations ................................... 0.65 0.49 (b)
----------- -----------
Distributions to shareholders from
Net investment income ..................................................... (0.00) (0.02)
----------- -----------
Net asset value, end of period .......................................................... $ 11.12 $ 10.47
=========== ===========
Total return ............................................................................ 6.21 % 4.86 %
=========== ===========
Ratios/supplemental data
Net assets, end of period ........................................................ $ 4,561,957 $ 1,632,407
=========== ===========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ............................. 2.45 % (d) 1.65 % (d)
After expense reimbursements and waived fees .............................. 1.52 % (d) 1.58 % (d)
Ratio of net investment (loss) income to average net assets
Before expense reimbursements and waived fees ............................. (0.88)% (d) 0.03 % (d)
After expense reimbursements and waived fees .............................. 0.06 % (d) 0.10 % (d)
Portfolio turnover rate .......................................................... 130.94 % 116.16 %
(a) For the period from December 15, 1997 (commencement of operations) to November 30, 1998.
(b) Includes undistributed net investment income of $0.00 per share and undistributed net realized gains and unrealized
gains of $0.00 per share, from December 1, 1997 (initial seed date) through December 15, 1997 (commencement of
operations).
(c) The amount shown in this caption for a share outstanding does not correspond with the aggregate net realized and
repurchases of fund shares in relation to fluctuating market values of the investments of the fund. Net realized and
unrealized loss of investments includes gains of $0.82 per share due to market appreciation during the period and
losses of $0.35 due to market depreciation during the period.
(d) Annualized.
See accompanying notes to financial statements
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BLUE RIDGE TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Blue Ridge Total Return Fund (the "Fund") is a diversified
series of shares of beneficial interest of the Blue Ridge Funds
Trust (the "Trust"). The Trust, an open-ended investment company,
was organized on September 30, 1997 as a Delaware Business Trust
and is registered under the Investment Company Act of 1940, as
amended. The investment objective of the Fund is to seek total
return from a combination of capital appreciation and current
income. The Fund began operations on December 15, 1997. The
following is a summary of significant accounting policies followed
by the Fund.
A. Security Valuation - The Fund's investments in securities
are carried at value. Securities listed on an exchange or
quoted on a national market system are valued at the last
sales price as of 4:00 p.m. New York time on the day of
valuation. Other securities traded in the over-the-counter
market and listed securities for which no sale was reported
on that date are valued at the most recent bid price.
Securities for which market quotations are not readily
available, if any, are valued by using an independent
pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost
which approximates value.
B. Federal Income Taxes - It is the policy of the Fund to
comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and to make
sufficient distributions of taxable income to relieve it
from all federal income taxes.
Net investment income (loss) and net realized gains (losses)
may differ for financial statement and income tax purposes
primarily because of losses incurred subsequent to October
31, which are deferred for income tax purposes. The
character of distributions made during the year from net
investment income or net realized gains may differ from
their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ
from the year that the income or realized gains were
recorded by the Fund.
C. Investment Transactions - Investment transactions are
recorded on the trade date. Realized gains and losses are
determined using the specific identification cost method.
Interest income is recorded daily on the accrual basis.
Dividend income is recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends quarterly, payable in March, June, September and
December, on a date selected by the Trust's Trustees. In
addition, distributions may be made annually in December out
of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the
ex-dividend date. The Fund may make a supplemental
distribution subsequent to the end of its fiscal year ending
November 30.
E. Use of Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amount of assets, liabilities, expenses and
revenues reported in the financial statements. Actual
results could differ from those estimates.
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
F. Options Transactions - The Fund may write put and call
options only if such options are considered to be covered. A
written call option is considered to be covered when the
writer of the call option owns throughout the option period
the security on which the option is written. A written put
option is considered covered when the writer of the put has
deposited and maintained in a segregated account throughout
the option period sufficient cash or other liquid assets in
an amount equal to or greater than the exercise price of the
put option. The Fund may purchase put options and purchase
call options only to close open positions.
