ALPHA ANALYTICS
INVESTMENT TRUST
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
ALPHA ANALYTICS DIGITAL FUTURE FUND
SEMI-ANNUAL REPORT
JANUARY 31, 2000
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
Alpha Analytics Value Fund
Alpha Analytics Small Cap Quant Fund
Alpha Analytics Digital Future Fund
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
February 29, 2000
Dear Fellow Shareholders:
This letter covers the six month period from July 31, 1999 through January 31,
2000. It is an integral part of the Alpha Analytics Mutual Funds' semi-annual
report.
The Alpha Analytics Value Fund and the Alpha Analytics Small Cap Quant Fund
finished their first full year of operations in December, 1999.
Our funds started to be regularly tracked by Lipper and Morningstar. This allows
potential shareholders to easily compare the Alpha Analytics mutual funds with
their peers.
Several exciting things happened during the last six months. Let me share some
of them with you.
The performance of the Alpha Analytics Small Cap Quant Fund over the 12 months
ending January 31, 2000, has been disappointing. Its return was -3.07%.
Morningstar ranks it in the bottom 10% of all Small Cap Blend Funds for this
period. Because of these disappointing results, we reviewed the quantative model
we had been using and changed it significantly. The performance over shorter and
more recent time periods tells a different story. Over the three months ending
January 31, 2000, Morningstar ranks the Small Cap Quant Fund in the top 37%, and
for the month of January, 2000 in the top 17% of Small Cap Blend Funds. We
believe that this improvement in performance is due to the refinement in our
quantatively based investment strategy which we have been implementing since
September, 1999. This refinement uses a more complex quantative model looking at
over 50 factors to determine which stocks to buy and which stocks to sell. We
have gradually been selling stocks which we bought earlier in the year, and
investing the money using our newly refined proprietary model. At the end of
January, 2000, approximately 75% of the Alpha Analytics Small Cap Quant
portfolio was invested using the more complex strategy. By the end of the
current fiscal year (July 31, 2000) the portfolio will be close to 100% invested
using the refined quantitative discipline.
The Alpha Analytics Value Fund had an extraordinary first year, returning 46.73%
for the calendar year ending on December 31, 1999. The Value Fund was the top
performing Large Cap Value Fund as determined by both Morningstar and Lipper.
Over this same period the return for the S&P500 was 21.04%. The average return
of all Large Cap Value mutual funds followed by Morningstar was 6.59%. This
strong performance of the Alpha Analytics Value Fund relative to its peers has
continued into the new year. The Value Fund remains the top performing Large Cap
Value Mutual Fund for the one year period ending January 31, 2000.
<PAGE>
On December 22, 1999 we added a new fund to our family: The Alpha Analytics
Digital Future Fund. This Fund is off to a strong start, returning 13.70% from
inception through January 31, 2000. For the month of January this Fund finished
in the top 6% of Tech sector funds followed by Morningstar. This Fund is team
managed by myself, Michael Cohen and John Gipson. In picking stocks we employ
our own unique hybrid approach. We start with our vision of the future of
information technology, and pick companies that we believe will be leaders in
the information technology sector. These stocks are then tested using our
proprietary quantitative model developed specifically for the tech sector. This
model aids us in determining which stocks we should buy (or sell), and how large
a position to establish in each. We are pleased with the results to date.
Our website (WWW.ALPHAANALYTICS.COM) continues to be an extremely important
channel for communication. We encourage you to visit us there. Prospectuses and
account applications can be directly downloaded from the website. The daily Net
Asset Values ("NAV") and performance figures are updated on a daily basis. We
have had virtual visitors from around the world, including Indonesia, Japan,
Sweden, and more than 20 other countries. In January our website was finally
listed on Yahoo. Following this we were picked up by several other search
engines. This had an immediate impact on traffic to the website. Web hits
increased from less than 5 per day to about 200 per day in the period
immediately following our inclusion on Yahoo. Things have fallen off since then,
but we seem to have stabilized at about 50 visits per day. We continue to work
on publicizing our website with other search engines. We answer all email that
originates from the website, and welcome suggestions from you on how we can
improve the website and our customer service.
I started this letter by addressing you as "Fellow Shareholders". I personally
own substantial shares in all three funds. This is true of our portfolio
managers as well. We invest this money like our own because our money is
invested side-by-side with yours.
Thanks again for choosing Alpha Analytics Mutual Funds as one of your investment
vehicles. Some closing thoughts. Are we concerned by the very high valuations in
the large cap tech sector? Yes, we are. Do we think this means you should
abandon your long-term investment strategy and move to cash? No, we don't. The
basics of successful long-term investing remain: knowing your own tolerance for
risk and desire for reward, careful planning, diligent implementation,
persistent patience and appropriate diversification. Don't let short term market
volatility (either up or down) knock you off your well thought out long term
investment plans.
