[PHOTO DEPICTS A DESK WITH STOCK CERTIFICATES AND CLOCK]
YORKTOWN CLASSIC VALUE TRUST
ANNUAL REPORT
[LOGO]
1997
<PAGE>
[LOGO]
Dear Fellow Shareholders,
First, we would like to welcome all the new shareholders that have come into the
Fund. As a best kept secret, the Yorktown Classic Value Trust appears to be
moving in the right direction for national recognition as one of the best value
funds in today's marketplace. Performance of the Fund during the fiscal year
ended May 31, 1997 was up 20.59%. The Fund distributed capital gains of $.205
per share on December 10, 1996.
As noted in last year's annual report, management felt that the high quality
value sector of the domestic marketplace was undervalued. We seem to echo this
belief year in and year out. Our research efforts have always centered on above
average companies at below average prices. Today I am pleased to confirm our
strategy is working very very well.
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.
% OF FUND'S DISCOUNT (PREMIUM)
TOP 10 STOCKS AS OF 5/31/97 INVESTMENTS TO DOW JONES (1)
- ------------------------------------------ ----------- ------------------
FMC Corp 16.2% 30.7%
Phelps Dodge 14.77 38.0
Boeing Co 7.86 (9.2)
CSX Corp 4.84 35.2
Norfolk Southern Corp 4.55 22.4
Morgan Stanley Group Inc 4.40 26.1
Fannie Mae 3.01 13.2
International Business Machines Inc 2.89 29.0
General Electric Co 2.55 (35.5)
Parker Hannifin Corp 2.55 21.9
(1) Discount (Premium) as a % of average P/E Ratio of the Dow Jones Industrial
Average
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 of May 31, 1997.
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 stock rises, the greater the perceived opportunity. Value
averaging-the practice of buying more when prices are cheap is a fundamental
style within the Yorktown Classic Value Trust.
<PAGE>
A LOOK FORWARD
Consumer confidence . . . steady consumer prices (does it get any better than
this). According the Conference Board's Consumer Confidence Index, twenty-seven
years have passed since consumers felt as confident about their current
situation as they do now. Not only has consumer confidence risen to this high
current level, but future projections put year to year economic growth in the
neighborhood of 3%. With consumer prices moving at half that amount, the
extended market outlook for both bond yields and equity stock prices continue to
look favorable into fiscal year 1998. The negatives of job insecurity and slow
income growth for many workers in the U.S., Japan, and Western Europe, has lead
to pronounced consumer resistance to price increases. The lifting of the iron
curtain and the bamboo curtains, with the end of the cold war, made vast pools
of cheap labor available to the industrialized West. Businesses now control
their labor cost much more effectively and are avoiding price increases that
would normally diminish their market share. Increases in world standards of
living statistics, although moderate, are positive. The future growth of the
global equity markets appears to have a solid foundation for the turn of the
century.
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, 1997 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.
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C>
Standard & Poor's 500 $10,000 $10,946 $11,412 $13,716 $17,617 $22,800
Yorktown Classic Value Trust $10,000 $10,340 $10,129 $13,239 $14,081 $16,781
Consumer Price Index $10,000 $10,169 $10,401 $10,731 $11,070 $11,347
</TABLE>
Past performance is not predictive of future performance
AVERAGE ANNUAL
TOTAL RETURN
Since
1 Year Inception
18.59% 12.04%
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
SCHEDULE OF INVESTMENTS
MAY 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
COMMON STOCKS -- 100.00%
AIRCRAFT & AEROSPACE -- 7.86%
Boeing Company 13,400 $ 1,410,350
------------
BANKS -- 4.38%
J.P. Morgan & Co., Inc. 3,500 376,250
Mellon Bank Corp. 2,000 175,000
NationsBank Corp. 4,000 235,500
------------
786,750
------------
BUILDING MATERIALS AND
EQUIPMENT -- 1.91%
Owens-Corning 8,200 342,350
------------
CANDY & GUM -- 1.84%
Hershey Foods Corp. 5,900 331,138
------------
CHEMICALS -- 19.38%
Air Products and Chemicals,
Inc. 2,400 186,600
FMC Corp.* 40,400 2,908,800
PPG Industries, Inc. 6,600 383,625
------------
3,479,025
------------
COMPUTERS -- 2.89%
International Business
Machines, Inc. 6,000 519,000
------------
COPPER -- 14.77%
Phelps Dodge 31,700 2,650,912
------------
DRUGS -- 3.65%
Bristol Myers Squibb Co. 3,600 264,150
Merck & Co., Inc. 2,400 215,700
Pfizer, Inc. 1,700 174,888
------------
654,738
------------
ELECTRICAL EQUIPMENT -- 2.55%
General Electric Co. 7,600 458,850
------------
FINANCE -- 5.88%
American Express Co. 3,800 264,100
Fannie Mae 12,400 540,950
Keycorp 4,600 250,125
------------
1,055,175
------------
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
HOSPITALS AND NURSING
HOMES -- 1.89%
Humana, Inc.* 15,000 $ 339,375
------------
INSURANCE -- 2.97%
American International Group,
Inc. 2,000 270,750
Chubb Corp. 4,300 262,300
------------
533,050
------------
MACHINERY AND EQUIPMENT --
7.01%
Caterpillar, Inc. 2,000 195,250
Deere & Co. 4,000 204,500
Dover Corp. 7,000 400,750
Parker Hannifin Corp. 8,700 457,837
------------
1,258,337
------------
OFFICE EQUIPMENT AND
SUPPLIES -- 2.38%
Xerox Corp. 6,300 426,825
------------
OIL -- 1.44%
Amoco Corp. 2,900 259,188
------------
RAILROADS -- 9.39%
CSX Corp. 16,400 869,200
Norfolk Southern Corp. 8,400 815,850
------------
1,685,050
------------
RECREATION -- 0.91%
Disney (Walt) Co. 2,000 163,750
------------
SECURITIES BROKERAGE -- 4.40%
Morgan Stanley Group, Inc. 11,700 789,750
------------
SOAPS & CLEANERS -- 1.32%
Procter & Gamble Co. 1,717 236,731
------------
SOFT DRINKS -- 2.17%
Coca Cola Co. 5,700 389,025
------------
TELECOMMUNICATIONS -- 1.01%
GTE Corp. 4,100 180,912
------------
TOTAL INVESTMENTS
(cost $14,926,958) $ 17,950,281
------------
------------
</TABLE>
*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, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $14,926,958) $ 17,950,281
Cash 23,038
Receivable for securities sold 275,343
Other assets 53,226
------------
Total assets 18,301,888
------------
LIABILITIES:
Accrued distribution fees 9,541
Accrued advisory fees 7,951
Securities purchased 176,434
Securities purchased under loan agreement 5,017,490
Accrued interest expense 22,610
Other liabilities 7,974
------------
Total liabilities 5,242,000
------------
