[FLAGS OF EIGHT INTERNATIONAL COUNTRIES]
[LOGO]
API TRUST
May 31, 1999
ANNUAL REPORT
GROWTH FUND
CAPITAL INCOME FUND
MULTIPLE INDEX TRUST
YORKTOWN CLASSIC
VALUE TRUST
TREASURIES TRUST
<PAGE>
[LOGO]
API TRUST
CONTENTS
Letter to Shareholders 1
Growth Fund
Performance 4
Investments 5
Financial Statements 7
Capital Income Fund
Performance 14
Investments 15
Financial Statements 16
Multiple Index Trust
Performance 23
Investments 24
Financial Statements 25
Yorktown Classic Value Trust
Performance 31
Investments 32
Financial Statements 33
Treasuries Trust
Performance 41
Investments 42
Financial Statements 43
Report of Independent Accountants 49
<PAGE>
[LOGO]
API TRUST
Dear Fellow Shareholders:
It is with great pleasure that we present the annual report to shareholders.
From the inception of API Trust, we have developed a leadership position in
developing and maintaining some of our industry's most diversified and diverse
mutual funds. Three of our funds, the API Trust Growth Fund, Capital Income Fund
and Multiple Index Trust have offered superior performance through the broadest
of diversification. Also our Yorktown Classic Value Trust and our Treasuries
Trust are tightly focused within their portfolio holdings. The right asset
allocation requires the right structure. We believe very strongly in building
our family of funds to enhance your future. Today our funds offer efficient
direct access to the world's financial marketplaces.
The last twelve months we have seen investor enthusiasm drive markets to new
highs across the board. Lead by the NASDAQ technology sector and then followed
closely by the Dow Jones Industrial Average, our domestic markets have done
very, very well. Driving the market, in part, was consumer confidence. Consumer
spending exceeded 6% for the first half of 1999, the largest rise in eleven
years. The market's rise seems to have buoyed consumer confidence, which rose
for the seventh consecutive month in May. The resilience of the economy has
bolstered more optimistic expectations for the remainder of the year. Also
inspiring consumer confidence was one of the lowest levels of inflation in a
generation. As measured by the Consumer Price Index (CPI), inflation has been
between 1 1/2 and 2%, compared to approximately 4% in the beginning of the
1990's and 10 to 12% in the beginning of the 1980's. Still, inflation worries
have been seeping into the market. The growing conviction that Asian and Latin
American economies are recovering is raising commodity prices, particularly oil.
The price of West Texas Intermediate oil surged from less than $12 in February
to almost $19 in early May. That alone almost guarantees a rise in the
"headline" inflation rate this year, which is the rate of inflation as measured
by the entire CPI. But it's important to note that the Federal Reserve Board
looks primarily at the core inflation rate, which is the CPI minus food and
energy --and the core inflation rate looks as if it will remain low at about 2%
this year.
Fiscal Year 1999 Results for Treasuries Trust
Fixed Income Commentary
For fiscal year ended May 31, 1999 the Treasuries Trust had a total return of
5.11% and its average annualized return since inception of 6.80%. The aggregate
total return since inception is 14.92%. Of course, past performance is no
guarantee of future results. During the twelve month period ended March 31,
1999, the fund was ranked #1 out of twenty funds in the Government Bond category
as reported by Lipper Analytical Services and Morningstar. Where can we expect
to go from here? The fundamentals by which we judge the health of the economy
have been stretched to the upper limits. Unemployment stands at a twenty- nine
year low of 4.2% and eleven states currently have jobless rates of under 3%.
While different surveys show vary-
1
<PAGE>
ing rates of wage increases, they all indicate compensation rising significantly
faster than prices. The conference boards latest surveys of companies suggest
that pay raises will average about 4% both for this year and next year. When
productivity gains keep pace with wage increases, there is no squeeze on profit
margins or direct pressures on companies to raise prices. Real inflation and
real interest rates become the real question for the future market cycle.
April's Consumer Price Index jumped 0.7% for an annualized inflation rate of a
frightening 8.4%. The Fed issued its official warning . . . the economy must
slow down and inflation must decrease or interest rates will be raised. The
efficiency by which our markets adjust any and all influence factors suggests to
us that the market will accomplish the Fed's tightening on its own. The market
is very cognizant of the relationship between interest rates and inflation.
Adjusting for a current inflation rate of about 2%, a 5% federal funds rate
would imply a real interest rate of about 3%. This compares with an average
historical rate closer to 2%. However, strong economic growth in the U.S.
economy and vigorous investment demand have driven up the underlying real return
on capital. If the Federal Reserve attempted to peg its target rate well above
this equilibrium real interest rate, the money supply would shrink
substantially. Instead, monetary aggregates continue to grow rapidly, suggesting
that a tightening in Federal Reserve policy is appropriate. Interest rates will
surely rise until we see a leveling of the growth rate in our domestic economy.
Fiscal year 1999 results for the API Trust Growth Fund, Capital Income Fund,
Multiple Index Trust and Yorktown Classic Value Trust
Equity Commentary
For the fiscal year ended May 31, 1999, the API Trust Growth Fund returned
8.46%, the Capital Income Fund returned 6.57%, the Multiple Index Trust returned
17.49%, and the Yorktown Classic Value Trust returned 17.80%. As always, past
performance is no guarantee of future results. The U.S. Market rally started in
the fall of 1998 and was fueled by investor appetite for growth stocks,
particularly technology, communications and Internet-related stocks. On March
29,1999 the Dow Jones Industrial Average closed above 10,000 for the first time
and the broader averages also flirted with their all-time highs. However, market
activity was narrow.
Roughly one-third of the performance of the Standard & Poor's 500 Index came
from just two stocks, Microsoft Corp. and America Online, Inc. The divergence
between large and small cap stocks widened dramatically -- as indicated by the
Russell 2000 Index's decline of more than 16%. For the twelve month period, only
value stocks broke free and reversed their trend to finally outperform the
overheated technology sector by the end of May.
Despite our concerns about the technology sector's lofty valuations, the broad
markets both domestic and overseas are supporting good economic news that is
getting better. The U.S. economy is growing at a healthy 3 to 3 1/2% annual
rate, and unemployment remains at near historical lows with only a trace of
inflation. Consumer spending, which accounts for two-thirds of Gross Domestic
Product growth, is high, and so far in 1999 corporate profits have been much
stronger than had been expected.
