________________________________________________________________________________
BLUE RIDGE TOTAL RETURN FUND
________________________________________________________________________________
a series of the Blue Ridge Funds Trust
Semi-Annual Report 2000
FOR THE PERIOD ENDED MAY 31
INVESTMENT ADVISOR
Colonial Asset Management, Inc.
359 South Pine Street
P.O. Box 1724
Spartanburg, South Carolina 29304
BLUE RIDGE TOTAL RETURN FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-800-525-3863
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Fund. This report is not
authorized for distribution to prospective investors in the Fund unless preceded
or accompanied by an effective prospectus. Mutual fund shares are not deposits
or obligations of, or guaranteed by, any depository institution. Shares are not
insured by the FDIC, Federal Reserve Board or any other agency, and are subject
to investment risks, including possible loss of principal amount invested.
Neither the fund nor the fund's distributor is a bank.
For more information about the Blue Ridge Total Return Fund, including charges
and expenses, call the fund for a free prospectus. You should read the
prospectus carefully before you invest or send money.
<PAGE>
COLONIAL ASSET MANAGEMENT, INC.
H. Walter Barre 359 South Pine Street
Barry D. Wynn P.O. Box 1724
Johnnie M. Walters Spartanburg, SC 29304
(864) 582-3356
Following a series of six interest rate increases by the Federal Reserve, the
economy showed signs of slowing as the second quarter ended.
Consumer spending appears to be slowing from its previous robust levels as
higher rates on mortgages and consumer loans impact buying plans. Housing starts
declined in May by 3.9% from April levels and retail sales fell .3%, the second
consecutive monthly decline. Also, auto sales suggested a beginning of
retrenchment in new car purchases. Households have steadily reduced their
savings rates over the last few years as they spent more and more of their
income and assumed more consumer debt. Higher interest rates on this debt may
contribute to a slowdown.
The soft landing that the Fed is aiming for should reduce real economic growth
to a sustainable 3% rate of expansion as we approach next year. This should take
some pressure off inflation, increase personal savings rates, and improve the
disturbing deficit in our nation's balance of payments.
The equity markets refocused on fundamentals during the second quarter as
investors lost patience with companies with disappointing announcements or
preannouncements of earnings. Favorite technology stocks of 1999 like Novell and
Qualcomm were down over 60% during the quarter. The Dow Jones Industrial Average
fell 4.34%, the Standard and Poor 500 dropped 2.93%, and the Nasdaq Composite
was down 13.27% for the quarter. The best performing groups during the quarter
were drug and food stocks led by Johnson and Johnson (up 45%) and by Best Foods
and Nabisco with their merger announcements.
The technology stock sell-off was a result of a combination of three factors.
First, evaluations of many tech stocks had become vastly inflated. Second, the
Justice Department's assault against technology bellwether Microsoft; and,
third, the interest rate increases by the Federal Reserve. This market action
should actually be healthy for stocks over the long term, as investors grow more
realistic with their expectation. Stock prices based on realistic fundamentals
instead of lofty dreams form a more solid foundation for equity markets.
As we move to the next market phase during the second half of 2000, we expect
more conversation about earnings growth and strong balance sheets, and less
conversation about "new economy" versus "old economy". Strong market performance
in this phase will be based more on anticipated results and less on sector
association. In this environment, investors will gradually adjust their
expectation of equity returns to more realistic levels.