Best regards,
Robert Gipson
President
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
VALUE FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(UNAUDITED)
MARKET
SHARES VALUE
------ -----
COMMON STOCKS - 99.16%
APPAREL MANUFACTURERS - 3.56%
<C> <S> <C>
3,000+ Jones Apparel Group, Inc. ......................... $ 66,000
4,100 Warnaco Group, Inc. ............................... 42,794
-----------
108,794
-----------
BANKING - 2.09%
1,900 First Union Corporation ........................... 63,769
-----------
BASIC MATERIALS - 2.22%
1,500 Minerals Technologies, Inc. ....................... 67,688
-----------
BEVERAGES - 3.17%
3,200 Diageo PLC- Sposored ADR .......................... 96,600
-----------
COMMERCIAL SERVICES - 6.36%
2,500 First Data Corporation ............................ 122,656
2,000 Manpower, Inc. .................................... 71,375
-----------
194,031
-----------
COMMUNICATION SERVICES - 3.98
2,300 AT&T Corporation .................................. 121,325
-----------
COMPUTER HARDWARE - 6.82%
7,600 Compaq Computer Corporation ....................... 208,050
-----------
COMPUTER NETWORKS - 16.28%
5,700+ 3Com Corporation .................................. 289,275
6,200+ Novell, Inc. ...................................... 206,925
-----------
496,200
COMPUTER SOFTWARE & PROGRAMMI -----------
2,000+ J.D. Edwards & Company ............................ 59,625
1,000+ Oracle Corporation ................................ 49,953
2,700+ Synopsys, Inc. .................................... 124,706
-----------
234,284
-----------
ELECTRICAL EQUIPMENT - 3.12%
644 Knoninklijke Philips Electronics N.V .............. 95,151
-----------
FINANCIAL SERVICES - 6.49%
1,424 ING Groep N.V. Sponsored ADR ...................... 72,713
2,500 MBIA, Inc. ........................................ 125,156
-----------
197,869
-----------
INSURANCE - 1.52%
2,000 Allstate Corporation .............................. 46,375
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-2-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
VALUE FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(CONTINUED) - (UNAUDITED)
MARKET
SHARES VALUE
------ -----
MANUFACTURING - 1.80%
3,000+ Owens-Illinois, Inc. .............................. $ 54,937
-----------
MEDIA & ENTERTAINMENT - 1.71%
1,600+ Infinity Broadcating Corporation .................. 52,000
-----------
MEDICAL & RELATED - 4.23%
2,000 Abbott Laboratories ............................... 65,250
1,000 Baxter International, Inc. ........................ 63,875
-----------
129,125
-----------
OIL, ENERGY & NATURAL GAS - 6.47%
3,500 Conoco, Inc- Cl B ................................. 82,469
1,000 Schlumbeger Limited ............................... 61,062
1,693+ Transocean Sedco Forex, Inc. ...................... 53,859
-----------
197,390
-----------
PHARMACEUTICALS - 10.48%
3,200 American Home Products Corporation ................ 150,600
2,000+ Elan Corporation PLC Sponsored ADR ................ 60,125
2,700+ Watson Pharmaceuticals, Inc. ...................... 108,844
-----------
319,569
-----------
RETAIL - 9.19%
4,700+ Abercrombie & Fitch ............................... 100,463
1,700+ Borders Group, Inc. ............................... 23,375
2,600+ Brinker International, Inc. ....................... 65,650
800 Limited, Inc. ..................................... 24,550
6,400+ Office Depot, Inc. ................................ 64,400
114+ Too, Inc. ......................................... 1,888
-----------
280,326
-----------
TRAVEL SERVICES - 1.97%
2,500 Galileo International, Inc. ....................... 60,156
-----------
TOTAL COMMON STOCK
(Cost $2,719,862) ................................. 3,023,639
-----------
SHORT TERM INVESTMENTS - 2.23%
67,988 Firstar Treasury Fund
(Cost $67,988) .................................... 67,988
-----------
TOTAL INVESTMENTS
(Cost $2,787,850) ................. 101.39% 3,091,627
Liabilities in excess of
other assets ................... (1.39)% (42,348)
-------- -----------
TOTAL NET ASSETS .................. 100.00 % $ 3,049,279
======== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-3-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
VALUE FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(CONTINUED) - (UNAUDITED)
(1) Federal Tax Information: At January 31, 2000
the net unrealized appreciation based
on cost for Federal Income tax purposes of
$2,787,850 was as follows:
Aggregate gross unrealized appreciation
for all investments for
which there was an excess of
value over cost ................................... $ 517,579
Aggregate gross unrealized depreciation
for all investments for
which there was an excess of
cost over value ................................... (213,802)
-----------
Net unrealized appreciation ....................... $ 303,777
===========
+ Non-income producing security
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-4-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
SMALL CAP QUANT FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(UNAUDITED)
MARKET
SHARES VALUE
------ -----
COMMON STOCKS - 101.89%
AUTO & AUTOMOTIVE PRODUCTS- 4.97%
900+ Strattec Security Corporation...................... $ 30,600
1,500+ Tower Automotive, Inc.............................. 21,563
-----------
52,163
-----------
BUILDING & CONSTRUCTION - 4.17%
1,900+ Dayton Superior Corporation........................ 43,819
-----------
CAPITAL EQUIPMENT - 4.07%
1,800+ Astec Industries, Inc.............................. 42,750
-----------
