YORKTOWN CLASSIC VALUE TRUST
SEMI-ANNUAL REPORT
1997
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.
250 West Pratt St.
Baltimore, Maryland 21201
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>
[YORKTOWN CLASSIC VALUES LOGO]
Dear Fellow Shareholders:
Yorktown Classic Value Trust stayed the course of value accumulation during the
ugliest market we have seen in the last three years. When the US stock market
plunged in response to the Asian crisis in the third quarter of 1997, it pulled
blue chip stocks down with it. Despite the turmoil, the period proved a
positive one for the fund (up 25.40% for the year) as we continued to invest in
those areas of the marketplace that showed the greatest opportunity for reward.
As we review the last six months, three situations in particular are worth
noting. First, we had a dramatic sell-off in commodities that is unparalleled
in modern times. This sell-off affected not only the commodities themselves,
but prompted severe price reductions in the shares of the companies that
produce those commodities. Gold, silver, oil, the base metals (aluminum,
copper, etc.,) have all been hard hit. One company in particular represents
what I believe is the best value out of the hundreds of securities that were
negatively affected in this worldwide decline: Phelps Dodge Corp. Phelps Dodge
is a world class copper producer, has low costs, is highly profitable and is
uniquely positioned to gain market share and profit following this turmoil. I
believe Phelps Dodge shareholders will benefit from both the firm's long term
strategy of building market share and superior earnings, and the most
aggressive share repurchase plan we know of in the global group of public
commodities companies.
Second, we had significant performance from our financial sector, led by Fannie
Mae, American Express and the two banks, Chase Manhattan and J. P. Morgan. Each
is well-recognized as an investment-grade holding of the highest order and we
continue to accumulate these shares whenever their prices are negatively
impacted by short-term market influences.
Third, IBM and Caterpillar are the fund's two core holdings which I anticipate
will be among our best performers for 1998. Each has suffered undue negative
impact in the Asian sell-off. Each will benefit as these countries in the
Pacific Rim rebuild on a stronger platform in both infrastructure and
information-structure.
A word about Asia. Much of what has happened in the financial markets during
the last six months is an outgrowth of technological advances made in the
investment industry: technology reveals waste, inefficiency and poor
productivity, and any financial market in which such inadequacies appear cannot
count on hiding them for long. Technology revealed the truth about Asia's
markets last quarter.
The most important thing I can say about Asia is that the news is not all bad.
In fact, I expect the recent turmoil will lead to something quite good.
If you think back to the mid-1980's you will remember our country was reeling
from the crisis in the savings and loan and banking industries. Companies were
over-leveraged, productivity was down and American businesses in general were
fat and complacent. Turmoil in our stock markets reflected these problems and
the message was clear: American business needed to go on a diet.
<PAGE>
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The housecleaning we did in the 1980's fueled much of
the gains we have seen in the 1990's.
In many ways, Asia is dealing with the same problems we dealt with a decade
ago. Asian companies need to trim the fat and get out of debt. With the flood
of bad news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy -- and meaningful -- solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of these countries will experience a recovery similar to our own.
The US stock market has had a great run following its own belt-tightening
process. I believe the next great run will be in those global markets whose
companies are streamlining operations and becoming more efficient, competitive
and fiscally secure. US companies who provide goods and services to these
Pacific Rim countries stand equally poised to benefit. We are positioning
Yorktown Classic Value Trust to profit from the aftermath of the Asian crisis.
In my view the patient investor will be highly rewarded as Asia is forced to
compete globally with strong balance sheets and real productivity.
Thank you for your continued support. Without you, the success we have achieved
in the Yorktown Classic Value Trust would not be possible. Best regards as we
look forward to another rewarding year.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
SCHEDULE OF INVESTMENTS
November 30, 1997
(Unaudited)
Shares Value
-------- ------------
COMMON STOCKS - 100.00%
Aircraft & aerospace - 2.55%
Boeing Company 9,800 $ 520,625
------------
Banks - 4.59%
Chase Manhattan Corp. 4,000 434,500
J. P. Morgan & Co., Inc. 4,400 502,425
------------
936,925
------------
Candy & gum - 4.00%
Hershey Foods Corp. 13,300 816,288
------------
Chemicals - 5.28%
PPG Industries, Inc. 18,600 1,077,637
------------
Computers - 12.52%
International Business
Machines, Inc. 23,300 2,552,806
------------
Copper - 13.38%
Phelps Dodge 41,200 2,729,500
------------
Drugs - 7.06%
Bristol Myers Squibb Co. 8,400 786,450
Merck & Co., Inc. 6,900 652,481
------------
1,438,931
------------
Electrical equipment - 2.75%
General Electric Co. 7,600 560,500
------------
Finance - 5.44%
American Express Co. 8,700 686,212
Fannie Mae 8,000 422,500
------------
1,108,712
------------
Hospitals & nursing
homes - 1.63%
Humana, Inc. 15,000 $ 332,813
------------
Insurance - 6.06%
Chubb Corp. 9,900 702,281
Jefferson Pilot Corp. 7,000 534,188
------------
1,236,469
------------
Machinery &
equipment - 12.14%
Caterpillar, Inc. 29,900 1,433,331
Dover Corp. 7,000 469,438
Ingersoll-Rand Co. 2,000 81,750
Parker Hannifin Corp. 11,050 491,725
------------
2,476,244
------------
Office equipment &
supplies - 2.40%
Xerox Corp. 6,300 489,431
------------
Oil - 3.31%
Amoco Corp. 7,000 675,000
------------
Railroads - 8.28%
Norfolk Southern Corp. 53,100 1,689,244
------------
Securities brokerage-4.93%
Morgan Stanley, Dean Witter,
Discover & Company 18,505 1,005,053
------------
Soaps & cleaners - 3.68%
Procter & Gamble Co. 9,834 750,457
------------
Total investments
(cost $17,886,904) $20,396,635
============
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $17,886,904) $ 20,396,635
Cash 7,022
Other assets 70,592
-------------
Total assets 20,474,249
-------------
Liabilities:
Accrued distribution fees 9,860
Accrued advisory fees 8,217
Securities purchased under loan agreement 6,699,028
Accrued interest expense 38,395
Other liabilities 4,180
-------------
Total liabilities 6,759,680
-------------
Net assets $ 13,714,569
=============
Shares of beneficial interest outstanding (unlimited number of no par value shares 991,640
=============
authorized)
Net asset value, offering and redemption price per share outstanding $ 13.83
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF OPERATIONS
for the six months ended November 30, 1997
(Unaudited)
Investment income:
Dividends $ 163,445
Interest 766
----------
Total income 164,211
----------
Expenses:
Investment advisory fees 63,617
Distribution fees 63,617
Transfer agent fees 19,258
Custodial fees 4,039
Professional fees 8,548
Registration fees 8,391
Trustee fees 703
Insurance 3,016
Miscellaneous 4,815
----------
176,004
Less expenses waived by investment advisor (10,603)
----------
Total operating expenses 165,401
Interest expense 218,737
----------
Total expenses 384,138
----------
Net investment loss (219,927)
----------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 1,262,202
Change in unrealized appreciation on investments (513,592)
----------
Net realized and unrealized gain on investments 748,610
----------
Net increase in net assets resulting from operations $ 528,683
==========
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF CASH FLOWS
for the six months ended November 30, 1997
(Unaudited)
<TABLE>
<S> <C> <C>
Net Increase (Decrease) in Cash:
Cash flows from operating activities:
Dividends and interest received $ 158,610
Operating expenses paid (180,111)
------------
Net cash used in operating activities $ (21,501)
-------------
Cash flows from investing activities:
Purchase of portfolio securities (19,872,600)
Proceeds from disposition of portfolio securities 18,273,765
Interest paid (202,952)
-------------
Net cash used in investing activities (1,801,787)
-------------
Net cash used in operating and investing activities (1,823,288)
Cash flows from financing activities:
Borrowings under loan agreement 6,581,642
Repayments under loan agreement (4,900,104)
Receipts for shareholder purchases and reinvested distributions 2,122,582
Payments for shareholder redemptions and distributions (1,996,848)
------------
Net cash provided by financing activities 1,807,272
-------------
Net decrease in cash (16,016)
Cash at beginning of period 23,038
-------------
Cash at end of period $ 7,022
=============
Reconciliation of Net Increase in Net Assets from Operations to Net Cash Used in
Operating and Investing Activities:
Increase in net assets from operations $ 528,683
Increase in investments-net (1,697,744)