NET ASSETS $ 13,059,888
------------
------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 917,661
------------
------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 14.23
------------
------------
</TABLE>
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, 1997
INVESTMENT INCOME:
Dividends $ 250,768
Interest 1,101
----------
Total income 251,869
----------
EXPENSES:
Investment advisory fees 83,622
Distribution fees 83,622
Transfer agent fees 34,881
Custodial fees 8,054
Professional fees 17,049
Registration fees 16,736
Trustee fees 1,400
Insurance 6,014
Shareholder reports 7,341
Miscellaneous 2,265
----------
260,984
Less expenses waived by investment advisor (13,937)
----------
Total operating expenses 247,047
Interest expense 237,304
----------
Total expenses 484,351
----------
Net investment loss (232,482)
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions 98,970
Change in unrealized appreciation on investments 2,292,605
----------
Net realized and unrealized gain on investments 2,391,575
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,159,093
----------
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MAY 31, 1997
<TABLE>
<S> <C>
NET INCREASE (DECREASE) IN CASH:
Cash flows from operating activities:
Dividends and interest received $ 275,937
Operating expenses paid (238,236)
Interest paid (244,056)
-----------
Net cash provided by operating activities $ (206,355)
------------
Cash flows from investing activities:
Purchase of portfolio securities (16,681,127)
Proceeds from disposition of portfolio securities 14,493,514
------------
Net cash used in investing activities (2,187,613)
------------
Net cash used in operating and investing activities (2,393,968)
Cash flows from financing activities:
Borrowings under loan agreement 9,447,918
Repayments under loan agreement (8,927,731)
Receipts for shareholder purchases and reinvested distributions 3,946,711
Payments for shareholder redemptions and distributions (2,074,415)
-----------
Net cash provided by financing activities 2,392,483
------------
Net decrease in cash (1,485)
Cash at beginning of year 24,523
------------
CASH AT END OF YEAR $ 23,038
------------
------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN
OPERATING AND INVESTING ACTIVITIES:
Increase in net assets from operations $ 2,159,093
Increase in investments-net $(2,140,306)
Increase in receivable for securities sold (223,741)
Increase in liability for securities purchased 176,434
Decrease in other assets 23,950
Increase in accrued expenses and other liabilities 2,177
Net realized gain (98,970)
Net unrealized appreciation (2,292,605)
-----------
Total adjustments (4,553,061)
------------
NET CASH USED IN OPERATING AND INVESTING ACTIVITIES $ (2,393,968)
------------
------------
</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, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C>
OPERATIONS:
Net investment loss $ (232,482) $ (208,244)
Net realized gain from security transactions 98,970 873,225
Net change in unrealized appreciation (depreciation) on investments 2,292,605 (198,523)
----------- ----------
Increase in net assets resulting from operations 2,159,093 466,458
----------- ----------
DISTRIBUTIONS FROM:
Net realized gains on security transactions (158,577) (958,586)
----------- ----------
Decrease in net assets resulting from distributions (158,577) (958,586)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 302,614 and 206,173 shares 3,750,533 2,587,575
Value of 12,635 and 85,786 shares issued upon reinvestment of dividends 152,889 929,057
Cost of 153,825 and 35,821 shares redeemed (1,915,839) (443,201)
----------- ----------
Increase in net assets resulting from capital share transactions 1,987,583 3,073,431
----------- ----------
Total increase in net assets 3,988,099 2,581,303
NET ASSETS:
Beginning of year 9,071,789 6,490,486
----------- ----------
End of year $13,059,888 $9,071,789
----------- ----------
----------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
FINANCIAL HIGHLIGHTS
FOR THE FOUR YEARS ENDED MAY 31, 1997 AND FOR THE PERIOD FROM NOVEMBER 2, 1992
(COMMENCEMENT OF OPERATIONS) TO MAY 31, 1993
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net asset value, beginning of year $ 12.00 $ 12.98 $ 10.12 $ 10.34 $ 10.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.25) (0.28) (0.28) 0.06 0.02
Net realized and unrealized gain (loss) on investments 2.69 0.93 3.33 (0.27) 0.32
------- ------- ------- ------- -------
Total income (loss) from investment operations 2.44 0.65 3.05 (0.21) 0.34
------- ------- ------- ------- -------
Distributions:
From net investment income (0.07) (0.01)
From net realized gain on security transactions (0.21) (1.63) (0.12)
------- ------- ------- -------
Total distributions (0.21) (1.63) (0.19) (0.01)
------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 14.23 $ 12.00 $ 12.98 $ 10.12 $ 10.34
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total return(2) 20.59 % 6.36 % 30.70 % (2.04)% 5.88%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's omitted) $13,060 $ 9,072 $ 6,490 $ 5,323 $ 3,353
Ratio of operating expenses to average net assets(3) 2.65 % 2.68 % 2.39 % 1.99 % 1.80%(1)
Ratio of total expenses to average net assets(4) 5.20 % 6.22 % 5.79 % 4.49 % 3.32%(1)
Ratio of net investment income (loss) to average net assets (2.50)% (2.67)% (2.60)% 0.76 % 0.42%(1)
Portfolio turnover rate 115 % 145 % 220 % 170 % 25%(1)
Average commission rate paid 0.1650 N/A N/A N/A N/A
</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
2.80%, 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
5.35%, 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, 1997, 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 $14,975,331, $2,974,950, $2,982,127 and
$7,177, respectively.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
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. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
f. 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, 1997, the balance due for securities purchased
through leveraging was $5,017,490. The average daily balance during the
year ended May 31, 1997 was $3,371,414 or $4.28 per share, based on
average shares outstanding of 786,862. The maximum amount of borrowings
outstanding at any month-end during the year was $5,017,490. 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
(7.125% as of May 31, 1997). Such interest amounted to $237,304 for the
year ended May 31, 1997.