COMMERCIAL SERVICES - 1.90%
2,100+ Personnel Group of America, Inc.................... 19,950
-----------
COMMUNICATIONS EQUIPMENT - 8.67%
1,000+ Powerwave Technologies, Inc........................ 91,125
-----------
COMPUTERS- PERIPHERAL EQUIPMENT - 5.87%
1,000 Ancor Communications, Inc.......................... 37,625
2,100+ CHS Electronics, Inc............................... 2,625
3,500+ Mitek Systems, Inc................................. 21,437
-----------
61,687
-----------
COMPUTER SERVICES - 5.58%
2,000+ Data Broadcasting Corporation...................... 16,500
1,000+ Digital River, Inc................................. 26,125
1,000+ Vixel Corporation.................................. 16,000
-----------
58,625
-----------
COMPUTER SOFTWARE - 2.45%
2,300+ Pervasive Software, Inc............................ 25,731
-----------
ELECTRIC COMPANIES - 3.77%
1,600 Harmon Industries, Inc............................. 21,000
800 Trigen Energy Corporation.......................... 18,550
-----------
39,550
-----------
ELECTRONIC - SEMICONDUCTOR- 4.80%
500+ Hi/Fn, Inc......................................... 27,562
500+ Zoran Corporation.................................. 22,813
-----------
50,375
-----------
FIBER OPTICS - 2.04%
1,000+ C-Cor.Net Corporation.............................. 21,375
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-5-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
SMALL CAP QUANT FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(CONTINUED) - (UNAUDITED)
MARKET
SHARES VALUE
------ -----
FINANCIAL SERVICES - 7.90%
700+ FPIC Insurance Group, Inc.......................... $ 11,944
800+ National Discount Brokers Group, Inc............... 17,400
1,000+ Nextcard, Inc...................................... 34,625
3,000+ Track Data Corporation............................. 18,938
-----------
82,907
-----------
HEALTHCARE - 3.32%
2,000+ Eclipse Surgical Technologies, Inc................. 14,250
1,500+ Res-Care, Inc...................................... 20,625
-----------
34,875
-----------
HOUSEHOLD FURNISHINGS & APPLIANCES - 2.98%
3,630 The Rowe Companies................................. 31,309
-----------
INTERNET - 5.12%
500+ MarketWatch.com, Inc............................... 19,062
500+ Netopia, Inc....................................... 24,813
500+ On2.com, Inc....................................... 9,844
-----------
53,719
-----------
MARKETING - 1.72%
1,000+ Marketing Services Group, Inc...................... 18,063
-----------
MEDICAL & RELATED - 8.52%
2,000+ Cell Genesys, Inc.................................. 29,500
5,000+ North American Vaccine, Inc........................ 28,438
1,300+ Syncor International Corporation................... 31,525
-----------
89,463
-----------
OIL & GAS - 2.98%
1,000+ Basin Exploration, Inc............................. 13,562
2,000+ Key Energy Services, Inc........................... 17,750
-----------
31,312
-----------
PRINTING & PUBLISHING - 1.67%
2,000+ Gibson Greetings, Inc.............................. 17,500
-----------
RADIO - 3.72%
1,000+ Cumulus Media, Inc................................. 39,062
-----------
RESTAURANTS - .88%
2,000 Avado Brands, Inc.................................. 9,250
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-6-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
SMALL CAP QUANT FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(CONTINUED) - (UNAUDITED)
MARKET
SHARES VALUE
------ -----
RETAIL - 4.36%
1,000+ Cyberian Outpost, Inc.............................. $ 9,250
4,000+ Grand Union Company................................ 23,500
2,600+ Value America, Inc................................. 13,081
-----------
45,831
-----------
STEEL - 6.42%
1,000+ Lone Star Technologies, Inc........................ 27,562
2,000+ Maverick Tube Corporation.......................... 39,875
-----------
67,437
-----------
S&L'S/SAVINGS BANKS - 1.46%
1,000+ Net.B@nk, Inc...................................... 15,312
-----------
TRANSPORTATION - 2.55%
2,000+ Covenant Transport, Inc............................ 26,750
-----------
TOTAL COMMON STOCK
(Cost $1,206,463).................................. 1,069,940
-----------
SHORT TERM INVESTMENTS - 3.36%
35,273 Firstar Treasury Fund
(Cost $35,273)..................................... 35,273
-----------
TOTAL INVESTMENTS
(Cost $1,241,736)..........................105.25 % 1,105,213
Liabilities in excess of other assets.......(5.25)% (55,139)
-------- -----------
TOTAL NET ASSETS...........................100.00 % $ 1,050,074
======== ===========
(1) Federal Tax Information: At January 31, 2000
the net unrealized depreciation based
on cost for Federal Income tax purposes
of $1,241,736 was as follows:
Aggregate gross unrealized appreciation
for all investments for which there was
an excess of value over cost....................... $ 111,768
Aggregate gross unrealized depreciation for all
investments for which there was an excess of
cost over value.................................... (248,291)
-----------
Net unrealized depreciation........................ $ (136,523)
===========
+ Non-income producing security
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-7-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
DIGITAL FUTURE FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(UNAUDITED)
MARKET
SHARES VALUE
- ------ -----
COMMON STOCKS - 95.10%
COMMUNICATIONS EQUIPMENT - 14.15%
300+ Comverse Technology, Inc........................... $ 43,013
500+ Harmonic, Inc...................................... 48,156