/s/ Barry D. Wynn
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 2000
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 72.54%
Beverages - 3.27%
The Coca-Cola Company .................................................. 2,500 $ 133,437
PepsiCo, Inc. .......................................................... 3,500 142,406
----------
275,843
----------
Brewery - 1.37%
Anheuser-Busch Companies, Inc. ......................................... 1,500 115,969
----------
Computer Software & Services - 6.59%
(a)America Online, Inc. ................................................... 1,750 92,750
(a)Cisco Systems, Inc. .................................................... 4,600 262,200
(a)Microsoft Corporation .................................................. 1,500 93,844
(a)Oracle Corporation ..................................................... 1,500 107,812
----------
556,606
----------
Computers - 3.89%
EMC Corporation ........................................................ 1,300 150,800
International Business Machines ........................................ 800 85,850
(a)Sun Microsystems, Inc. ................................................ 1,200 91,950
----------
328,600
----------
Cosmetics & Personal Care - 2.94%
Colgate-Palmolive Company .............................................. 2,500 131,562
Gillette Company ....................................................... 3,500 116,813
----------
248,375
----------
Electronics - 3.47%
General Electric Company ............................................... 3,300 173,456
Hewlett-Packard Company ................................................ 1,000 120,125
----------
293,581
----------
Electronics - Semiconductor - 4.40%
Intel Corporation ...................................................... 2,000 249,250
Motorola, Inc. ......................................................... 1,300 122,200
----------
371,450
----------
Entertainment - 2.00%
The Walt Disney Company ................................................ 4,000 168,750
----------
Financial - Banks, Money Center - 6.05%
Bank of America Corporation ............................................ 3,000 166,687
Citigroup Inc. ......................................................... 2,750 171,016
Wachovia Corporation ................................................... 2,500 172,812
----------
510,515
----------
Food - Processing - 0.64%
Sara Lee Corporation ................................................... 3,000 54,000
----------
Food - Wholesale - 3.43%
Bestfoods .............................................................. 3,000 193,500
Wm. Wrigley Jr. Company ................................................ 1,200 96,075
----------
289,575
----------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 2000
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Foreign Securities - 5.61% (c)
Grupo Televisa S.A. - GDR .............................................. 1,500 $ 83,531
Koninklijke (Royal) Philips Electronics N.V. - NY SH ................... 3,808 168,266
Telefonaktiebolaget LM Ericsson AB - ADR ............................... 10,800 221,400
----------
473,197
----------
Household Products & Housewares - 1.58%
The Procter & Gamble Company ........................................... 2,000 133,000
----------
Insurance - Multiline - 2.00%
American International Group, Inc. ..................................... 1,500 168,844
----------
Medical - Biotechnology - 1.58%
Pfizer Inc. ............................................................ 3,000 133,687
----------
Medical - Hospital Management & Services - 1.77%
UnitedHealth Group Incorporated ........................................ 2,000 149,125
----------
Medical Supplies - 2.12%
Johnson & Johnson ...................................................... 2,000 179,000
----------
Miscellaneous - Manufacturing - 0.81%
Minnesota Mining and Manufacturing Company ............................. 800 68,600
----------
Oil & Gas - Equipment & Services - 1.31%
Schlumberger Limited ................................................... 1,500 110,344
----------
Oil & Gas - Exploration - 0.14%
Transocean Sedco Forex Inc. ............................................ 232 11,411
----------
Oil & Gas - International - 1.78%
Exxon Mobil Corporation ................................................ 1,800 149,963
----------
Pharmaceuticals - 3.59%
Bristol-Myers Squibb Company ........................................... 2,800 154,175
Merck & Co., Inc. ...................................................... 2,000 149,250
----------
303,425
----------
Restaurant & Food Services - 1.27%
McDonald's Corporation ................................................. 3,000 107,438
----------
Retail - Department Stores - 1.71%
Wal-Mart Stores, Inc. .................................................. 2,500 144,063
----------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 2000
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Retail - Specialty Lines - 1.48%
The Home Depot, Inc. ................................................... 2,550 $ 124,631
----------
Telecommunications Equipment - 3.45%
(a)JDS Uniphase Corporation ............................................... 1,000 88,000
Lucent Technologies Inc. ............................................... 2,500 143,437
(a)QUALCOMM Inc ........................................................... 900 59,738
----------
291,175
----------
Transportation - Miscellaneous - 1.42%
United Parcel Service, Inc. ............................................ 2,000 119,750
----------
Utilities - Telecommunications - 2.87%
AT&T Corp. ............................................................. 1,500 52,031
BellSouth Corporation .................................................. 2,500 116,719