Decrease in receivable for securities sold 275,343
Decrease in liability for securities purchased (176,434)
Increase in other assets (5,602)
Increase in accrued expenses and other liabilities 1,076
Net realized gain (1,262,202)
Change in unrealized appreciation 513,592
------------
Total adjustments (2,351,971)
-------------
Net cash used in operating and investing activities $ (1,823,288)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
Six Months
Ended
Nov. 30, For the
1997 Year Ended
(Unaudited) May 31, 1997
-------------- -------------
<S> <C> <C>
Operations:
Net investment loss $ (219,927) $ (232,482)
Net realized gain from security transactions 1,262,202 98,970
Net change in unrealized appreciation on investments (513,592) 2,292,605
------------ ------------
Increase in net assets resulting from operations 528,683 2,159,093
------------ ------------
Distributions from:
Net realized gain on security transactions (875,884) (158,577)
------------ ------------
Decrease in net assets resulting from distributions (875,884) (158,577)
------------ ------------
Capital share transactions:
Proceeds from sale of 84,122 and 302,614 shares 1,263,956 3,750,533
Value of 64,627 and 12,635 shares issued upon reinvestment of dividends 858,890 152,889
Cost of 74,770 and 153,825 shares redeemed (1,120,964) (1,915,839)
------------ ------------
Increase in net assets resulting from capital share transactions 1,001,882 1,987,583
------------ ------------
Total increase in net assets 654,681 3,988,099
Net assets:
Beginning of year/period 13,059,888 9,071,789
------------ ------------
End of year/period $ 13,714,569 $ 13,059,888
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION> For the
Six Months
Ended
Nov. 30,
1997
(Unaudited)
-----------
<S> <C>
For a share outstanding throughout each year/period:
Net asset value, beginning of year/period $ 14.23
------------
Income from investment operations:
Net investment income (loss) (0.22)
Net realized and unrealized gain (loss) on investments 0.77
------------
Total income (loss) from investment operations 0.55
------------
Distributions:
From net investment income
From net realized gain on security transactions (0.95)
------------
Total distributions (0.95)
------------
Net asset value, end of year/period $ 13.83
============
Total return(2) 4.14%
Ratios/Supplemental Data:
Net assets, end of year/period (000's omitted) $ 13,715
Ratio of operating expenses to average net assets(3) 2.39%(1)
Ratio of total expenses to average net assets(4) 5.54%(1)
Ratio of net investment income (loss) to average net assets (3.18)%(1)
Portfolio turnover rate 181%(1)
Average commission rate paid 0.1950
<CAPTION>
For the Years Ended May 31
-------------------------------------------------------
1997 1996 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
For a share outstanding throughout each year/period:
Net asset value, beginning of year/period $ 12.00 $ 12.98 $ 10.12 $ 10.34
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income (loss) (0.25) (0.28) (0.28) 0.06
Net realized and unrealized gain (loss) on investments 2.69 0.93 3.33 (0.27)
------------- ------------- ------------- -------------
Total income (loss) from investment operations 2.44 0.65 3.05 (0.21)
------------- ------------- ------------- -------------
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/period $ 14.23 $ 12.00 $ 12.98 $ 10.12
============= ============= ============= =============
Total return(2) 20.59% 6.36% 30.70% (2.04)%
Ratios/Supplemental Data:
Net assets, end of year/period (000's omitted) $ 13,060 $ 9,072 $ 6,490 $ 5,323
Ratio of operating expenses to average net assets(3) 2.65% 2.68% 2.39% 1.99%
Ratio of total expenses to average net assets(4) 5.20% 6.22% 5.79% 4.49%
Ratio of net investment income (loss) to average net assets (2.50)% (2.67)% (2.60)% 0.76%
Portfolio turnover rate 115% 145% 220% 170%
Average commission rate paid 0.1650 N/A N/A N/A
<CAPTION>
1993(5)
-------------------
<S> <C>
For a share outstanding throughout each year/period:
Net asset value, beginning of year/period $ 10.00
-------------
Income from investment operations:
Net investment income (loss) 0.02
Net realized and unrealized gain (loss) on investments 0.32
-------------
Total income (loss) from investment operations 0.34
-------------
Distributions:
From net investment income
From net realized gain on security transactions
Total distributions
Net asset value, end of year/period $ 10.34
=============
Total return(2) 5.88%(1)
Ratios/Supplemental Data:
Net assets, end of year/period (000's omitted) $ 3,353
Ratio of operating expenses to average net assets(3) 1.80% (1)
Ratio of total expenses to average net assets(4) 3.32%
Ratio of net investment income (loss) to average net assets 0.42% (1)
Portfolio turnover rate 25% (1)
Average commission rate paid 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 2.54%, 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 to total expenses to average net assets would have been
5.69%, 5.35%, 6.41%, 6.34%, 5.19% and 4.29%, respectively.
(5) Commencement of operations was November 2, 1992.
The accompanying notes are an integral part of the financial statements.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS
(Information as of and for the six months ended
November 30, 1997 is unaudited)
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 seven 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 November 30, 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 $17,915,017, $2,481,618, $3,002,465 and
$520,847, 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. 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 November 30, 1997, the balance due for securities
purchased through leveraging was $6,699,028. The average daily balance
during the six months ended November 30, 1997 was $6,108,118 or $6.63 per
share, based on average shares outstanding of 921,235. The maximum amount
of borrowings outstanding at any month-end during the period was
$6,699,028. The Fund's investment securities are pledged as collateral
under the borrowing arrangement.
Interest is charged at a rate of 1.50% plus the federal funds rate (7.25%
as of November 30, 1997). Such interest amounted to $218,737 for the six
months ended November 30, 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 six months ended November 30, 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 $19,696,166 and $17,998,422, respectively.
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 10,975,213
Accumulated net investment loss (219,927)
Accumulated net realized gain from security transactions 449,552
Unrealized appreciation on investments 2,509,731
------------
Net assets applicable to outstanding shares of beneficial interest $ 13,714,569
============
</TABLE>
<PAGE>
CAPITAL INCOME FUND SEMI-ANNUAL REPORT
[API TRUST 1997 logo]
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. Box 5228
Martinsville, Virginia 24115
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
250 West Pratt St.
Baltimore, Maryland 21201
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>
[API TRUST logo]
Dear Fellow Shareholders:
Much of what has happened in the financial markets during the last six months is
an outgrowth of technological advances made in the investment industry:
technology reveals waste, inefficiency and poor productivity, and any financial
market in which such inadequacies appear cannot count on hiding them for long.
In the third quarter of 1997 the financial markets of the Pacific Rim and beyond
were forced to pay the price of doing business "the eighties way." Financial
technology revealed that much of what appeared positive about the Asian markets
was overshadowed by excessive spending, poor productivity and unaudited,
over-leveraged borrowing. Once discovered, savvy institutional investors
capitalized on these problems. Financial markets in Asia crumbled within weeks,
and our own stock market wobbled in their wake.
Our commitment to being a global player helped us diagnose and avoid much of
this debacle. As you will note in the weightings of your portfolio, we had very
little invested in Asian-focused mutual funds prior to year end. Our three
largest holdings (Principal Preservation S&P 100, John Hancock Bank & Thrift
Opportunity Fund and Pilgrim Regional Bank Shares) invest chiefly in the blue
chip industrial and financial sectors, which were the top-performing US sectors
for this period. Overweighting US securities and avoiding problems brought on by
the Asian crisis accounts for the superior performance the Capital Income Fund
returned relative to its peers and the Dow Jones World Index (DJWI): our fund
was up 25.24% for the year, while Lipper's Flexible Portfolio Funds returned
18.51% on average and DJWI was up only 12.32%.
Going forward our best opportunity may lie in two holdings which, although they
incurred losses in the fourth quarter, achieved performance far exceeding that
of their peer group: Templeton Foreign Fund and Princor World Fund. We see
potential for reward here from deep discounts available in the debt and equity
markets that have been pummeled overseas.
WHAT ABOUT THE FUTURE? One of the most important things I can say to you right
now is that the news from Asia is not all bad. In fact, we expect the recent
turmoil will lead to something quite good.