400 Nortel Networks Corporation........................ 38,250
400+ Qualcomm, Inc...................................... 50,800
-----------
180,219
-----------
COMPUTER HARDWARE - 6.88%
1,000+ Ancor Communications, Inc.......................... 37,625
500+ Emulex Corporation................................. 50,000
-----------
87,625
-----------
COMPUTERS - PERIPHERAL EQUIPMENT - 4.21%
400+ SanDisk Corporation................................ 53,550
-----------
COMPUTER SOFTWARE & SERVICES - 12.06%
100+ Commerce One, Inc.................................. 17,225
300+ Foundry Networks, Inc.............................. 40,406
300+ Informatica Corporation............................ 28,087
1,400+ Legato Systems, Inc................................ 35,263
500 SAP AG- Sponsored ADR.............................. 32,594
-----------
153,575
-----------
ELECTRICAL EQUIPMENT - 3.36%
2,000+ C-COR.net Corporation.............................. 42,750
-----------
ELECTRONICS - INSTRUMENT - 6.81%
1,000+ Coherent, Inc...................................... 44,062
600 Newport Corporation................................ 42,675
-----------
86,737
-----------
ELECTRONICS- SEMICONDUCTORS - 21.30%
200+ Broadcom Corporation............................... 57,863
600+ Conexant Systems, Inc.............................. 50,700
300+ QLogic Corporation................................. 45,881
600+ Rambus, Inc........................................ 45,225
700+ Vitesse Semiconductor Corporation.................. 30,450
900+ Xilinx, Inc........................................ 41,175
-----------
271,294
-----------
FIBER OPTICS - 14.94%
200+ E-Tek Dynamics, Inc................................ 36,400
500+ JDS Uniphase Corporation........................... 101,969
200+ SDL, Inc........................................... 51,838
-----------
190,207
-----------
INTERNET - 11.39%
500+ CMGI, Inc.......................................... 56,281
500+ DoubleClick, Inc................................... 49,406
2,000+ On2.com, Inc....................................... 39,375
-----------
145,062
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-8-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
DIGITAL FUTURE FUND
SCHEDULE OF INVESTMENTS
January 31, 2000
(CONTINUED) - (UNAUDITED)
TOTAL COMMON STOCK
(Cost $1,227,213).................................. $ 1,211,019
-----------
TOTAL INVESTMENTS
(Cost $1,227,213)...........................95.10 % 1,211,019
Cash and other assets less liabilities.......4.90 % 62,392
-------- -----------
TOTAL NET ASSETS...........................100.00 % $ 1,273,411
======== ===========
(1) Federal Tax Information: At January 31, 2000
the net unrealized depreciation based
on cost for Federal Income tax purposes of
$1,227,213 was as follows:
Aggregate gross unrealized appreciation
for all investments for which there was
an excess of value over cost....................... $ 98,145
Aggregate gross unrealized depreciation
for all investments for which there was an
excess of cost over value.......................... (114,339)
-----------
Net unrealized depreciation........................ $ (16,194)
===========
+ Non-income producing security
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-9-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
January 31, 2000
(UNAUDITED)
SMALL CAP DIGITAL
VALUE FUND QUANT FUND FUTURE FUND
---------- ---------- -----------
ASSETS:
<S> <C> <C> <C>
Investments in securities, at value (Cost $2,787,850, $1,241,736
and $1,227,213, respectively) (Note 2) ................... $ 3,091,627 $ 1,105,213 $ 1,211,019
Cash ........................................................... 0 0 6,678
Receivable for securities sold ................................. 30,701 0 122,796
Receivable for fund shares sold ................................ 10,487 0 20,826
Dividends and interest receivable .............................. 1,194 38 107
----------- ----------- -----------
Total Assets ............................................. 3,134,009 1,105,251 1,361,426
----------- ----------- -----------
LIABILITIES:
Payable for securities purchased ............................... 81,305 53,992 86,765
Accrued advisory fees (Note 3) ................................. 3,425 1,185 1,250
----------- ----------- -----------
Total Liabilities ........................................ 84,730 55,177 88,015
----------- ----------- -----------
Net Assets ............................................... $ 3,049,279 $ 1,050,074 $ 1,273,411
=========== =========== ===========
NET ASSETS CONSIST OF:
Additional paid in capital (Note 6) ..................... $ 2,447,536 $ 1,114,419 $ 1,245,768
Accumulated net investment loss (Note 6) ................. (8,719) (5,411) (1,106)
Undistributed net realized gain
from investment transactions (Note 6) .................. 306,685 77,589 44,943
Net unrealized appreciation (depreciation) on
investments ............................................ 303,777 (136,523) (16,194)
----------- ----------- -----------
Net Assets ............................................... $ 3,049,279 $ 1,050,074 $ 1,273,411
=========== =========== ===========
Net asset value and redemption price per share
($3,049,279/226,776, $1,050,074/114,455 and
and $1,273,411/112,044 shares of capital stock
outstanding, respectively) (Note 4) ..................... $ 13.45 $ 9.17 $ 11.37
=========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-10-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
STATEMENT OF OPERATIONS
