[FLAGS FROM [API LOGO]
DIFFERENT COUNTRIES]
May 31, 1998
ANNUAL REPORT
GROWTH FUND
CAPITAL INCOME FUND
MULTIPLE INDEX TRUST
YORKTOWN CLASSIC VALUE TRUST
TREASURIES TRUST
<PAGE>
[API LOGO]
CONTENTS
Letter to Shareholders 1
Growth Fund
Performance 3
Investments 4
Financial Statements 6
Report of Independent Accountants 13
Capital Income Fund
Performance 14
Investments 15
Financial Statements 16
Report of Independent Accountants 23
Multiple Index Trust
Performance 24
Investments 25
Financial Statements 26
Report of Independent Accountants 32
Yorktown Classic Value Trust
Performance 33
Investments 34
Financial Statements 35
Report of Independent Accountants 43
Treasuries Trust
Performance 44
Investments 45
Financial Statements 46
Report of Independent Accountants 52
<PAGE>
[API LOGO]
Dear Fellow Shareholders:
We are pleased to provide you with combined annual reports for the API Trust
Growth Fund, Capital Income Fund, Multiple Index Trust, Treasuries Trust and
the Yorktown Classic Value Trust for their fiscal years ended May 31, 1998.
The following table summarizes key statistics for the shares of each fund, as
of May 31, 1998:
<TABLE>
<CAPTION>
6 Month 12 Month
Total Return Total Return
-------------- -------------
<S> <C> <C>
Growth Fund 10.37% 18.39%
Capital Income Fund 12.45% 25.30%
Multiple Index Trust 11.77% 11.99%*
Yorktown Classic Value Trust 8.53% 13.02%
Treasuries Trust 5.31% 9.33%*
</TABLE>
*Returns are since inception on July 2, 1997 through May 31, 1998
As we look back over the last twelve months, the continued prosperity of the
United States and western Europe has created significant investment
opportunities. In these areas of the world we continue to see low interest
rates, very high returns on equity and investments, strong real growth, stable
currencies, and best of all, stock markets that are liquid and very efficient
in disclosing the realistic value of their stocks. During the past year we have
also seen several large companies buying back their stock, indicating
management believes their stock represents a good long term value and does not
perceive it as being overpriced.
Despite much positive news, this period has been punctuated by pockets of
volatility. One such period followed the financial turmoil in Asia last fall.
As we write this letter we are experiencing another healthy consolidation in
the financial markets. Though they can have an unsettling effect on short term
performance, we continue to view these periods of market correction as healthy
and necessary, giving us opportunities to buy selective equity investments at
attractive prices.
Strategies Affecting Fiscal Year 1998 Results: Growth Fund, Capital Income Fund
and Multiple Index Trust
During the fiscal year there was much reshuffling of financial assets as
investments sailed into positive market environments or fled those areas that
were under stress. General economic conditions were most favorable in Europe
and the U.S., with continuing problems in Southeast Asia and the emerging
markets in South America and the Pacific Rim.
The financial markets are never constant in their direction nor are they
without surprises. No matter where events take place, good news and bad news
are showing an increased tendency to unsettle and change the direction of
markets around the world. During these reactions to short term news, it is
often easy to overlook the long term focus that investors must have to be
successful without taking unnecessary risk. We believe our broad
diversification and attention to global economic conditions has again proved
its value to our investors.
The Growth Fund, Capital Income Fund and Multiple Index Trust each relies
heavily on unembellished International Monetary Fund data to help identify
value around the world, and those areas of the global marketplace to avoid.
Growth in domestic product, low inflation, favorable interest rates and
currency strength are all factors we consider when determining which countries
we will emphasize or de-emphasize in our portfolios. We interact in a
cooperative spirit with the management companies of the underlying funds we
choose (using Lipper Analytics and other research), while quantitative and
qualitative data helps us estimate the value of companies within each market.
As we write this letter we continue to be overweighted in the U.S. and Europe,
while avoiding the Pacific Rim and those emerging markets where we continue to
see trouble.
1
<PAGE>
We are proud of our improving long term performance and the recognition we are
receiving in the financial press. Our global diversification strategy has
earned us a place on the very prestigious list of Kiplinger's best performing
funds for 1, 3 and 10 year periods for the Capital Income Fund and Growth Fund.
Since its inception in July 1997, our no-load Multiple Index Trust has
consistently outperformed the Dow Jones World Index, growing from its initial
share price of $10.00 to $11.04 at fiscal year end.
Strategies Affecting Fiscal Year 1998 Results: Yorktown Classic Value Trust
Large capitalization domestic stocks again performed well for the year ended
May 31, 1998. The fund's results benefited from positive performance in the
majority of its value-oriented holdings. Exceptional returns were achieved in
the pharmaceutical sector, where we owned the three leaders (Merck, Bristol
Myers Squibb, and Pfizer), and in the financial sector (Fannie Mae, Chase
Manhattan Bank and Morgan Stanley Dean Witter Discover). Significant gains were
also posted in our basic industry sectors, which included large positions in
Norfolk Southern (Transportation), PPG (Chemicals) and General Electric
(Electrical Equipment). Each of the securities held by the Yorktown Classic
Value Trust is a recognized leader in its industry group and currently
undervalued relative to the broad market averages and its peers.
Strategies Affecting Fiscal Year 1998 Results: Treasuries Trust
The Federal Reserve Board, though ultimately consistent, continues to keep
financial markets off balance as industry professionals try to anticipate
policy moves that are not coming to fruition. Again and again, the Fed opts to
keep interest rates at current levels until there is a significant movement in
consumer prices. This environment has been very positive for the Treasuries
Trust.
We are very pleased that investors within the Treasuries Trust have received
one of the highest rates of return in U.S. Treasury products -- and that these
results have been achieved using pure Treasury investments. We have not
compromised the quality of the portfolio with the use of derivatives or any
other synthetic investment.
Our domestic economy now appears to be slowing. It makes sense that after such
a long and unprecedented growth period the economy should begin settling down
to somewhat lower growth numbers. We believe the Federal Reserve Board will
continue to favor a policy which keeps interest rates on the short term as low
as possible, helping to fuel a continued positive growth trend. All of these
factors bode well for the Treasuries Trust.
Going forward
We believe this period of extraordinary returns in the U.S. and European
financial markets should be viewed as an outgrowth of the actual success of the
underlying companies within these markets. We do not believe these markets are
overpriced. In fact, we believe there is significant opportunity for investors
who have at least a two- to five-year time horizon. Many world stock markets
have underperformed the 12-14% annualized rates of return that today's
environment makes it reasonable to expect. As a result, we see significant
opportunities as we enter the second half of 1998.
As we continue our efforts to provide quality investment services we want to
offer a special welcome to the new shareholders who have invested in the
Multiple Index Trust and the Treasuries Trust. These new funds are designed to
work in concert with the Growth Fund, Capital Income Fund and Yorktown Classic
Value Trust to achieve improving long term performance while keeping volatility
in check.
PricewaterhouseCoopers LLP, independent auditors of API Trust's mutual funds,
have completed their annual examination, and audited financial statements for
the fiscal year ended May 31, 1998 accompany this report.