Think back to the mid-1980's. Our country was reeling from the crisis in the
savings and loan and banking industries. Companies were over-leveraged,
productivity was down and American businesses in general were fat and
complacent. Turmoil in our stock markets reflected these problems and the
message was clear: American business needed to go on a diet.
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The price appreciation of the investments within our
funds is well deserved in light of the vast accomplishments American companies
have achieved in productivity, growth in market share and leadership into the
next century.
<PAGE>
In many ways, Asia is dealing with the same problems we dealt with a decade ago.
Asian companies need to trim the fat and get out of debt. With the flood of bad
news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy -- and meaningful -- solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of these countries to experience a recovery similar to our own. As
we write this letter in mid-January, for the first time in many years we are
increasing our positions in many of the Asian markets at what we believe are
bargain prices. In my view, the patient global investor will be highly rewarded
as Asian companies clean house.
A FINAL WORD. The US stock market has had a great run. I believe the next great
run will be in those global markets whose companies are streamlining operations
and becoming more efficient, competitive and fiscally secure. We are positioning
the Capital Income Fund to benefit from this next transition. In my opinion
there has never been a better time to be in a globally diversified portfolio.
Thank you for your continued support. Without you, the success we have achieved
would not be possible. Best regards as we look forward to a bright future.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
CLOSED-END FUNDS -- 13.60%
John Hancock Bank & Thrift
Opportunity Fund 12,800 $ 636,800
Pilgrim Regional Bank Shares,
Inc. 23,000 600,300
-----------
TOTAL CLOSED-END FUNDS
(cost $686,408) 1,237,100
-----------
MUTUAL FUNDS -- 86.40%
EQUITY INCOME FUNDS -- 7.96%
Putnam Equity Income Fund
New Class A 22,123 354,867
T. Rowe Price Equity Income
Fund 13,572 369,578
-----------
724,445
-----------
GLOBAL FUNDS -- 2.16%
SoGen International Fund, Inc. 6,949 196,942
-----------
GROWTH FUNDS -- 6.92%
Alliance Fund, Inc. Class A 50,591 440,149
Vanguard Index Trust Total
Stock Market Portfolio 8,352 189,099
-----------
629,248
-----------
GROWTH AND INCOME FUNDS --
28.73%
American Century Income and
Growth Fund 13,060 340,492
Mutual Series Fund, Inc.
Beacon Fund 8,838 136,286
Neuberger & Berman Equity Funds
Guardian Fund 8,015 240,868
Principal Preservation
Portfolios S&P 100 Plus
Portfolio 34,133 947,197
Vanguard Index Trust Value
Portfolio 20,935 439,438
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
Vanguard/Windsor Fund, Inc.
Vanguard/Windsor II Portfolio 2,951 $ 89,940
Vista Mutual Fund Group Growth
& Income Fund 8,783 418,614
-----------
2,612,835
-----------
INTERNATIONAL FUNDS -- 24.75%
Alliance International Fund,
Inc. Class A 18,259 317,712
Alliance Worldwide
Privatization Fund, Inc.
Class A 25,488 322,430
Princor World Fund, Inc. Class
A 93,643 869,949
Templeton Foreign Fund, Inc. 72,806 741,168
-----------
2,251,259
-----------
S&P 500 INDEX OBJECTIVE
FUNDS -- 5.31%
Vanguard Index Trust 500
Portfolio 5,387 482,831
-----------
WORLD INCOME FUNDS -- 10.57%
Alliance North American
Government Income Trust, Inc.
Class A 12,071 96,814
Bear Stearns Investment Trust
Emerging Markets Debt
Portfolio Class A 37,403 443,605
Phoenix Multi-Portfolio Fund
Emerging Markets Bond
Portfolio Class A 32,741 420,730
-----------
961,149
-----------
TOTAL MUTUAL FUNDS (cost
$6,748,573) 7,858,709
-----------
TOTAL INVESTMENTS (cost
$7,434,981) $ 9,095,809
-----------
-----------
</TABLE>
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $7,434,981) $9,095,809
Cash 251,791
Receivables for fund shares sold 25,747
Other assets 20,573
----------
Total assets 9,393,920
----------
LIABILITIES:
Accrued distribution fees 3,729
Other liabilities 4,982
----------
Total liabilities 8,711
----------
NET ASSETS $9,385,209
----------
----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 445,223
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 21.08
----------
----------
</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 SIX MONTHS ENDED NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 87,031
Interest 4,206
--------
Total income 91,237
--------
EXPENSES:
Investment advisory fees 26,669
Distribution fees 22,224
Transfer agent fees 11,556
Custodial fees 1,638
Professional fees 7,036
Registration fees 7,854
Trustee fees 703
Insurance 1,729
Shareholder reports 3,845
Miscellaneous 949
--------
84,203
Less expenses waived by investment advisor (26,669)
--------
Total expenses 57,534
--------
Net investment income 33,703
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions 274,467
Capital gain distributions from mutual funds 72,860
Increase in unrealized appreciation on investments 543,414
--------
Net realized and unrealized gain on investments 890,741
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $924,444
--------
--------
</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
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
NOV. 30, FOR THE
1997 YEAR ENDED
(UNAUDITED) MAY 31, 1997
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 33,703 $ 101,568
Net realized gain from security transactions 274,467 114,354
Capital gain distributions from mutual funds 72,860 330,087
Net change in unrealized appreciation on investments 543,414 630,186
----------- ------------
Increase in net assets resulting from operations 924,444 1,176,195
----------- ------------
DISTRIBUTIONS FROM:
Net investment income (141,336 )
Net realized gain on security transactions (447,607 ) (289,331 )
----------- ------------
Decrease in net assets resulting from distributions (447,607 ) (430,667 )
----------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 44,383 and 231,628 shares 958,053 4,353,629
Value of 20,864 and 20,945 shares issued upon reinvestment of dividends 425,624 390,402
Cost of 26,548 and 97,374 shares redeemed (573,119 ) (1,808,679 )
----------- ------------
Increase in net assets resulting from capital share transactions 810,558 2,935,352
----------- ------------
Total increase in net assets 1,287,395 3,680,880
NET ASSETS:
Beginning of year/period 8,097,814 4,416,934
----------- ------------
End of year/period (including undistributed net investment income of $85,102
and $51,399, respectively) $9,385,209 $ 8,097,814
----------- ------------
----------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
NOV. 30, FOR THE YEARS ENDED MAY 31,
1997 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR/PERIOD:
Net asset value, beginning of year/period $ 19.92 $17.57 $17.21 $16.34 $16.06 $14.69
----------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) 0.06 0.32 0.34 0.35 (0.01) (0.06)
Net realized and unrealized gain on investments 2.18 3.49 2.57 1.64 0.78 1.43
----------- ------ ------ ------ ------ ------
Total income from investment operations 2.24 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 (1.08) (0.98) (2.27) (0.76) (0.49)
----------- ------ ------ ------ ------
Total distributions (1.08) (1.46) (2.55) (1.12) (0.49)
----------- ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR/PERIOD $ 21.08 $19.92 $17.57 $17.21 $16.34 $16.06
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Total return* 11.43% 22.43% 17.65% 13.08% 4.79% 9.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year/period (000's omitted) $ 9,385 $8,098 $4,417 $3,031 $2,964 $2,603
Ratio of expenses to average net assets(2) 1.31%(1) 1.77% 2.22% 2.05% 2.12% 2.77%
Ratio of net investment income (loss) to average
net assets 0.77%(1) 1.84% 1.43% 0.75% (0.06)% (0.82)%
Portfolio turnover rate 47%(1) 67% 40% 65% 17% 29%
</TABLE>
- ---------------
(1) Annualized
(2) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 1.91%, 2.38%, 2.82%, 2.65%, 2.72% and
3.37%, respectively.
* Total return for periods of less than one year are not annualized.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1997 IS UNAUDITED)
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 seven 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 November 30, 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 $7,434,981,
$1,660,828, $1,817,727 and $156,899, 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) retains 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
six months ended November 30, 1997, the Distributor received $18,498 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 six months ended November 30, 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 $2,405,331
and $2,052,815, respectively.