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.
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, 1997, 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
$16,857,561 and $14,717,255, respectively.
<PAGE>
YORKTOWN CLASSIC VALUE
TRUST NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. COMPOSITION OF NET ASSETS:
At May 31, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 9,973,331
Accumulated net realized gain from security transactions 63,234
Unrealized appreciation on investments 3,023,323
-----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $13,059,888
-----------
-----------
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $232,482 of net operating losses were
reclassified to paid-in capital during the year ended May 31, 1997. 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, 1997, 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 four years in the period ended May 31, 1997 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, 1997 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,
1997, the results of its operations, 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 13, 1997
<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
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.
<PAGE>
[PHOTO OF WALL STREET]
CAPITAL INCOME FUND
ANNUAL REPORT
[API LOGO]
1997
<PAGE>
[API LOGO]
Dear Fellow Shareholders,
The API Trust Capital Income Fund's net asset value increased from $17.57 to
$19.52 during the twelve months ended May 31, 1997. The total return (price
appreciation plus reinvested distributions) of the Fund for the fiscal year was
22.43% The Fund distributed capital gains of $0.98 per share and ordinary
dividends of $0.48 per share in December 1996.
The Fund continued its allocation into undervalued markets during the twelve
months ended May 31, 1997. Indeed their were vast opportunities during the
fiscal year. Emerging market debt issued soared in the second half of 1996. The
Fund's largest positions were in funds that invest in fixed income securities of
issuers located in this sector and such positions grew at almost a 30% pace.
Profits were taken just before calendar year-end in all debt sectors of the
portfolio, locking in substantial gains. Set forth below is the change in the
allocation of the Fund's portfolio assets from May 31, 1996 to May 31, 1997.
<TABLE>
<CAPTION>
FUND CATEGORY 1997 1996 CHANGE
- --------------------------------------------------------------- ----- ----- ------
<S> <C>
Capital Appreciation Funds 1.64% 0.00% 1.64
Equity Income Funds 8.24 14.77 -6.53
Fixed Income Funds 0.00 3.51 -3.51
Global Funds 1.55 10.91 -9.36
Growth Funds 8.72 7.22 1.50
Growth & Income Funds 35.13 28.16 6.97
International Funds 18.81 0.00 18.81
S&P 500 Index Funds 2.24 3.30 -1.06
World Income Funds 12.56 32.13 -19.57
Closed-End Funds 11.11 0.00 11.11
</TABLE>
A LOOK FORWARD
Consumer confidence . . . steady consumer prices (does it get any better than
this). According the Conference Board's Consumer Confidence Index, twenty-seven
years have passed since consumers felt as confident about their current
situation as they do now. Not only has consumer confidence risen to this high
current level, but future projections put year to year economic growth in the
neighborhood of 3%. With consumer prices moving at 1/2 that amount, the extended
market outlook for both bond yields and equity stock prices continue to look
favorable into fiscal year 1998. The negatives of job insecurity and slow income
growth for many workers in the U.S., Japan, and Western Europe, has lead to
pronounced consumer resistance to price increases. The lifting of the iron
curtain and bamboo curtains, with the end of the cold war, made vast pools of
cheap labor available to the industrialized West. Businesses now control their
labor cost much more effectively and are avoiding price increases that would
normally diminish their market
<PAGE>
share. Increases in world standards of living statistics, although moderate, are
positive. The future growth of the global equity markets appears to have a solid
foundation for the turn of the century.
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, 1997 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, MSCI World Index and the Consumer Price Index, year ended May 31.
[GRAPH]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C>
Standard & Poor's 500 $10,126 $12,830 $14,958 $16,741 $18,390 $20,525 $21,399 $25,719 $33,033 $42,751
MSCI World Index $10,000 $11,337 $12,154 $12,307 $12,524 $14,334 $15,788 $17,515 $20,840 $24,373
Capital Income Fund $ 9,670 $10,120 $10,078 $11,049 $11,878 $12,987 $13,609 $15,389 $18,111 $22,173
Consumer Price Index $10,060 $10,598 $11,060 $11,607 $11,959 $12,344 $12,627 $13,029 $13,441 $13,777
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN
Since
1 Year 5 Year Inception
22.43% 13.29% 9.10%
Past performance is not predictive of future performance
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
SCHEDULE OF INVESTMENTS
MAY 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
CLOSED-END FUNDS -- 11.11%
John Hancock Bank & Thrift
Opportunity Fund 12,800 $ 427,200
Pilgrim Regional Bank Shares,
Inc. 23,000 396,750
Tri Continental Corp. 2,100 56,175
------------
TOTAL CLOSED-END FUNDS
(cost $734,824) 880,125
------------
MUTUAL FUNDS -- 88.89%
CAPITAL APPRECIATION FUNDS --
1.64%
MFS Series Trust VII Value
Fund Class A 9,800 130,151
------------
EQUITY INCOME FUNDS -- 8.24%
Putnam Equity Income Fund New
Class A 22,123 322,345
T. Rowe Price Equity Income
Fund 13,572 330,354
------------
652,699
------------
GLOBAL FUNDS -- 1.55%
SoGen International Fund,
Inc. 4,409 122,880
------------
GROWTH FUNDS -- 8.72%
Alliance Fund, Inc. Class A 50,591 368,814
Berger One Hundred Fund, Inc. 8,446 156,182
Vanguard Index Trust Total
Stock Market Portfolio 8,352 166,297
------------
691,293
------------
GROWTH AND INCOME FUNDS --
35.13%
American Century Income and
Growth Fund 13,035 294,731
Evergreen Growth & Income
Fund 6,471 161,599
Mutual Series Fund, Inc.