However, we do see some vulnerability. Trade is a weak spot in the economy
right now. Exports of U.S. goods and services dropped in the first quarter
while imports soared. This reflects the fact that the U.S. is one of the few
countries financially fit enough to buy goods produced elsewhere in the world.
But for as long as less vibrant international economies are unable to buy U.S.
goods, the profitability of U.S. companies trying to export will be challenged.
2
<PAGE>
When you think about it, vulnerability in regard to the international economy is
nothing new. Globally, the outlook is slightly more positive than it was a few
months ago. For example, the European markets are slowing down, which will most
likely lead to the central bank lowering interest rates in order to boost
domestic spending. In many countries in Europe, there are no fixed-rate
mortgages, only adjustable-rate mortgages. When interest rates go down,
mortgages are reduced and homeowners spend money elsewhere. This has a huge
impact on consumer spending, and will help European equities in the long term.
Additionally, the situation in Japan remains unchanged. And, problems in the
emerging markets haven't had the negative impact many people expected both the
Mexican and Brazilian stock markets have actually risen in the past three
months.
Going Forward
In summary, there are concerns that the current economy is unsustainable and we
soon could see an abrupt end. In many cases, however, people are looking for a
slowdown because they are fearful growth will drive up inflation -- these are
particularly older investors who are accustomed to inflation accompanying
growth. But we currently just don't see the pressure toward inflation at all, so
there's no reason to want a slowdown. The best approach now, as in any market,
is to diversify and invest for the long term.
PricewaterhouseCoopers LLP, the Trust's independent auditors, have completed
their annual examination, and audited financial statements 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
3
<PAGE>
[GRAPH]
Growth Fund
Comparison of change in value of $10,000 in the Growth Fund,
MSCI World Index and the Consumer Price Index, year ended May 31.
AVERAGE ANNUAL
TOTAL RETURN
1 Year 5 Year 10 Year
6.96% 13.37% 10.97%
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C>
Growth Fund 10,000 10,354 11,759 12,337 13,945 15,144 16,852 20,396 22,092 26,247 28,319
Consumer Price Index 10,000 10,436 10,953 11,284 11,648 11,914 12,294 12,640 12,932 13,150 13,522
MSCI World Index 10,000 10,720 10,855 11,047 12,643 13,926 15,449 18,286 21,499 25,898 29,404
</TABLE>
Past performance is not predictive of future performance
4
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
Shares Value
---------- ----------------
<S> <C> <C>
COMMON STOCKS -- 5.67%
Aircraft & Aerospace -- 0.27%
United Technologies Corp. 3,000 $ 186,188
---------
Automobiles & Trucks -- 0.33%
Ford Motor Co. 4,000 228,250
---------
Banks -- 0.75%
Bank One Corp. 4,500 254,531
U. S. Bancorp 8,000 260,000
---------
514,531
---------
Chemicals -- 0.31%
du Pont (E.I.) de Nemours & Co. 3,300 215,944
---------
Defense Systems &
Equipment -- 0.44%
Harris Corp 8,000 302,500
---------
Finance -- 0.36%
Fannie Mae 3,700 251,600
---------
Insurance -- 0.42%
American General 4,000 289,000
---------
Medical & Dental Equipment -- 0.36%
Johnson & Johnson 2,700 250,087
---------
Office Equipment and
Supplies -- 0.33%
Xerox Corp. 4,100 230,369
---------
Railroads -- 0.54%
CSX Corp. 8,000 375,500
---------
Recreation -- 0.36%
Disney (Walt) Co. 8,600 250,475
---------
Retail -- Department Stores -- 0.44%
May Department Stores Co. 7,000 303,188
---------
Soaps & Cleaners -- 0.38%
Proctor & Gamble Co. 2,800 261,450
---------
Soft Drinks -- 0.38%
Coca Cola Co. 3,800 259,588
---------
Total Common Stocks
(cost $3,881,031) 3,918,670
---------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
---------- ----------------
<S> <C> <C>
MUTUAL FUNDS -- 94.33%
Emerging Markets Funds -- 5.89%
Goldman Sachs Emerging Markets Fund
Class A 63,199 $ 537,196
Putnam Emerging Growth Fund 214,155 1,846,018
Templeton Developing Markets Trust 129,471 1,683,127
---------
4,066,341
---------
Equity Income Funds -- 0.54%
Pioneer Growth Trust Equity Income
Fund Class A 12,458 375,762
---------
European Region Funds -- 0.67%
Deutche European Mid-Cap Fund
Class A 33,288 466,711
---------
Financial Services Funds -- 1.07%
John Hancock Freedom Regional Bank
Fund Class A 14,197 737,298
---------
Global Small Company Funds -- 2.20%
SmallCap World Fund, Inc. 57,101 1,520,624
---------
Growth Funds -- 12.37%
Davis New York Venture Fund Class A 87,779 2,388,467
Enterprise Group Fund, Inc. Growth
Portfolio 23,894 527,360
Guardian Park Avenue Fund, Inc. 10,289 540,091
Hilliard Lyons Growth Fund, Inc. 33,245 1,150,637
Legg Mason Value Trust -- Navigator
Class 22,578 1,642,357
New Economy Fund 46,560 1,151,435
Sentinel Growth Fund, Inc. 69,790 1,143,176
---------
8,543,523
---------
Growth and Income Funds -- 7.46%
AIM Equity Funds, Inc. Blue Chip Fund 27,941 1,195,327
</TABLE>
5
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
SCHEDULE OF INVESTMENTS, (Continued)
May 31, 1999
<TABLE>
<CAPTION>
Shares Value
--------------- -----------------
<S> <C> <C>
Growth and Income Funds
(continued)
Fidelity Adviser Growth & Income
Fund Class T 23,602 $ 402,667
Pioneer Fund, Inc. 51,071 2,325,803
Vanguard Growth and Income Fund 37,362 1,231,846
-----------
5,155,643
-----------
Index Funds -- 40.36%
ASM Index 30 Fund 30,089 651,431
BT EAFE Equity Index Fund
Institutional Class 561,877 6,512,157
BT S&P 500 Fund 2,083 344,287
Federated Index Trust Max-Cap Fund 107,747 2,896,260
Principal Preservation S&P 100 Plus
Portfolio 63,811 2,424,201
Principal Preservation Technology 100
Index Portfolio 88,729 1,924,541
SSGA S&P 500 Index Fund 164,646 3,856,032
T. Rowe Price Index Trust, Inc. Equity
Index Fund 22,155 781,877
Vanguard Index Trust 500 Portfolio 24,584 2,963,167