6. COMPOSITION OF NET ASSETS:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $7,559,327
Accumulated net investment income 85,102
Accumulated net realized gain from security transactions 79,952
Unrealized appreciation on investments 1,660,828
----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $9,385,209
----------
----------
</TABLE>
<PAGE>
T-1 TREASURY TRUST
SEMI-ANNUAL REPORT
1997
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. Box 5228
Martinsville, Virginia 24115
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
250 West Pratt St.
Baltimore, Maryland 21201
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.
Dear Fellow Shareholders:
Both T-1 and the Treasuries Trust experienced solid real rates of return net of
inflation over the last six months. These funds profited from the turmoil in
Asia as the US Treasury market became the safe haven of the world. At home,
inflation remained low and Federal Reserve Board Chairman Alan Greenspan
continued to keep a tight reign on interest rates. All of these situations
helped performance during the period, and bode well for the coming months.
The Treasuries Trust, which was launched on July 2, 1997, manages the yield
curve based on a proprietary model that Yorktown Management & Research has been
perfecting over the last ten years. We feel a significant accomplishment in the
public offering of this fund because it is one of the only products we know of
that 1) restricts itself to Treasury investments, 2) does not use any
derivatives, and 3) is designed to potentially deliver positive returns on
principal while generating the safe income that is the hallmark of pure
Treasury investments. From its inception to the end of this reporting period,
the fund returned a healthy 3.81% (less sales load). We are very proud of our
early accomplishment.
We are also pleased to announce that on March 1, 1998, T-1 and the Treasuries
Trust will become a single fund under the Treasuries Trust banner. While T-1
has certainly served a useful purpose, we believe its shareholders will benefit
more from teaming up with the Treasuries Trust: aside from the capital
appreciation potential mentioned above, it has the same relative safety and
income features as T-1, but is currently operating with much lower internal
expenses (after waivers and reimbursements). We know our T-1 shareholders will
be pleased with the superior structure of the Treasuries Trust. Welcome aboard!
A word about Asia. Much of what has happened in the financial markets during
the last six months is an outgrowth of technological advances made in the
investment industry: technology reveals waste, inefficiency and poor
productivity, and any financial market in which such inadequacies appear cannot
count on hiding them for long. Technology revealed the truth about the Asian
markets in the third quarter of 1997, and the world felt its aftershock.
The most important thing I can say about Asia is that the news is not all bad.
In fact, I expect the recent turmoil will lead to something quite good. While
volatility is always uncomfortable, I believe much of what is happening in Asia
right now bodes well for the Treasuries Trust and the patient investor.
If you think back to the mid-1980's you will remember our country was reeling
from the crisis in the savings and loan and banking industries. Companies were
over-leveraged, productivity was down and American businesses in general were
fat and complacent. Turmoil in our stock markets reflected these problems and
the message was clear: American business needed to go on a diet.
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The housecleaning we did in the 1980's fueled much of
the gains we have seen in the 1990's.
<PAGE>
In many ways, Asia is dealing with the same problems we dealt with a decade
ago. Asian companies need to trim the fat and get out of debt. With the flood
of bad news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy -and meaningful - solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of Asia will experience a recovery similar to our own. In the
meantime, money will continue to flee to the safe haven of the US Treasury
market. The Treasuries Trust is positioned to benefit from the Asian recovery
process, as well as the advantages that will come from a healthier global
economy.
Thank you for your support. Without you, the success we have achieved would not
be possible. Best regards as we look forward to a bright future.
Sincerely,
/s/ David D. Basten
David D. Basten
President
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
SCHEDULE OF INVESTMENTS
November 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Principal Value
------------- ------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 100.00%
United States Treasury Bills
Due 9/17/98 $ 2,297,000 $ 2,201,151
------------
Total investments (cost $2,201,833) $ 2,201,151
============
</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
November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $2,201,833) $ 2,201,151
Cash 55,716
Other assets 3,640
------------
Total assets 2,260,507
------------
Liabilities:
Accrued distribution fees 449
Accrued advisory fees 180
Other liabilities 88,412
------------
Total liabilities 89,041
------------
Net assets $ 2,171,466
============
Shares of beneficial interest outstanding (unlimited number of no par
value shares authorized) 463,795
============
Net asset value, offering and redemption price per share outstanding $ 4.68
============
</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 six months ended November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest $ 62,709
--------
Expenses:
Investment advisory fees 7,005
Distribution fees 5,838
Transfer agent fees 7,976
Custodial fees 1,113
Professional fees 7,160
Registration fees 7,913
Trustee fees 703
Insurance 1,910
Shareholder reports 3,924
Miscellaneous 701
--------
44,243
Less expenses waived by investment advisor and distributor (8,757)
--------
Total expenses 35,486
--------
Net investment income 27,223
--------
Realized and unrealized gain (loss) on investments:
Net realized loss from security transactions (20)
Change in unrealized appreciation on investments 211
--------
Net realized and unrealized gain on investments 191
--------
Net increase in net assets resulting from operations $ 27,414
========
</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
<TABLE>
<CAPTION>
For the
Six Months
Ended
Nov. 30, For the
1997 Year Ended
(Unaudited) May 31, 1997
------------- --------------
<S> <C> <C>
Operations:
Net investment income $ 27,223 $ 231,376
Net realized loss from security transactions (20) (12,667)
Net change in unrealized appreciation on investments 211 24,149
----------- ------------
Increase in net assets resulting from operations 27,414 242,858
----------- ------------
Distributions from:
Net investment income (40,230) (237,714)
----------- ------------
Decrease in net assets resulting from distributions (40,230) (237,714)
Capital share transactions:
Proceeds from sale of 89,962 and 308,853 shares 421,744 1,448,713
Value of 8,281 and 49,699 shares issued upon reinvestment of dividends 38,675 231,979
Cost of 171,539 and 1,239,835 shares redeemed (804,226) (5,809,439)
----------- ------------
Decrease in net assets resulting from capital share transactions (343,807) (4,128,747)
----------- ------------
Total decrease in net assets (356,623) (4,123,603)
Net assets:
Beginning of year/period 2,528,089 6,651,692
----------- ------------
End of year/period (including undistributed net investment income of
$21,880 and $34,887, respectively) $ 2,171,466 $ 2,528,089
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the
Six Months
Ended For the Years Ended May 31,
Nov. 30, 1997 1996 1995 1994 1993
1997 ----------- ----------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
For a share outstanding throughout each year/period:
Net asset value, beginning of $ 4.71 $ 4.69 $ 4.73 $ 4.75 $ 5.15 $ 5.16
----------- --------- --------- --------- ------------ ---------
Income from investment operations:
Net investment income 0.06 0.21 0.17 0.23 0.19 0.18
Net realized and unrealized gain (loss) on investments (0.01) (0.02) (0.35) 0.03
----------- --------- ------------ ---------
Total income (loss) from investment operations 0.05 0.19 0.17 0.23 (0.16) 0.21
----------- --------- --------- --------- ------------ ---------
Distributions:
From net investment income (0.08) (0.17) (0.21) (0.25) (0.14) (0.22)
From net realized gain on security transactions (0.10)
----------- --------- --------- --------- ------------ ---------
Total distributions (0.08) (0.17) (0.21) (0.25) (0.24) (0.22)
----------- --------- --------- --------- ------------ ---------
Net asset value, end of year/period $ 4.68 $ 4.71 $ 4.69 $ 4.73 $ 4.75 $ 5.15
=========== ========= ========= ========= ============ =========
Total return* 1.07% 4.13% 3.67% 4.99% (3.48)% 4.18%
Ratios/Supplemental Data:
Net assets, end of year/period (000's omitted) $ 2,171 $ 2,528 $ 6,652 $ 4,049 $ 4,234 $ 7,295
Ratio of expenses to average net assets(2) 3.04% (1) 1.49% 1.49% 1.76% 1.57% 1.44%
Ratio of net investment income to average net assets 2.33% (1) 3.66% 3.77% 4.19% 3.71% 4.72%
Portfolio turnover rate 199% (1) 108% 278% 292% 127% 308%
</TABLE>
- -----------
(1) Annualized
(2) Without fees waived/reimbursed by the investment advisor and distributor,
the ratio of expenses to average net assets would have been 3.79%, 2.24%,
2.46%, 2.56%, 2.16% and 2.04%, respectively.
* Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS
(Information as of and for the six months ended
November 30, 1997 is unaudited)
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 seven 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 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 November 30, 1997 a net capital loss
carryforward of approximately $442,000 expiring from 2000 through 2005. As
of November 30, 1997, 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 $2,201,833 and $682,
respectively.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
T-1 TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
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.