Thank you for your continued confidence. We look forward to the future with
your support.
Best regards.
/S/ David D. Basten
- -------------------
David D. Basten
President
2
<PAGE>
[GROWTH GRAPH FROM M. SAVAGE]
GROWTH MSCI CPI
DATE FD VALUE VALUE VALUE
---- -------- -------- --------
31-May-88 10,000 10,000 10,000
31-May-89 12,397 11,420 10,536
31-May-90 12,816 12,242 10,996
31-May-91 14,554 12,396 11,540
31-May-92 15,268 12,615 11,899
31-May-93 17,258 14,438 12,272
31-May-94 18,742 15,903 12,553
31-May-95 20,856 17,643 12,953
31-May-96 25,242 20,883 13,318
31-May-97 27,342 24,551 13,626
31-May-98 32,375 29,728 13,855
3
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS
May 31, 1998
<TABLE>
<CAPTION>
Shares Value
---------------- ----------------
<S> <C> <C>
CLOSED-END FUNDS -- 0.79%
John Hancock Bank & Thrift
Opportunity Fund 51,200 $ 611,200
---------
Total closed-end funds (cost $656,000) 611,200
---------
MUTUAL FUNDS -- 99.21%
Capital Appreciation Funds -- 1.43%
Oppenheimer Quest Value Fund, Inc.
Class A 43,069 972,930
Putnam Voyager Fund, Inc. 6,018 126,516
---------
1,099,446
---------
Emerging Markets Funds -- 4.09%
Delaware Group Global & International
Funds, Inc. Emerging Markets Class A 49,407 437,253
Pioneer Emerging Markets Fund Class A 70,866 904,259
SSGA Emerging Markets Fund 100,139 956,330
Templeton Developing Markets Trust 72,452 849,867
---------
3,147,709
---------
Equity Income Funds -- 2.82%
Delaware Group Decatur Total Return
Fund Class A 50,175 969,894
Kemper-Dreman High Return Fund
Class A 14,701 506,322
Pioneer Growth Trust Equity Income
Fund Class A 24,673 692,351
---------
2,168,567
---------
European Region Funds -- 10.59%
Alliance New Euope Fund, Inc. 46,430 1,025,176
Kemper Europe Fund Class A 47,489 747,490
Mutual Series Fund, Inc. European Fund 168,417 2,615,525
Pioneer Europe Fund Class A 68,991 2,430,556
Vanguard International Equity Index
Fund, Inc. European Portfolio 52,891 1,334,447
---------
8,153,194
---------
Financial Services Funds -- 8.52%
Davis Series, Inc. Financial Fund
Class A 126,218 3,513,920
John Hancock Freedom Regional Bank
Fund Class A 54,205 3,051,252
---------
6,565,172
---------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
---------------- ----------------
<S> <C> <C>
Global Funds -- 0.43%
Oppenheimer Global Fund, Inc. 7,206 $ 331,851
---------
Growth Funds -- 9.75%
AIM Funds Group Value Fund Class A 18,186 660,548
Bear Stearns Large Cap Value Fund
Class A 16,234 341,565
Davis New York Venture Fund Class A 45,748 1,099,790
Guardian Park Avenue Fund, Inc. 24,099 1,229,788
Hilliard Lyons Growth Fund, Inc. 9,966 309,469
Legg Mason Value Trust - Navigator
Class 22,578 1,175,209
Longleaf Partners Fund 40,694 1,215,538
Vanguard Index Trust Total Stock
Market Portfolio 58,783 1,476,635
---------
7,508,542
---------
Growth and Income Funds -- 11.67%
ASM Fund, Inc. 30,089 594,262
Kemper-Dreman Contrarian Fund
Class A 22,768 495,674
Principal Preservation Dividend
Achievers Portfolio 10,752 294,406
Principal Preservation S&P 100 Plus
Portfolio 48,906 1,520,509
SSGA Matrix Equity Fund 134,653 2,465,512
Vanguard Index Trust Value Portfolio 21,346 485,431
Vanguard Quantitative Portfolios, Inc. 37,362 1,087,626
Vista Mutual Fund Group Growth &
Income Fund 15,033 686,896
Washington Mutual Investors Fund, Inc. 40,543 1,359,821
---------
8,990,137
---------
</TABLE>
4
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, Continued
May 31, 1998
<TABLE>
<CAPTION>
Shares Value
---------- --------------
<S> <C> <C>
Health/Biotechnology Funds -- 1.33%
Eaton Vance Worldwide Health
Sciences Fund Class A 68,352 $ 1,022,556
-----------
International Funds -- 9.29%
Euro Pacific Growth Fund 37,327 1,102,650
Ivy International Fund Class A 65,968 2,863,672
Munder International Equity Fund
Class A 64,691 977,484
Phoenix Multi-Portfolio Fund
International Portfolio Class A 40,599 680,856
Sentinel Group Funds, Inc. World Fund 52,493 994,226
Templeton Foreign Fund, Inc. 50,734 538,797
-----------
7,157,685
-----------
Latin American Funds -- 0.55%
BT Investment Funds Latin America
Equity Fund 32,594 426,988
-----------
Mid-Cap Funds -- 3.17%
Principal Preservation Select Value
Portfolio 22,238 292,439
Vanguard Index Trust Extended Market
Portfolio 65,627 2,149,312
-----------
2,441,751
-----------
Pacific Region Funds -- 1.20%
Colonial Trust VII Newport Tiger Fund
Class A 132,207 925,449
-----------
S&P 500 Index Objective
Funds -- 15.39%
Federated Index Trust Max-Cap Fund 84,861 1,933,156
Fidelity Commonwealth Trust Market
Index Trust 16,647 1,287,652
SSGA S&P 500 Index Fund 132,356 2,929,047
T. Rowe Price Index Trust, Inc. Equity
Index Fund 50,428 1,497,219
Vanguard Index Trust 500 Portfolio 41,482 4,207,940
-----------
11,855,014
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
---------- --------------
<S> <C> <C>
Science & Technology
Funds -- 7.05%
Alliance Technology Fund 43,758 $ 2,645,658
Principal Preservation Technology 100
Index Portfolio 77,339 1,088,945
Seligman Communication &
Information Fund, Inc. 68,175 1,698,263
-----------
5,432,866
-----------
Small Company Growth
Funds -- 11.93%
Bear Stearns Small Cap Value Fund
Class A 58,754 1,316,099
Enterprise Group Funds, Inc. Small
Company Portfolio Class A 116,009 983,759
Federated Index Trust Mini-Cap Fund 75,580 1,200,214
Kaufmann Fund, Inc. 286,902 1,910,769
Putnam OTC Emerging Growth Fund 219,137 3,775,734
-----------
9,186,575
-----------
Total Mutual Funds (cost
$63,193,323) 76,413,502
-----------
Total Investments (cost
$63,849,323) $77,024,702
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $63,849,323) $ 77,024,702
Cash 251,168
Other assets 75,085
-------------
Total assets 77,350,955
-------------
Liabilities:
Accrued distribution fees 67,308
Accrued advisory fees 27,734
Other liabilities 82,763
-------------
Total liabilities 177,805
Net Assets $ 77,173,150
=============
Shares of beneficial interest outstanding (unlimited number of no par value shares 5,460,742
authorized)
Net asset value, offering and redemption price per share outstanding $ 14.13
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF OPERATIONS
for the year ended May 31, 1998
<TABLE>
<S> <C>
Investment Income:
Dividends $ 1,115,925
Interest 40,337
------------
Total income 1,156,262
------------
Expenses:
Investment advisory fees 741,672
Distribution fees 741,672
Transfer agent fees 233,216
Custodial fees 23,494
Professional fees 45,066
Registration fees 16,616
Trustee fees 13,186
Insurance 30,246
Shareholder reports 22,628
Miscellaneous 6,570
------------
1,874,366
Less expenses waived by investment advisor (261,195)
------------
Total expenses 1,613,171
------------
Net investment loss (456,909)
------------
Realized and unrealized gain on investments:
Net realized gain from security transactions 5,004,312
Capital gain distributions from mutual funds 3,909,171
Change in unrealized appreciation on investments 3,926,788
------------
Net realized and unrealized gain on investments 12,840,271
------------
Net increase in net assets resulting from operations $ 12,383,362
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Operations:
Net investment loss $ (456,909) $ (867,602)