Beacon Fund 8,838 125,239
Neuberger & Berman Equity
Funds Guardian Fund 8,015 231,249
Principal Preservation
Portfolios S&P 100 Plus
Portfolio 34,133 854,013
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
Vanguard Index Trust Value
Portfolio 16,139 $ 301,324
Vanguard/Windsor Fund, Inc.
Vanguard/Windsor II
Portfolio 2,951 78,811
Vista Mutual Fund Group
Growth & Income Fund 8,783 368,549
Warburg Pincus Growth &
Income Fund 3,639 61,681
World Funds, Inc. Vontobel
U.S. Value Fund 20,171 307,211
------------
2,784,407
------------
INTERNATIONAL FUNDS -- 18.81%
Alliance International Fund,
Inc. Class A 18,259 326,111
Alliance Worldwide
Privatization Fund, Inc.
Class A 25,488 319,371
Princor World Fund, Inc.
Class A 93,643 845,602
------------
1,491,084
------------
S&P 500 INDEX OBJECTIVE
FUNDS -- 2.24%
Vanguard Index Trust 500
Portfolio 2,234 177,515
------------
WORLD INCOME FUNDS -- 12.56%
AIM International Funds, Inc.
Global Income Fund 9,560 101,243
Alliance North American
Government Income Trust,
Inc. Class A 19,424 155,007
Bear Stearns Investment Trust
Emerging Markets Debt
Portfolio Class A 23,996 286,518
Phoenix Multi-Portfolio Fund
Emerging Markets Bond
Portfolio Class A 32,741 452,490
------------
995,258
------------
TOTAL MUTUAL FUNDS (cost
$6,073,174) 7,045,287
------------
TOTAL INVESTMENTS (cost
$6,807,998) $ 7,925,412
------------
------------
</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, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $6,807,998) $7,925,412
Cash 175,813
Other assets 7,809
----------
Total assets 8,109,034
----------
LIABILITIES:
Accrued distribution fees 3,323
Other liabilities 7,897
----------
Total liabilities 11,220
----------
NET ASSETS $8,097,814
----------
----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 406,524
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 19.92
----------
----------
</TABLE>
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, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 190,939
Interest 8,740
----------
Total income 199,679
----------
EXPENSES:
Investment advisory fees 33,229
Distribution fees 27,691
Transfer agent fees 23,048
Custodial fees 3,266
Professional fees 14,033
Registration fees 15,664
Trustee fees 1,400
Insurance 3,448
Shareholder reports 7,669
Miscellaneous 1,892
----------
131,340
Less expenses waived by investment advisor (33,229)
----------
Total expenses 98,111
----------
Net investment income 101,568
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions 114,354
Capital gain distributions from mutual funds 330,087
Change in unrealized appreciation on investments 630,186
----------
Net realized and unrealized gain on investments 1,074,627
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,176,195
----------
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MAY 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C>
OPERATIONS:
Net investment income $ 101,568 $ 50,462
Net realized gain from security transactions 114,354 280,411
Capital gain distributions from mutual funds 330,087 86,437
Net change in unrealized appreciation on investments 630,186 129,912
----------- ----------
Increase in net assets resulting from operations 1,176,195 547,222
----------- ----------
DISTRIBUTIONS FROM:
Net investment income (141,336) (34,821)
Net realized gain on security transactions (289,331) (412,741)
----------- ----------
Decrease in net assets resulting from distributions (430,667) (447,562)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 231,628 and 90,494 shares 4,353,629 1,590,547
Value of 20,945 and 26,026 shares issued upon reinvestment of dividends 390,402 435,424
Cost of 97,374 and 41,370 shares redeemed (1,808,679) (740,077)
----------- ----------
Increase in net assets resulting from capital share transactions 2,935,352 1,285,894
----------- ----------
Total increase in net assets 3,680,880 1,385,554
NET ASSETS:
Beginning of year 4,416,934 3,031,380
----------- ----------
End of year (including undistributed net investment income of $51,399 and $43,006,
respectively) $ 8,097,814 $4,416,934
----------- ----------
----------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
FINANCIAL HIGHLIGHTS
FOR THE FIVE YEARS ENDED MAY 31, 1997
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net asset value, beginning of year $17.57 $17.21 $16.34 $16.06 $14.69
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.32 0.34 0.35 (0.01) (0.06)
Net realized and unrealized gain on investments 3.49 2.57 1.64 0.78 1.43
------ ------ ------ ------ ------
Total income from investment operations 3.81 2.91 1.99 0.77 1.37
------ ------ ------ ------ ------
DISTRIBUTIONS:
From net investment income (0.48) (0.28) (0.36)
From net realized gain on security transactions (0.98) (2.27) (0.76) (0.49)
------ ------ ------ ------
Total distributions (1.46) (2.55) (1.12) (0.49)
------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $19.92 $17.57 $17.21 $16.34 $16.06
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return 22.43% 17.65% 13.08% 4.79% 9.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's omitted) $8,098 $4,417 $3,031 $2,964 $2,603
Ratio of expenses to average net assets(1) 1.77% 2.22% 2.05% 2.12% 2.77%
Ratio of net investment income (loss) to average net assets 1.84% 1.43% 0.75% (0.06)% (0.82)%
Portfolio turnover rate 67% 40% 65% 17% 29%
</TABLE>
- ---------------
(1) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 2.38%, 2.82%, 2.65%, 2.72% and 3.37%,
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, 1997, the aggregate cost of investments for federal income
tax purposes and the unrealized appreciation with respect to each security
where there is an excess of value over tax cost were $6,807,998 and
$1,117,414, respectively.
d. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities 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 .60% 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 Note74) receives any dealer reallowances
or 12b-1 fees resulting from the Fund's purchase of shares of underlying
funds.
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 .50% 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, 1997, the Distributor received $26,443 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, 1997, 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 $6,524,949
and $3,597,113, respectively.
6. COMPOSITION OF NET ASSETS:
At May 31, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $6,748,769
Accumulated net investment income 51,399
Accumulated net realized gain from security transactions 180,232
Unrealized appreciation on investments 1,117,414
----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $8,097,814
----------
----------
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $48,161 of net realized gains were
reclassified to net investment income during the year ended May 31, 1997. 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, 1997, 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, 1997 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, 1997, 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 13, 1997
<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) 268-4077
CUSTODIAN
MainStreet Trust Company
P.O. Box 5228
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.