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 period ended November
30, 1997, the Advisor waived $5,838 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, effective November 23, 1994,
the Distributor has undertaken to limit such fee to .25% of the Fund's
average daily net assets. For the six months ended November 30, 1997, the
Distributor waived $2,919 of its fees. The principal stockholder of the
Distributor is also a trustee of the Trust.
5. Investment Activity:
For the six months ended November 30, 1997, purchases and sales of U.S.
government obligations amounted to $2,279,125 and $2,627,054, respectively.
There were no purchases and sales of securities other than U.S. government
obligations.
6. Composition of Net Assets:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 2,601,913
Accumulated net investment income 21,880
Accumulated net realized loss from security transactions (451,645)
Unrealized depreciation on investments (682)
-----------
Net assets applicable to outstanding shares of beneficial interest $ 2,171,466
===========
</TABLE>
<PAGE>
GROWTH FUND
SEMI-ANNUAL REPORT
[API TRUST LOGO]
1997
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. Box 5228
Martinsville, Virginia 24115
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
250 West Pratt St.
Baltimore, Maryland 21201
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>
Dear Fellow Shareholders:
As the year 2000 approaches I believe "multi-market diversification" will become
the buzzword of the financial industry in the 21st century. As we look past the
volatility, illiquidity and the political turmoil of the fourth quarter
sell-off, we may be able to say once and for all that the best is yet to come.
When we created the Growth Fund back in the mid-1980's our driving force was to
find the best equity values in the US, and then within the global marketplace.
We used the term "total management system" to describe the way we looked forward
into each and every asset class and then invested in those with superior
fundamental strengths. Today we continue with the same strategy but with one
added advantage: we now obtain the expertise of the best mutual fund managers in
the world.
This year saw the weightings of our portfolio and the success of the underlying
funds in which we invested deliver a continuation of superior long term
performance. Domestically, the funds focused on the financial services markets
were our best performers (Davis Financial, John Hancock Regional Bank Shares),
followed closely by the large cap growth and growth and income sectors of the US
marketplace, including Vanguard Total Stock, Davis New York Venture, Legg Mason
Value Trust, FPA Capital, Guardian Park Avenue and SSGA Matrix Equity funds,
just to name a few. Internationally, our research and the research of our
underlying fund families was able to detect the shaky foundation in the Pacific
Rim. For this reason, you will note our weightings in Asia totaled less than 2%
of the Growth Fund's portfolio over the last six months.
Combining global diversification with active asset allocation paid off. Our
performance overall was up 15.64% for the year, a laudable achievement
especially when compared with both the Dow Jones World Index (12.32%) and
Lipper's Global Funds (12.89%) We are pleased with our results and look forward
to profiting in the aftermath of the Asian crisis.
WHAT COMES NEXT? Much of what has happened in the financial markets during the
last six months is an outgrowth of technological advances made in the investment
industry: technology reveals waste, inefficiency and poor productivity, and any
financial market in which such inadequacies appear cannot count on hiding them
for long. Technology revealed the truth about the Asian markets in the third
quarter of 1997, and the world felt its aftershock.
The most important thing I can say about Asia is that the news is not all bad.
In fact, I expect the recent turmoil will lead to something quite good. While
volatility is always uncomfortable, I believe much of what is happening in Asia
right now will shape the Growth Fund in the months ahead and will bode well for
the patient investor.
If you think back to the mid-1980's you will remember our country was reeling
from the crisis in the savings and loan and banking industries. Companies were
over-leveraged, productivity was down and American businesses in general were
fat and complacent. Turmoil in our stock markets reflected these problems and
the message was clear: American business needed to go on a diet.
<PAGE>
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The housecleaning we did in the 1980's fueled much of the
gains we have seen in the 1990's.
In many ways, Asia is dealing with the same problems we dealt with a decade ago.
Asian companies need to trim the fat and get out of debt. With the flood of bad
news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy - and meaningful - solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of Asia will experience a recovery similar to our own. In fact, I
believe the next great bull market will come from those countries whose
companies are streamlining operations and becoming more efficient, competitive
and fiscally secure. As we write this letter in mid-January, for the first time
in many years we are increasing our positions in many of the Asian markets at
what we believe are bargain prices. In my view, there could be no better time to
own a globally diversified fund. I expect investors will be highly rewarded as
Asian companies clean house, and we take advantage of the opportunities this
transition creates around the world. We are positioning the Growth Fund to
benefit from this anticipated recovery.
Thank you again for your support. Without you, the success we have achieved
would not be possible. Best regards as we look forward to a bright future.
Sincerely,
David D. Basten
President
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
MUTUAL FUNDS -- 100.00%
CAPITAL APPRECIATION FUNDS --
3.05%
Oppenheimer Quest for Value
Fund, Inc. Class A 43,069 $ 903,589
Putnam Voyager Fund, Inc. 62,971 1,249,361
------------
2,152,950
------------
EMERGING MARKETS FUNDS --
7.60%
Delaware Group Global &
International Funds, Inc.
Emerging Markets Class A 49,407 503,953
Pioneer Emerging Markets Fund
Class A 70,866 1,021,898
SSGA Emerging Markets Fund 100,139 967,345
Templeton Developing Markets
Trust 205,053 2,870,748
------------
5,363,944
------------
EQUITY INCOME FUNDS -- 2.06%
Delaware Group Decatur Total
Return Fund Class A 50,175 965,379
Kemper-Dreman High Return
Fund Class A 14,701 492,796
------------
1,458,175
------------
EUROPEAN REGION FUNDS --
4.05%
GAM Funds, Inc. Europe Fund 79,089 1,121,486
Pioneer Europe Fund Class A 24,923 691,633
Vanguard International Equity
Index Fund, Inc. European
Portfolio 52,891 1,049,363
------------
2,862,482
------------
FINANCIAL SERVICESFUNDS --
6.92%
Davis Series, Inc. Financial
Fund Class A 46,014 1,143,914
John Hancock Freedom Regional
Bank Fund Class A 73,767 3,741,504
------------
4,885,418
------------
GLOBAL FUNDS -- 1.73%
Oppenheimer Global Fund, Inc. 7,206 339,273
SoGen International Fund,
Inc. 13,029 369,267
Templeton Growth Fund, Inc. 25,755 509,961
------------
1,218,501
------------
GROWTH FUNDS -- 12.81%
Bear Sterns Large Cap Value
Fund Class A 16,234 351,793
Davis New York Venture Fund
Class A 139,245 3,187,341
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
FPA Capital Fund, Inc. 10,367 $ 383,920
Guardian Park Avenue Fund,
Inc. 32,444 1,596,285
Legg Mason Value Trust --
Navigator Class 22,578 1,006,999
Longleaf Partners Fund 40,694 1,183,390
Vanguard Index Trust Total
Stock Market Portfolio 58,783 1,330,852
------------
9,040,580
------------
GROWTH AND INCOME FUNDS --
10.15%
ASM Fund, Inc. 30,089 545,216
Kemper-Dreman Contrarian Fund
Class A 22,768 481,102
SSGA Matrix Equity Fund 134,653 2,295,848
Vanguard Index Trust Value
Portfolio 21,346 448,074
Vanguard Quantitative
Portfolios, Inc. 37,362 1,051,011
Vista Mutual Fund Group
Growth and Income Fund 22,238 1,059,896
Washington Mutual Investors
Fund, Inc. 40,543 1,279,951
------------
7,161,098
------------
HEALTH/BIOTECHNOLOGY FUNDS --
1.46%
Eaton Vance Worldwide Health
Sciences Fund Class A 68,352 1,030,075
------------
INTERNATIONAL FUNDS -- 16.14%
Alliance Worldwide
Privatization Fund, Inc.