Net realized gain from security transactions 5,004,312 5,397,332
Capital gain distributions from mutual funds 3,909,171 2,792,861
Net change in unrealized appreciation on investments 3,926,788 (2,016,057)
------------- -------------
Increase in net assets resulting from operations 12,383,362 5,306,534
------------- -------------
Distributions:
From net realized gain on security transactions (7,875,892) (7,908,281)
------------- -------------
Decrease in net assets resulting from distributions (7,875,892) (7,908,281)
------------- -------------
Capital share transactions:
Proceeds from sale of 555,387and 822,821 shares 7,758,789 10,920,862
Value of 594,591 and 590,613 shares issued upon reinvestment of dividends 7,615,929 7,542,131
Cost of 810,738 and1,169,419 shares redeemed (11,426,062) (15,450,717)
------------- -------------
Increase in net assets resulting from capital share transactions 3,948,656 3,012,276
------------- -------------
Total increase in net assets 8,456,126 410,529
Net assets:
Beginning of year 68,717,024 68,306,495
------------- -------------
End of year $ 77,173,150 $ 68,717,024
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1998
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 13.42 $ 14.00 $ 12.48 $ 12.32 $ 11.86
-------- -------- -------- -------- --------
Income from investment operations:
Net investment loss (0.08) (0.17) (0.14) (0.10) (0.21)
Net realized and unrealized gain on investments 2.36 1.25 2.67 1.37 1.25
-------- -------- -------- -------- --------
Total income from investment operations 2.28 1.08 2.53 1.27 1.04
-------- -------- -------- -------- --------
Distributions:
From net realized gain on security transactions (1.57) (1.66) (1.01) (1.11) (0.58)
-------- -------- -------- -------- --------
Total distributions (1.57) (1.66) (1.01) (1.11) (0.58)
-------- -------- -------- -------- --------
Net asset value, end of year $ 14.13 $ 13.42 $ 14.00 $ 12.48 $ 12.32
======== ======== ======== ======== ========
Total return 18.39% 8.32% 21.03% 11.28% 8.60%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 77,173 $ 68,717 $ 68,306 $ 55,191 $ 46,958
Ratio of expenses to average net assets(1) 2.18% 2.18% 2.24% 2.06% 2.24%
Ratio of net investment income (loss) to average net assets (0.62)% (1.31)% (1.08)% (1.50)% (1.75)%
Portfolio turnover rate 57% 84% 63% 91% 90%
</TABLE>
- -----------
(1) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 2.54%, 2.55%, 2.57%, 2.60% and 2.56%,
respectively.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of six 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 Funds to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
As of May 31, 1998, 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 $63,849,323, $13,175,379, $13,797,525 and $622,146,
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.
10
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies:, continued:
e. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
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
Note 4) receives any dealer reallowances or 12b-1 fees resulting from the
Fund's purchase of shares of underlying funds. During the year ended May
31, 1998, the Advisor waived $261,195 of its fees.
4. Distribution Plan and Fees:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive annual fees of 1.00% of
the Fund's average daily net assets.
In addition, to the extent possible, the Distributor is generally
designated as the dealer entitled to receive the dealer reallowance portion
of the sales charge on purchases of underlying load fund shares by the
Fund. During the year ended May 31, 1998, the Distributor received $261,195
from brokerage commissions earned on its execution of purchases of
portfolio investments for the Fund. The principal stockholder of the
Distributor is also a trustee of the Trust.
5. Investment Activity:
For the year ended May 31, 1998, 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
$42,043,676 and $41,985,787, respectively.
11
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Compostion of Net Assets:
At May 31, 1998, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 58,557,485
Accumulated net realized gain from security transactions 5,440,286
Unrealized appreciation on investments 13,175,379
------------
Net assets applicable to outstanding shares of beneficial interest $ 77,173,150
============
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the
tax character of certain transactions, $456,909 of net operating losses
were reclassified to offset short-term capital gains during the year ended
May 31, 1998. The results of operations and net assets were not affected by
the reclassifications.
12
<PAGE>
[PRICEWATERHOUSECOOPERS LOGO]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Growth Fund:
We have audited the accompanying statement of assets and liabilities of
American Pension Investors Trust Growth Fund (the "Fund"), including the
schedule of investments, as of May 31, 1998, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Growth Fund as of May 31, 1998, the results of
its operations, the changes in its net assets, and the financial highlights for
each of the respective periods stated in the first paragraph, in conformity
with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS LLP
Baltimore, Maryland
June 12, 1998
13
<PAGE>
[CAPITAL INCOME GRAPH FROM M. SAVAGE]
CAP INC MSCI CPI
DATE VALUE VALUE VALUE
---- ----- ----- -----
31-May-88 $10,000 10,000 $10,000
31-May-89 10,330 11,420 10,536
31-May-90 10,288 12,242 10,996
31-May-91 11,279 12,396 11,540
31-May-92 12,126 12,615 11,889
31-May-93 13,257 14,438 12,272
31-May-94 13,891 15,903 12,553
31-May-95 15,708 17,643 12,953
31-May-96 18,481 20,883 13,318
31-May-97 22,625 24,551 13,626
31-May-98 28,350 29,728 13,855
14
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
SCHEDULE OF INVESTMENTS
May 31, 1998
<TABLE>
<CAPTION>
Shares Value
---------- --------------
<S> <C> <C>
MUTUAL FUNDS -- 100.00%
Equity Income Funds -- 6.50%
Putnam Equity Income Fund New
Class A 22,123 $ 371,239
T. Rowe Price Equity Income Fund 13,572 373,378
-----------
744,617
-----------
European Region Funds -- 2.16%
Kemper Europe Fund Class A 7,906 124,446
Pioneer Europe Fund Class A 3,479 122,599
-----------
247,045
-----------
Financial Services Funds -- 5.53%
Pilgrim Regional Bank Shares, Inc. 23,000 634,110
-----------
Global Funds -- 1.67%
SoGen International Fund, Inc. 6,949 191,174
Growth Funds -- 4.92%
Alliance Fund, Inc. Class A 50,591 354,143
Vanguard Index Trust Total Stock
Market Portfolio 8,352 209,813
-----------
563,956
-----------
Growth and Income Funds -- 29.06%
American Century Income and Growth
Fund 13,060 $ 356,557
Mutual Series Fund, Inc. Beacon Fund 8,838 138,584
Neuberger & Berman Equity Funds
Guardian Fund 8,015 232,211
Principal Preservation Portfolios S&P
100 Plus Portfolio 52,406 1,629,324
Vanguard Index Trust Value Portfolio 20,935 476,076
Vanguard/Windsor Fund, Inc. Vanguard/
Windsor II Portfolio 2,951 95,725
Vista Mutual Fund Group Growth &
Income Fund 8,783 401,311
-----------
3,329,788
-----------
Income Funds -- 1.56%
Fidelity Advisor Series II High Yield
Fund 13,899 179,166
-----------
International Funds -- 23.39%
Alliance International Fund, Inc.
