EXECUTIVE OFFICES
AMERICAN PENSION INVESTORS TRUST
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
INVESTMENT ADVISOR
YORKTOWN MANAGEMENT & RESEARCH
COMPANY, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
DISTRIBUTOR
YORKTOWN DISTRIBUTORS, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
TRANSFER AND DIVIDEND
DISBURSING AGENT
FUND SERVICES, INC.
P.O. BOX 26305
RICHMOND, VIRGINIA 23260
(800) 628-4077
CUSTODIAN
CUSTODIAL TRUST COMPANY
101 CARNEGIE CENTER
PRINCETON, NEW JERSEY 08540-6231
INDEPENDENT AUDITORS
COOPERS & LYBRAND L.L.P
217 E. REDWOOD STREET
BALTIMORE, MARYLAND 21202-3316
This report is submitted for the general information of the shareholders of the
Trust. The report is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective Prospectus.
YORKTOWN CLASSIC VALUE TRUST
ANNUAL REPORT
[Logo]
1996
<PAGE>
[Yorktown Logo]
To Our Shareholders,
First I would like to welcome all the new shareholders to the Fund. I am
committed at this point to my belief that Yorktown Classic Value Trust is one of
the most undervalued investments available today. On March 20, 1996 we
announced the 2% bonus program for all new and existing shareholders making new
purchases of the Yorktown Classic Value Trust. At that time we felt that high
quality, cyclical companies had fallen to bargain prices, and we had to make a
significant effort to bring new accounts into the Fund. This, like any other
equity investment, is a long term proposition. I hope the realization of value
will occur in the not too distant future.
The Yorktown Classic Value Trust returned 6.36% for the fiscal year ended May
31, 1996. The Trust distributed capital gains of $1.63 per share on December 28,
1995.
VALUE INVESTING - Our approach to investing in large, high quality companies
that are currently out of favor has proven to be very beneficial over the long
haul, but it can be both unpredictable and frustrating in the short term. We
believe that the stock market in the short-term is a polling place, and in the
long-term, a highly efficient weighting device. Ultimately our success is
driven by the process of "weighting the true value" of the companies in which we
invest.
DISCOUNTS AS A % OF AVERAGE P/E RATIO OF
THE DOW JONES INDUSTRIAL AVERAGE
YORKTOWN CLASSIC VALUE TRUST PORTFOLIO AS OF 5/31/96:
AIR PRODUCTS AND CHEMICALS INC 16.0%
AMOCO 19.7
CHUBB CORP 35.0
CSX CORP 31.5
FEDERAL NATIONAL MORTGAGE ASSOCIATION 26.5
FMC CORP 42.7
FORD MOTOR CO 49.7
HUMANA INC 31.7
INTERNATIONAL BUSINESS MACHINES 54.5
KEYCORP 42.4
LIBERTY FINANCIAL 49.2
MERCK & COMPANY (16.4)
NORFOLK SOUTHERN CORP 21.0
OWENS CORNING 52.5
PARK ELECTRO CHEMICAL CORP 37.7
PARKER HANNIFIN CORP 35.3
PHELPS DODGE CORP 59.0
PPG INDUSTRIES 32.9
STONE CONTAINER CORP 67.7
This listing shows the dramatic nature of the discount within the Yorktown
Classic Value Trust. Of course, the holdings of the Fund change over time and
the Fund's holdings are already different from those on May 31, 1996.
YORKTOWN CLASSIC VALUE TRUST -- INVESTMENT STYLE
Value investing requires a basic premise that stocks, like other goods and
services, should be purchased at the most attractive prices possible, preferably
at a discount to their "intrinsic worth." The reality for most investors is
just the opposite. In other words, investors' comfort levels and, therefore,
demand increase when prices rise, and diminish as prices decline. The higher a a
stock rises, the greater the perceived opportunity
The ECONOMY AND THE STOCK MARKET
Caught between the countervailing fears of recession or recovery the U.S. stock
markets have experienced both optimism and considerable uncertainty over the
past twelve months. In the second quarter of 1996 evidence of a strengthening
economy and rising commodity prices continued to exert upward pressure on
intered rates. Fixed income market participants tend to believe the economy is
currently operating at or near its capacity. The fear is that an acceleration of
GDP growth to above its trend rate of about 2% might ignite inflationary
pressures. Growth is generally good, but when we have unsustainable growth it is
bad. Signs of on apparent speed up in growth have derailed earlier expectations
of the Federal Reserve lowering short-term interest rates. Stock markets tend to
shift in market sentiment on the pulse of how fast the economy is growing. As we
ended May, it appeared that interest rates and inflationary pressures were still
areas of concern. We will monitor the events as they develop and look for the
best long-term solutions to promote growth in your Fund's investments.
Coopers & Lybrand L.L.P., the Fund's independent auditors, have completed their
annual examination, and audited financial statements fior the fiscal year ended
May 31, 1996 accompany this report
Thank you for your continuing confidence in the Yorktown Classic Value Trust. We
constantly review, analyze and update the Fund's portfolio in an effort to
acquire those companies which appear to have the greatest opportunity for
success and delete those that fall short of their performance potential. We look
forward to the future with your support Best regards.
Sincerely,
/s/ DAVID D. BASTEN
David D. Basten
President
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
Comparison of change in value of $10,000 in the Yorktown Classic Value Trust,
the S&P 500 and the Consumer Price Index, for the period November 2, 1992
(Commencement of Operations) to May 31, 1996.
AVERAGE ANNUAL
TOTAL RETURN
1 Year Since Inception
4.36% 9.59%
[GRAPH]
YORKTOWN S&P 500 CPI
DATE VALUE VALUE VALUE
- ----------------------------------------------------
02-NOV-92 $10,000 $10,000 $10,000
31-MAY-93 10,340 10,946 10,169
31-MAY-94 10,129 11,412 10,401
31-MAY-95 13,239 13,716 10,731
31-MAY-96 13,682 17,617 11,070
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
SCHEDULE OF INVESTMENTS
MAY 31, 1996
Shares Value
COMMON STOCKS--100.00%
Automobiles and trucks-- 1.25%
Ford Motor Co. 4,600 $ 167,900
Building materials and equipment--7.11%
Owens-Corning Fiberglas Corp.*
23,700 953,925
---------
Chemicals--9.87%
Air Products and Chemicals, Inc.
2,700 160,650
FMC Corp.* 9,000 605,250
PPG Industries, Inc. 10,800 558,900
---------
1,324,800
---------
Computers--4.69%
International Business Machines, Inc.