<PAGE>
[PHOTO OF THE STATUE OF LIBERTY]
T-1 TREASURY TRUST
ANNUAL REPORT
[API LOGO]
1997
<PAGE>
[LOGO]
Dear Fellow Shareholders,
Investments in the U.S. Treasury Bill Market proved to be a stable choice for
the entire fiscal year ended May 31, 1997. The pace of inflation remained
subdued. Growth in the economy continued at a moderate pace with job creation
reaching its highest level during the entire expansion which began in the fall
of 1990. A serious commitment to balancing the budget was endorsed by both
parties. Obviously the treasury markets are favorably influenced by this
significant goal. Our investments in U.S. Treasury bills, at virtually no
negative fluctuation during this period, provided positive returns for each of
the twelve months of this fiscal report.
The T-1 Treasury Trust's total return (price appreciation plus reinvested
dividends) for the fiscal year ended May 31, 1997 was 4.13%. During the last 12
months, the Trust paid $0.17 per share in ordinary income dividends.
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, 1997 accompany this report.
Thank you for your continuing confidence in the T-1 Treasury Trust. We hope you
will consider using this Fund for investment of additional funds as they become
available. We look forward to the future with your support. 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.
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C>
Ibbotson U.S. Treasury
Bill Index $10,075 $10,837 $11,736 $12,553 $13,141 $13,547 $13,961 $14,642 $15,436 $16,254
T-1 Treasury Trust $ 9,820 $10,283 $10,968 $11,666 $12,457 $12,978 $12,526 $13,151 $13,633 $14,196
Consumer Price Index $10,060 $10,598 $11,060 $11,607 $11,959 $12,344 $12,627 $13,029 $13,441 $13,777
</TABLE>
Past performance is not predictive of future performance
AVERAGE ANNUAL
TOTAL RETURN
Since
1 Year 5 Year Inception
4.13% 2.65% 3.91%
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
SCHEDULE OF INVESTMENTS
MAY 31, 1997
PRINCIPAL VALUE
---------- ----------
U.S. GOVERNMENT OBLIGATIONS -- 100.00%
United States Treasury Bills
Due 10/16/97 $ 788,000 $ 772,908
Due 2/5/98 1,779,000 1,714,292
----------
TOTAL INVESTMENTS (cost $2,488,093) $2,487,200
----------
----------
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, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $2,488,093) $2,487,200
Cash 45,927
Other assets 6,467
----------
Total assets 2,539,594
----------
LIABILITIES:
Accrued distribution fees 621
Accrued advisory fees 249
Other liabilities 10,635
----------
Total liabilities 11,505
----------
NET ASSETS $2,528,089
----------
----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 537,091
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 4.71
----------
----------
</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, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $325,464
--------
Total income 325,464
--------
EXPENSES:
Investment advisory fees 37,961
Distribution fees 31,634
Transfer agent fees 23,160
Custodial fees 2,801
Professional fees 15,587
Registration fees 15,781
Trustee fees 1,400
Insurance 3,989
Shareholder reports 7,824
Miscellaneous 1,402
--------
141,539
Less expenses waived by investment advisor and distributor (47,451)
--------
Total expenses 94,088
--------
Net investment income 231,376
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from security transactions (12,667)
Change in unrealized appreciation on investments 24,149
--------
Net realized and unrealized gain on investments 11,482
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $242,858
--------
--------
</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, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C>
OPERATIONS:
Net investment income $ 231,376 $ 169,692
Net realized gain (loss) from security transactions (12,667) 29,148
Net change in unrealized appreciation (depreciation) on investments 24,149 (50,747)
----------- -----------
Increase in net assets resulting from operations 242,858 148,093
----------- -----------
DISTRIBUTIONS FROM:
Net investment income (237,714) (185,165)
----------- -----------
Decrease in net assets resulting from distributions (237,714) (185,165)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 308,853 and 1,146,107 shares 1,448,713 5,394,968
Value of 49,699 and 38,568 shares issued upon reinvestment of dividends 231,979 180,577
Cost of 1,239,835 and 621,900 shares redeemed (5,809,439) (2,936,280)
----------- -----------
Increase (decrease) in net assets resulting from capital share
transactions (4,128,747) 2,639,265
----------- -----------
Total increase (decrease) in net assets (4,123,603) 2,602,193
NET ASSETS:
Beginning of year 6,651,692 4,049,499
----------- -----------
End of year (including undistributed net investment income of $34,887 and
$41,225, respectively) $ 2,528,089 $ 6,651,692
----------- -----------
----------- -----------
</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, 1997
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net asset value, beginning of year $ 4.69 $ 4.73 $ 4.75 $ 5.15 $ 5.16
------ ------ ------ ------ ------
Income from investment operations:
Net investment income 0.21 0.17 0.23 0.19 0.18
Net realized and unrealized gain (loss) on investments (0.02) (0.35) 0.03
------ ------ ------ ------ ------
Total income (loss) from investment operations 0.19 0.17 0.23 (0.16) 0.21
------ ------ ------ ------ ------
Distributions:
From net investment income (0.17) (0.21) (0.25) (0.14) (0.22)
From net realized gain on security transactions (0.10)
------ ------ ------ ------ ------
Total distributions (0.17) (0.21) (0.25) (0.24) (0.22)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $ 4.71 $ 4.69 $ 4.73 $ 4.75 $ 5.15
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return 4.13% 3.67% 4.99% (3.48)% 4.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's omitted) $2,528 $6,652 $4,049 $4,234 $7,295
Ratio of expenses to average net assets(1) 1.49% 1.49% 1.76% 1.57% 1.44%
Ratio of net investment income to average net assets 3.66% 3.77% 4.19% 3.71% 4.72%
Portfolio turnover rate 108% 278% 292% 127% 308%
</TABLE>
- ---------------
(1) Without fees waived/reimbursed by the investment advisor and distributor,
the ratio of expenses to average net assets would have been 2.24%, 2.46%,
2.56%, 2.16% and 2.04%, 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, 1997 a net capital loss carryforward of
$441,959 expiring from 2000 through 2005. As of May 31, 1997, the
aggregate cost of investments for federal income tax purposes, the net
unrealized depreciation 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 $2,488,093, $893, $445 and $1,338, respectively.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
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 .60% of the
average daily net assets of the Fund. From time to time, the Advisor may
elect to waive all or a portion of its fees. For the year ended May 31,
1997, the Advisor waived $31,634 of its fees.