For the six months ended January 31, 2000
(UNAUDITED)
SMALL CAP DIGITAL
VALUE FUND QUANT FUND FUTURE FUND(1)
---------- ---------- -----------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends ....................................... $ 7,804 $ 782 $ 0
Interest ........................................ 2,064 248 144
-------- --------- --------
Total investment income .................. 9,868 1,030 144
EXPENSES:
Investment advisory fee (Note 3) ................ 17,591 6,441 1,250
Trustees fees ................................... 5,000 5,000 2,000
-------- --------- --------
Total expenses ........................... 22,591 11,441 3,250
Less: Expense reimbursement and waivers (Note 3) (5,000) (5,000) (2,000)
-------- --------- --------
Net expenses ............................. 17,591 6,441 1,250
-------- --------- --------
Net investment loss ....................... (7,723) (5,411) (1,106)
-------- --------- --------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS
(Note 2)
Net realized gain from investment
transactions .............................. 306,547 77,589 44,943
Unrealized appreciation (depreciation) of
investments for the period ................ 167,656 (35,283) (16,194)
-------- --------- --------
Net realized and unrealized gain
on investments ........................... 474,203 42,306 28,749
-------- --------- --------
Net increase in net assets resulting
from operations .......................... $466,480 $ 36,895 $ 27,643
-------- --------- --------
<FN>
(1) The Digital Future Fund commenced operations on December 22, 1999.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-11-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX JANUARY 1, 1999(1)
MONTHS ENDED THROUGH
JANUARY 31, 2000 JULY 31, 1999
---------------- -------------
(UNAUDITED)
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income (loss) .............................. $ (7,723) $ 1,162
Net realized gain from investment transactions ............ 306,547 125,255
Unrealized appreciation for the period .................... 167,656 136,121
--------- ----------
Net increase in net assets resulting from operations ...... 466,480 262,538
--------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income ($0.01 and $0.00
per share, respectively) .............................. (2,157) 0
Distributions from net gain on investments ($0.58 and $0.00
per share, respectively) ............................. (125,117) 0
Capital share transactions (Note 4) ....................... 324,824 2,071,711
--------- ----------
Net increase in net assets ................................ 664,030 2,334,249
NET ASSETS:
Beginning of period ....................................... 2,385,249 51,000
--------- ----------
End of period ............................................. $ 3,049,279 $ 2,385,249
=========== ===========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-12-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
SMALL CAP QUANT FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX JANUARY 1, 1999(1)
MONTHS ENDED THROUGH
JANUARY 31, 2000 JULY 31, 1999
---------------- -------------
(UNAUDITED)
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment loss ........................................... $ (5,411) $ (4,520)
Net realized gain from investment transactions ................ 77,589 470
Unrealized depreciation for the period ........................ (35,283) (101,240)
----------- -----------
Net increase (decrease) in net assets resulting from operations 36,895 (105,290)
----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income ...................... 0 0
Distributions from net gain on investments .................... 0 0
Capital share transactions (Note 4) ........................... 18,785 1,048,684
----------- -----------
Net increase in net assets .................................... 55,680 943,394
NET ASSETS:
Beginning of period ........................................... 994,394 51,000
----------- -----------
End of period ................................................. $ 1,050,074 $ 994,394
=========== ===========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-13-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
DIGITAL FUTURE FUND
STATEMENT OF CHANGES IN NET ASSETS
DECEMBER 22, 1999(1)
THROUGH
JANUARY 31, 2000
----------------
(UNAUDITED)
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C>
Net investment loss .......................................... $ (1,106)
Net realized gain from investment transactions ............... 44,943
Unrealized depreciation for the period ....................... (16,194)
-----------
Net increase in net assets resulting from operations ......... 27,643
-----------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income ..................... 0
Distributions from net gain on investments ................... 0
Capital share transactions (Note 4) .......................... 1,235,768
-----------
Net increase in net assets ................................... 1,263,411
NET ASSETS:
Beginning of period .......................................... 10,000
-----------
End of period ................................................ $ 1,273,411
===========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-14-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
VALUE FUND
FINANCIAL HIGHLIGHTS
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE SIX JANUARY 1, 1999(1)
MONTHS ENDED THROUGH
JANUARY 31, 2000 JULY 31, 1999
(UNAUDITED)
----------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ....................... $ 11.92 $ 10.00