5,900 629,825
---------
Conglomerates--2.70%
Park Electrochemical Corp. 15,000 361,875
---------
Copper--17.10%
Phelps Dodge 33,500 2,294,750
---------
Drugs--4.62%
Merck & Co., Inc. 9,600 620,400
---------
Finance--6.83%
Federal National Mortgage Association
18,400 568,100
Keycorp 9,000 348,750
---------
916,850
---------
Hospitals and nursing homes--3.12%
Humana, Inc.* 19,000 $ 418,000
---------
Insurance--3.61%
Chubb Corp. 10,400 484,900
---------
Machinery and equipment-- 3.92%
Parker Hannifin Corp. 12,900 525,675
---------
Oil--1.19%
Amoco 2,200 159,500
---------
Paper--22.15%
Stone Container Corp. 191,700 2,971,350
----------
Railroads--6.99%
CSX Corp. 9,200 455,400
Norfolk Southern Corp. 5,600 483,000
----------
938,400
----------
Securities brokerage--4.85%
Liberty Financial Companies, Inc. 20,400 650,250
----------
Total investments
(cost $12,687,682) $13,418,400
===========
* Non-income producing security
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
Assets:
Investments at value (identified cost of $12,687,682) $ 13,418,400
Cash 24,523
Receivable for securities sold 51,602
Other assets 120,466
-----------
Total assets 13,614,991
-----------
Liabilities:
Accrued distribution fees 7,095
Accrued advisory fees 5,912
Securities purchased under loan agreement 4,497,303
Accrued interest expense 29,362
Other liabilities 3,530
-----------
Total liabilities 4,543,202
Net assets $ 9,071,789
===========
Shares of beneficial interest outstanding (unlimited number of
no par value shares authorized)
756,237
===========
Net asset value, offering and redemption price per share
outstanding $ 12.00
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF OPERATIONS
for the year ended May 31, 1996
Investment income:
Dividends $ 274,833
-------
Interest 1,418
Total income 276,251
-------
Expenses:
Investment advisory fees 69,898
Distribution fees 69,898
Transfer agent fees 31,887
Custodial fees 6,932
Professional fees 19,369
Registration fees 14,948
Trustee fees 800
Insurance 5,164
Miscellaneous 4,383
223,279
Less expenses waived by investment advisor (14,535)
-------
Total operating expenses 208,744
Interest expense 275,751
-------
Total expenses 484,495
-------
Net investment loss (208,244)
-------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 873,225
Decrease in unrealized appreciation on investments (198,523)
-------
Net realized and unrealized gain
on investments 674,702
-------
Net increase in net assets
resulting from operations $ 466,458
=======
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF CASH FLOWS
for the year ended May 31, 1996
<S> <C>
Net Increase (Decrease) in Cash:
Cash flows from operating activities:
Dividends and interest received $ 239,184
Operating expenses paid (202,902)
------------
Net cash provided by operating activities $ 36,282
------------
Cash flows from investing activities:
Purchase of portfolio securities (20,231,542)
Proceeds from disposition of portfolio securities 16,500,411
Interest paid (265,185)
-------------
Net cash used in investing activities (3,996,316)
-------------
Net cash used in operating and investing
activities (3,960,034)
Cash flows from financing activities:
Borrowings under loan agreement 7,675,843
Repayments under loan agreement (5,817,104)
Receipts for shareholder purchases and reinvested
distributions 3,505,322
Payments for shareholder redemptions and distributions (1,401,790)
-----------
Net cash provided by financing activities 3,962,271
------------
Net increase in cash 2,237
Cash at beginning of year 22,286
------------
Cash at end of year $ 24,523
============
Reconciliation of Net Increase in Net Assets from Operations to
Net Cash Used in Operating and Investing Activities:
Increase in net assets from operations $ 466,458
Increase in investments-net $(3,678,273)
Decrease in receivable for securities sold 438,046
Decrease in liability for securities purchased (490,905)
Increase in other assets (37,515)
Increase in accrued expenses and other liabilities 16,857
Net realized gain (873,225)
Net unrealized depreciation 198,523
------------
Total adjustments (4,426,492)
-------------
Net cash used in operating and investing activities $ (3,960,034)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C>
Operations:
Net investment loss $ (208,244) $ (140,338)
Net realized gain from security transactions 873,225 800,529
Net change in unrealized appreciation on investments (198,523) 828,409
----------- ------------
Increase in net assets resulting from operations 466,458 1,488,600
----------- ------------
Distributions from:
Net investment income (34,983)
Net realized gains on security transactions (958,586) (60,126)
----------- ------------
Decrease in net assets resulting from distributions (958,586) (95,109)
----------- ------------
Capital share transactions:
Proceeds from sale of 206,173 and 93,963 shares 2,587,575 1,070,570
Value of 85,786 and 9,404 shares issued upon reinvestment of dividends 929,057 93,855
Cost of 35,821 and 129,377 shares redeemed (443,201) (1,390,642)
----------- ------------
Increase (decrease) in net assets resulting from
capital share transactions
3,073,431 (226,217)
----------- ------------
Total increase in net assets 2,581,303 1,167,274
Net assets:
Beginning of year 6,490,486 5,323,212
----------- ------------
End of year $9,071,789 $ 6,490,486
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
FINANCIAL HIGHLIGHTS
for the three years ended May 31, 1996 and for the period from November 2, 1992
(commencement of operations) to May 31, 1993
<TABLE>
<CAPTION>
1996 1995 1994 1993
------ ------ ------ -----
<S> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 12.98 $ 10.12 $ 10.34 $ 10.00
----- ----- ----- -----
Income from investment operations:
Net investment income (loss) (0.28) (0.28) 0.06 0.02
Net realized and unrealized gain (loss) on investments 0.93 3.33 (0.27) 0.32
----- ---- ---- ----
Total income (loss) from investment
operations 0.65 3.05 (0.21) 0.34
---- ---- ---- ----
Distributions:
From net investment income (0.07) (0.01)
From net realized gain on security transactions (1.63) (0.12)
---- ---- ----
Total distributions (1.63) (0.19) (0.01)
---- ---- ----
Net asset value, end of year $ 12.00 $ 12.98 $ 10.12 $ 10.34
======== ======== ======== ========
Total return(2) 6.36% 30.70% (2.04)% 5.88%(1)
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 9,072 $ 6,490 $ 5,323 $ 3,353
Ratio of operating expenses to average net assets(3) 2.68% 2.39% 1.99% 1.80%(1)
Ratio of total expenses to average net assets(4) 6.22% 5.79% 4.49% 3.32%(1)
Ratio of net investment income (loss) to average net assets (2.67)% (2.60)% 0.76% 0.42%(1)
Portfolio turnover rate 145% 220% 170% 25%(1)
</TABLE>
(1) Annualized
(2) Does not reflect contingent deferred sales charge.
(3) Without fees waived by the investment advisor and distributor, the
annualized ratio of operating expenses to average net assets would have
been 2.87%, 2.95%, 2.69% and 2.76%, respectively.
(4) Without fees waived by the investment advisor and distributor, the
annualized ratio of total expenses to average net assets would have been
6.41%, 6.34%, 5.19% and 4.29%, respectively
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. It is composed of five separate portfolios. The
accompanying financial statements include only the Yorktown Classic Value
Trust (the "Fund"). The primary investment objective of the Fund is growth of
capital; income is a secondary objective. The Fund seeks to achieve these
objectives by investing primarily in equity securities which the Fund's
investment advisor believes are undervalued in relation to the quality of the
securities and the long-term earning power of their issuers, regardless of
short-term indicators.
2. Significant Accounting Policies:
a. Portfolio Valuation
Fund assets are valued at current market value or, where unavailable, at
fair value as determined in good faith by or under the direction of the
Board of Trustees.
b. Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are reported on an identified-cost
basis for both financial statement and federal income tax purposes.
Dividend income and distributions to shareholders are recorded on the ex-
dividend date. Interest income and expenses are recorded on an accrual
basis.
c. Federal Income Taxes
The Trust's policy is for the Fund to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
As of May 31, 1995, the aggregate cost of investments for federal income
tax purposes, the net unrealized appreciation on a federal income tax
basis, and the gross unrealized appreciation and depreciation with respect
to each security where there is an excess of value over tax cost or tax
cost over value were $12,722,179, $696,222, $1,171,966 and $475,744,
respectively.
d. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Borrowings
The Fund is permitted to borrow up to one-third of the value of its net
assets for investment purposes. Such borrowing is referred to as
leveraging. As of May 31, 1996, the balance due for securities purchased
through leveraging was $4,497,303. The average daily balance during the
year ended May 31, 1996 was $3,370,113 or $5.44 per share, based on
average shares outstanding of 619,171. The maximum amount of borrowings
outstanding at any month-end during the year was $4,497,303. The Fund's
investment securities are pledged as collateral under the borrowing
arrangement.
Interest is charged at a rate of 1.50% plus the brokers loan call rate
(7.75% as of May 31, 1996). Such interest amounted to $275,751 for the
year ended May 31, 1996.
3. Investment Advisory Agreement:
Yorktown Management & Research Company, Inc. (the "Advisor"), whose principal
stockholder is also a trustee of the Trust, serves as the Fund's investment
advisor and manager. For its services, the Advisor receives a fee, calculated
daily and payable monthly, at an annual rate of .90% of the average daily net
assets of the Fund. If the aggregate expenses of the Fund in any fiscal year
exceed the highest expense limitation established pursuant to the statutes or
regulations of any jurisdiction in which the shares of the Fund are qualified
or registered for offer and sale, the Advisor has agreed to waive such
portion of its advisory fee as may be necessary to provide for such expenses.
For purposes of this limitation, aggregate Fund expenses exclude interest,
taxes, brokerage fees on portfolio transactions, distribution fees and
expenses, and extraordinary expenses.
4. Distribution Plan and Fees:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive an annual fee of .90% of the
Fund's average daily net assets, which is comprised of .65% of distribution
fees and .25% of service fees. The principal stockholder of the Distributor
is also a trustee of the Trust.