Class A 18,259 339,805
Alliance Worldwide Privatization
Fund, Inc. Class A 25,488 $ 331,351
Princor World Fund, Inc. Class A 116,962 1,235,125
Templeton Foreign Fund, Inc. 72,806 773,203
-----------
2,679,484
-----------
S&P 500 Index Objective
Funds -- 20.58%
Federated Index Trust Max-Cap Fund 10,739 244,654
Vanguard Index Trust 500 Portfolio 20,826 2,112,656
-----------
2,357,310
-----------
World Income Funds -- 4.63%
Alliance North American Government
Income Trust, Inc. Class A 12,071 95,003
Bear Stearns Investment Trust Emerging
Markets Debt Portfolio Class A 37,403 435,750
-----------
530,753
-----------
Total investments (cost $9,472,947) $11,457,403
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments at value (identified cost of $9,472,947) $ 11,457,403
Cash 142,721
Other assets 10,901
-------------
Total assets 11,611,025
-------------
Liabilities:
Accrued distribution fees 4,937
Other liabilities 14,032
-------------
Total liabilities 18,969
-------------
Net assets $ 11,592,056
=============
Shares of beneficial interest outstanding (unlimited number of no par value shares 504,806
authorized) =============
Net asset value, offering and redemption price per share outstanding $ 22.96
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENT OF OPERATIONS
for the year ended May 31, 1998
<TABLE>
<CAPTION>
<S> <C>
Investment income:
Dividends $ 210,804
Interest 9,646
-----------
Total income 220,450
-----------
Expenses:
Investment advisory fees 58,321
Distribution fees 48,601
Transfer agent fees 38,724
Custodial fees 4,371
Professional fees 17,888
Registration fees 17,637
Trustee fees 2,129
Insurance 4,840
Shareholder reports 6,618
Miscellaneous 1,942
-----------
201,071
Less expenses waived by investment advisor (58,321)
-----------
Total expenses 142,750
-----------
Net investment income 77,700
-----------
Realized and unrealized gain on investments:
Net realized gain from security transactions 531,899
Capital gain distributions from mutual funds 650,304
Change in unrealized appreciation on investments 867,042
-----------
Net realized and unrealized gain on investments 2,049,245
-----------
Net increase in net assets resulting from operations $ 2,126,945
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Operations:
Net investment income $ 77,700 $ 101,568
Net realized gain from security transactions 531,899 114,354
Capital gain distributions from mutual funds 650,304 330,087
Net change in unrealized appreciation on investments 867,042 630,186
------------ ------------
Increase in net assets resulting from operations 2,126,945 1,176,195
------------ ------------
Distributions:
From net investment income (137,628) (141,336)
From net realized gain on security transactions (619,051) (289,331)
------------ ------------
Decrease in net assets resulting from distributions (756,679) (430,667)
------------ ------------
Capital share transactions:
Proceeds from sale of 123,986 and 231,628 shares 2,750,079 4,353,629
Value of 34,684 and 20,945 shares issued upon reinvestment of dividends 715,156 390,402
Cost of 60,388 and 97,374 shares redeemed (1,341,259) (1,808,679)
------------ ------------
Increase in net assets resulting from capital share transactions 2,123,976 2,935,352
------------ ------------
Total increase in net assets 3,494,242 3,680,880
Net assets:
Beginning of year 8,097,814 4,416,934
------------ ------------
End of year $ 11,592,056 $ 8,097,814
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1998
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 19.92 $ 17.57 $ 17.21 $ 16.34 $ 16.06
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) 0.16 0.32 0.34 0.35 (0.01)
Net realized and unrealized gain on investments 4.64 3.49 2.57 1.64 0.78
-------- -------- -------- -------- --------
Total income from investment operations 4.80 3.81 2.91 1.99 0.77
-------- -------- -------- -------- --------
Distributions:
From net investment income (0.30) (0.48) (0.28) (0.36)
From net realized gain on security transactions (1.46) (0.98) (2.27) (0.76) (0.49)
-------- --------- --------- --------- --------
Total distributions (1.76) (1.46) (2.55) (1.12) (0.49)
-------- --------- --------- --------- --------
Net asset value, end of year $ 22.96 $ 19.92 $ 17.57 $ 17.21 $ 16.34
======== ========= ========= ========= ========
Total return 25.30% 22.43% 17.65% 13.08% 4.79%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $11,592 $ 8,098 $ 4,417 $ 3,031 $ 2,964
Ratio of expenses to average net assets(1) 1.47% 1.77% 2.22% 2.05% 2.12%
Ratio of net investment income (loss) to average net assets 0.80% 1.84% 1.43% 0.75% (0.06)%
Portfolio turnover rate 33% 67% 40% 65% 17%
</TABLE>
- -----------
(1) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 2.07%, 2.38%, 2.82%, 2.65% and 2.72%,
respectively.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of six separate portfolios.
The accompanying financial statements include only the Capital Income Fund
(the "Fund").
The Fund's primary investment objective is to seek to achieve high current
income. The Fund's secondary objective is growth of capital and income. The
Fund seeks to achieve its objectives by investing in mutual funds, at least
65% of which seek to achieve an objective of high current income by
investing in income-producing equity securities, long or short-term bonds
and other fixed-income securities (such as U.S. government securities,
commercial paper and preferred stock).
2. Significant Accounting Policies:
a. Portfolio Valuation
The investments of the Fund consist primarily of mutual funds that are
valued daily at their respective net asset values in accordance with the
1940 Act.
b. Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are reported on an identified-cost
basis for both financial statement and federal income tax purposes.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and expenses are recorded on an accrual
basis.
c. Federal Income Taxes
The Trust's policy is for the Fund to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
As of May 31, 1998, 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 $9,472,947, $1,984,456, $2,104,300 and $119,844,
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.
20
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
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 Note 4) receives
any dealer reallowances or 12b-1 fees resulting from the Fund's purchase of
shares of underlying funds. During the year ended May 31, 1998, the Advisor
waived all of its fees in the amount of $58,321.
4. Distribution Plan and Fees:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive an annual fee of .50% of
the Fund's average daily net assets.