------------ ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................... (0.04) 0.01
Net realized and unrealized gain on
investments ........................................... 2.16 1.91
------------ ------------
Total from investment operations ........................... 2.12 1.92
------------ ------------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... (0.01) 0.00
Distribution from realized gains from security
transactions .......................................... (0.58) 0.00
------------ ------------
Total distributions ........................................ (0.59) 0.00
------------ ------------
Net asset value, end of period ............................. $ 13.45 $ 11.92
============ ============
Total return (3) ........................................... 18.00% 19.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ...................... $ 3,049 $ 2,385
Ratio of expenses to average net assets,
before reimbursement .................................. 1.66%(2) 2.45%(2)
Ratio of expenses to average net assets,
net of reimbursement ................................... 1.30%(2) 1.30%(2)
Ratio of net investment income (loss) to average net
assets, before reimbursement .......................... (0.94)%(2) (1.03)%(2)
Ratio of net investment income (loss) to average net assets,
net of reimbursement .................................. (0.57)%(2) 0.12%(2)
Portfolio turnover rate .................................... 51.18% 32.98%
<FN>
(1) Commencement of operations.
(2) Ratios for this period of operations are annualized.
(3) Based on net asset value per share.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-15-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
SMALL CAP QUANT FUND
FINANCIAL HIGHLIGHTS
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE SIX JANUARY 1, 1999(1)
MONTHS ENDED THROUGH
JANUARY 31, 2000 JULY 31, 1999
---------------- -------------
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period ....................... $ 8.86 $ 10.00
------------ ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment loss ........................................ (0.05) (0.04)
Net realized and unrealized gain (loss) on
investments ............................................ 0.36 (1.10)
------------ ----------
Total from investment operations ........................... 0.31 (1.14)
------------ ----------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... 0.00 0.00
Distribution from realized gains from security
transactions .......................................... 0.00 0.00
------------ ----------
Total distributions ........................................ 0.00 0.00
------------ ----------
Net asset value, end of period ............................. $ 9.17 $ 8.86
============ ==========
Total return (3) ........................................... 3.50% (11.40)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ..................... $ 1,050 $ 994
Ratio of expenses to average net assets,
before reimbursement .................................. 2.30%(2) 3.23%(2)
Ratio of expenses to average net assets,
net of reimbursement .................................. 1.30%(2) 1.30%(2)
Ratio of net investment income (loss) to average net
assets, before reimbursement .......................... (2.09)%(2) (2.80)%(2)
Ratio of net investment income (loss) to average net assets,
net of reimbursement .................................. (1.09)%(2) (0.87)%(2)
Portfolio turnover rate .................................... 94.18% 3.90%
<FN>
(1) Commencement of operations.
(2) Ratios for this period of operations are annualized.
(3) Based on net asset value per share.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-16-
<PAGE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS INVESTMENT TRUST
DIGITAL FUTURE FUND
FINANCIAL HIGHLIGHTS
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
DECEMBER 22, 1999(1)
THROUGH
JANUARY 31, 2000
----------------
(UNAUDITED)
<S> <C>
Net asset value, beginning of period .......................... $ 10.00
---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) .................................. (0.01)
Net realized and unrealized gain on
investments .............................................. 1.38
---------
Total from investment operations .............................. 1.37
---------
LESS DISTRIBUTIONS
Dividends from net investment income .......................... 0.00
Distribution from realized gains from security
transactions ............................................. 0.00
---------
Total distributions ........................................... 0.00
---------
Net asset value, end of period ................................ $ 11.37
=========
Total return (3) .............................................. 13.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ......................... $ 1,273
Ratio of expenses to average net assets,
before reimbursement ...................................... 3.31%(2)
Ratio of expenses to average net assets,
net of reimbursement ..................................... 1.30%(2)
Ratio of net investment income (loss) to average net
assets, before reimbursement ............................. (3.12)%(2)
Ratio of net investment income (loss) to average net assets,
net of reimbursement ..................................... (1.11)%(2)
Portfolio turnover rate ....................................... 41.49%
<FN>
(1) Commencement of operations.
(2) Ratios for this period of operations are annualized.