A 2% contingent deferred sales charge is generally imposed on redemptions
made within five years of the date that Fund shares are purchased.
5. Investment Activity:
For the year ended May 31, 1996, there were no purchases or sales of U.S.
government obligations. Purchases and sales of securities other than
short-term obligations and U.S. government obligations amounted to
$19,740,637 and $16,062,365, respectively.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1996, net assets consisted of:
Paid-in capital $8,218,230
Accumulated net realized gain from security transactions 122,841
Unrealized appreciation on investments 730,718
---------
Net assets applicable to outstanding
shares of beneficial interest
$9,071,789
==========
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $208,244 of net realized losses were
reclassified to capital gains during the year ended May 31, 1996. The results
of operations and net assets were not affected by the reclassification.
<PAGE>
[Coopers & Lybrand letterhead]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Yorktown Classic Value Trust:
We have audited the accompanying statement of assets and liabilities of American
Pension Investors Trust Yorktown Classic Value Trust (the "Fund"), including the
schedule of investments, as of May 31, 1996, and the related statements of
operations and cash flows for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the three years in the period ended May 31, 1996 and for
the period from November 2, 1992 (commencement of operations) to May 31, 1993.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Yorktown Classic Value Trust as of May 31,
1996, the results of its operations and its cash flows, the changes in its net
assets, and the financial highlights for each of the respective periods stated
in the first paragraph, in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
June 14, 1996
<PAGE>
EXECUTIVE OFFICES
AMERICAN PENSION INVESTORS TRUST
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
INVESTMENT ADVISOR
YORKTOWN MANAGEMENT & RESEARCH
COMPANY, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
DISTRIBUTOR
YORKTOWN DISTRIBUTORS, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
TRANSFER AND DIVIDEND
DISBURSING AGENT
FUND SERVICES, INC.
P.O. BOX 26305
RICHMOND, VIRGINIA 23260
(800) 628-4077
CUSTODIAN
PIEDMONT TRUST BANK
P.O. BOX 4751
MARTINSVILLE, VIRGINIA 24115
INDEPENDENT AUDITORS
COOPERS & LYBRAND L.L.P
217 E. REDWOOD STREET
BALTIMORE, MARYLAND 21202-3316
This report is submitted for the general information of the shareholders of the
Trust. The report is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective Prospectus.
T-1 TREASURY TRUST
ANNUAL REPORT
[LOGO]
1996
<PAGE>
[T-1 Treasury Logo]
To Our Shareholders,
Investment in the U. S. Treasury bill market proved to be a good choice for
the final quarter of fiscal year ended May 31, 1996. The pace of job creation
and significant economic growth fueled inflation fears and negatively
impacted investments in U. S. government and corporate bonds with maturities
greater than two years. Our investments in U.S. Treasury bills were protected
from most principal losses during this volatile time period.
The T-1 Treasury Trusts' total return (price appreciation plus reinvested
dividends) for the fiscal year ended May 31, 1996 was 3.67%. During the last
12 months, the Trust paid $0.21 per share in ordinary income dividends. As of
May 31, 1996, the dollar weighted average maturity of the Trust's investment
portfolio was 274 days and its 30-day yield was 3.70%.
The T-1 Treasury Trust seeks to provide current income while limiting credit
risk in order to achieve a stable total return by investing in U.S. Treasury
securities (bills, notes and bonds) and other direct obligations of the U.S.
Treasury that are guaranteed as to payment of principal and interest by the
full faith and credit of the U.S. government. Investments in U.S. Treasuries
should be considered a core part of any well diversified investment
portfolio.
Coopers & Lybrand L.L.P., the Fund's independent auditors, have completed
their annual examination, and audited financial statements for the fiscal
year ended May 31,1996 accompany this report.
We hope you will consider using the T-1 Treasury Trust for investment of
additional funds as they become available. Some shareholders regularly add to
their investments in the Trust by authorizing automatic monthly transfers
from their bank checking accounts. Your representative will be happy to help
you make these arrangements if you would like to purchase additional shares
in this convenient manner. Best regards.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
T-1 TREASURY TRUST
Comparison of change in value of $10,000 in the T-1 Treasury Trust,
the Ibbotson U.S. Treasury Bill Index, and the Consumer
Price Index, year ended May 31.
AVERAGE ANNUAL
TOTAL RETURN
1 Year 5 Year Since Inception
3.67% 3.17% 3.88%
T-1 Treas. Ibbotson CPI
Date Value Value Value
12-Apr-88 $10,000 $10,000 $10,000
31-May-88 9,820 10,075 10,060
31-May-89 10,283 10,837 10,598
31-May-90 10,968 11,736 11,060
31-May-91 11,666 12,553 11,607
31-May-92 12,457 13,141 11,959
31-May-93 12,978 13,547 12,344
31-May-94 12,526 13,961 12,627
31-May-95 13,151 14,642 13,029
31-May-96 13,633 15,436 13,441
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
SCHEDULE OF INVESTMENTS
May 31, 1996
<TABLE>
<CAPTION>
Principal Value
<S> <C>
U.S. GOVERNMENT OBLIGATIONS--100.00%
United States Treasury Bill --53.11% due 2/6/97 $ 3,615,000 $ 3,484,506
United States Treasury Note--46.89%
6.625% due 3/31/97 3,055,000 3,076,956
------------
Total investments (cost $6,586,504) $ 6,561,462
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $6,586,504) $ 6,561,462
Cash 58,342
Other assets 36,867
-----------
Total assets 6,656,671
-----------
Liabilities:
Accrued distribution fees 1,416
Accrued advisory fees 566
Other liabilities 2,997
----------
Total liabilities 4,979
----------
Net assets $ 6,651,692
------------
Shares of beneficial interest outstanding (unlimited number
of no par value shares authorized) 1,418,374
===========
Net asset value, offering and redemption price per share outstanding $ 4.69
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
STATEMENT OF OPERATIONS
for the year ended May 31, 1996
<TABLE>
<S> <C>
Investment income:
Interest $ 236,895
Total income 236,895
Expenses:
Investment advisory fees 26,132
Distribution fees 21,777
Transfer agent fees 17,062
Custodial fees 2,117
Professional fees 16,977
Registration fees 17,579
Trustee fees 800
Insurance 3,846
Shareholder reports 3,213
Miscellaneous 1,181
110,684
Less expenses waived/reimbursed by investment
advisor and distributor (43,481)
Total expenses 67,203
Net investment income 169,692
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 29,148
Decrease in unrealized appreciation on investments (50,747)
Net realized and unrealized loss on investments (21,599)
Net increase in net assets resulting from operations $ 148,093
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C>
Operations:
Net investment income $ 169,692 $ 151,346
Net realized gain from security transactions 29,148 (269,567)
Net change in unrealized appreciation on investments (50,747) 304,828
------------------------------------
Increase in net assets resulting
from operations 148,093 186,607
------------------------------------
Distributions from:
Net investment income (185,165) (171,386)
------------------------------------
Decrease in net assets resulting
from distributions (185,165) (171,386)
------------------------------------
Capital share transactions:
Proceeds from sale of 1,146,107 and 539,753 shares 5,394,968 2,544,854
Value of 38,568 and 36,506 shares issued upon
reinvestment of dividends 180,577 169,086
Cost of 621,900 and 611,507 shares redeemed (2,936,280) (2,913,306)
------------------------------------
Increase (decrease) in net assets
resulting from capital share
transactions 2,639,265 (199,366)
------------------------------------
Total increase (decrease) in
net assets 2,602,193 (184,145)
Net assets:
Beginning of year 4,049,499 4,233,644
------------------------------------
End of year (including undistributed net investment
income of $41,225 and $56,698, respectively) $ 6,651,692 $ 4,049,499
=====================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1996
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------ ------ ----- ------ ------
<S> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 4.73 $ 4.75 $ 5.15 $ 5.16 $ 5.03
-------------------------------------------------------------
Income from investment operations:
Net investment income 0.17 0.23 0.19 0.18 0.17
Net realized and unrealized gain
(loss) on investments (0.35) 0.03 0.17
--------------------------------------------------------------
Total income (loss) from
investment operations 0.17 0.23 (0.16) 0.21 0.34
--------------------------------------------------------------
Distributions:
From net investment income (0.21) (0.25) (0.14) (0.22) (0.13)
From net realized gain on security transactions (0.10) (0.08)
Total distributions (0.21) (0.25) (0.24) (0.22) (0.21)
-------------------------------------------------------------
Net asset value, end of year $ 4.69 $ 4.73 $ 4.75 $ 5.15 $ 5.16
=============================================================
Total return 3.67% 4.99% (3.48)% 4.18% 6.78%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $6,652 $4,049 $4,234 $7,295 $5,614
Ratio of expenses to average net assets(1) 1.49% 1.76% 1.57% 1.44% 2.08%
Ratio of net investment income to average net assets 3.77% 4.19% 3.71% 4.72% 5.01%
Portfolio turnover rate 278% 292% 127% 308% 391%
</TABLE>
(1) Without fees waived/reimbursed by the investment advisor and distributor,
the ratio of expenses to average net assets would have been 2.46%, 2.56%,
2.16%, 2.04% and 2.70%, respectively.