In addition, to the extent possible, the Distributor is generally
designated as the dealer entitled to receive the dealer reallowance portion
of the sales charge on purchases of underlying load fund shares by the
Fund. During the year ended May 31, 1998, the Distributor received $29,234
from brokerage commissions earned on its execution of purchases of
portfolio investments for the Fund. The principal stockholder of the
Distributor is also a trustee of the Trust.
5. Investment Activity:
For the year ended May 31, 1998, 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
$5,240,331 and $3,107,281, respectively.
21
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1998, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 8,864,216
Accumulated net realized gain from security transactions 743,384
Unrealized appreciation on investments 1,984,456
------------
Net assets applicable to outstanding shares of beneficial interest $ 11,592,056
============
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the
tax character of certain transactions, $8,529 of ordinary income
distributions were reclassified to paid in capital during the year ended
May 31, 1998. The results of operations and net assets were not affected by
the reclassification.
22
<PAGE>
[PRICEWATERHOUSECOOPERS LOGO]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Capital Income Fund:
We have audited the accompanying statement of assets and liabilities of
American Pension Investors Trust Capital Income Fund (the "Fund"), including
the schedule of investments, as of May 31, 1998, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Capital Income Fund as of May 31, 1998, the
results of its operations, the changes in its net assets, and the financial
highlights for each of the respective periods stated in the first paragraph, in
conformity with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS LLP
Baltimore, Maryland
June 12, 1998
23
<PAGE>
[MULTIPLE INDEX GRAPH TO COME FROM M. SAVAGE]
MULTIPLE MSCI CPI
DATE INDEX VALUE VALUE
---- ----- ----- -----
02-Jul-97 $10,000 $10,000 $10,000
31-Jul-97 10,330 10,226 10,012
31-Aug-97 9,800 9,544 10,031
30-Sep-97 10,260 10,064 10,056
31-Oct-97 9,810 9,536 10,081
30-Nov-97 10,020 9,707 10,075
31-Dec-97 10,205 9,826 10,062
31-Jan-98 10,185 10,101 10,081
28-Feb-98 10,915 10,786 10,100
31-Mar-98 11,402 11,243 10,119
30-Apr-98 11,514 11,354 10,137
31-May-98 11,199 11,271 10,156
24
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
SCHEDULE OF INVESTMENTS
May 31, 1998
<TABLE>
<CAPTION>
Shares Value
-------- --------------
<S> <C> <C>
MUTUAL FUNDS -- 100.00%
Capital Appreciation Funds -- 3.58%
Rydex Series Trust OTC Fund 3,893 $ 105,094
Emerging Markets Funds -- 3.19%
Vanguard International Equity Index Fund, Inc. Emerging Markets Portfolio 10,191 93,868
-----------
European Region Funds -- 14.66%
BT EAFE Equity Index Fund 9,424 104,421
Invesco Specialty Funds, Inc. European Small Company Fund 3,184 50,382
T. Rowe Price International Funds, Inc. European Fund 11,581 275,766
-----------
430,569
-----------
Growth Funds -- 5.16%
Vanguard Index Trust Total Stock Market Portfolio 6,032 151,539
-----------
Growth and Income Funds -- 2.22%
ASM Index 30 Fund 3,296 65,110
-----------
International Funds -- 2.77%
Vanguard Total International Index Fund 7,337 81,522
-----------
Mid-Cap Funds -- 12.58%
Federated Index Trust Mid-Cap Fund 8,680 154,162
Vanguard Index Trust Extended Market Portfolio 6,576 215,374
-----------
369,536
-----------
Pacific Region Funds -- 0.31%
Vanguard International Equity Index Fund, Inc. Pacific Portfolio 1,271 9,231
-----------
S&P 500 Index Objective Funds -- 47.28%
Federated Index Trust Max-Cap Fund 30,589 696,833
SSGA S&P 500 Index Fund 16,765 371,014
Vanguard Index Trust 500 Portfolio 3,167 321,350
-----------
1,389,197
-----------
Science & Technology Funds -- 5.18%
Principal Preservation Tech 100 Index Portfolio 10,814 152,266
-----------
Small Company Growth Funds -- 3.07%
Federated Index Trust Mini-Cap Fund 5,673 90,089
-----------
Total Investments (cost $2,786,724) $ 2,938,021
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $2,786,724) $ 2,938,021
Cash 82,976
Other assets 64,037
------------
Total assets 3,085,034
------------
Liabilities:
Other liabilities 4,853
------------
Total liabilities 4,853
------------
Net assets $ 3,080,181
============
Shares of beneficial interest outstanding (unlimited number of no par value shares 278,887
authorized) ============
Net asset value, offering and redemption price per share outstanding $ 11.04
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF OPERATIONS
for the period from July 2, 1998
(commencement of operations) to May 31, 1998
<TABLE>
<S> <C>
Investment income:
Dividends $ 17,870
Interest 1,644
---------
Total income 19,514
---------
Expenses:
Investment advisory fees 11,631
Transfer agent fees 10,560
Custodial fees 2,070
Professional fees 6,899
Registration fees 6,863
Trustee fees 250
Insurance 976
Shareholder reports 2,549
Organizational expenses 7,011
Miscellaneous 1,135
---------
49,944
Less expenses waived/reimbursed by investment advisor (37,056)
---------
Total expenses 12,888
---------
Net investment income 6,626
---------
Realized and unrealized gain (loss) on investments:
Net realized loss from security transactions (29)
Capital gain distributions from mutual funds 88,452
Change in unrealized appreciation on investments 151,297
---------
Net realized and unrealized gain on investments 239,720
---------
Net increase in net assets resulting from operations $ 246,346
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<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 May 31, 1998
<TABLE>
<S> <C>
Operations:
Net investment income $ 6,626
Net realized loss from security transactions (29)
Capital gain distributions from mutual funds 88,452
Net change in unrealized appreciation on investments 151,297
-----------
Increase in net assets resulting from operations 246,346
-----------
Distributions:
From net investment income (6,626)
From net realized gain on security transactions (22,680)
-----------
Decrease in net assets resulting from distributions (29,306)
-----------
Capital share transactions:
Proceeds from sale of 296,136 shares 3,054,036
Value of 2,752 shares issued upon reinvestment of dividends 27,626
Cost of 20,001 shares redeemed (218,521)
-----------
Increase in net assets resulting from capital share transactions 2,863,141
-----------
Total increase in net assets 3,080,181
Net assets:
Beginning of period -0-
-----------
End of period $ 3,080,181
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
FINANCIAL HIGHLIGHTS
for the period ended May 31, 1998(2)
<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 0.03
Net realized and unrealized gain on investments 1.16
--------
Total income from investment operations 1.19
--------
Distribution:
From net investment income (0.03)
From net realized gain on security transactions (0.12)
--------
Total distributions (0.15)
--------
Net asset value, end of period $ 11.04
========
Total return 11.99%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 3,080
Ratio of expenses to average net assets 0.71%
Ratio of net investment income to average net assets 0.36%
Portfolio turnover rate 49%
</TABLE>
- -----------
(1) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 2.75%.
(2) Commencement of operations was July 2, 1997.
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of six 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 ojbective 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. Organizaiton 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 May 31, 1998, such unamortized costs amounted to
$8,133.