Vanguard Index Trust Extended Market
Portfolio 65,627 2,036,432
Vanguard Index Trust Total Stock
Market Portfolio 58,783 1,701,775
Vanguard Index Trust Value Portfolio 21,346 508,913
Vanguard International Equity Index
Fund, Inc. European Portfolio 52,891 1,283,142
-----------
27,884,215
-----------
International Funds -- 6.33%
Alliance Worldwide Privatization Fund,
Inc. Class A 77,280 859,362
Goldman Sachs Core International
Equity Class A 82,051 828,718
Kemper International Fund 55,031 600,940
Pioneer International Growth Fund
Class A 55,549 969,345
Putnam International Growth Fund
Class A 54,760 1,112,179
-----------
4,370,544
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
--------------- -----------------
<S> <C> <C>
Latin American Funds -- 1.47%
T. Rowe Price Latin America Fund 124,223 $ 1,012,422
-----------
Mid-Cap Funds -- 3.55%
MFS Emerging Growth Fund Class A 16,671 754,712
Phoenix Mid-Cap Fund Class A 27,609 460,519
Phoenix Small Cap Fund Class A 55,960 872,991
Pioneer Mid Cap Fund Class A 20,314 366,265
-----------
2,454,487
-----------
Pacific Region Funds -- 0.92%
Goldman Sachs Asia Growth Fund
Class A 67,191 632,941
-----------
Science & Technology
Funds -- 4.16%
Alliance Technology Fund 22,069 1,804,840
John Hancock Global Technology Fund 23,174 1,072,306
2,877,146
-----------
Small Cap Funds -- 7.34%
AIM Equity Aggressive Growth Fund
Class A 22,614 1,071,687
Delaware Group Value Fund, Inc. 46,437 1,241,727
Enterprise Small Company Value Fund
Class A 60,275 518,972
Fidelity Advisors Small Cap Fund
Class T 25,500 411,840
Guardian Small Cap Fund 60,610 726,110
Kemper Small Cap Equity Fund Class A 88,203 493,940
Transamerica Premier Small Company
Fund 25,342 603,903
-----------
5,068,179
-----------
Total Mutual Funds
(cost $52,566,568) 65,165,836
-----------
Total Investments
(cost $56,447,599) $69,084,506
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $56,447,599) $ 69,084,506
Cash 1,874,665
Receivable for shareholder purchases 1,044,703
Other assets 30,250
------------
Total assets 72,034,124
------------
Liabilities:
Accrued distribution fees 62,026
Accrued advisory fees 54,012
Payable for shareholder redemptions 77,194
Other liabilities 76,747
------------
Total liabilities 269,979
Net Assets $ 71,764,145
============
Shares of beneficial interest outstanding (unlimited number of no par value shares
authorized) 5,057,312
Net asset value and offering price per share outstanding ============
$ 14.19
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENT OF OPERATIONS
for the year ended May 31, 1999
<TABLE>
<S> <C>
Investment Income:
Dividends $ 543,720
Interest 54,476
------------
Total income 598,196
------------
Expenses:
Investment advisory fees 724,192
Distribution fees 724,192
Transfer agent fees 243,662
Custodial fees 23,601
Professional fees 50,256
Registration fees 13,689
Trustee fees 17,949
Insurance 34,660
Shareholder reports 22,955
Miscellaneous 7,363
------------
1,862,519
Less expenses waived by investment advisor (184,052)
------------
Total expenses 1,678,467
------------
Net investment loss (1,080,271)
------------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 3,675,641
Capital gain distributions from mutual funds 3,666,807
Change in unrealized appreciation on investments (538,472)
------------
Net realized and unrealized gain on investments 6,803,976
------------
Net increase in net assets resulting from operations $ 5,723,705
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------------- ---------------
<S> <C> <C>
Operations:
Net investment loss $ (1,080,271) $ (456,909)
Net realized gain from security transactions 3,675,641 5,004,312
Capital gain distributions from mutual funds 3,666,807 3,909,171
Net change in unrealized appreciation on investments (538,472) 3,926,788
------------- -------------
Increase in net assets resulting from operations 5,723,705 12,383,362
------------- -------------
Distributions:
From net realized gain on security transactions (5,447,088) (7,875,892)
------------- -------------
Decrease in net assets resulting from distributions (5,447,088) (7,875,892)
------------- -------------
Capital share transactions:
Proceeds from sale of 649,068 and 555,387 shares 8,869,932 7,758,789
Value of 406,482 and 594,591 shares issued upon reinvestment of dividends 5,316,787 7,615,929
Cost of 1,458,980 and 810,738 shares redeemed (19,872,341) (11,426,062)
------------- -------------
Increase (decrease) in net assets resulting from capital share
transactions (5,685,622) 3,948,656
------------- -------------
Total increase (decrease) in net assets (5,409,005) 8,456,126
Net assets:
Beginning of year 77,173,150 68,717,024
------------- -------------
End of year $ 71,764,145 $ 77,173,150
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 14.13 $ 13.42 $ 14.00 $ 12.48 $ 12.32
------- -------- -------- -------- --------
Income from investment operations:
Net investment loss (.21) (0.08) (0.17) (0.14) (0.10)
Net realized and unrealized gain on investments 1.32 2.36 1.25 2.67 1.37
------- -------- -------- -------- --------
Total income from investment operations 1.11 2.28 1.08 2.53 1.27
------- -------- -------- -------- --------
Distributions:
From net realized gain on security transactions (1.05) (1.57) (1.66) (1.01) (1.11)
------- -------- -------- -------- --------
Total distributions (1.05) (1.57) (1.66) (1.01) (1.11)
------- -------- -------- -------- --------
Net asset value, end of year $ 14.19 $ 14.13 $ 13.42 $ 14.00 $ 12.48
======= ======== ======== ======== ========
Total return(1) 8.46% 18.39% 8.32% 21.03% 11.28%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $71,764 $ 77,173 $ 68,717 $ 68,306 $ 55,191
Ratio of expenses to average net assets(2) 2.32% 2.18% 2.18% 2.24% 2.06%
Ratio of net investment income (loss) to average net assets (1.49)% (0.62)% (1.31)% (1.08)% (1.50)%
Portfolio turnover rate 86% 57% 84% 63% 91%
</TABLE>
- -----------
(1) Does not reflect contingent deferred sales charge.