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of five separate portfolios.
The accompanying financial statements include only the T-1 Treasury Trust
(the "Fund"). The Fund's investment objective is to seek current income
while limiting credit risk.
The Fund seeks to achieve its objective by investing under normal conditions
in U.S. Treasury securities (bills, notes and bonds) and other direct
obligations of the U.S. Treasury that are guaranteed as to payment of
principal and interest by the full faith and credit of the U.S. government.
The Fund limits its investments to securities with remaining maturities of
one year or less.
2. SIGNIFICANT ACCOUNTING POLICIES:
A. PORTFOLIO VALUATION
Fund assets are valued at current market value or, where unavailable, at
fair value as determined in good faith by or under the direction of the
Board of Trustees.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Realized
gains and losses from security transactions are reported on an
identified-cost basis for both financial statement and federal income
tax purposes. Distributions to shareholders are recorded on the
ex-dividend date. Interest income and expenses are recorded on an
accrual basis.
C. FEDERAL INCOME TAXES
The Trust's policy is for the Fund to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
The Fund has available at May 31, 1996 a net capital loss carryforward
of $438,958 expiring from 2001 through 2004. As of May 31, 1996, the
aggregate cost of investments for federal income tax purposes and the
unrealized depreciation with respect to each security where there is an
excess of tax cost over value were $6,586,504 and $25,042, respectively.
d. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
3. INVESTMENT ADVISORY AGREEMENT:
Yorktown Management & Research Company, Inc. (the "Advisor"), whose
principal stockholder is also a trustee of the Trust, serves as the Fund's
investment advisor and manager. For its services, the Advisor receives a
fee, calculated daily and payable monthly, at an annual rate of .6% of the
average daily net assets of the Fund.
If the aggregate expenses of the Fund in any fiscal year exceed the highest
expense limitation established pursuant to the statutes or regulations of
any jurisdiction in which the shares of the Fund are qualified or registered
for offer and sale, the Advisor has agreed to waive such portion of its
advisory fee as may be necessary to provide for such expenses. For purposes
of this limitation, aggregate Fund expenses exclude interest, taxes,
brokerage fees on portfolio transactions, distribution fees and expenses,
and extraordinary expenses. For the year ended May 31, 1996, the Advisor
waived $26,132 of its fees and reimbursed additional expenses of $6,820. The
Fund has agreed to reimburse the Advisor in subsequent years for fees waived
in prior years, provided that such reimbursement does not result in
increasing the Fund's aggregate expenses above the aforementioned limit or
the expense limit in effect at the time of the waiver, as applicable. The
Advisor, however, does not intend to seek reimbursement of fees previously
waived.
4. DISTRIBUTION PLAN AND FEES:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive an annual fee of .5% of the
Fund's average daily net assets; however, effective November 23, 1994, the
Distributor has undertaken to limit such fee to .25% of the Fund's average
daily net assets. For the year ended May 31, 1996, the Distributor waived
$10,889 of its fees. The principal stockholder of the Distributor is also a
trustee of the Trust.
5. INVESTMENT ACTIVITY:
For the year ended May 31, 1996, purchases and sales of U.S. government
obligations amounted to $14,799,558 and $12,230,286, respectively. There
were no purchases and sales of securities other than short-term obligations
and U.S. government obligations.
6. COMPOSITION OF NET ASSETS:
At May 31, 1996, net assets consisted of:
Paid-in capital $ 7,074,467
Accumulated net investment income 41,225
Accumulated net realized loss from security
transactions (438,958)
Unrealized depreciation on investments (25,042)
----------
Net assets applicable to outstanding
shares of beneficial interest
$ 6,651,692
============
<PAGE>
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
T-1 Treasury Trust:
We have audited the accompanying statement of assets and liabilities of American
Pension Investors Trust T-1 Treasury Trust (the "Fund"), including the schedule
of investments, as of May 31, 1996, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust T-1 Treasury Trust as of May 31, 1996, the
results of its operations, the changes in its net assets, and the financial
highlights for each of the respective periods stated in the first paragraph, in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Baltimore, Maryland
June 14, 1996
<PAGE>
EXECUTIVE OFFICES
AMERICAN PENSION INVESTORS TRUST
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
INVESTMENT ADVISOR
YORKTOWN MANAGEMENT & RESEARCH
COMPANY, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
DISTRIBUTOR
YORKTOWN DISTRIBUTORS, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
TRANSFER AND DIVIDEND
DISBURSING AGENT
FUND SERVICES, INC.
P.O. BOX 26305
RICHMOND, VIRGINIA 23260
(800) 628-4077
CUSTODIAN
PIEDMONT TRUST BANK
P.O. BOX 4751
MARTINSVILLE, VIRGINIA 24115
INDEPENDENT AUDITORS
COOPERS & LYBRAND L.L.P
217 E. REDWOOD STREET
BALTIMORE, MARYLAND 21202-3316
This report is submitted for the general information of the shareholders of the
Trust. The report is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective Prospectus.
CAPITAL INCOME FUND
ANNUAL REPORT
[LOGO]
1996
<PAGE>
[API LOGO]
To Our Shareholders,
The API Trust Capital Income Fund's net asset value increased from $17.21 to
$17.57 during the twelve months ended May 31, 1996. The total return (price
appreciation plus reinvested dividends and other distributions) of the Fund
for the fiscal year was 17.65%. The fund distributed dividends of $0.28 and
capital gains of $2.27 for a total distribution of $2.55 per share on
December 28, 1995.
Set forth below is the change in the allocation of the Fund's portfolio
assets from May 31, 1995 to May 31, 1996.
FUND CATEGORY 1996 1995 CHANGE
EQUITY INCOME FUNDS 14.77% 34.58% -19.81%
FIXED INCOME FUNDS 3.51 0.00 3.51
GLOBAL FUNDS 10.91 7.12 3.79
GROWTH FUNDS 7.22 4.48 2.74
GROWTH & INCOME FUNDS 28.16 51.07 -22.91
S&P 500 INDEX FUNDS 3.30 0.00 3.30
WORLD INCOME FUNDS 32.13 2.75 29.38
Highlights of the twelve month period show the success of our policy of
investing globally. Domestically, the fixed income markets were on a
rollercoaster ride for the first two quarters of 1996. The long-term
treasury bond advanced a full 1%, and for the most part, U.S. government and
corporate debt funds have produced negative returns year-to-date. Global
debt markets have taken up the slack and avoided most of the negative impact
of our domestic rise in interest rates and appear to be poised for significant
recovery in the third and fourth quarters of 1996. Accordingly, the Fund's
portfolio is heavily weighted in global funds.
Caught between the countervailing fears of recession or recovery in the world
economy, the markets have now firmly decided they fear recovery and have
stopped worrying about recession. In Europe and in particular Germany, where
present economic conditions are bleak, the weakness of European currencies
against the U.S. dollar is expected to boost confidence and growth in the
latter part of the year.
Coopers & Lybrand L.L.P., the Fund's independent auditors, have completed
their annual examination, and audited financial statements for the fiscal
year ended May 31, 1996 accompany this report.
Thank you for your continuing confidence in the API Trust Capital Income
Fund. We constantly review, analyze and update the Fund's portfolio in an
effort to acquire those funds which appear to have the greatest opportunity
for success and delete those that fall short of their performance potential.