Class A 58,284 737,302
Euro Pacific Growth Fund 37,327 1,013,065
GAM Funds, Inc. International
Fund 159,868 4,461,921
Ivy International Fund Class
A 65,968 2,554,282
Templeton Foreign Fund, Inc. 201,639 2,052,691
Vanguard World Fund
International Growth
Portfolio 33,467 569,947
------------
11,389,208
------------
JAPANESE FUNDS -- 0.61%
GAM Funds, Inc. Japan Fund 46,469 428,916
------------
LATIN AMERICAN FUNDS -- 0.63%
BT Investment Funds Latin
America Equity Fund 32,594 445,567
------------
MID-CAP FUNDS -- 2.98%
Vanguard Index Trust Extended
Market Portfolio 65,267 2,100,091
------------
PACIFIC REGION FUNDS -- 0.73%
Colonial Trust VII Newport
Tiger Fund Class A 56,219 514,406
------------
</TABLE>
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
S&P 500 INDEX OBJECTIVE
FUNDS -- 12.11%
<S> <C> <C>
Federated Index Trust Max-Cap
Fund 64,771 $ 1,334,294
Fidelity Commonwealth Trust
Market Index Trust 16,647 1,135,664
SSGA S&P 500 Index Fund 100,404 1,947,850
T. Rowe Price Index Trust,
Inc. Equity Index Fund 50,428 1,320,720
Vanguard Index Trust 500
Portfolio 31,334 2,808,200
------------
8,546,728
------------
SCIENCE & TECHNOLOGY FUNDS --
5.00%
Alliance Technology Fund 30,741 1,673,558
Principal Preservation
Technology 100 Index
Portfolio 15,099 201,122
Seligman Communications &
Information Fund, Inc. 68,175 1,653,266
------------
3,527,946
------------
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
SMALL COMPANY GROWTH FUNDS --
11.18%
Bear Stearns Small Cap Value
Fund Class A 58,754 $ 1,301,998
Federated Index Trust
Mini-Cap Fund 75,580 1,250,853
Kaufmann Fund, Inc. 286,902 1,827,567
Munder Small Company Growth
Fund 47,293 1,138,825
Putnam OTC Emerging Growth
Fund 149,732 2,368,775
------------
7,888,018
------------
WORLD INCOME FUNDS -- 0.79%
Phoenix Multi-Portfolio Fund
Emerging Markets Bond
Portfolio Class A 43,321 $ 556,679
------------
TOTAL INVESTMENTS (cost
$60,107,179) $ 70,570,782
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost of $60,107,179) $70,570,782
Cash 828,086
Other assets 61,666
-----------
Total assets 71,460,534
-----------
LIABILITIES:
Accrued distribution fees 57,904
Accrued advisory fees 32,315
Other liabilities 48,193
-----------
Total liabilities 138,412
-----------
NET ASSETS $71,322,122
-----------
-----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING (unlimited number of no par value shares authorized) 5,477,283
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OUTSTANDING $ 13.02
-----------
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 382,388
Interest 19,583
----------
Total income 401,971
----------
EXPENSES:
Investment advisory fees 364,160
Distribution fees 364,160
Transfer agent fees 104,354
Custodial fees 11,814
Professional fees 25,891
Registration fees 7,843
Trustee fees 4,211
Insurance 15,462
Shareholder reports 10,045
Miscellaneous 3,781
----------
911,721
Less expenses waived by investment advisor (109,547)
----------
Total expenses 802,174
----------
Net investment loss (400,203)
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions 2,960,091
Capital gain distributions from mutual funds 1,240,193
Increase in unrealized appreciation on investments 1,215,012
----------
Net realized and unrealized gain on investments 5,415,296
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,015,093
----------
----------
</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
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED FOR THE
NOV. 30, 1997 YEAR ENDED
(UNAUDITED) MAY 31, 1997
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (400,203) $ (867,602 )
Net realized gain from security transactions 2,960,091 5,397,332
Capital gain distributions from mutual funds 1,240,193 2,792,861
Net change in unrealized appreciation on investments 1,215,012 (2,016,057 )
------------- ------------
Increase in net assets resulting from operations 5,015,093 5,306,534
------------- ------------
DISTRIBUTIONS FROM:
Net realized gain on security transactions (6,675,316) (7,908,281 )
------------- ------------
Decrease in net assets resulting from distributions (6,675,316) (7,908,281 )
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 246,377 and 822,821 shares 3,497,001 10,920,862
Value of 504,851 and 590,613 shares issued upon reinvestment of dividends 6,451,999 7,542,131
Cost of 395,447 and 1,169,419 shares redeemed (5,683,679) (15,450,717 )
------------- ------------
Increase in net assets resulting from capital share transactions 4,265,321 3,012,276
------------- ------------
Total increase in net assets 2,605,098 410,529
NET ASSETS:
Beginning of year/period 68,717,024 68,306,495
------------- ------------
End of year/period $71,322,122 $68,717,024
------------- ------------
------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
NOV. 30, FOR THE YEARS ENDED MAY 31,
1997 ---------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH
YEAR/PERIOD:
Net asset value, beginning of year/period $ 13.42 $ 14.00 $ 12.48 $ 12.32 $ 11.86 $ 10.84
----------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment loss (0.07) (0.17) (0.14) (0.10) (0.21) (0.18)
Net realized and unrealized gain on
investments 1.02 1.25 2.67 1.37 1.25 1.57
----------- ------- ------- ------- ------- -------
Total income from investment
operations 0.95 1.08 2.53 1.27 1.04 1.39
----------- ------- ------- ------- ------- -------
Distributions:
From net realized gain on security
transactions (1.35) (1.66) (1.01) (1.11) (0.58) (0.37)
----------- ------- ------- ------- ------- -------
Total distributions (1.35) (1.66) (1.01) (1.11) (0.58) (0.37)
----------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR/PERIOD $ 13.02 $ 13.42 $ 14.00 $ 12.48 $ 12.32 $ 11.86
----------- ------- ------- ------- ------- -------
----------- ------- ------- ------- ------- -------
Total return* 7.27% 8.32% 21.03% 11.28% 8.60% 13.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year/period (000's omitted) $71,322 $68,717 $68,306 $55,191 46,958 $44,364
Ratio of expenses to average net assets(2) 2.24%(1) 2.18% 2.24% 2.06% 2.24% 2.05%
Ratio of net investment loss to average net
assets (1.13)%(1) (1.31)% (1.08)% (1.50)% (1.75)% (1.56)%
Portfolio turnover rate 52%(1) 84% 63% 91% 90% 157%
</TABLE>
- ---------------
(1) Annualized
(2) Without fees recouped or waived by the investment advisor, the ratio of
expenses to average net assets would have been 2.54%, 2.55%, 2.57%, 2.60%,
2.56% and 2.52%, respectively.
* Total return for periods less than one year are not annualized.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1997 IS UNAUDITED)
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 seven 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 November 30, 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 $60,107,179,
$10,463,603, $11,696,846 and $1,233,243, 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) retains
any dealer reallowances or 12b-1 fees resulting from the Fund's purchase of
shares of underlying funds. During the six months ended November 30, 1997,
the Advisor waived $109,547 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
six months ended November 30, 1997, the Distributor received $107,681 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 six months ended November 30, 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
$18,398,488 and $20,038,523, respectively.
6. COMPOSITION OF NET ASSETS:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $58,874,150
Accumulated net investment loss (400,203)
Accumulated net realized gain from security transactions 2,384,572
Unrealized appreciation on investments 10,463,603
-----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST $71,322,122
-----------
-----------
</TABLE>
<PAGE>
MULTIPLE INDEX TRUST
TREASURIES TRUST
SEMI-ANNUAL REPORT
[API TRUST LOGO]
1997
[API TRUST LOGO]
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.
250 West Pratt St.
Baltimore, Maryland 21201
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>
TABLE OF CONTENTS
Multiple Index Trust
Letter From the President ................ 2
Schedule of Investments .................. 4
Statement of Assets and Liabilities ...... 5
Statement of Operations .................. 6
Statement of Changes in Net Assets ...... 7
Financial Highlights .................... 8
Notes to Financial Statements ............ 9
Treasuries Trust
Letter From the President ................ 11
Schedule of Investments ................ 13
Statement of Assets and Liabilities ...... 14
Statement of Operations .................. 15
Statement of Changes in Net Assets ...... 16
Financial Highlights .................... 17
Notes to Financial Statements ............ 18
<PAGE>
[API TRUST LOGO]
Dear Fellow Shareholders:
Many thanks to all of you. I greatly appreciate the first shareholders in this
fund and those who have supported this project from its conception back in the
1980's to the point we have achieved today. The power of index investing,
global diversification, low costs and active allocation is incomparable in
today's market, and I invite any expert to compare his or her results with
ours: the Multiple Index Trust will stand as a formidable competitor.