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 .50% of
the Fund's average daily net assets; however, for the year ended May 31,
1997, the Distributor has undertaken to limit such fee to .25% of the Fund's
average daily net assets. For the year ended May 31, 1997, the Distributor
waived $15,817 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, 1997, purchases and sales of U.S. government
obligations amounted to $6,715,061 and $11,036,260, 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, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $2,945,720
Accumulated net investment income 34,887
Accumulated net realized loss from security transactions (451,625)
Unrealized depreciation on investments (893)
----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $2,528,089
----------
----------
</TABLE>
<PAGE>
[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 May731, 1997, 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, 1997 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, 1997, 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 13, 1997
<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
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
MainStreet Trust Company
P.O. Box 5228
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.
<PAGE>
[PHOTO OF VARIOUS NATIONAL FLAGS]
GROWTH FUND
ANNUAL REPORT
[API LOGO]
1997
<PAGE>
[API LOGO]
Dear Fellow Shareholders,
We are pleased to present the annual report to shareholders for the API Trust
Growth Fund for the fiscal year ended May 31, 1997. General economic conditions
were favorable for most stock markets worldwide, and the period proved to be a
rewarding one for the Fund. During the fiscal year, as in every year of the
past, their was considerable market volatility as the bulls and the bears
squared off on each market event. In the short-term, market direction is
unknown; over the long-term the direction is positive and we look forward to
finding bargains in periods of uncertainty.
The performance advantage of being broadly diversified is clearly evident in the
following: The Investors Business Daily Mutual Fund Index of twenty leading
funds fell from a high of 430 in January 1997 to a low of 370 in late April
1997, a drop of 13.95%. The API Trust Growth Fund fell less than 1% during the
same period. The total return (price appreciation plus reinvested distributions)
of the Fund for the fiscal year was 8.32%. The Fund distributed capital gains of
$1.66 per share on December 10, 1996. Much more important are the longer term
results which have earned the Fund prominence with major ranking organizations
such as Morningstar, which just added a fourth star to the Fund's ranking during
this reporting period.
The following chart depicts market performance, as reported by Lipper Analytical
Services, Inc. from October 11, 1990 to May 29, 1997, the current market
up-cycle phase, as well as for the twelve months ended May 29, 1997.
<TABLE>
<CAPTION>
10/11/90 5/30/96
TO 5/29/97 TO 5/29/97
---------- ----------
<S> <C>
API Trust Growth Fund 213.05% 9.10%
Global Funds 129.28 14.91
S & P 500 Index Objective Funds 233.48 27.66
European Region Funds 111.65 21.59
Pacific Region Funds 71.58 1.73
</TABLE>
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 markets late in the fiscal year. Set forth below is
the change in the allocation of the Fund's portfolio assets from May 31, 1996 to
May 31, 1997.
<TABLE>
<CAPTION>
FUND CATEGORY 1997 1996 CHANGE
- --------------------------------------------------------------------- ----- ----- ------
<S> <C>
Capital Appreciation Funds 4.45% 7.55% -3.10%
Emerging Markets Funds 5.43 3.01 2.42
Equity Income Funds 0.00 3.05 -3.05
European Region Funds 4.35 4.19 0.16
Financial Services Fund 4.99 1.49 3.50
Global Funds 5.01 6.73 -1.72
Global Small Company Funds 4.03 10.94 -6.91
Growth Funds 10.82 13.67 -2.85
Growth & Income Funds 14.49 3.85 10.64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FUND CATEGORY 1997 1996 CHANGE
- --------------------------------------------------------------------- ----- ----- ------
<S> <C>
Health/Biotechnology Funds 1.50 0.00 1.50
International Funds 9.53 7.12 2.41
Japanese Funds 0.00 1.79 -1.79
Mid-Cap Funds 3.96 1.37 2.59
Pacific Region Funds 1.97 23.19 -21.22
S&P 500 Index Obj Funds 10.58 0.88 9.70
Science & Technology Funds 5.26 3.27 1.99
Small Company Growth Funds 11.62 7.90 3.72
World Income Funds 0.88 0.00 0.88
Closed-End Funds 1.13 0.00 1.13
</TABLE>
A LOOK FORWARD
Consumer confidence. . . steady consumer prices (does it get any better than
this). According the Conference Board's Consumer Confidence Index, twenty seven
years have passed since consumers felt as confident about their current
situation as they do now. Not only has consumer confidence risen to this high
current level, but future projections put year to year economic growth in the
neighborhood of 3%. With consumer prices moving at 1/2 that amount, the extended
market outlook for both bond yields and equity stock prices continue to look
favorable into fiscal year 1998. The negatives of job insecurity and slow income
growth for many workers in the U.S., Japan, and Western Europe, has lead to
pronounced consumer resistance to price increases. The lifting of the iron
curtain and bamboo curtains, with the end of the cold war, made vast pools of
cheap labor available to the industrialized West. Businesses now control their
labor cost much more effectively and are avoiding price increases that would
normally diminish their market share. Increases in world standards of living
statistics, although moderate, are positive. The future growth of the global
equity markets appears to have a solid foundation for the turn of the century.
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, 1997 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 charge in value of $10,000 in the Growth Fund,
the S&P 500, MSCI World Index and the Consumer Price Index, year ended May 31.