We look forward to the future with your support. Best regards.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
CAPITAL INCOME FUND
Comparison of change in value of $10,000 in the Capital Income Fund,
the S&P 500 and the Consumer Price Index, year ended May 31.
AVERAGE ANNUAL
TOTAL RETURN
1 YEAR 5 YEAR SINCE INCEPTION
17.65% 10.38% 7.57%
[GRAPH]
CAP INC S&P 500 CPI
DATE VALUE VALUE VALUE
---- ------- ------- -----
12-Apr-88 $10,000 $10,000 $10,000
31-May-88 9,670 10,126 10,060
31-May-89 10,120 12,830 10,598
31-May-90 10,078 14,958 11,060
31-May-91 11,049 16,741 11,607
31-May-92 11,878 18,390 11,959
31-May-93 12,987 20,525 12,344
31-May-94 13,609 21,399 12,627
31-May-95 15,389 25,719 13,029
31-May-96 18,111 33,033 13,441
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
<PAGE>
<TABLE>
<CAPTION>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
SCHEDULE OF INVESTMENTS
May 31, 1996
Shares Value
<S> <C>
MUTUAL FUNDS--100.00%
Equity Income Funds--14.77%
Kemper-Dreman High Return Fund Class A 3,159 $ 75,153
Putnam Equity Income Fund New Class A 22,124 265,487
T. Rowe Price Equity Income Fund 13,572 287,736
----------
628,376
----------
Fixed Income Funds - 3.51%
Vanguard Bond Index Fund, Inc. 15,496 149,070
----------
Global Funds--10.91%
SoGen International Fund, Inc. 17,291 464,088
----------
Growth Funds--7.22%
Berger One Hundred Fund, Inc. 8,447 168,514
Vanguard Index Trust Total Stock Market Portfolio 8,352 138,567
----------
307,081
----------
Growth and Income Funds--28.16%
Mutual Series Fund, Inc. Beacon Fund 2,946 117,549
Neuberger & Berman Equity Funds Guardian Fund 8,016 197,985
RBB Fund, Inc. Equity Growth & Income Portfolio Class A 3,639 60,844
Vanguard Index Trust Value Portfolio 16,139 255,326
Vanguard/Windsor Fund, Inc. Vanguard/Windsor II Portfolio 2,952 66,650
Vista Mutual Fund Group Growth & Income Fund 5,235 197,898
World Funds, Inc. Vontobel U.S. Value Fund 21,515 301,205
----------
1,197,457
----------
S&P 500 Index Objective Funds--3.30%
Vanguard Index Trust 500 Portfolio 2,234 140,453
----------
World Income Funds--32.13%
AIM International Funds, Inc. Global Income Fund 9,560 99,713
Alliance North American Government Income Trust, Inc. Class A 19,424 141,993
Franklin/Templeton Global Trust Hard Currency Portfolio 10,672 126,356
MFS Series Trust VII World Governments Fund Class A 11,166 121,265
Scudder Global Fund, Inc. International Bond Fund 11,957 131,293
T. Rowe Price International Bond Fund 12,043 121,518
Van Eck Global Income Fund Class A 57,604 493,664
Van Kampen American Capital World Portfolio Series Global
Government Class A 16,504 130,709
-----------
1,366,511
--------------
Total investments (cost $3,765,808) $ 4,253,036
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
Assets:
Investments at value (identified cost of $3,765,808) $4,253,036
Cash 160,028
Other assets 8,994
----------------
Total assets 4,422,058
----------------
Liabilities:
Accrued distribution fees 1,845
Other liabilities 3,279
--------------
Total liabilities 5,124
-------------
Net assets $ 4,416,934
============
Shares of beneficial interest outstanding (unlimited
number of no par value shares authorized)
251,325
============
Net asset value, offering and redemption price
per share outstanding $ 17.57
============
The accompanying notes are an integral part of the
financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENT OF OPERATIONS
for the year ended May 31, 1996
Investment income:
Dividends $ 121,423
Interest 7,361
------------
Total income 128,784
-----------
Expenses:
Investment advisory fees 21,194
Distribution fees 17,662
Transfer agent fees 17,283
Custodial fees 2,261
Professional fees 16,322
Registration fees 16,379
Trustee fees 800
Insurance 2,849
Shareholder reports 3,177
Miscellaneous 1,589
------------
99,516
Less expenses waived by investment advisor (21,194)
-----------
Total expenses 78,322
-----------
Net investment income 50,462
----------
Realized and unrealized gain on investments:
Net realized gain from security transactions 280,411
Capital gain distributions from mutual funds 86,437
Increase in unrealized appreciation on investments 129,912
----------
Net realized and unrealized
gain on investments 496,760
----------
Net increase in net assets
resulting from operations $ 547,222
===========
The accompanying notes are an integral part of the
financial statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1996 and 1995
1996 1995
<S> <C> ------ ------
Operations:
Net investment income $ 50,462 $ 22,625
Net realized gain from security transactions 280,411 149,896
Capital gain distributions from mutual funds 86,437 68,220
Net change in unrealized appreciation on investments 129,912 128,139
----------------- ----------------
Increase in net assets resulting from operations 547,222 368,880
----------------- ----------------
Distributions from:
Net investment income (34,821) (68,144)
Net realized gain on security transactions (412,741) (143,858)
----------------- ----------------
Decrease in net assets resulting from distributions (447,562) (212,002)
----------------- ----------------
Capital share transactions:
Proceeds from sale of 90,494 and 26,903 shares 1,590,547 440,775
Value of 26,026 and 13,795 shares issued upon reinvestment of dividends 435,424 209,819
Cost of 41,370 and 45,869 shares redeemed (740,077) (740,092)
---------------- ----------------
Increase (decrease) in net assets resulting from capital share
transactions 1,285,894 (89,498)
----------------- ----------------
Total increase in net assets 1,385,554 67,380
Net assets:
Beginning of year 3,031,380 2,964,000
---------------- ----------------
End of year (including undistributed net investment income
of $43,006 and $2,394, respectively) $ 4,416,934 $ 3,031,380
================= ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1996
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 17.21 $ 16.34 $ 16.06 $ 14.69 $ 13.66
------------- ------------ ------------- ------------- --------
Income from investment operations:
Net investment income (loss) 0.34 0.35 (0.01) (0.06) (0.13)
Net realized and unrealized gain on investments 2.57 1.64 0.78 1.43 1.16
------------- ------------ ------------- ------------- ----------
Total income from investment operations 2.91 1.99 0.77 1.37 1.03
------------- ------------ ------------- ------------- ----------
Distributions:
From net investment income (0.28) (0.36)
From net realized gain on security transactions (2.27) (0.76) (0.49)
------------- ------------ -------------
Total distributions (2.55) (1.12) (0.49)
------------- ------------ -------------
Net asset value, end of year $ 17.57 $ 17.21 $ 16.34 $ 16.06 $ 14.69
============= ============ ============= ============= ==========
Total return 17.65% 13.08% 4.79% 9.33% 7.51%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 4,417 $ 3,031 $ 2,964 $ 2,603 $ 1,828
Ratio of expenses to average net assets(1) 2.22% 2.05% 2.12% 2.77% 3.47%
Ratio of net investment income (loss)
to average net assets 1.43% 0.75% (0.06)% (0.82)% (0.98)%
Portfolio turnover rate 40% 65% 17% 29% 55%
</TABLE>
- ---------------------
(1) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 2.82%, 2.65%, 2.72%, 3.37% and 4.07%,
respectively.
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of five separate portfolios.
The accompanying financial statements include only the Capital Income Fund
(the "Fund").
The Fund's primary investment objective is to seek to achieve high current
income. The Fund's secondary objective is growth of capital and income. The
Fund seeks to achieve its objectives by investing in mutual funds, at least
65% of which seek to achieve an objective of high current income by investing
in income-producing equity securities, long or short-term bonds and other
fixed-income securities (such as U.S. government securities, commercial paper
and preferred stock).
2. SIGNIFICANT ACCOUNTING POLICIES:
A. PORTFOLIO VALUATION
The investments of the Fund consist primarily of mutual funds that are
valued daily at their respective net asset values in accordance with the
1940 Act.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are reported on an identified-cost
basis for both financial statement and federal income tax purposes.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and expenses are recorded on an accrual
basis.