(2) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 2.58%, 2.54%, 2.55%, 2.57% and 2.60%,
respectively.
The accompanying notes are an integral part of the financial statements.
10
<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 closing net asset values in accordance
with the 1940 Act. Equity securities listed or regularly traded on a
securities exchange are valued at the last quoted sales price on the
exchange where they are principally traded.
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, 1999, 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 securities where there is an excess of value over tax cost or tax cost
over value were $56,781,511, $12,321,639, $12,708,691 and $387,052,
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
11
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
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, 1999,
the Advisor waived $184,052 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, 1999, the Distributor received $184,052 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.
A 1.50% contingent deferred sales charge in 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, 1999, 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
$60,564,795 and $71,642,160, respectively.
12
<PAGE>
AMERICAN PENSION INVESTORS TRUST
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Compostion of Net Assets:
At May 31, 1999, net assets consisted of:
Paid-in capital $52,178,450
Accumulated net realized gain from security transactions 6,948,788
Unrealized appreciation on investments 12,636,907
-----------
Net assets applicable to outstanding shares of
beneficial interest $71,764,145
===========
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions $693,413 of net operating losses was
reclassified to paid-in capital, $386,858 of short-term capital gains was
reclassified to undistributed net investment income, and $492,090 of
short-term capital gain distributions was reclassified to cover the prior
year net investment income underdistribution during the year ended May 31,
1999. The results of operations and net assets were not affected by the
reclassification.
13
<PAGE>
[GRAPH]
Capital Income Fund
Comparison of change in value of $10,000 in the Capital Income Fund,
MSCI World Index and the Consumer Price Index, year ended May 31.
AVERAGE ANNUAL
TOTAL RETURN
1 Year 5 Year 10 Year
5.07% 16.81% 11.33%
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C>
Capital Income Fund 10,000 10,200 11,182 11,981 13,143 13,772 15,574 18,324 22,433 28,207 29,249
Consumer Price Index 10,000 10,436 10,953 11,284 11,648 11,914 12,294 12,640 12,932 13,150 13,522
MSCI World Index 10,000 10,720 10,855 11,047 12,643 13,926 15,449 18,286 21,499 25,898 29,404
</TABLE>
Past performance is not predictive of future performance
14
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
SCHEDULE OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
Shares Value
---------- ------------
<S> <C> <C>
MUTUAL FUNDS -- 100.00%
Equity Income Funds -- 11.61%
T. Rowe Price Equity Income Fund 13,572 $ 386,001
Van Kampen American Capital Equity
Income Fund 145,502 1,158,201
---------
1,544,202
---------
European Region Funds -- 4.99%
Alliance New Europe Fund, Inc. Class A 21,631 391,093
Goldman Sachs European Equity Fund 24,271 273,058
---------
664,151
---------
Financial Services Funds -- 6.38%
Davis Financial Fund Class A 27,635 848,677
---------
Global Funds -- 0.87%
Pioneer World Equity Fund Class A 6,164 116,014
---------
Growth Funds -- 12.02%
Bear Stearns Insider Select Fund Class A 23,526 419,709
MFS Large Cap Growth Fund Class A 46,143 819,974
New Economy Fund 14,504 358,703
---------
1,598,386
---------
Growth and Income Funds -- 10.37%
Fidelity Advisers Growth & Income
Class C 53,599 907,440
Kemper Blue Chip Fund 24,299 472,142
---------
1,379,582
---------
Index Funds -- 32.49%
ASM Index 30 Fund 13,774 298,209
Federated Index Trust Max-Cap Fund 15,397 413,893
Principal Preservation Portfolios S&P
100 Plus Portfolio 64,451 2,448,531
Vanguard Index Trust 500 Portfolio 9,051 1,090,946
Vanguard Index Trust Total Stock
Market Portfolio 2,378 68,864
---------
4,320,443
---------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
--------- -------------
<S> <C> <C>
International Funds -- 9.20%
Putnam International Growth & Income
Fund 103,080 $ 1,223,567
-----------
Latin America Funds -- 4.21%
Van Kampen American Capital Latin
America Fund 51,449 559,775
-----------
World Income Funds -- 7.86%
Bear Stearns Emerging Markets Debt
Portfolio Class A 57,833 519,927
Phoenix Emerging Markets Bond
Portfolio Class A 73,726 525,670
-----------
1,045,597
-----------
Total investments (cost $11,503,827) $13,300,394
===========
</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, 1999
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $11,503,827) $ 13,300,394
Cash 436,187
Receivable for shareholder purchases 124,888
Other assets 15,953
-------------
Total assets 13,877,422
-------------
Liabilities:
Accrued distribution fees 5,966
Payable for shareholder redemptions 29,449
Other liabilities 18,839
-------------
Total liabilities 54,254
-------------
Net assets $ 13,823,168
=============
Shares of beneficial interest outstanding (unlimited number of no par value shares
authorized) 600,256
=============
Net asset value and offering price per share outstanding $ 23.03
=============
</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, 1999
<TABLE>
<S> <C>
Investment income:
Dividends $ 152,041
Interest 24,543
----------
Total income 176,584
----------
Expenses:
Investment advisory fees 74,342
Distribution fees 61,951
Transfer agent fees 51,272
Custodial fees 5,734
Professional fees 18,756
Registration fees 12,181
Trustee fees 2,878
Insurance 5,241
Shareholder reports 5,864
Miscellaneous 2,190
----------
240,409
Less expenses waived by investment advisor (74,342)
----------
Total expenses 166,067
----------
Net investment income 10,517
----------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 560,298
Capital gain distributions from mutual funds 525,948
Change in unrealized appreciation on investments (187,889)
----------
Net realized and unrealized gain on investments 898,357
----------
Net increase in net assets resulting from operations $ 908,874
==========
</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, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Operations:
Net investment income $ 10,517 $ 77,700
Net realized gain from security transactions 560,298 531,899