When the Fund writes a covered call or put option, an amount
equal to the premium received is included in the statement
of assets and liabilities as a liability. The amount of the
liability is subsequently marked-to-market to reflect the
current market value of the option. If an option expires on
its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized. If
a written call option is exercised, a gain or loss is
realized for the sale of the underlying security and the
proceeds from the sales are increased by the premium
originally received. If a written put option is exercised,
the cost of the security acquired is decreased by the
premium originally received. As writer of an option, the
Fund has no control over whether the underlying securities
are subsequently sold (call) or purchased (put) and, as a
result, bears the market risk of an unfavorable change in
the price of the security underlying the written option.
When the Fund purchases a call or put option, an amount
equal to the premium paid is included in the Fund's
statement of assets and liabilities as an investment, and is
subsequently marked-to-market to reflect the current market
value of the option. If an option expires on the stipulated
expiration date or if the Fund enters into a closing sale
transaction, a gain or loss is realized. If the Fund
exercises a call the cost of the security acquired is
increased by the premium paid for the call. If a Fund
exercises a put option, a gain or loss is realized from the
sale of the underlying security, and the proceeds from such
sale are decreased by the premium originally paid. Written
and purchased options are non-income producing securities.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Blue Ridge Advisors,
Inc. (the "Manager") provides the Fund with a continuous program
of supervision of the Fund's assets, including the composition of
its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and
sale of securities. Colonial Asset Management became the Fund's
advisor (the "Manager") on April 1, 1999. Prior to that date, Blue
Ridge Advisors, Inc. served as the Fund's Advisor. As compensation
for its services, from December 1, 1998 to March 31, 1999 the Blue
Ridge Advisors, Inc. received a fee at the annual rate of 1.65% of
the first $20 million of the average daily net assets of the Fund
and 1.20% of average daily net assets over $20 million. As
compensation for its services, beginning April 1, 1999, the
Manager receives a fee at the annual rate of 0.750% of the Fund's
average daily net assets up to and including $20 million, 0.625%
of the Fund's average daily net assets on the next $30 million,
and 0.500% of the Fund's average daily net assets over $50
million. The Manager currently intends to voluntarily waive a
portion of its fee and to reimburse the Fund for expenses as
necessary to limit total Fund operating expenses to 1.45% of the
average daily net assets of the Fund. There can be no assurance
that the foregoing voluntary fee waivers will continue.
(Continued)
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BLUE RIDGE TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
The Fund's administrator, The Nottingham Company (the
"Administrator"), provides administrative services to and is
generally responsible for the overall management and day-to-day
operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. The Administrator was
compensated by the Manager and not directly by the Fund from
December 1, 1998 to March 31, 1999. Beginning April 1, 1999 as
compensation for its services, the Administrator receives a fee at
the annual rate of 0.150% of the Fund's first $100 million of
average daily net assets, and 0.125% of average daily net assets
over $100 million. The Administrator also receives a monthly fee
of $2,000 for accounting and recordkeeping services. The contract
with the Administrator provides that the aggregate fees for the
aforementioned administration, accounting and recordkeeping
services shall not be less than $3,000 per month. The
Administrator also charges the Fund for certain expenses involved
with the daily valuation of portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent")
serves as the Fund's transfer, dividend paying, and shareholder
servicing agent. The Transfer Agent, subject to the authority of
the Board of Trustees, provides transfer agency services pursuant
to an agreement with the Administrator, which has been approved by
the Trust. The Transfer Agent maintains the records of each
shareholder's account, answers shareholder inquiries concerning
accounts, processes purchases and redemptions of the Fund shares,
acts as dividend and distribution disbursing agent, and performs
other shareholder servicing functions.
Capital Investment Group, Inc. (the "Distributor"), serves as the
Fund's principal underwriter and distributor. The Distributor may
sell Fund shares to or through qualified securities dealers or
others. With respect to the Class NL shares, the Distributor
receives no compensation from the Fund. Certain Trustees and
officers of the Trust are also officers of the Manager, the
Distributor or the Administrator.
NOTE 3 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term
investments, aggregated $5,424,183 and $2,678,884, respectively,
for the period ended May 31, 1999.