C. FEDERAL INCOME TAXES
The Trust's policy is for the Fund to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
As of May 31, 1996, the aggregate cost of investments for federal income
tax purposes, the net unrealized appreciation on a federal income tax
basis, and the gross unrealized appreciation and depreciation with respect
to each security where there is an excess of value over tax cost or tax
cost over value were $3,765,808, $487,228, $531,658 and $44,430,
respectively.
d. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
3. INVESTMENT ADVISORY AGREEMENT:
Yorktown Management & Research Company, Inc. (the "Advisor"), whose principal
stockholder is also a trustee of the Trust, serves as the Fund's investment
advisor and manager. For its services, the Advisor receives a fee, calculated
daily and payable monthly, at an annual rate of .6% of the average daily net
assets of the Fund. The Advisor reduces its advisory fees (not below zero) to
the extent that the Distributor (see Note 4) retains any dealer reallowances
resulting from the Fund's purchase of shares of underlying funds that are
sold with a sales load.
In addition to the advisory fee reduction noted above, to the extent that the
aggregate expenses of the Fund in any fiscal year exceed the highest expense
limitation established pursuant to the statutes or regulations of any
jurisdiction in which the shares of the Fund are qualified or registered for
offer and sale (currently 1.5% of the first $30 million of the average net
assets of the Fund and 1.0% of the remaining average net assets of the Fund),
the Advisor has agreed to waive such portion of its remaining advisory fee as
may be necessary to provide for such expenses. For purposes of this
limitation, aggregate Fund expenses exclude interest, taxes, brokerage fees
on portfolio transactions, distribution fees and expenses, and extraordinary
expenses. The Fund has agreed to reimburse the Advisor in subsequent years
for fees waived in prior years, provided that such reimbursement does not
result in increasing the Fund's aggregate expenses above the aforementioned
limit or the expense limit in effect at the time of the waiver, as
applicable. The Advisor, however, does not intend to seek reimbursement of
fees previously waived.
4. DISTRIBUTION PLAN AND FEES:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive an annual fee of .5% of the
Fund's average daily net assets.
In addition, to the extent possible, the Distributor is generally designated
as the dealer entitled to receive the dealer reallowance portion of the sales
charge on purchases of underlying load fund shares by the Fund. During the
year ended May 31, 1996, the Distributor received $8,220 from brokerage
commissions earned on its execution of purchases of portfolio investments for
the Fund. The principal stockholder of the Distributor is also a trustee of
the Trust.
5. INVESTMENT ACTIVITY:
For the year ended May 31, 1996, there were no purchases or sales of U.S.
government obligations. Purchases and sales of securities other than
short-term obligations and U.S. government obligations amounted to $2,269,522
and $1,366,589, respectively.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1996, net assets consisted of:
Paid-in capital $3,813,417
Accumulated net investment income 43,006
Accumulated net realized gain from
security transactions 73,283
Unrealized appreciation on investments 487,228
----------
Net assets applicable to outstanding
shares of beneficial interest $4,416,934
==========
In order for the Fund's capital accounts and distributions to reflect the
tax character of certain transactions, $24,971 of net realized gains were
reclassified to net investment income during the year ended May 31, 1996.
The results of operations and net assets were not affected by the
reclassification.
<PAGE>
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Capital Income Fund:
We have audited the accompanying statement of assets and liabilities of American
Pension Investors Trust Capital Income Fund (the "Fund"), including the schedule
of investments, as of May 31, 1996, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Capital Income Fund as of May 31, 1996, the
results of its operations, the changes in its net assets, and the financial
highlights for each of the respective periods stated in the first paragraph, in
conformity with generally accepted accounting principles.
Baltimore, Maryland
June 14, 1996
/s/ Coopers & Lybrand L.L.P.
<PAGE>
EXECUTIVE OFFICES
AMERICAN PENSION INVESTORS TRUST
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
INVESTMENT ADVISOR
YORKTOWN MANAGEMENT & RESEARCH
COMPANY, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
DISTRIBUTOR
YORKTOWN DISTRIBUTORS, INC.
P.O. BOX 2529
2303 YORKTOWN AVENUE
LYNCHBURG, VIRGINIA 24501
(800) 544-6060
TRANSFER AND DIVIDEND
DISBURSING AGENT
FUND SERVICES, INC.
P.O. BOX 26305
RICHMOND, VIRGINIA 23260
(800) 628-4077
CUSTODIAN
PIEDMONT TRUST BANK
P.O. BOX 4751
MARTINSVILLE, VIRGINIA 24115
INDEPENDENT AUDITORS
COOPERS & LYBRAND L.L.P
217 E. REDWOOD STREET
BALTIMORE, MARYLAND 21202-3316
This report is submitted for the general information of the shareholders of the
Trust. The report is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective Prospectus.
GROWTH FUND
ANNUAL REPORT
[API LOGO]
1996
<PAGE>
[API LOGO]
To Our Shareholders,
The API Trust Growth Fund's net asset value increased from $12.48 to $14.00
during the twelve months ended May 31, 1996. The total return (price
appreciation plus reinvented distributions) of the Fund for the fiscal year was
21.03%. The Fund distributed capital gains of $1.01 per share on December 28,
1995.
The following chart depicts market performances, as reported by Lipper
Analytical Services, Inc., from October 11, 1990 to May 30, 1996, the current
market up-cycle phase, as well as for the twelve months ended May 30, 1996.
10/11/90 6/1/95
TO 5/30/96 TO 5/30/96
---------- ----------
API GROWTH FUND 186.95% 19.46%
GLOBAL FUNDS 99.51% 19.74%
S&P 500 INDEX OBJECTIVE FUNDS 160.89% 28.15%
EUROPEAN REGION FUNDS 72.97% 16.20%
PACIFIC REGION FUNDS 68.24% 9.58%
The Fund's investment structure allows it to enter the complex global
marketplace quickly and efficiently, capturing opportunities often overlooked
or inaccessible by other funds. The Fund continued its allocation into funds
that invest in the undervalued European and Pacific Rim markets late in the
fiscal year. Set forth below is the change in the allocation of the Fund's
portfolio assets from May 31, 1995 to May 31, 1996.
FUND CATEGORY 1996 1995 CHANGE
- ------------- ---- ---- ------
CAPITAL APPRECIATION FUNDS 7.55% 12.34% - 4.79%
EMERGING MARKETS FUND 3.01 4.60 - 1.59
EQUITY INCOME FUNDS 3.05 0.80 2.25
EUROPEAN REGION FUNDS 4.19 2.50 1.69
FINANCIAL SERVICES FUNDS 1.49 0.00 1.49
GLOBAL FUNDS 6.73 4.61 2.12
GLOBAL SMALL COMPANY FUNDS 10.94 0.90 10.04
GROWTH FUNDS 13.67 16.82 -3.15
GROWTH & INCOME FUNDS 3.85 4.14 -0.29
INTERNATIONAL FUNDS 7.12 7.09 0.03
JAPANESE FUNDS 1.79 5.90 -4.11
MID-CAP FUNDS 1.37 1.57 -0.20
PACIFIC REGION FUNDS 23.19 12.81 10.38
S&P INDEX OBJECTIVE FUNDS 0.88 1.45 -0.57
SCIENCE & TECHNOLOGY FUNDS 3.27 9.77 -6.50
SMALL COMPANY GROWTH FUNDS 7.90 11.83 -3.93
WORLD INCOME FUNDS 0.00 2.87 -2.87
Global stock markets exhibited positive performance throughout fiscal 1995 and
1996. From January 1, 1996 through May 31, 1996, U.S. markets outpaced Europe
and the Pacific Rim by a narrowing margin of 12.62% to 10.65% and 7.14%,
respectively. Increased expectations recently for economic growth in the second
quarter pushed the year over year forecast of real GDP growth up a full
percentage point to 3.3% over the past two months. Good news has a tendency to
forecast Federal Reserve policy that may raise interest rates and thus slow
economic trends that are currently quite positive. Nonetheless, it remains the
consensus forecast that economic growth during the second half will slow from
its first half pace. All appears stable within our domestic economy.
On the international front, economic forecasts for the second half of 1996
continue to show Europe slipping, as Germany suffers its sixth consecutive
month of negative real GDP growth. However, forecasts for the second half
of 1996 continue to show positive real numbers for the Asian nations.