Capital gain distributions from mutual funds 525,948 650,304
Net change in unrealized appreciation on investments (187,889) 867,042
------------ ------------
Increase in net assets resulting from operations 908,874 2,126,945
------------ ------------
Distributions:
From net investment income (137,628)
From net realized gain on security transactions (744,723) (619,051)
------------ ------------
Decrease in net assets resulting from distributions (744,723) (756,679)
------------ ------------
Capital share transactions:
Proceeds from sale of 194,245 and 123,896 shares 4,300,974 2,750,079
Value of 33,166 and 34,684 shares issued upon reinvestment of dividends 706,114 715,156
Cost of 131,961 and 60,388 shares redeemed (2,940,127) (1,341,259)
------------ ------------
Increase in net assets resulting from capital share transactions 2,066,961 2,123,976
------------ ------------
Total increase in net assets 2,231,112 3,494,242
Net assets:
Beginning of year 11,592,056 8,097,814
------------ ------------
End of year $ 13,823,168 $ 11,592,056
============ ============
</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, 1999
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 22.96 $ 19.92 $ 17.57 $ 17.21 $ 16.34
------- -------- -------- -------- --------
Income from investment operations:
Net investment income .02 0.16 0.32 0.34 0.35
Net realized and unrealized gain on investments 1.38 4.64 3.49 2.57 1.64
------- -------- -------- -------- --------
Total income from investment operations 1.40 4.80 3.81 2.91 1.99
------- -------- -------- -------- --------
Distributions:
From net investment income (0.30) (0.48) (0.28) (0.36)
From net realized gain on security transactions (1.33) (1.46) (0.98) (2.27) (0.76)
------- -------- -------- -------- --------
Total distributions (1.33) (1.76) (1.46) (2.55) (1.12)
------- -------- -------- -------- --------
Net asset value, end of year $ 23.03 $ 22.96 $ 19.92 $ 17.57 $ 17.21
======= ======== ======== ======== ========
Total return(1) 6.57% 25.30% 22.43% 17.65% 13.08%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $13,823 $ 11,592 $ 8,098 $ 4,417 $ 3,031
Ratio of expenses to average net assets(2) 1.34% 1.47% 1.77% 2.22% 2.05%
Ratio of net investment income (loss) to average net assets 0.09% 0.80% 1.84% 1.43% 0.75%
Portfolio turnover rate 79% 33% 67% 40% 65%
</TABLE>
- -----------
(1) Does not reflect contingent deferred sales charge.
(2) Without fees waived by the investment advisor, the ratio of expenses to
average net assets would have been 1.94%, 2.07%, 2.38%, 2.82% and 2.65%
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 primarily 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 closing net asset values in accordance
with the 1940 Act. Equity securities listed or regularly traded on a
securities exchange are valued at the last quoted sales price on the
exchange where they are principally traded.
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, 1999, 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 securities where there is an excess of value over tax cost or tax cost
over value were $11,503,827, $1,796,567, $1,879,630 and $83,063,
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
20
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
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, 1999, the Advisor waived all of its fees
in the amount of $74,342.
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, 1999, the Distributor received $84,720 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.
A 1.50% contingent deferred sales charge in 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, 1999, 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
$10,872,662 and $9,402,080, respectively.
21
<PAGE>
AMERICAN PENSION INVESTORS TRUST
CAPITAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS, Continued
6. Composition of Net Assets:
At May 31, 1999, net assets consisted of:
Paid-in capital $ 10,931,177
Accumulated net investment income 100,136
Accumulated net realized gain from security transactions 995,288
Unrealized appreciation on investments 1,796,567
------------
Net assets applicable to outstanding shares of
beneficial interest $ 13,823,168
============
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $89,619 of short-term capital gains was
reclassified to undistributed net investment income during the year ended May
31, 1999. The results of operations and net assets were not affected by the
reclassification.
22
<PAGE>
[GRAPH]
Multiple Index Trust
Comparison of change in value of $10,000 in the Multiple Index Trust,
MSCI World Index and the Consumer Price Index, for the period
July 2, 1997 (Commencement of Operations) to May 31, 1999
TOTAL RETURN
Since
Inception
14.72%
7/2/97 12/31/97 5/31/98 12/31/98 5/31/99
------ -------- ------- -------- -------
Multiple Index Trust 10,000 10,250 11,199 12,372 13,009
Consumer Price Index 10,000 10,062 10,156 10,243 10,443
MSCI World Index 10,000 10,052 11,271 12,545 13,025
Past performance is not predictive of future performance
23
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
SCHEDULE OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
Shares Value
-------- -------------
<S> <C> <C>
MUTUAL FUNDS -- 100.00%
Capital Appreciation Index Funds -- 8.56%
Rydex Series Trust OTC Fund 8,971 $ 422,185
----------
Emerging Markets Index Funds -- 2.01%
Vanguard International Equity Index Fund, Inc. Emerging Markets Portfolio 10,191 98,862
----------
Growth Index Funds -- 7.92%
Vanguard Index Trust Total Stock Market Portfolio 13,484 390,371
----------
Growth and Income Index Funds -- 1.45%
ASM Index 30 Fund 3,296 71,374
----------
International Index Funds -- 17.60%
BT EAFE Equity Index Fund 67,628 783,810
Vanguard Total International Index Fund 7,337 83,577
----------
867,387
----------
Mid-Cap Index Funds -- 0.84%
Federated Index Trust Mid-Cap Fund 2,367 41,425
----------
Pacific Region Index Funds -- 2.96%
Vanguard International Equity Index Fund, Inc. Pacific Portfolio 16,613 145,701
----------
S&P 500 Index Objective Funds -- 43.05%
Federated Index Trust Max-Cap Fund 14,256 383,207
SSGA S&P 500 Index Fund 23,934 560,537
T. Rowe Price Equity Index Fund 14,478 510,930
Vanguard Index Trust 500 Portfolio 5,535 667,139
----------
2,121,813
----------
Science & Technology Index Funds -- 12.24%
Principal Preservation Tech 100 Index Portfolio 27,819 603,410
----------
Small Cap Index Funds -- 3.37%
Vanguard Index Trust Small Cap Value Fund 18,679 166,245
----------
Total Investments (cost $4,151,401) $4,928,773