(a)WorldCom, Inc. ......................................................... 1,950 73,369
----------
242,119
----------
Total Common Stocks (Cost $5,621,613) .......................................................... 6,123,036
----------
------------------------------------------------------------------------------------------------------------------------------------
Interest Maturity
Principal Rate Date
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 25.60%
Bank of America ............................. $200,000 7.125% 03/01/09 188,028
CIT Group Inc ............................... 250,000 7.250% 08/15/05 238,871
CNF Transportation .......................... 250,000 8.875% 05/01/10 242,757
Duke Capital Corporation .................... 200,000 7.250% 10/01/04 194,758
General Electric Cap Corporation ............ 200,000 6.500% 11/01/06 189,802
Goldmas Sachs Group Incorporated ............ 500,000 7.800% 01/28/10 482,567
Lehman Brothers Holdings .................... 250,000 7.875% 11/01/09 238,056
SBC Commun Capital Corporation .............. 250,000 7.350% 05/24/10 245,061
Texaco Capital Incorporated ................. 150,000 7.250% 01/10/10 141,373
----------
Total Corporate Obligations (Cost $2,239,085) ....................................................... 2,161,273
----------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
May 31, 2000
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY - 1.47%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ............................... 124,404 $ 124,404
(Cost $124,404) ----------
Total Value of Investments (Cost $7,985,102 (b)) ................................... 99.61% $8,408,713
Other Assets Less Liabilities ...................................................... 0.39% 32,683
------ ----------
Net Assets .................................................................. 100.00% $8,441,396
====== ==========
(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 .......................................................................... $ 997,055
Unrealized depreciation .......................................................................... (573,444)
----------
Net unrealized appreciation ...................................................... $ 423,611
==========
(c) Foreign securities represent securities issued in the United States markets by non-domestic companies.
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
(Unaudited)
ASSETS
Investments, at value (cost $7,985,102) ......................................................... $8,408,713
Cash ............................................................................................ 79
Income receivable ............................................................................... 42,835
----------
Total assets ............................................................................... 8,451,627
----------
LIABILITIES
Accrued expenses ................................................................................ 9,548
Other liabilities ............................................................................... 683
----------
Total liabilities .......................................................................... 10,231
----------
NET ASSETS
(applicable to 733,708 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ......................................... $8,441,396
==========
NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE
($8,441,396 / 733,708 shares) ................................................................... $11.51
==========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................. $8,274,421
Undistributed net investment income ............................................................. 22,026
Accumulated net realized loss on investments .................................................... (278,662)
Net unrealized appreciation on investments ...................................................... 423,611
----------
$8,441,396
==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
STATEMENT OF OPERATIONS
Period ended May 31, 2000
(Unaudited)
INVESTMENT INCOME
Income
Interest ....................................................................................... $ 67,967
Dividends ...................................................................................... 38,891
---------
Total income ............................................................................. 106,858
---------
Expenses
Investment advisory fees (note 2) .............................................................. 30,041
Fund administration fees (note 2) .............................................................. 5,019
Custody fees ................................................................................... 2,520
Registration and filing administration fees (note 2) ........................................... 827
Fund accounting fees (note 2) .................................................................. 13,500
Audit fees ..................................................................................... 5,050
Legal fees ..................................................................................... 4,250
Securities pricing fees ........................................................................ 2,700
Shareholder recordkeeping fees ................................................................. 4,500
Shareholder servicing expenses ................................................................. 3,361
Registration and filing expenses ............................................................... 3,000
Printing expenses .............................................................................. 1,750
Trustee fees and meeting expenses .............................................................. 3,000
Other operating expenses ....................................................................... 950