[GRAPH]
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C>
Standard & Poor's 500 $10,000 $10,652 $13,496 $15,735 $17,611 $19,345 $21,591 $22,511 $27,056 $34,751 $44,975
Growth Fund $10,000 $ 9,600 $11,901 $12,303 $13,972 $14,658 $16,568 $17,992 $20,022 $24,233 $26,249
MSCI World Index $10,000 $ 9,957 $11,370 $12,189 $12,343 $12,561 $14,376 $15,834 $17,566 $20,901 $24,445
Consumer Price Index $10,000 $10,393 $10,949 $11,426 $11,992 $12,352 $12,749 $13,041 $13,456 $13,881 $14,228
</TABLE>
Past performance is not predictive of future performance
AVERAGE ANNUAL
TOTAL RETURN
1 Year 5 Year 10 Year
8.32% 12.36% 10.13%
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 5/29/97
[GRAPH]
API S&P 500 General Global World
Growth Index Equity Equity Equity
Funds Avg. Funds Avg.* Funds Avg. Funds Avg.
$31,305 $33,348 $31,943 $22,928 $19,176
Based on cumulative gain of $10,000 investment
Source: Lipper Analytical Services 5/29/97 edition
*Domestic funds
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS
MAY 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
CLOSED-END FUNDS -- 1.13%
Asia Pacific Fund, Inc. 10,000 $ 117,500
Asia Tigers Fund, Inc. 10,000 107,500
Fidelity Advisor Emerging
Asia Fund 8,208 112,860
Morgan Stanley Asia Pacific
Fund, Inc. 10,000 105,000
Morgan Stanley Emerging
Markets Fund, Inc. 10,000 167,500
Scudder New Europe Fund, Inc. 10,000 157,500
------------
TOTAL CLOSED-END FUNDS
(cost $783,699) 767,860
------------
MUTUAL FUNDS -- 98.87%
CAPITAL APPRECIATION FUNDS --
4.45%
MFS Series Trust VII Value
Fund Class A 39,904 529,928
Oppenheimer Quest Value
Fund, Inc. Class A 43,069 789,456
PBHG Growth Fund, Inc. 26,058 619,153
Putnam Voyager Fund, Inc. 62,971 1,089,413
------------
3,027,950
------------
EMERGING MARKETS FUNDS --
5.43%
Pioneer Emerging Markets Fund
Class A 70,866 1,092,765
SSGA Emerging Markets Fund 100,139 1,256,747
Templeton Developing Markets
Trust 76,161 1,345,011
------------
3,694,523
------------
EUROPEAN REGION FUNDS --
4.35%
GAM Funds, Inc. Europe Fund 106,061 1,376,680
Pioneer Europe Fund Class A 24,923 628,078
Vanguard International Equity
Index Fund, Inc. European
Portfolio 52,891 955,216
------------
2,959,974
------------
FINANCIAL SERVICES FUNDS --
4.99%
Davis Series, Inc. Financial
Fund Class A 19,675 414,953
John Hancock Freedom Regional
Bank Fund Class A 73,767 2,978,745
------------
3,393,698
------------
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
GLOBAL FUNDS -- 5.01%
Templeton Growth Fund, Inc. 158,077 $ 3,406,566
------------
GLOBAL SMALL COMPANY
FUNDS -- 4.03%
AIM International Funds, Inc.
Global Aggressive Growth
Fund Class A 84,392 1,440,587
Oppenheimber Global Emerging
Growth Fund Class A 14,299 317,445
Smallcap World Fund, Inc. 37,119 986,998
------------
2,745,030
------------
GROWTH FUNDS -- 10.82%
Bear Stearns Large Cap Value
Fund Class A 16,234 312,344
Davis New York Venture Fund
Class A 139,245 2,766,818
FPA Capital Fund, Inc. 10,367 347,633
Guardian Park Avenue Fund,
Inc. 18,634 799,251
Longleaf Partners Fund 40,694 1,013,288
Oppenheimer Growth Fund
Class A 19,915 742,634
Putnam Vista Fund, Inc. 121,951 1,376,829
------------
7,358,797
------------
GROWTH AND INCOME FUNDS --
14.49%
ASM Fund, Inc. 30,089 510,614
Evergreen Growth & Income
Fund 40,567 1,012,985
Fortis Equity Portfolio, Inc.
Growth & Income Fund
Class A 80,454 1,005,675
Investment Company of
America 38,565 1,054,377
Munder Funds, Inc. Value Fund
Class A 25,146 334,199
SSGA Matrix Equity Fund 119,887 2,006,911
Vanguard Index Trust Value
Portfolio 21,346 398,548
Vanguard Growth and Income
Fund 37,362 910,154
Van Kampen American Capital
Growth & Income Fund 33,634 578,516
Vista Mutual Fund Group
Growth & Income Fund 22,238 933,135
Washington Mutual Investors
Fund, Inc. 40,543 1,114,128
------------
9,859,242
------------
</TABLE>
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, CONTINUED
MAY 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
HEALTH/BIOTECHNOLOGY FUNDS --
1.50%
<S> <C>
Eaton Vance Worldwide Health
Sciences Fund Class A 68,352 1,021,189
------------
INTERNATIONAL FUNDS -- 9.53%
Alliance Worldwide
Privatization Fund, Inc.
Class A 58,284 730,308
Euro Pacific Growth Fund 37,327 1,028,369
GAM Funds, Inc. International
Fund 72,690 1,920,471
Ivy International Fund Class
A 16,880 666,779
Munder International Equity
Fund Class A 9,090 137,364
Templeton Foreign Fund, Inc. 124,978 1,392,262
Vanguard World Fund
International Growth
Portfolio 33,467 609,772
------------
6,485,325
------------
MID-CAP FUNDS -- 3.96%
AIM Equity Funds, Inc.