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $4,151,401) $ 4,928,773
Cash 483,500
Receivable for shareholder purchases 202,416
Other assets 3,988
-----------
Total assets 5,618,677
-----------
Liabilities:
Other liabilities 6,361
-----------
Total liabilities 6,361
-----------
Net assets $ 5,612,316
===========
Shares of beneficial interest outstanding (unlimited number of no par value shares
authorized) 442,052
===========
Net asset value and offering price per share outstanding $ 12.70
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF OPERATIONS
for the year ended
May 31, 1999
<TABLE>
<S> <C>
Investment income:
Dividends $ 36,658
Interest 10,328
---------
Total income 46,986
---------
Expenses:
Investment advisory fees 28,785
Transfer agent fees 18,533
Custodial fees 3,216
Professional fees 14,203
Registration fees 10,620
Trustee fees 1,080
Insurance 1,258
Shareholder reports 1,791
Organizational expenses 8,133
Miscellaneous 1,240
---------
88,859
Less expenses waived/reimbursed by investment advisor (38,370)
---------
Total expenses 50,489
---------
Net investment loss (3,503)
---------
Realized and unrealized gain (loss) on investments:
Net realized loss from security transactions (52,747)
Capital gain distributions from mutual funds 113,199
Change in unrealized appreciation on investments 626,075
---------
Net realized and unrealized gain on investments 686,527
---------
Net increase in net assets resulting from operations $ 683,024
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
STATEMENT OF CHANGES IN NET ASSETS
for the year ended May 31, 1999 and
the period from July 2, 1997
(commencement of operations) to May 31, 1998
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Operations:
Net investment income (loss) $ (3,503) $ 6,626
Net realized loss from security transactions (52,747) (29)
Capital gain distributions from mutual funds 113,199 88,452
Net change in unrealized appreciation on investments 626,075 151,297
------------ -----------
Increase in net assets resulting from operations 683,024 246,346
------------ -----------
Distributions:
From net investment income (6,626)
From net realized gain on security transactions (77,414) (22,680)
------------ -----------
Decrease in net assets resulting from distributions (77,414) (29,306)
------------ -----------
Capital share transactions:
Proceeds from sale of 298,823 and 296,136 shares 3,530,158 3,054,036
Value of 6,537 and 2,752 shares issued upon reinvestment of dividends 75,303 27,626
Cost of 142,195 and 20,001 shares redeemed (1,678,936) (218,521)
------------ -----------
Increase in net assets resulting from capital share transactions 1,926,525 2,863,141
------------ -----------
Total increase in net assets 2,532,135 3,080,181
Net assets:
Beginning of year/period 3,080,181 -0-
------------ -----------
End of year/period $ 5,612,316 $ 3,080,181
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
AMERICAN PENSION INVESTORS TRUST
MULTIPLE INDEX TRUST
FINANCIAL HIGHLIGHTS
for the year ended May 31, 1999 and
the period ended May 31, 1998(1)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
For a share outstanding throughout the period:
Net asset value, beginning of year/period $ 11.04 $ 10.00
------- --------
Income from investment operations:
Net investment income (loss) (0.01) 0.03
Net realized and unrealized gain on investments 1.91 1.16
------- --------
Total income from investment operations 1.90 1.19
------- --------
Distribution:
From net investment income (0.03)
From net realized gain on security transactions (.24) (0.12)
------- --------
Total distributions (.24) (0.15)
------- --------
Net asset value, end of year/period $ 12.70 $ 11.04
======= ========
Total return(2) 17.49% 11.99%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 5,612 $ 3,080
Ratio of expenses to average net assets(3) 1.23% 0.71%
Ratio of net investment income (loss) to average net assets (0.09)% 0.36%
Portfolio turnover rate 35% 49%
</TABLE>
- -----------
(1) Commencement of operations was July 2, 1997.
(2) Does not reflect contingent deferred sales charge.
(3) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 2.16% and 2.75%,
respectively.
The accompanying notes are an integral part of the financial statements.
28
<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. A 1.50% contingent deferred sales charge is generally imposed on
redemptions made within five years of the date that fund shares are
purchased.
2. Significant Accounting Policies:
a. Portfolio Valuation
The investments of the Fund consist primarily of mutual funds that are
valued daily at their respective closing net asset values in accordance
with the 1940 Act. Equity securities listed or regularly traded on a
securities exchange are valued at the last quoted sales price on the
exchange where they are principally traded.
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 have been amortized evenly over two years. At May
31, 1999, no such unamortized costs remained.
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, 1999, 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 securities where there is an excess of value over tax cost or tax cost
over value were $4,151,401, $777,372, $788,997 and $11,625, respectively.
29
<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 year ended May 31, 1999, the Advisor voluntarily
waived all of its advisory fees in the amount of $28,785. In addition, the
Advisor voluntarily reimbursed $9,585 of the Fund's operating expenses.
4. Investment Activity:
For the period ended May 31, 1999, 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
$2,772,653 and $1,355,229, respectively.
5. Composition of Net Assets:
At May 31, 1999, net assets consisted of:
Paid-in capital $ 4,789,666
Accumulated net investment income 14,574
Accumulated net realized gain from security transactions 30,704
Unrealized appreciation on investments 777,372
-----------
Net assets applicable to outstanding shares of
beneficial interest $ 5,612,316
===========
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $18,077 of short-term capital gains was
reclassified to undistributed net investment income during the year ended May
31, 1999. The results of operations and net assets were not affected by the
reclassification.
30
<PAGE>
[GRAPH]
Yorktown Classic Value Trust
Comparison of change in value of $10,000 in the Yorktown Classic Value Trust,
the S&P 500 and the Consumer Price Index, for the period
November 2, 1992 (Commencement of Operations) to May 31.