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 May 31, 1998, 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 $2,794,022, $143,999, $179,906 and $35,907,
respectively.
30
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
f. 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 .70% of the
average daily net assets of the Fund. For the period ended May 31, 1998,
the Advisor waived all of its advisory fees in the amount of $11,631. In
addition, the Advisor reimbursed $25,425 of the Fund's operating expenses.
4. Investment Activity:
For the period ended May 31, 1998, 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
$3,633,632 and $846,879, respectively.
5. Composition of Net Assets:
At May 31, 1998, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 2,863,141
Accumulated net realized gain from security transactions 65,743
Unrealized appreciation on investments 151,297
-----------
Net assets applicable to outstanding shares of beneficial interest $ 3,080,181
===========
</TABLE>
Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under
income tax regulations.
31
<PAGE>
[PRICEWATERHOUSECOOPERS LOGO]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Multiple Index Trust:
We have audited the accompanying statement of assets and liabilities of
American Pension Investors Trust Multiple Index Trust (the "Trust"), including
the schedule of investments, as of May 31, 1998, and the related statement of
operations, the statement of changes in net assets, and the financial
highlights for the period from July 2, 1997 (commencement of operations) to May
31, 1998. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Multiple Index Trust as of May 31, 1998, the
results of its operations, the changes in its net assets, and the financial
highlights for the period from July 2, 1997 (commencement of operations) to May
31, 1998, in conformity with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS, LLP
Baltimore, Maryland
June 12, 1998
32
<PAGE>
[YORKTOWN CLASSIC GRAPH TO COME FROM M. SAVAGE]
YORKTOWN S&P 500 CPI
DATE VALUE VALUE VALUE
---- ----- ----- -----
02-Nov-92 $10,000 $10,000 $10,000
31-May-93 10,340 10,946 10,169
31-May-94 10,129 11,412 10,402
31-May-95 13,239 13,716 10,734
31-May-96 14,081 17,616 11,036
31-May-97 16,980 22,798 11,319
31-May-98 19,192 29,793 11,481
33
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
SCHEDULE OF INVESTMENTS
May 31, 1998
<TABLE>
<CAPTION>
Shares Value
----------- --------------
<S> <C> <C>
COMMON STOCKS -- 100.00%
Aircraft & Aerospace -- 2.12%
United Technologies, Inc. 3,800 $ 357,200
-----------
Banks -- 6.47%
Chase Manhatten Corp. 4,000 543,750
J. P. Morgan & Co., Inc. 4,400 546,425
-----------
1,090,175
-----------
Candy & Gum -- 5.46%
Hershey Foods Corp. 13,300 921,025
-----------
Chemicals -- 3.16%
PPG Industries, Inc. 7,300 531,988
-----------
Computers -- 12.40%
International Business Machines,
Inc. 17,800 2,089,275
-----------
Drugs -- 12.20%
Bristol Myers Squibb Co. 8,400 903,000
Merck & Co., Inc. 6,900 807,731
Pfizer, Inc. 3,300 345,881
-----------
2,056,612
-----------
Electrical Equipment -- 1.88%
General Electric Co. 3,800 316,825
-----------
Finance -- 6.05%
American Express Co. 3,900 400,238
Fannie Mae 4,000 239,500
Keycorp 10,000 379,375
-----------
1,019,113
-----------
Food Processing -- 2.35%
BestFoods 7,000 395,062
-----------
Insurance -- 8.20%
Chubb Corp. 8,700 692,194
TransAmerica Corporation 6,000 690,000
-----------
1,382,194
-----------
Shares Value
------ -----------
Machinery and Equipment --
7.05%
Caterpillar, Inc. 8,600 $ 472,462
Dover Corp. 7,000 262,500
Parker Hannifin Corp. 11,050 453,741
-----------
1,188,703
-----------
Office Equipment and
Supplies -- 3.84%
Xerox Corp. 6,300 647,325
-----------
Oil -- 3.60%
Exxon Corp. 8,600 606,300
-----------
Publishing -- 2.32%
McGraw-Hill Companies, Inc. 5,000 390,938
Railroads -- 9.12%
Norfolk Southern Corp. 49,100 1,537,444
-----------
Retail - Discount &
Variety -- 2.46%
WalMart Stores, Inc. 7,500 413,906
-----------
Securities Brokerage -- 2.38%
Eaton Vance Corp. 4,700 211,206
Pioneer Group, Inc. 6,700 190,531
-----------
401,737
-----------
Soaps & Cleaners -- 4.40%
Procter & Gamble Co. 8,834 741,504
-----------
Telecommunications -- 2.34%
Sprint Corp. 5,500 394,625
-----------
Textiles -- 2.20%
Paxar Corp. 30,000 371,250
-----------
Total Investments
(cost $14,091,892) $16,853,201
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $14,091,892) $ 16,853,201
Cash 46,886
Other assets 53,399
------------
Total assets 16,953,486
------------
Liabilities:
Accrued distribution fees 10,777
Accrued advisory fees 8,981
Securities purchased under loan agreement 3,228,550
Accrued interest expense 21,590
Other liabilities 20,019
------------
Total liabilities 3,289,917
------------
Net Assets $ 13,663,569
============
Shares of Beneficial Interest Outstanding (unlimited number of no par value shares 916,722
authorized) ============
Net Asset Value, Offering and Redemption Price Per Share Outstanding $ 14.90
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF OPERATIONS
for the year ended May 31, 1998
<TABLE>
<S> <C>
Investment Income:
Dividends $ 336,154
Interest 1,830
----------
Total income 337,984
----------
Expenses:
Investment advisory fees 125,827
Distribution fees 125,827
Transfer agent fees 52,797
Custodial fees 10,749
Professional fees 21,683
Registration fees 18,732
Trustee fees 2,129
Insurance 6,862
Shareholder reports 6,442
Miscellaneous 2,323
----------
373,371
Less expenses waived by investment advisor (20,971)
----------
Total operating expenses 352,400
Interest expense 413,693
----------
Total expenses 766,093
----------
Net investment loss (428,109)
----------
Realized and Unrealized Gain on Investments:
Net realized gain from security transactions 2,342,121
Change in unrealized appreciation on investments (262,014)
----------
Net realized and unrealized gain on investments 2,080,107
----------
Net increase in net assets resulting from operations $1,651,998
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF CASH FLOWS
for the year ended May 31, 1998
<TABLE>
<S> <C> <C>
Net Increase (Decrease) in Cash:
Cash flows from operating activities:
Dividends and interest received $ 339,759
Operating expenses paid (343,424)
-------------
Interest paid (414,712)
-------------
Net cash used in operating activities $ (418,377)
-------------
Cash flows from investing activities:
Purchase of portfolio securities (28,551,815)
Proceeds from disposition of portfolio securities 31,827,911
-------------
Net cash provided by investing activities 3,276,096
-------------
Net cash provided by operating and investing activities 2,857,719
Cash flows from financing activities:
Borrowings under loan agreement 10,892,639
Repayments under loan agreement (12,681,579)
Receipts for shareholder purchases and reinvested distributions 3,530,171
Payments for shareholder redemptions and distributions (4,575,102)
-------------
Net cash used in financing activities (2,833,871)
-------------
Net increase in cash 23,848
Cash at beginning of year 23,038
-------------
Cash at the end of year $ 46,886
=============
Reconciliation of Net Increase in Net Assets from Operations to Net Cash Provided
by Operating and Investing Activities:
Increase in net assets from operations $ 1,651,998
Decrease in investments-net $ 3,177,187
Decrease in receivable for securities sold 275,343
Decrease in liability for securities purchased (176,434)
Decrease in other assets 991
Increase in accrued expenses and other liabilities 8,741
Net realized gain (2,342,121)
Net unrealized depreciation 262,014
-------------
Total adjustments 1,205,721
-------------
Net cash provided by operating and investing activities $ 2,857,719
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Operations:
Net investment loss $ (428,109) $ (232,482)
Net realized gain from security transactions 2,342,121 98,970
Net change in unrealized appreciation on investments (262,014) 2,292,605
------------ ------------
Increase in net assets resulting from operations 1,651,998 2,159,093
------------ ------------
Distributions:
From net realized gains on security transactions (977,103) (158,577)
------------ ------------
Decrease in net assets resulting from distributions (977,103) (158,577)
------------ ------------
Capital Share Transactions:
Proceeds from sale of 174,926 and 302,614 shares 2,573,311 3,750,533
Value of 71,927 and 12,635 shares issued upon reinvestment of dividends 958,024 152,889
Cost of 247,792 and 153,825 shares redeemed (3,602,549) (1,915,839)
------------ ------------
Increase (decrease) in net assets resulting from capital share transactions (71,214) 1,987,583
------------ ------------
Total increase in net assets 603,681 3,988,099
Net assets:
Beginning of year 13,059,888 9,071,789
------------ ------------
End of year $ 13,663,569 $ 13,059,888
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1998
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 14.23 $ 12.00 $ 12.98 $ 10.12 $ 10.34
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.47) (0.25) (0.28) (0.28) 0.06
Net realized and unrealized gain (loss) on investments 2.19 2.69 0.93 3.33 (0.27)
-------- -------- -------- -------- --------
Total income (loss) from investment operations 1.72 2.44 0.65 3.05 (0.21)
-------- -------- -------- -------- --------
Distributions:
From net investment income (0.07) (0.01)
From net realized gain on security transactions (1.05) (0.21) (1.63) (0.12)
-------- -------- -------- --------
Total distributions (1.05) (0.21) (1.63) (0.19) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of year $ 14.90 $ 14.23 $ 12.00 $ 12.98 $ 10.12
======== ======== ======== ======== ========
Total return(1) 13.02% 20.59% 6.36% 30.70% (2.04)%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 13,664 $ 13,060 $ 9,072 $ 6,490 $ 5,323
Ratio of operating expenses to average net assets(3) 2.54% 2.65% 2.68% 2.39% 1.99%
Ratio of total expenses to average net assets(4) 5.52% 5.20% 6.22% 5.79% 4.49%
Ratio of net investment income (loss) to average net assets (3.08)% (2.50)% (2.67)% (2.60)% 0.76%
Portfolio turnover rate 145% 115% 145% 220% 170%
</TABLE>
- -----------
(1) Does not reflect contingent deferred sales charge.
(2) Without fees waived by the investment advisor and distributor, the
annualized ratio of operating expenses to average net assets would have
been 2.69%, 2.80%, 2.87%, 2.95% and 2.69%, respectively.
(3) Without fees waived by the investment advisor and distributor, the
annualized ratio of total expenses to average net assets would have been
5.67%, 5.35%, 6.41%, 6.34% and 5.19%, respectively
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. It is composed of six separate portfolios. The
accompanying financial statements include only the Yorktown Classic Value
Trust (the "Fund").
The primary investment objective of the Fund is growth of capital; income
is a secondary objective. The Fund seeks to achieve these objectives by
investing primarily in equity securities which the Fund's investment
advisor believes are undervalued in relation to the quality of the
securities and the long-term earning power of their issuers, regardless of
short-term indicators.
2. Significant Accounting Policies:
a. Portfolio Valuation
Fund assets are valued at current market value or, where unavailable, at
fair value as determined in good faith by or under the direction of the
Board of Trustees.
b. Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are reported on an identified-cost
basis for both financial statement and federal income tax purposes.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and expenses are recorded on an accrual
basis.
c. Federal Income Taxes
The Trust's policy is for the Fund to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its investment company taxable income
to its shareholders. Therefore, no federal income tax provision is
required.
As of May 31, 1998, the aggregate cost of investments for federal income
tax purposes, the net unrealized appreciation on a federal income tax
basis, and the gross unrealized appreciation and depreciation with respect
to each security where there is an excess of value over tax cost or tax
cost over value were $14,122,035, $2,731,166, $2,908,196 and $177,030,
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.
40
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
f. Borrowings
The Fund is permitted to borrow up to one-third of the value of its net
assets for investment purposes. Such borrowing is referred to as
leveraging. As of May 31, 1998, the balance due for securities purchased
through leveraging was $3,228,550. The average daily balance during the
year ended May 31, 1998 was $5,796,073 or $6.19 per share, based on
average shares outstanding of 936,316. The maximum amount of borrowings
outstanding at any month-end during the year 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 brokers loan call rate
(7.125% as of May 31, 1998). Such interest amounted to $413,693 for the
year ended May 31, 1998.
3. Investment Advisory Agreement:
Yorktown Management & Research Company, Inc. (the "Advisor"), whose
principal stockholder is also a trustee of the Trust, serves as the Fund's
investment advisor and manager. For its services, the Advisor receives a
fee, calculated daily and payable monthly, at an annual rate of .90% of the
average daily net assets of the Fund.
4. Distribution Plan and Fees:
Yorktown Distributors, Inc. (the "Distributor") distributes shares of the
Fund pursuant to a Rule 12b-1 distribution plan adopted by the Trust. The
plan provides that the Distributor shall receive an annual fee of .90% of
the Fund's average daily net assets, which is comprised of .65% of
distribution fees and .25% of service fees. The principal stockholder of
the Distributor is also a trustee of the Trust.
A 2% contingent deferred sales charge is generally imposed on redemptions
made within five years of the date that Fund shares are purchased.
5. Investment Activity:
For the year ended May 31, 1998, 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
$28,375,381 and $31,552,568, respectively.
41
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1998, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 9,794,875
Accumulated net realized gain from security transactions 1,107,385
Unrealized appreciation on investments 2,761,309
------------
Net assets applicable to outstanding shares of beneficial interest $ 13,663,569
============
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the
tax character of certain transactions, $107,242 of net operating losses
were reclassified to paid-in capital and $320,867 of net operating losses
were reclassified to accumulated realized gains during the year ended May
31, 1998. The results of operations and net assets were not affected by the
reclassification.
42
<PAGE>
[PRICEWATERHOUSECOOPERS LOGO]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Yorktown Classic Value Trust:
We have audited the accompanying statement of assets and liabilities of
American Pension Investors Trust Yorktown Classic Value Trust (the "Fund"),
including the schedule of investments, as of May 31, 1998, and the related
statements of operations and cash flows for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Yorktown Classic Value Trust as of May 31,
1998, the results of its operations, its cash flows, the changes in its net
assets, and the financial highlights for each of the respective periods stated
in the first paragraph, in conformity with generally accepted accounting
principles.