The major currencies have all weakened versus the U.S. dollar through
mid-year as belief that the Federal Reserve will hike short-term interest
rates at the sign of any inflation growth.
Coopers & Lybrand L.L.P., the Fund's independent auditors, have completed
their annual examination, and audited financial statements for the fiscal
year ended May 31, 1996 accompany this report.
Thank you for your continuing confidence in the API Trust Growth Fund. We
constantly review, analyze and update the Fund's portfolio in an effort to
acquire those funds which appear to have the greatest opportunity for
success and delete those that fall short of their performance potential. We
look forward to the future with your
support. Best regards.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
GROWTH FUND:
Comparison of change in value of $10,000 in the Growth Fund,
the S&P 500 and the Consumer Price Index, year ended May 31, 1996
AVERAGE ANNUAL
TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
21.03% 11.64% 9.97%
[GRAPH]
GROWTH S&P 500 CPI
DATE FD VALUE VALUE VALUE
---- -------- ------- ------
31-MAY-86 $10,000 $10,000 $10,000
31-MAY-87 10,546 12,113 10,380
31-MAY-88 10,124 11,323 10,788
31-MAY-89 12,551 14,346 11,365
31-MAY-90 12,975 16,726 11,861
31-MAY-91 14,735 18,719 12,448
31-MAY-92 15,458 20,563 12,821
31-MAY-93 17,472 22,950 13,234
31-MAY-94 18,975 23,928 13,537
31-MAY-95 21,115 28,759 13,967
31-MAY-96 25,556 36,938 14,408
TOTAL RETURN FROM MARKET LOW
(AS REPORTED BY LIPPER ANALYTICAL SERVICES)
Comparison of percentage change in value of $10,000 investment:
10/11/90 to 5/30/96
[GRAPH]
API GENERAL EQUITY S&P 500 GLOBAL EQUITY WORLD EQUITY
GROWTH FUNDS AVG.* INDEX FUNDS AVG. FUNDS AVG.
$28,695 $27,651 $22,734 $19,951 $18,096
Based on cumulative gain of $10,000 investment
*Domestic funds
Source: Lipper Analytical Services 5/30/96 edition
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, Continued
May 31, 1996
Shares Value
------ -----
MUTUAL FUNDS--100.00%
Capital Appreciation Funds-- 7.55%
Delaware Group Trend Fund, Inc.
25,331 $ 480,280
Evergreen Trust Aggressive Growth Fund Class A 96,423 2,010,424
MFS Series Trust VII Value Fund Class A 39,904 522,745
Oppenheimer Quest Value Fund, Inc. Class A 81,103 1,308,192
PBHG Growth Fund, Inc.* 26,059 747,362
---------
5,069,003
---------
Emerging Markets Funds-- 3.01%
Govett Worldwide Opportunity Funds, Inc.
International Emerging Markets 47,698 651,561
Seven Seas Series Fund Emerging Markets Fund 20,626 228,326
Templeton Developing Markets Trust 76,161 1,137,091
----------
2,016,978
----------
Equity Income Funds--3.05%
Kemper-Dreman Fund, Inc. High Return Fund Class A 86,113 2,048,617
European Region Funds-- 4.19%
Alliance New Europe Fund, Inc. Class A 70,412 1,134,338
Putnam Europe Growth Fund Class A 40,486 641,295
Vanguard International Equity
Index Fund, Inc. European Portfolio 70,051 1,035,353
---------
2,810,986
---------
Financial Services Funds--1.49%
John Hancock Regional Bank Fund Class A 33,456 1,002,007
---------
Global Funds--6.73%
IDEX II Series Fund Global
Portfolio Class A 25,329 $ 526,089
Legg Mason Global Trust, Inc.
International Equity Trust 64,220 759,725
MFS Series Trust VI World Equity Fund Class A 81,978 1,506,762
SoGen International Fund, Inc. 54,194 1,454,573
Templeton Growth Fund, Inc. 14,270 269,269
4,516,418
---------
Global Small Company Funds--10.94%
AIM International Funds, Inc.
Global Aggressive Growth
Fund Class A
Seligman Henderson Global 146,621 2,357,660
Smaller Companies Fund
Class A 256,456 3,982,765
Smallcap World Fund, Inc. 36,298 1,002,904
---------
7,343,329
---------
Growth Funds--13.67%
Davis New York Venture Fund Class A 62,136 974,293
FPA Capital Fund, Inc. 19,892 618,434
Guardian Park Avenue Fund, Inc.
36,658 1,369,160
Harris Associates Investment Trust Oakmark Fund 9,753 312,874
IDEX II Series Fund Growth Portfolio Class A 42,259 1,096,182
Longleaf Partners Fund 40,694 953,874
Oppenheimer Growth Fund Class A 38,138 1,294,780
Putnam New Opportunities Fund* 57,062 2,552,938
---------
9,172,535
---------
Growth and Income Funds-- 3.85%
American Funds Fundamental Investors 14,849 350,594
ASM Fund, Inc. 66,274 884,094
*Non-income producing security
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, Continued
May 31, 1996
Growth and Income Funds, continued
Vanguard Index Trust Value Portfolio 21,347 $ 337,710
Van Kampen American Capital Growth & Income Fund 66,667 1,013,33
--------
2,585,731
---------
International Funds--7.12%
Ivy International Fund Class A 16,880 561,276
Seligman Henderson International Fund Class A 88,775 1,565,992
Templeton Foreign Fund, Inc. 128,145 1,276,326
Twentieth Century World Investors, Inc.
International Equity 38,119 314,485
Vanguard World Fund International Growth Portfolio
33,467 544,846
World Funds, Inc. Vontobel Europacific Fund 28,072 514,567
--------
4,777,492
---------
Japanese Funds--1.79%
Fidelity Investment Trust Japan Fund* 78,230 1,025,601
T. Rowe Price International Funds, Inc. Japan Fund* 17,677 178,005
--------
1,203,606
Mid-Cap Funds--1.37%
AIM Equity Funds, Inc. Constellation Fund 13,785 358,960
Twentieth Century Investors, Inc. Ultra Investors 7,148 208,435
Vanguard Index Trust Extended Market Portfolio 12,991 352,579
-------
919,974
-------
Pacific Region Funds--23.19%
Colonial Trust VII Newport Tiger Fund Class A 383,155 5,149,603
GAM Funds, Inc. Pacific Basin Fund 99,672 1,788,112
Pacific Region Funds, continued
Nomura Pacific Basin Fund, Inc. 34,995 $ 568,315
Putnam Asia Pacific Growth Fund Class A 276,315 3,840,775
Templeton International Trust Pacific Growth Fund 70,727 1,095,554
Van Eck Asia Dynasty Fund Class A 44,226 588,207
Vanguard International Equity Index Fund, Inc.