AVERAGE ANNUAL
TOTAL RETURN
1 Year 5 Year Since Inception
16.30% 17.42% 13.20%
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ---- ----
<S> <C>
Yorktown Classic Value Trust 10,000 10,340 10,129 13,239 14,082 16,982 19,424 22,624
Consumer Price Index 10,000 10,155 10,387 10,718 11,020 11,275 11,465 11,789
Standard & Poor's 500 10,000 10,583 11,034 13,259 17,032 22,038 28,783 34,608
</TABLE>
Past performance is not predictive of future performance
31
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
SCHEDULE OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
Shares Value
---------- -------------
<S> <C> <C>
COMMON STOCKS -- 100.00%
Automobiles & Trucks -- 1.83%
Ford Motor Co. 7,000 $ 399,438
-----------
Banks -- 3.98%
Chase Manhatten Corp. 12,000 870,000
-----------
Candy & Gum -- 3.72%
Hershey Foods Corp. 15,000 813,750
-----------
Chemicals -- 2.22%
PPG Industries, Inc. 8,000 485,500
-----------
Computers -- 2.66%
International Business Machines, Inc. 5,000 581,562
-----------
Cosmetics & Toiletries -- 1.79%
International Flavors & Fragrances,
Inc. 9,500 390,688
-----------
Defense Systems &
Equipment -- 3.11%
Raytheon Co. 10,000 680,625
-----------
Drugs -- 4.97%
Bristol Myers Squibb Co. 6,000 411,750
Merck & Co., Inc. 10,000 675,000
-----------
1,086,750
-----------
Finance -- 14.75%
American Express Co. 12,000 1,454,250
Fannie Mae 7,500 510,000
First Data Corp. 10,300 462,856
Keycorp 23,000 799,250
-----------
3,226,356
-----------
Insurance -- 12.39%
Chubb Group 16,000 1,121,000
Citi Group 24,000 1,590,000
-----------
2,711,000
-----------
Machinery and Equipment -- 1.03%
Dover Corp. 6,000 226,125
-----------
Mining & Processing -- 2.51%
Aluminum Company of America 10,000 550,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
---------- -------------
<S> <C> <C>
Office Equipment and
Supplies -- 6.42%
Xerox Corp. 25,000 $ 1,404,688
-----------
Oil -- 2.66%
BP Amoco 3,500 374,937
Exxon Corp. 2,600 207,675
-----------
582,612
-----------
Photo & Optical -- 1.93%
Polaroid Corp. 20,000 422,500
-----------
Publishing -- 2.13%
McGraw-Hill Companies, Inc. 9,000 466,875
-----------
Railroads -- 4.89%
CSX Corp. 16,500 774,469
Norfolk Southern Corp. 9,000 294,750
-----------
1,069,219
-----------
Retail -- Discount &
Variety -- 2.92%
WalMart Stores, Inc. 15,000 639,375
-----------
Securities Brokerage -- 19.11%
Bear Stearns Cos., Inc. 22,000 976,250
Lehman Brothers Holdings, Inc. 16,000 874,000
Morgan Stanley, Dean Witter,
Discover & Co. 10,500 1,013,250
Phoenix Investment Partners 80,000 785,000
Raymond James Financial, Inc. 24,000 531,000
-----------
4,179,500
-----------
Telecommunications -- 2.08%
Lucent Technologies 8,000 455,000
-----------
Television & Radio
Broadcasting -- 1.91%
CBS Corp. 10,000 417,500
-----------
Textiles -- 0.99%
Paxar Corp. 23,800 215,687
-----------
Total Investments
(cost $17,618,996) $21,874,750
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $17,618,996) $ 21,874,750
Cash 674
Receivable for shareholder purchases 56,900
Other assets 43,899
------------
Total assets 21,976,223
------------
Liabilities:
Accrued distribution fees 12,741
Accrued advisory fees 10,618
Borrowings for purchase of securities 6,314,000
Accrued interest expense 34,308
Other liabilities 17,682
------------
Total liabilities 6,389,349
------------
Net Assets $ 15,586,874
============
Shares of beneficial interest outstanding (unlimited number of no par value shares authorized) 968,557
============
Net asset value and offering price per share outstanding $ 16.09
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF OPERATIONS
for the year ended May 31, 1999
<TABLE>
<S> <C>
Investment Income:
Dividends $ 277,075
Interest 1,395
----------
Total income 278,470
----------
Expenses:
Investment advisory fees 128,859
Distribution fees 128,859
Transfer agent fees 50,662
Custodial fees 11,562
Professional fees 19,672
Registration fees 12,577
Trustee fees 2,878
Insurance 6,918
Shareholder reports 5,208
Miscellaneous 2,681
----------
369,876
Less expenses waived by investment advisor (21,477)
----------
Total operating expenses 348,399
Interest expense 331,363
----------
Total expenses 679,762
----------
Net investment loss (401,292)
----------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 1,825,485
Change in unrealized appreciation on investments 1,494,445
----------
Net realized and unrealized gain on investments 3,319,930
----------
Net increase in net assets resulting from operations $2,918,638
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENT OF CASH FLOWS
for the year ended May 31, 1999
<TABLE>
<S> <C> <C>
Cash provided (used) by financing activities:
Sales of capital shares $ 5,424,220
Repurchase of capital shares (6,447,592)
-------------
Cash used in capital share transactions (1,023,372)
Cash provided by borrowing, net of borrowings repaid of $16,548,165 3,085,450
Dividends and distributions paid in cash (22,411)
-------------
$ 2,039,667
Cash provided (used) by operations:
Purchases of portfolio securities $ (37,970,048)
Proceeds from sales of portfolio securities 36,268,429
-------------
(1,701,619)
-------------
Net investment loss (401,292)
Net change in receivables/payables related to operations 17,032
-------------
(384,260)
-------------
(2,085,879)
------------
Net decrease in cash (46,212)
Cash, beginning of year 46,886
------------
Cash, end of year $ 674
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended May 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------- ---------------
<S> <C> <C>
Operations:
Net investment loss $ (401,292) $ (428,109)
Net realized gain from security transactions 1,825,485 2,342,121
Net change in unrealized appreciation on investments 1,494,445 (262,014)
------------
Increase in net assets resulting from operations 2,918,638 1,651,998
------------ ------------
Distributions:
From net realized gains on security transactions (1,138,299) (977,103)
------------ ------------
Decrease in net assets resulting from distributions (1,138,299) (977,103)
------------ ------------
Capital share transactions:
Proceeds from sale of 371,908 and 174,926 shares 5,470,120 2,573,311
Value of 85,247 and 71,927 shares issued upon reinvestment of dividends 1,115,888 958,024
Cost of 405,320 and 247,792 shares redeemed (6,443,042) (3,602,549)
------------ ------------
Increase (decrease) in net assets resulting from capital share transactions 142,966 (71,214)
------------ ------------
Total increase in net assets 1,923,305 603,681
Net assets:
Beginning of year 13,663,569 13,059,888
------------ ------------
End of year $ 15,586,874 $ 13,663,569
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
FINANCIAL HIGHLIGHTS
for the five years ended May 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
For a share outstanding throughout each year:
Net asset value, beginning of year $ 14.90 $ 14.23 $ 12.00 $ 12.98 $ 10.12
------- -------- -------- -------- --------
Income from investment operations:
Net investment loss (0.41) (0.47) (0.25) (0.28) (0.28)
Net realized and unrealized gain on investments 2.79 2.19 2.69 0.93 3.33
------- -------- -------- -------- --------
Total income from investment operations 2.38 1.72 2.44 0.65 3.05
------- -------- -------- -------- --------
Distributions:
From net investment income (0.07)
From net realized gain on security transactions (1.19) (1.05) (0.21) (1.63) (0.12)
------- -------- -------- -------- --------
Total distributions (1.19) (1.05) (0.21) (1.63) (0.19)
------- -------- -------- -------- --------
Net asset value, end of year $ 16.09 $ 14.90 $ 14.23 $ 12.00 $ 12.98
======= ======== ======== ======== ========
Total return(1) 17.80% 13.02% 20.59% 6.36% 30.70%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $15,587 $ 13,664 $ 13,060 $ 9,072 $ 6,490
Ratio of operating expenses to average net assets(3) 2.44% 2.54% 2.65% 2.68% 2.39%
Ratio of total expenses to average net assets(4) 4.77% 5.52% 5.20% 6.22% 5.79%
Ratio of net investment loss to average net assets (2.82)% (3.08)% (2.50)% (2.67)% (2.60)%
Portfolio turnover rate 187% 145% 115% 145% 220%
</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
2.60%, 2.69%, 2.80%, 2.87% and 2.95%, respectively.