On July 2, 1997, the first day of public trading, the Multiple Index Trust's
global, region and country macroeconomic guidelines were put in place and the
fund came to life with a truly unique and superior investment path to the
future. It is diversification of the highest order - pure, simple indexing
weighted to the best performing world economies and their equity markets.
Indexing has long been touted as the most rewarding and cost-effective way to
achieve investment results over the long term. By investing in index mutual
funds at home and abroad we are able to give Multiple Index Trust shareholders
the benefit of indexing with an added touch - taking the best each market has
to offer and adding it to the portfolio. With more than 6,500 companies in 50
markets the Multiple Index Trust is one of the most diversified stock funds in
the world - and has one of the most efficient total fee structures available
for actively managed funds in the industry.
Since its inception last summer the Multiple Index Trust has been strongly
overweighted in US securities. At the end of this reporting period, the fund
had 45% of its assets invested in S&P 500 index funds, 20% in small cap US
stock funds that replicate the Russell 2000, and 25% in funds that mirror the
Wilshire 5000. Less than 2% of the assets were invested in the Pacific and
Emerging markets which were battered in the fourth quarter sell-off. Our
portfolio composition paid off, and we are proud of our early accomplishment.
Where do we go from here? Much of what has happened in the financial markets
during the last six months is an outgrowth of technological advances made in
the investment industry: technology reveals waste, inefficiency and poor
productivity, and any financial market in which such inadequacies appear cannot
count on hiding them for long. Technology revealed the truth about the Asian
markets in the third quarter of 1997, and the world felt its aftershock.
The most important thing I can say about Asia is that the news is not all bad.
In fact, I expect the recent turmoil will lead to something quite good. While
volatility is always uncomfortable, I believe much of what is happening in Asia
right now bodes well for the Multiple Index Trust and the patient investor.
If you think back to the mid-1980's you will remember our country was reeling
from the crisis in the savings and loan and banking industries. Companies were
over-leveraged, productivity was down and American businesses in general were
fat and complacent. Turmoil in our stock markets reflected these problems and
the message was clear: American business needed to go on a diet.
2
<PAGE>
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The housecleaning we did in the 1980's fueled much of
the gains we have seen in the 1990's.
In many ways, Asia is dealing with the same problems we dealt with a decade
ago. Asian companies need to trim the fat and get out of debt. With the flood
of bad news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy -and meaningful - solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of Asia will experience a recovery similar to our own. In fact, I
believe the next great bull market will come from those countries whose
companies are streamlining operations and becoming more efficient, competitive
and fiscally secure. In my view, there could be no better time to own a
globally diversified fund. I expect investors will be highly rewarded as Asian
companies clean house, and we take advantage of the opportunities this
transition creates around the world.
Thank you again for your support. Without you, the success we have achieved
would not be possible. Best regards as we look forward to a bright future.
Sincerely,
/s/ David D. Basten
David D. Basten
President
3
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
SCHEDULE OF INVESTMENTS
November 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares Value
-------- -----------
<S> <C> <C>
MUTUAL FUNDS - 100.00%
Emerging Markets Funds - 1.16%
Vanguard International Equity Index Fund, Inc. Emerging Markets Portfolio 2,055 $ 20,720
-----------
European Region Funds - 3.35%
BT EAFE Equity Index Fund 5,840 59,861
-----------
Growth Funds - 5.93%
Vanguard Index Trust Total Stock Market Portfolio 4,681 105,997
-----------
Growth and Income Funds - 3.34%
ASM Index 30 Fund 3,296 59,736
-----------
Mid-Cap Funds - 21.20%
Federated Index Trust Mid-Cap Fund 20,110 349,727
Vanguard Index Trust Extended Market Portfolio 903 28,906
-----------
378,633
-----------
Pacific Region Funds - 0.58%
Vanguard International Equity Index Fund, Inc. Pacific Portfolio 1,271 10,389
-----------
S&P 500 Index Objective Funds - 44.92%
Federated Index Trust Max-Cap Fund 20,154 415,177
SSGA S&P 500 Index Fund 8,032 155,832
T. Rowe Price Index Trust, Inc. Equity Index Fund 3,777 98,942
Vanguard Index Trust 500 Portfolio 1,478 132,483
-----------
802,434
-----------
Small Company Growth Funds - 19.52%
Federated Index Trust Mini-Cap Fund 21,067 348,674
-----------
Total investments (cost $1,812,280) $1,786,444
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $1,812,280) $1,786,444
Cash 3,328
Other assets 16,445
-----------
Total assets 1,806,217
-----------
Liabilities:
Other liabilities 11,362
-----------
Total liabilities 11,362
-----------
Net assets $1,794,855
===========
Shares of beneficial interest outstanding (unlimited number of no par value shares 179,068
===========
authorized)
Net asset value and redemption price per share outstanding $ 10.02
===========
Maximum offering price per share $ 10.17
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF OPERATIONS
for the period from July 2, 1997
(commencement of operations)
to November 30, 1997
(Unaudited)
Investment income:
Dividends $ 4,367
Interest 811
---------
Total income 5,178
---------
Expenses:
Investment advisory fees 2,924
Transfer agent fees 8,273
Custodial fees 1,241
Professional fees 4,551
Registration fees 4,965
Trustee fees 414
Insurance 1,241
Shareholder reports 1,241
Organizational expenses 3,040
Miscellaneous 414
---------
28,304
Less expenses waived/reimbursed by investment advisor (23,937)
---------
Total expenses 4,367
---------
Net investment income 811
---------
Realized and unrealized gain (loss) on investments:
Capital gain distributions from mutual funds 3,463
Decrease in unrealized appreciation on investments (25,836)
---------
Net realized and unrealized loss on investments (22,373)
---------
Net decrease in net assets resulting from operations $ (21,562)
=========
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF CHANGES IN NET ASSETS
for the period from July 2, 1997
(commencement of operations)
to November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Operations:
Net investment income $ 811
Capital gain distributions from mutual funds 3,463
Net change in unrealized appreciation on investments (25,836)
----------
Decrease in net assets resulting from operations (21,562)
----------
Capital share transactions:
Proceeds from sale of 185,076 shares 1,877,438
Cost of 6,008 shares redeemed (61,021)
----------
Increase in net assets resulting from capital share transactions 1,816,417
----------
Total increase in net assets 1,794,855
Net assets:
Beginning of period -
----------
End of period (including undistributed net investment income of $811) $1,794,855
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
FINANCIAL HIGHLIGHTS
for the period ended November 30, 1997(3)
(Unaudited)
<TABLE>
<S> <C>
For a share outstanding throughout the period:
Net asset value, beginning of period $ 10.00
-----------
Income from investment operations:
Net investment income 0.01
Net realized and unrealized gain on investments 0.01
-----------
Total income from investment operations 0.02
-----------
Net asset value, end of period $ 10.02
===========
Total return* 0.20%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 1,795
Ratio of expenses to average net assets(2) 0.86%(1)
Ratio of net investment income to average net assets 0.16%(1)
Portfolio turnover rate -
</TABLE>
- -----------
(1) Annualized
(2) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 5.61%.
(3) Commencement of operations is July 2, 1997.
* Total returns do not include the one time sales charge and for periods of
less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 seven separate portfolios.
The accompanying financial statements include only the Multiple Index Trust
(the "Fund").
The Fund's investment objective is to maximize total return from capital
growth and income. The Fund seeks to achieve its objective by investing at
least 65% of its total assets in shares of other open-end investment
companies whose portfolios mirror those of one index or another of market
securities.
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. Organization Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are included in other assets and are being amortized evenly
over two years. At November 30, 1997, such unamortized costs amounted to
$12,756.
d. 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 November 30, 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 $1,812,280, $25,836, $15,358 and $41,194,
respectively.
9
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the 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.
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 .7%of the
average daily net assets of the Fund. For the period ended November 30,
1997, the Advisor waived all of its advisory fees in the amount of $2,924.
In addition, the Advisor reimbursed $21,013 of the Fund's operating
expenses.
4. Investment Activity:
For the period ended November 30, 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
$1,812,280 and $0, respectively.