Constellation Fund 13,785 364,199
Vanguard Index Trust Extended
Market Portfolio 65,627 1,807,391
Van Kampen American Capital
Emerging Growth Fund
Class A 14,481 520,183
------------
2,691,773
------------
PACIFIC REGION FUNDS -- 1.97%
Colonial Trust VII Newport
Tiger Fund Class A 54,776 749,890
Van Eck Asia Dynasty Fund
Class A 44,226 588,650
------------
1,338,540
------------
S&P 500 INDEX OBJECTIVE
FUNDS -- 10.58%
Federated Index Trust Max-Cap
Fund 64,771 1,187,263
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C>
Fidelity Commonwealth Trust
Market Index Trust 16,647 $ 1,021,132
SSGA S&P 500 Index Fund 74,226 1,328,656
T. Rowe Price Index Trust,
Inc. Equity Index Fund 50,428 1,172,461
Vanguard Index Trust 500
Portfolio 31,334 2,489,841
------------
7,199,353
------------
SCIENCE & TECHNOLOGY FUNDS --
5.26%
Alliance Technology Fund 30,741 1,574,878
Principal Preservation
Technology 100 Index
Portfolio 15,099 187,683
Seligman Communication &
Information Fund, Inc. 68,175 1,816,207
------------
3,578,768
------------
SMALL COMPANY GROWTH FUNDS --
11.62%
Bear Stearns Small Cap Value
Fund Class A 58,754 1,084,606
Federated Index Trust
Mini-Cap Fund 75,580 1,110,274
Kaufmann Fund, Inc. 286,902 1,715,676
Putnam OTC Emerging Growth
Fund 282,534 3,997,869
7,908,425
------------
WORLD INCOME FUNDS -- 0.88%
Phoenix Multi-Portfolio Fund
Emerging Markets Bond
Portfolio Class A 43,321 598,700
------------
TOTAL MUTUAL FUNDS
(cost $58,003,423) 67,267,853
------------
TOTAL INVESTMENTS
(cost $58,787,122) $ 68,035,713
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $58,787,122) $68,035,713
Cash 751,223
Other assets 93,811
-----------
Total assets 68,880,747
-----------
LIABILITIES:
Accrued distribution fees 57,141
Accrued advisory fees 43,378
Other liabilities 63,204
-----------
Total liabilities 163,723
-----------
NET ASSETS $68,717,024
-----------
-----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 5,121,502
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 13.42
-----------
-----------
</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, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 534,826
Interest 44,709
----------
Total income 579,535
----------
EXPENSES:
Investment advisory fees 663,418
Distribution fees 663,418
Transfer agent fees 208,136
Custodial fees 23,564
Professional fees 51,640
Registration fees 15,645
Trustee fees 8,400
Insurance 30,838
Shareholder reports 23,036
Miscellaneous 7,541
----------
1,695,636
Less expenses waived by investment advisor (248,499)
----------
Total expenses 1,447,137
----------
Net investment loss (867,602)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from security transactions 5,397,332
Capital gain distributions from mutual funds 2,792,861
Change in unrealized depreciation on investments (2,016,057)
----------
Net realized and unrealized gain on investments 6,174,136
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,306,534
----------
----------
</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, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C>
OPERATIONS:
Net investment loss $ (867,602) $ (702,010)
Net realized gain from security transactions 5,397,332 5,996,423
Capital gain distributions from mutual funds 2,792,861 2,020,687
Net change in unrealized appreciation (depreciation) on investments (2,016,057) 5,067,081
----------- ------------
Increase in net assets resulting from operations 5,306,534 12,382,181
----------- ------------
DISTRIBUTIONS FROM:
Net realized gain on security transactions (7,908,281) (4,753,440)
----------- ------------
Decrease in net assets resulting from distributions (7,908,281) (4,753,440)
----------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 822,821 and 955,339 shares 10,920,862 12,775,805
Value of 590,613 and 363,541 shares issued upon reinvestment of dividends 7,542,131 4,652,114
Cost of 1,169,419 and 1,268,110 shares redeemed (15,450,717) (16,967,233)
----------- ------------
Increase in net assets resulting from capital share transactions 3,012,276 460,686
----------- ------------
Total increase in net assets 410,529 8,089,427
NET ASSETS:
Beginning of year 68,306,495 60,217,068
----------- ------------
End of year $68,717,024 $ 68,306,495
----------- ------------
----------- ------------
</TABLE>
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, 1997
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net asset value, beginning of year $ 14.00 $ 12.48 $ 12.32 $ 11.86 $ 10.84
------- ------- ------- ------- -------
Income from investment operations:
Net investment loss (0.17) (0.14) (0.10) (0.21) (0.18)
Net realized and unrealized gain on investments 1.25 2.67 1.37 1.25 1.57
------- ------- ------- ------- -------
Total income from investment operations 1.08 2.53 1.27 1.04 1.39
------- ------- ------- ------- -------
Distributions:
From net realized gain on security transactions (1.66) (1.01) (1.11) (0.58) (0.37)
------- ------- ------- ------- -------
Total distributions (1.66) (1.01) (1.11) (0.58) (0.37)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 13.42 $ 14.00 $ 12.48 $ 12.32 $ 11.86
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total return 8.32% 21.03% 11.28% 8.60% 13.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's omitted) $68,717 $68,306 $55,191 $46,958 $44,364
Ratio of expenses to average net assets(1) 2.18% 2.24% 2.06% 2.24% 2.05%
Ratio of net investment income (loss) to average net assets (1.31)% (1.08)% (1.50)% (1.75)% (1.56)%
Portfolio turnover rate 84% 63% 91% 90% 157%
</TABLE>
- ---------------
(1) Without fees recouped or waived by the investment advisor, the ratio of
expenses to average net assets would have been 2.55%, 2.57%, 2.60%, 2.56%
and 2.52%, 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, 1997, 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 $58,787,122, $9,248,591, $9,276,766 and
$28,175, respectively.
d. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
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 1.00% 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 Note74)
receives any dealer reallowances or 12b-1 fees resulting from the Fund's
purchase of shares of underlying funds. During the year ended May 31, 1997,
the Advisor waived $248,499 of its fees.
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 1.00% 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, 1997, the Distributor received $249,242 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, 1997, 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
$54,745,474 and $57,207,271, respectively.
6. COMPOSITION OF NET ASSETS:
At May 31, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $54,608,829
Accumulated net realized gain from security transactions 4,859,604
Unrealized appreciation on investments 9,248,591
-----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $68,717,024
-----------
-----------
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $638,050 of net operating losses were
reclassified to offset short-term capital gains and $229,552 of net operating
losses were reclassed to paid-in-capital during the year ended May 31, 1997.
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, 1997, 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, 1997 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, 1997, 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 13, 1997
<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
MainStreet Trust Company
P.O. Bx 5228
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.