(3) Based on net asset value per share.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-17-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(UNAUDITED)
NOTE 1. ORGANIZATION
Alpha Analytics Value Fund, Alpha Analytics Small Cap Quant Fund and Alpha
Analytics Digital Future Fund (each a "Fund" or collectively the "Funds") were
each organized as a series of Alpha Analytics Investment Trust, an Ohio business
trust (the "Trust"). The Value Fund and Small Cap Quant Fund were organized on
August 18, 1998, and commenced operations on January 1, 1999. The Digital Future
Fund was organized on December 13, 1999, and commenced operations on December
22, 1999. The Trust is an open-end, diversified management investment company
under the Investment Company Act of 1940, authorized to issue an unlimited
number of shares, and each share represents an undivided, proportionate interest
in each Fund, each with its own investment objectives and policies.
Each Funds' investment objective is to provide shareholders with long term
capital appreciation. The Value Fund seeks to achieve its objective by pursuing
a relative value philosophy, investing in stocks of companies that possess
above-average financial characteristics and that are attractively priced
relative to the market and to the prices at which stocks have sold on a
historical basis. The Quant Fund seeks to achieve its objective by investing in
stocks which have characteristics empirically associated with growth in share
price. It is anticipated that the Quant Fund will invest primarily in equity
securities of U.S. and Canadian companies with smaller market capitalizations.
The Digital Future Fund seeks to achieve its objective by investing primarily in
stocks of information technology companies.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Fund in the preparation of its financial statements. These policies are
in conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the period. Actual results could differ from these estimates.
SECURITY VALUATION-Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price on such exchanges,
or at the last bid price in the over-the-counter market except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. Securities for which market quotations are not readily
available, or when the Adviser determines the last bid price does not accurately
reflect the current value, or when restricted securities are being valued, are
valued as determined in good faith by the Adviser, subject to review by the
Board of Trustees of the Trust.,
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by an independent pricing
service which uses prices based upon yields or prices of comparable securities,
indications as to values from dealers, and general market conditions, when the
Adviser believes such prices accurately reflect the fair market value of the
security.
-18-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(CONTINUED) - (UNAUDITED)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Short term investments in fixed income securities with maturities of less
than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board has determined will represent fair value.
FEDERAL INCOME TAXES- The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its net investment income and any realized
capital gain. Therefore, no federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS-Each Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on an annual
basis. Each Fund intends to distribute its net long-term capital gains and its
net short-term capital gains at least once a year. Income and capital gain
distributions to shareholders are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Those differences are primarily due to differing treatments for net operating
losses and deferral of wash sale losses.
ORGANIZATION EXPENSES- During its organization and initial registration
with the Securities and Exchange Commission (the "SEC"), the Funds incurred
organization expenses. The Adviser was obligated to incur these expenses.
SECURITY TRANSACTIONS- The Funds follow industry practice and records
security transactions on the trade date. The first in first out identification
method is used for determining gains or losses for financial statements and
income tax purposes. Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discount and premium on
securities purchased are amortized over the life of the respective securities.
NOTE 3. INVESTMENT ADVISORY AGREEMENT AND OTHER RELATED PARTY TRANSACTIONS
The Trust retains Alpha Analytics Investment Group, LLC (the "Adviser"), to
manage the assets of each Fund. Under the terms of the agreement, a monthly fee
is paid to the Adviser at an annual rate of 1.50% of the average daily net
assets of each Fund. The Adviser pays all of the operating expenses for each of
the Funds except brokerage, taxes, interest, fees and expenses of non-interested
person trustees and extraordinary expenses. Through November 30, 2000, the
Adviser has agreed to waive 0.20% of average net assets from its fees so that
the fee would be 1.30% of average daily net assets.
For the six months ended January 31, 2000, the Adviser earned advisory fees
of $25,282. The Advisor earned $17,591 from the Value Fund, $6,441 from the
Small Cap Quant Fund, and $1,250 from the Digital Future Fund. For this same
time period, the Adviser paid all fees and expenses relating to non-interested
person trustees, and will not seek reimbursement from the Funds.
The Adviser has entered into a sub-advisory agreement with Cambiar
Investors, Inc. to serve as the sub-adviser to the Value Fund.
-19-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(CONTINUED) - (UNAUDITED)
NOTE 3. INVESTMENT ADVISORY AGREEMENT AND OTHER RELATED PARTY TRANSACTIONS
(CONTINUED)
The Trust has an agreement with American Data Services, Inc. (the
"Administrator") to provide shareholder servicing , fund accounting and
administrative services to the Funds. The services to be provided under the
agreements include day-to-day administration of matters related to the corporate
existence of the Funds (other than rendering investment advice), maintenance of
its records, preparation of reports, supervision of the Fund's arrangement with
its custodian and assistance in the preparation of the Fund's registration
statement under federal and state laws. For its services as Administrator and
Transfer Agent, American Data Services, Inc. receives a monthly fee from the
Adviser equal to an annual average rate based upon assets and the number of
shareholder accounts serviced subject to an annual minimum fee of $43,200 per
Fund.