Pacific Portfolio 213,838 2,536,113
---------
15,566,679
----------
S&P 500 Index Objective Funds--0.88%
Seven Seas Series Fund S&P 500 Index 16,716 247,404
Vanguard Index Trust 500 Portfolio 5,412 340,247
-------
587,651
-------
Science & Technology Funds--3.27%
Alliance Technology Fund 12,925 $ 608,143
Seligman Communication & Information Fund, Inc. Class A 127,542 1,586,618
---------
2,194,761
---------
Small Company Growth Funds--7.90%
Fortis Advantage Capital Appreciation Portfolio 24,190 922,110
Kaufmann Fund, Inc. 471,745 2,905,950
PBHG Emerging Growth Fund, Inc. 44,177 1,220,177
Robertson Stephens Investment Trust Value
Plus Growth Fund* 10,625 252,231
--------
5,300,468
---------
Total investments (cost $55,851,587) $ 67,116,235
============
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $55,851,587) $ 67,116,235
Cash 1,024,838
Other assets 277,974
------------
Total assets 68,419,047
------------
Liabilities:
Accrued distribution fees 56,619
Other liabilities 55,933
-----------
Total liabilities 112,552
-----------
Net assets $ 68,306,495
============
Shares of beneficial interest outstanding (unlimited number of no par value
shares authorized)
4,877,487
============
Net asset value, offering and redemption price per share outstanding $ 14.00
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF OPERATIONS
for the year ended May 31, 1996
<TABLE>
<S> <C>
Investment income:
Dividends $ 704,054
Interest 43,350
--------
Total income 747,404
--------
Expenses:
Investment advisory fees 648,906
Distribution fees 648,906
Transfer agent fees 210,728
Custodial fees 23,531
Professional fees 60,427
Registration fees 20,242
Trustee fees 4,800
Insurance 30,756
Shareholder reports 8,862
Miscellaneous 7,465
------
1,664,623
---------
Less expenses waived by investment advisor (215,209)
---------
Total expenses 1,449,414
---------
Net investment loss (702,010)
---------
Realized and unrealized gain on investments:
Net realized gain from security transactions 5,996,423
Capital gain distributions from mutual funds 2,020,687
Increase in unrealized appreciation on investments 5,067,081
---------
Net realized and unrealized gain on investments 13,084,191
----------
Net increase in net assets resulting
from operations $ 12,382,181
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C>
Operations:
Net investment loss $ (702,010) $ (755,002)
Net realized gain from security transactions 5,996,423 1,421,329
Capital gain distributions from mutual funds 2,020,687 1,717,196
Net change in unrealized appreciation on investments 5,067,081 3,319,900
-----------------------------------
Increase in net assets resulting
from operations 12,382,181 5,703,423
-----------------------------------
Distributions from:
Net realized gain on security transactions (4,753,440) (4,524,662)
-----------------------------------
Decrease in net assets resulting from
distributions (4,753,440) (4,524,662)
------------------------------------
Capital share transactions:
Proceeds from sale of 955,339 and 903,145 shares 12,775,805 10,881,506
Value of 363,541 and 391,078 shares issued upon
reinvestment of dividends 4,652,114 4,407,470
Cost of 1,268,110 and 682,906 shares redeemed (16,967,233) (8,234,222)
-----------------------------------
Increase in net assets resulting from
capital share transactions 460,686 7,054,754
-----------------------------------
Total increase in net assets 8,089,427 8,233,515
Net assets:
Beginning of year* 60,217,068 46,957,824
-----------------------------------
End of year $ 68,306,495 $ 55,191,339
=====================================
</TABLE>
* Effective June 1, 1995, two other series of the Trust were merged into
the Fund, resulting in an increase in net assets and shares outstanding
of $5,025,729 and 402,702, respectively.
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1996
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------ ------ ------ ----- -----
<S> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 12.48 $ 12.32 $ 11.86 $ 10.84 $ 11.19
------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.14) (0.10) (0.21) (0.18) (0.11)
Net realized and unrealized gain
on investments 2.67 1.37 1.25 1.57 0.71
------------------------------------------------------------------
Total income from
investment operations 2.53 1.27 1.04 1.39 0.60
------------------------------------------------------------------
Distributions:
From net realized gain on security transactions (1.01) (1.11) (0.58) (0.37) (0.95)
------------------------------------------------------------------
Total distributions (1.01) (1.11) (0.58) (0.37) (0.95)
------------------------------------------------------------------
Net asset value, end of year $ 14.00 $ 12.48 $ 12.32 $ 11.86 $10.84
==================================================================
Total return 21.03% 11.28% 8.60% 13.03% 4.91%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 68,306 $ 55,191 $ 46,958 $ 44,364 $40,302
Ratio of expenses to average net assets(1) 2.24% 2.06% 2.24% 2.05% 1.97%
Ratio of net investment income (loss) to average
net assets (1.08)% (1.50)% (1.75)% (1.56)% (1.24)%
Portfolio turnover rate 63% 91% 90% 157% .99%
</TABLE>
(1) Without fees recouped or waived by the investment advisor, the ratio of
expenses to average net assets would have been 2.57%, 2.60%, 2.56%,
2.52% and 2.50%, respectively.
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of five separate portfolios.
The accompanying financial statements include only the Growth Fund (the
"Fund"). The Fund's investment objective is growth of capital. The Fund
seeks to achieve its objective by investing primarily in mutual funds that
invest primarily in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants) and that seek long-term capital growth
or appreciation.
2. Significant Accounting Policies:
a. Portfolio Valuation
The investments of the Fund consist primarily of mutual funds that are
valued daily at their respective net asset values in accordance with the
1940 Act.
b. Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are reported on an identified-cost
basis for both financial statement and federal income tax purposes.
Dividend income and distributions to shareholders are recorded on the ex-
dividend date. Interest income and expenses are recorded on an accrual
basis.
c. Federal Income Taxes
The Trust's policy is for the Fund to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies
and to distribute all of its investment company taxable income to its
shareholders. Therefore, no federal income tax provision is required.
As of May 31, 1996, the aggregate cost of investments for federal income tax
purposes, the net unrealized appreciation on a federal income tax basis, and
the gross unrealized appreciation and depreciation with respect to each
security where there is an excess of value over tax cost or tax cost over
value were $55,851,587, $11,264,648, $11,338,765 and $74,117, respectively.
d. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investment Advisory Agreement:
Yorktown Management & Research Company, Inc. (the "Advisor"), whose
principal stockholder is also a trustee of the Trust, serves as the Fund's
investment advisor and manager. For its services, the Advisor receives a
fee, calculated daily and payable monthly, at an annual rate of 1% of the
first $100 million of the average daily net assets of the Fund and .75% of
the average daily net assets exceeding $100 million. The Advisor reduces its
advisory fees (not below zero) to the extent that the Distributor (see Note
4) retains any dealer reallowances resulting from the Fund's purchase of
shares of underlying funds that are sold with a sales load.
In addition to the advisory fee reduction noted above, to the extent that
the aggregate expenses of the Fund in any fiscal year exceed the highest
expense limitation established pursuant to the statutes or regulations of
any jurisdiction in which the shares of the Fund are qualified or registered
for offer and sale (currently 1.5% of the first $30 million of the average
net assets of the Fund and 1.0% of the remaining average net assets of the
Fund), the Advisor has agreed to waive such portion of its remaining
advisory fee as may be necessary to provide for such expenses. For purposes
of this limitation, aggregate Fund expenses exclude interest, taxes,
brokerage fees on portfolio transactions, distribution fees and expenses,
and extraordinary expenses. During the year ended May 31, 1996, the advisor
waived $215,209 of its fees, of which $23,644 was receivable at May 31, 1996
and is included in other assets. The Fund has agreed to reimburse the
Advisor in subsequent years for fees waived in prior years, provided that
such reimbursement does not result in increasing the Fund's aggregate
expenses above the aforementioned limit or the expense limit in effect at
the time of the waiver, as applicable. The Advisor, however, does not intend
to seek reimbursement of fees previously waived.
4. Distribution Plan and Fees:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive annual fees of 1% of the
Fund's average daily net assets.
In addition, to the extent possible, the Distributor is generally designated
as the dealer entitled to receive the dealer reallowance portion of the
sales charge on purchases of underlying load fund shares by the Fund.
During the year ended May 31, 1996, the Distributor received $187,967 from
brokerage commissions earned on its execution of purchases of portfolio
investments for the Fund. The principal stockholder of the Distributor is
also a trustee of the Trust.
5. Investment Activity:
For the year ended May 31, 1996, there were no purchases or sales of U.S.
government obligations. Purchases and sales of securities other than
short-term obligations and U.S. government obligations amounted to
$40,304,141 and $44,121,082, respectively.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1996, net assets consisted of:
Paid-in capital $51,826,105
Accumulated net realized gain from
security transactions 5,215,742
Unrealized appreciation on investments 11,264,648
-------------
Net assets applicable to outstanding
shares of beneficial interest
$68,306,495
=============
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $702,010 of net realized gains were
reclassified to ordinary income during the year ended May 31, 1996. The results
of operations and net assets were not affected by the reclassifications.
<PAGE>
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust and the
Shareholders of American Pension Investors Trust Growth Fund:
We have audited the accompanying statement of assets and liabilities of American
Pension Investors Trust Growth Fund (the "Fund"), including the schedule of
investments, as of May 31, 1996, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Growth Fund as of May 31, 1996, the results of
its operations, the changes in its net assets, and the financial highlights for
each of the respective periods stated in the first paragraph, in conformity with
generally accepted accounting principles.
/s/ COOPER & LYBRAND LLP
Baltimore, Maryland
June 14, 1996