PRICEWATERHOUSECOOPERS, LLP
Baltimore, Maryland
June 12, 1998
43
<PAGE>
[TREASURIES TRUST GRAPH TO COME FROM M. SAVAGE]
Since Inception: 9.33%
TREASURIES LEHMAN CPI
DATE TRUST INTERM VALUE
---- ----- ------ -----
02-Jul-97 $10,000 $10,000 $10,000
31-Jul-97 10,180 10,184 10,012
31-Aug-97 9,930 10,145 10,031
30-Sep-97 10,140 10,256 10,056
31-Oct-97 10,381 10,376 10,081
30-Nov-97 10,381 10,398 10,075
31-Dec-97 10,543 10,482 10,062
31-Jan-98 10,778 10,618 10,081
28-Feb-98 10,686 10,607 10,100
31-Mar-98 10,737 10,639 10,119
30-Apr-98 10,758 10,686 10,137
31-May-98 10,933 10,760 10,156
44
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
SCHEDULE OF INVESTMENTS
May 31, 1998
<TABLE>
<CAPTION>
Principal Value
-------------- --------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 100.00%
United States Treasury Stripped Interest Payment
Due 5/15/2005 $ 683,000 $ 463,613
Due 8/15/2005 2,997,000 2,005,830
Due 5/15/2007 198,000 119,601
Due 5/15/2008 2,017,000 1,146,118
----------- -----------
Total investments (cost $3,689,866) $ 5,895,000 $ 3,735,162
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $3,689,866) $ 3,735,162
Cash 77,141
Other assets 36,923
------------
Total assets 3,849,226
------------
Liabilities:
Other liabilities 5,392
------------
Total liabilities 5,392
------------
Net assets $ 3,843,834
============
Shares of beneficial interest outstanding (unlimited number of no par value shares 361,475
authorized) ============
Net asset value, offering and redemption price per share outstanding $ 10.63
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF OPERATIONS
for the period from July 2, 1997 (commencement
of operations) to May 31, 1998
<TABLE>
<S> <C>
Investment income:
Interest $ 110,774
---------
Expenses:
Investment advisory fees 6,060
Transfer agent fees 13,094
Custodial fees 1,371
Professional fees 7,214
Registration fees 10,158
Trustee fees 250
Insurance 887
Shareholder reports 2,455
Organizational expenses 7,011
Miscellaneous 1,081
---------
49,581
Less expenses waived/reimbursed by investment advisor and distributor (35,601)
---------
Total expenses 13,980
---------
Net investment income 96,794
---------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 1,074
Change in unrealized appreciation on investments 45,296
---------
Net realized and unrealized gain on investments 46,370
---------
Net increase in net assets resulting from operations $ 143,164
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
for the period from July 2, 1997
(commencement of operations) to May 31, 1998
<TABLE>
<S> <C>
Operations:
Net investment income $ 96,794
Net realized gain from security transactions 1,074
Net change in unrealized appreciation on investments 45,296
Increase in net assets resulting from operations 143,164
-----------
Distributions from:
Net investment income (45,459)
-----------
Decrease in net assets resulting from distributions (45,459)
Capital share transactions:
Proceeds from sale of 396,805 shares 4,112,679
Value of 4,334 shares issued upon reinvestment of dividends 44,776
Cost of 39,664 shares redeemed (411,326)
-----------
Increase in net assets resulting from capital share transactions 3,746,129
-----------
Total increase in net assets 3,843,834
Net assets:
Beginning of period -0-
-----------
End of period $ 3,843,834
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
FINANCIAL HIGHLIGHTS
for the period ended May 31, 1998(2)
<TABLE>
<S> <C>
For a share outstanding throughout the period:
Net asset value, beginning of year/period $ 10.00
--------
Income from investment operations:
Net investment income 0.43
Net realized and unrealized gain on investments 0.49
--------
Total income from investment operations 0.92
--------
Distributions:
From net investment income (0.29)
---------
Total distributions (0.29)
---------
Net asset value, end of period $ 10.63
=========
Total return 9.33%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 3,844
Ratio of expenses to average net assets(1) 0.84%
Ratio of net investment income to average net assets 5.85%
Portfolio turnover rate 3%
</TABLE>
- -----------
(1) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 2.99%.
(2) Commencement of operations was July 2, 1997.
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization:
American Pension Investors Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of six 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 May 31, 1998, such unamortized costs amounted to
$8,133.
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 May 31, 1998, the aggregate cost of investments for federal income
tax purposes and the unrealized appreciation with respect to each security
where there is an excess of value over tax cost were $3,689,866 and
$45,296, respectively.
50
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
e. Cash and Cash Equivalents
Cash and cash equivalents include amounts invested in overnight money
market accounts, which are readily convertible to known amounts of cash.
These amounts are invested in one financial institution.
f. 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 May 31, 1998,
the Advisor waived all of its fees in the amount of $6,060. In addition,
the Advisor reimbursed $29,541 of the Fund's operating expenses.
4. Investment Activity:
For the year ended May 31, 1998, purchases and sales of U.S. government
obligations amounted to $3,630,744 and $50,339, 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 May 31, 1998, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 3,746,129
Accumulated net investment income 51,335
Accumulated net realized gain from security transactions 1,074
Unrealized appreciation on investments 45,296
-----------
Net assets applicable to outstanding shares of beneficial interest $ 3,843,834
===========
</TABLE>
51
<PAGE>
[PRICEWATERHOUSECOOPERS LOGO]
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust
Treasuries Trust:
We have audited the accompanying statement of assets and liabilities of
American Pension Investors Trust Treasuries Trust (the "Trust"), including the
schedule of investments, as of May 31, 1998, and the related statement of
operations, statement of changes in net assets, and the financial highlights
for the period from July 2, 1997 (commencement of operations) to May 31, 1998.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Pension Investors Trust Treasuries Trust as of May 31, 1998, the
results of its operations, the changes in its net assets, and the financial
highlights for the period from July 2, 1997 (commencement of operations) to May
31, 1998, in conformity with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS, LLP
Baltimore, Maryland
June 12, 1998
52
<PAGE>
EXECUTIVE OFFICES
American Pension Investors Trust
P.O. Box 2529
2303 Yorktown Avenue
Lynchburg, Virginia 24501
(800) 544-6060
INVESTMENT ADVISOR
Yorktown Management & Research Company, Inc.
P.O. Box 2529
2303 Yorktown Avenue
Lynchburg, Virginia 24501
(800) 544-6060
DISTRIBUTOR
Yorktown Distributors, Inc.
P.O. Box 2529
2303 Yorktown Avenue
Lynchburg, Virginia 24501
(800) 544-6060
CUSTODIANS
MainStreet Trust Company
P.O. Box 5228
Martinsville, Virginia 24115
Custodial Trust Company
101 Carnegie Center
Princeton, New Jersey 08540-6231
INDEPENDENT AUDITORS
PricewaterhouseCoopers, LLP
250 West Pratt Street
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.