5. Composition of Net Assets:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $1,816,417
Accumulated net investment income 811
Accumulated net realized gain from security transactions 3,463
Unrealized depreciation on investments (25,836)
----------
Net assets applicable to outstanding shares of beneficial interest $1,794,855
==========
</TABLE>
10
<PAGE>
T-1 TREASURY TRUST
SEMI-ANNUAL REPORT
1997
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. Box 5228
Martinsville, Virginia 24115
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
250 West Pratt St.
Baltimore, Maryland 21201
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>
[API LOGO]
Dear Fellow Shareholders:
Both T-1 and the Treasuries Trust experienced solid real rates of return net of
inflation over the last six months. These funds profited from the turmoil in
Asia as the US Treasury market became the safe haven of the world. At home,
inflation remained low and Federal Reserve Board Chairman Alan Greenspan
continued to keep a tight reign on interest rates. All of these situations
helped performance during the period, and bode well for the coming months.
The Treasuries Trust, which was launched on July 2, 1997, manages the yield
curve based on a proprietary model that Yorktown Management & Research has been
perfecting over the last ten years. We feel a significant accomplishment in the
public offering of this fund because it is one of the only products we know of
that 1) restricts itself to Treasury investments, 2) does not use any
derivatives, and 3) is designed to potentially deliver positive returns on
principal while generating the safe income that is the hallmark of pure
Treasury investments. From its inception to the end of this reporting period,
the fund returned a healthy 3.81% (less sales load). We are very proud of our
early accomplishment.
We are also pleased to announce that on March 1, 1998, T-1 and the Treasuries
Trust will become a single fund under the Treasuries Trust banner. While T-1
has certainly served a useful purpose, we believe its shareholders will benefit
more from teaming up with the Treasuries Trust: aside from the capital
appreciation potential mentioned above, it has the same relative safety and
income features as T-1, but is currently operating with much lower internal
expenses (after waivers and reimbursements). We know our T-1 shareholders will
be pleased with the superior structure of the Treasuries Trust. Welcome aboard!
A word about Asia. Much of what has happened in the financial markets during
the last six months is an outgrowth of technological advances made in the
investment industry: technology reveals waste, inefficiency and poor
productivity, and any financial market in which such inadequacies appear cannot
count on hiding them for long. Technology revealed the truth about the Asian
markets in the third quarter of 1997, and the world felt its aftershock.
The most important thing I can say about Asia is that the news is not all bad.
In fact, I expect the recent turmoil will lead to something quite good. While
volatility is always uncomfortable, I believe much of what is happening in Asia
right now bodes well for the Treasuries Trust and the patient investor.
If you think back to the mid-1980's you will remember our country was reeling
from the crisis in the savings and loan and banking industries. Companies were
over-leveraged, productivity was down and American businesses in general were
fat and complacent. Turmoil in our stock markets reflected these problems and
the message was clear: American business needed to go on a diet.
The streamlining process that followed was sometimes painful, but it has paid
off handsomely. American companies are now healthy, lean, and efficient. Our
financial markets have become more secure, and our stock and bond markets are
the envy of the world. The housecleaning we did in the 1980's fueled much of
the gains we have seen in the 1990's.
11
<PAGE>
In many ways, Asia is dealing with the same problems we dealt with a decade
ago. Asian companies need to trim the fat and get out of debt. With the flood
of bad news that poured in from overseas, and the subsequent demands of the
International Monetary Fund and its related lenders, I anticipate a fairly
speedy -and meaningful - solution to the Pacific contagion. The process of
turning Asian financial markets around has already begun. The only question is
this: How long will it take?
I expect most of Asia will experience a recovery similar to our own. In the
meantime, money will continue to flee to the safe haven of the US Treasury
market. The Treasuries Trust is positioned to benefit from the Asian recovery
process, as well as the advantages that will come from a healthier global
economy.
Thank you for your support. Without you, the success we have achieved would not
be possible. Best regards as we look forward to a bright future.
Sincerely,
/s/ David D. Basten
David D. Basten
President
12
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
SCHEDULE OF INVESTMENTS
November 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Principal Value
------------ -----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 100.00%
United States Treasury Stripped Interest Payment
Due 5/15/2005 $ 759,000 $ 489,864
Due 5/15/2007 198,000 112,900
Due 5/15/2008 1,190,000 637,464
----------- -----------
Total investments (cost $1,230,934) $1,240,228
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $1,230,934) $1,240,228
Cash 15,923
Receivable for fund shares sold 28,075
Other assets 17,535
-----------
Total assets 1,301,761
-----------
Liabilities:
Other liabilities 15,024
-----------
Total liabilities 15,024
-----------
Net assets $1,286,737
===========
Shares of beneficial interest outstanding (unlimited number of no par value shares 124,717
===========
authorized)
Net asset value and redemption price per share outstanding $ 10.32
===========
Maximum offering price per share $ 10.48
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF OPERATIONS
for the period from July 2, 1997 (commencement of
operations) to November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest $ 15,716
---------
15,716
---------
Expenses:
Investment advisory fees 925
Transfer agent fees 8,273
Custodial fees 1,241
Professional fees 4,551
Registration fees 4,965
Trustee fees 414
Insurance 1,241
Shareholder reports 1,241
Organizational expenses 3,040
Miscellaneous 414
---------
26,305
Less expenses waived by investment advisor (23,532)
---------
Total expenses 2,773
---------
Net investment income 12,943
---------
Realized and unrealized gain on investments:
Increase in unrealized appreciation on investments 9,294
---------
Net realized and unrealized gain on investments 9,294
---------
Net increase in net assets resulting from operations $ 22,237
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
for the period from July 2, 1997 (commencement of
operations) to November 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Operations:
Net investment income $ 12,943
Net change in unrealized appreciation on investments 9,294
----------
Increase in net assets resulting from operations 22,237
Distributions from:
Net investment income (2,889)
----------
Decrease in net assets resulting from distributions (2,889)
----------
Capital share transactions:
Proceeds from sale of 145,627 shares 1,482,519
Value of 283 shares issued upon reinvestment of dividends 2,863
Cost of 21,193 shares redeemed (217,993)
----------
Increase in net assets resulting from capital share transactions 1,267,389
----------
Total increase in net assets 1,286,737
Net assets:
Beginning of period -
----------
End of period (including undistributed net investment income of $10,054) $1,286,737
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
FINANCIAL HIGHLIGHTS
for the period ended November 30, 1997(3)
(Unaudited)
<TABLE>
<S> <C>
For a share outstanding throughout the period:
Net asset value, beginning of period $ 10.00
-----------
Income from investment operations:
Net investment income 0.14
Net unrealized gain on investments 0.24
-----------
Total income from investment operations 0.38
-----------
Distributions:
From net investment income (0.06)
-----------
Total distributions (0.06)
-----------
Net asset value, end of year/period $ 10.32
===========
Total return* 3.81%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 1,287
Ratio of expenses to average net assets(2) 0.99%(1)
Ratio of net investment income to average net assets 4.63%(1)
Portfolio turnover rate
</TABLE>
- -----------
(1) Annualized
(2) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 9.42%.
(3) Commencement of operations is July 2, 1997.
* Total returns do not include the one time sales charge and for periods of
less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 seven separate portfolios.
The accompanying financial statements include only the Treasuries 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 in
obligations of the U.S. Treasury that are guaranteed as to principal and
interest by the full faith and credit of U.S. government.
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. Organization Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are included in other assets and are being amortized evenly
over two years. At November 30, 1997, such unamortized costs amounted to
$12,756.
d. 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 November 30, 1997, the aggregate cost of investments for federal
income tax purposes and the unrealized appreciation on a federal income
tax basis with respect to each security where there is an excess of value
over tax cost were $1,230,934 and $9,294, respectively.
18
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
(Unaudited)
2. Significant Accounting Policies, continued:
e. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the 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.
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 .40% of the
average daily net assets of the Fund. For the period ended November 30,
1997, the Advisor waived all of its advisory fees in the amount of $925. In
addition, the Advisor reimbursed $22,607 of the Fund's operating expenses.
4. Investment Activity:
For the period ended November 30, 1997, purchases and sales of U.S.
government obligations amounted to $1,215,881 and $0, respectively. There
were no purchases and sales of securities other than short-term obligations
and U.S. government obligations.
5. Composition of Net Assets:
At November 30, 1997, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $1,267,389
Accumulated net investment income 10,054
Unrealized appreciation on investments 9,294
-----------
Net assets applicable to outstanding shares of beneficial interest $1,286,737
===========
</TABLE>
19