---------
Total expenses ........................................................................... 80,468
---------
Less investment advisory fees waived (note 2) ............................................ (22,405)
---------
Net expenses ............................................................................. 58,063
---------
Net investment income ............................................................... 48,795
---------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss from investment transactions ...................................................... (238,137)
Increase in unrealized appreciation on investments .................................................. 56,577
---------
Net realized and unrealized loss on investments ................................................ (181,560)
---------
Net decrease in net assets resulting from operations ..................................... (132,765)
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Period ended Year ended
May 31, November 30,
2000 1999
------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ....................................................... $ 48,795 $ 25,619
Net realized loss from investment transactions .............................. (238,137) (37,982)
Increase in unrealized appreciation on investments .......................... 56,577 422,894
---------- ----------
Net (decrease) increase in net assets resulting from operations ......... (132,765) 410,531
---------- ----------
Distributions to shareholders from
Net investment income ....................................................... (36,644) (15,744)
---------- ----------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ........ 2,259,546 4,324,065
---------- ----------
Total increase in net assets ....................................... 2,090,137 4,718,852
NET ASSETS
Beginning of period .............................................................. 6,351,259 1,632,407
---------- ----------
End of period (including undistributed net investment income of
$22,026 at May 31, 2000 and $9,875 at November 30, 1999)........... $8,441,396 $6,351,259
========== ==========
(a) A summary of capital share activity follows:
-----------------------------------------------------------------------------
Period ended Year ended
May 31, 2000 November 30, 1999
Shares Value Shares Value
-----------------------------------------------------------------------------
Shares sold ............................. 253,848 $3,027,470 547,703 $6,133,477
Shares issued for reinvestment
of distributions ................... 3,032 36,644 1,441 15,745
---------- ---------- ---------- ----------
256,880 3,064,114 549,144 6,149,222
Shares redeemed ......................... (68,235) (804,568) (160,051) (1,825,157)
---------- ---------- ---------- ----------
Net increase ....................... 188,645 $2,259,546 389,093 $4,324,065
========== ========== ========== ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BLUE RIDGE TOTAL RETURN FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Period ended Year ended Period ended
May 31, November 30, November 30,
2000 1999 1998 (a)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ............................ $11.65 $10.47 $10.00
Income from investment operations
Net investment income ................................ 0.06 0.05 0.02
Net realized and unrealized (loss) gain on investments (0.15) 1.16 0.47
---------- ---------- ----------
Total from investment operations ................ (0.09) 1.21 0.49
---------- ---------- ----------
Distributions to shareholders from
Net investment income ................................ (0.05) (0.03) (0.02)
---------- ---------- ----------
Net asset value, end of period .................................. $11.51 $11.65 $10.47
========== ========== ==========
Total return .................................................... (0.75)% 11.58 % 4.86 %
========== ========== ==========
Ratios/supplemental data
Net assets, end of period ................................. $8,441,396 $6,351,259 $1,632,407
========== ========== ==========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ........ 2.00 %(b) 2.60 % 1.65 %(b)
After expense reimbursements and waived fees ......... 1.45 %(b) 1.48 % 1.58 %(b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ........ 0.66 %(b) (0.47)% 0.03 %(b)
After expense reimbursements and waived fees ......... 1.22 %(b) 0.65 % 0.10 %(b)
Portfolio turnover rate ................................... 39.08 % 85.51 % 116.16 %
(a) From the period from December 15, 1997 (commencement of operations) to November 30, 1998.
(b) Annualized.
See accompanying notes to financial statements
</TABLE>
<PAGE>
BLUE RIDGE TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
(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)
<PAGE>
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, Colonial Assets
Management, 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. As compensation for its
services, 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.
The Manager has voluntarily waived a portion of its fee amounting
to $22,405 ($0.03 per share) for the period ended May 31, 2000.
(Continued)
<PAGE>
BLUE RIDGE TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (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. As compensation for its
services, the Administrator receives a fee at the annual rate of
0.125% of the Fund's first $50 million of average daily net
assets, 0.100% on the next $50 million, and 0.075% of average
daily net assets over $100 million. The Administrator also
receives a monthly fee of $2,250 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 $5,242,361 and $3,112,740, respectively,
for the period ended May 31, 2000.