Certain officers and trustees of the Funds are also officers and owners of
Alpha Analytics Investment Group, L.L.C. and American Data Services. Beneficial
ownership of more than 25% of the voting securities of the Funds creates a
presumption of control of this Fund under Section 2(a)(9) of the Investment
Company Act of 1940. As of January 31, 2000, Wildwood Enterprises owned more
than 25% of each Fund, and Robert Gipson, President of the Fund, owned more than
25% of the Value Fund and Small Cap Quant Fund.
The Trust has an agreement with AmeriMutual Funds Distributors, Inc. (the
"Distributor") to act as the principal distributor of the Funds' shares. The
services of the Administrator, Transfer Agent and Distributor are operating
expenses paid by the Adviser.
NOTE 4. FUND SHARE TRANSACTIONS
At January 31, 2000, there were an unlimited number of Fund shares
authorized. Paid in capital at January 31, 2000, for the Value Fund, Small Cap
Quant Fund, and Digital Future Fund, amounted to $2,447,536, $1,114,419, and
$1,245,768, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
ALPHA ANALYTICS VALUE FUND
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JANUARY 1, 1999(1)
JANUARY 31, 2000 TO JULY 31, 1999
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold....................... 25,806 $323,629 195,006 $2,071,723
Shares issued for reinvestment of
dividends and distributions
from realized gains.............. 9,876 127,211 0 0
Shares redeemed................... (9,011) (126,015) (1) (12)
--------- --------- ------- ----------
Net increase...................... 26,671 $ 324,825 195,005 $2,071,711
========= ========= ======= ==========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
-20-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(CONTINUED) - (UNAUDITED)
NOTE 4. FUND SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
ALPHA ANALYTICS SMALL CAP QUANT FUND
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JANUARY 1, 1999(1)
JANUARY 31, 2000 TO JULY 31, 1999
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold ..................... 2,249 $ 18,800 107,108 $1,048,684
Shares issued for reinvestment of
dividends and distributions
from realized gains ............ 0 0 0 0
Shares redeemed ................. (2) (15) 0 0
---------- ---------- ---------- ----------
Net increase .................... 2,247 $ 18,785 107,108 $1,048,684
========== ========== ========== ==========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
<TABLE>
<CAPTION>
ALPHA ANALYTICS DIGITAL FUTURE FUND
FOR THE PERIOD
DECEMBER 22, 1999(1)
TO JANUARY 31, 2000
SHARES AMOUNT
----------------------------
(UNAUDITED)
<S> <C> <C>
Shares sold........................ 111,044 $1,235,768
Shares issued for reinvestment of
dividends and distributions
from realized gains............... 0 0
Shares redeemed................... 0 0
------- ----------
Net increase....................... 111,044 $1,235,768
======= ==========
<FN>
(1) Commencement of operations.
</FN>
</TABLE>
NOTE 5. INVESTMENTS
Investment transactions, excluding short-term investments, for the six
months ended January 31, 2000, were as follows:
<TABLE>
<CAPTION>
SMALL CAP DIGITAL
VALUE FUND QUANT FUND FUTURE FUND
----- ---- ---------- -----------
<S> <C> <C> <C>
Purchases ...................................... $ 1,873,377 $ 951,472 $ 1,418,303
Sales .......................................... $ 1,299,931 $ 917,388 $ 208,003
Accumulated unrealized appreciation-July 31, 1999 ....... $ 136,121 $ (101,240) $ 0
Add: Gross unrealized appreciation ................ 261,249 58,126 98,145
Less: Gross unrealized depreciation ............... (93,593) (93,409) $ (114,339)
----------- ----------- -----------
Accumulated unrealized appreciation-January 31, 2000 .... $ 303,777 $ (136,523) $ (16,194)
=========== =========== ===========
Aggregate cost of securities, Federal income tax purposes $ 2,787,850 $ 1,241,736 $ 1,227,213
=========== =========== ===========
</TABLE>
-21-
<PAGE>
INVESTMENT ADVISER INVESTMENT SUB-ADVISER (TO THE
Alpha Analytics Investment Group, LLC VALUE FUND)
1901 Avenue of the Stars, Suite 1100 Cambiar Investors, Inc.
Los Angeles, CA 90067 8400 East Prentice Avenue, Suite 460
Englewood, CO 80111
LEGAL COUNSEL ADMINISTRATOR
Brown, Cummins & Brown Co., L.P.A. American Data Services, Inc.
3500 Carew Tower, 441 Vine Street 150 Motor Parkway
Cincinnati, OH 45202 Hauppauge, New York 11788-5108
CUSTODIAN DISTRIBUTOR
Firstar Bank, N.A. AmeriMutual Funds Distributors, Inc.
425 Walnut Street, M.L. 6118 150 Motor Parkway
Cincinnati, Ohio 45202 Hauppauge, New York 11788-5108
TRANSFER AGENT (ALL PURCHASES AND INDEPENDENT AUDITORS
ALL REDEMPTION REQUESTS) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
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.
-22-