(3) Without fees waived by the investment advisor and distributor, the
annualized ratio of total expenses to average net assets would have been
4.92%, 5.67%, 5.35%, 6.41% and 6.34%, respectively
The accompanying notes are an integral part of the financial statements.
37
<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
Equity securities listed or regularly traded on a securities exchange are
valued at the last quoted sales price on the exchange where they are
principally traded. Securities for which market quotations are not readily
available are valued 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, 1999, 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 securities where there is an excess of value over tax cost or tax cost
over value were $17,652,317, $4,222,433, $4,511,382 and $288,949,
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
38
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
2. Significant Accounting Policies, continued:
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
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, before such borrowings, for investment purposes. Such borrowing is
referred to as leveraging. As of May 31, 1999, the balance due for
securities purchased through leveraging was $6,314,000. The average daily
balance during the year ended May 31, 1999 was $4,949,959 or $4.96 per
share, based on average shares outstanding of 997,456. The maximum amount
of borrowings outstanding at any month-end during the year was $6,314,000.
The Fund's investment securities are pledged as collateral under the
borrowing arrangement.
Interest is charged at a rate of 1.50% plus the Fed Funds rate (6.375% as
of May 31, 1999). Such interest amounted to $331,363 for the year ended May
31, 1999.
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. For the year ended May 31, 1999, the Advisor voluntarily
waived $21,477 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 .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 1.50% contingent deferred sales charge is generally imposed on redemptions
made within five years of the date that Fund shares are purchased.
39
<PAGE>
YORKTOWN CLASSIC VALUE TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investment Activity:
For the year ended May 31, 1999, 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
$37,970,048 and $36,268,429, respectively.
6. Composition of Net Assets:
At May 31, 1999, net assets consisted of:
<TABLE>
<S> <C>
Paid-in capital $ 9,937,841
Accumulated net realized gain from security transactions 1,393,279
Unrealized appreciation on investments 4,255,754
-----------
Net assets applicable to outstanding shares of
beneficial interest $15,586,874
===========
</TABLE>
In order for the Fund's capital accounts and distributions to reflect the tax
character of certain transactions, $401,292 of net operating losses was
reclassified to offset short-term capital gains during the year ended May 31,
1999. The results of operations and net assets were not affected by the
reclassification.
40
<PAGE>
[GRAPH]
Treasuries Trust
Comparison of change in value of $10,000 in the Treasuries Trust,
Lehman Brothers Intermediate Government Bond Index and the Consumer Price Index,
for the period July 2, 1997 (Commencement of Operations) to May 31, 1999.
TOTAL RETURN
Since
Inception
6.80%
<TABLE>
<CAPTION>
7/2/97 12/31/97 5/31/98 12/31/98 5/31/99
------ -------- ------- -------- -------
<S> <C>
Treasuries Trust 10,000 10,480 10,933 11,948 11,342
Consumer Price Index 10,000 10,062 10,156 10,243 10,443
Lehman Brothers Intermediate Government Bond Index 10,000 10,482 10,760 11,372 11,302
</TABLE>
Past performance is not predictive of future performance
41
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
SCHEDULE OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
Principal Value
------------ -------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 100.00%
United States Treasury Stripped Interest Payment
Due 5/15/2005 $ 508,000 $ 360,594
Due 2/15/2006 7,012,000 4,762,985
Due 5/15/2006 3,240,000 2,169,738
----------
Total investments (cost $7,485,153) $7,293,317
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
<TABLE>
<S> <C>
Assets:
Investments at value (identified cost of $7,485,153) $ 7,293,317
Cash 171,137
Other assets 51,578
------------
Total assets 7,516,032
------------
Liabilities:
Other liabilities 11,916
------------
Total liabilities 11,916
------------
Net assets $ 7,504,116
============
Shares of beneficial interest outstanding (unlimited number of no par value shares authorized) 712,510
============
Net asset value and offering price per share outstanding $ 10.53
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF OPERATIONS
for the year ended May 31, 1999
<TABLE>
<S> <C>
Investment income:
Interest $ 294,443
----------
Expenses:
Investment advisory fees 18,515
Transfer agent fees 21,198
Custodial fees 3,371
Professional fees 15,263
Registration fees 9,254
Trustee fees 1,080
Insurance 1,422
Shareholder reports 3,007
Organizational expenses 8,133
Miscellaneous 1,385
----------
82,628
Less expenses waived/reimbursed by investment advisor (42,226)
----------
Total expenses 40,402
----------
Net investment income 254,041
----------
Realized and unrealized gain (loss) on investments:
Net realized gain from security transactions 68,071
Change in unrealized appreciation on investments (237,132)
----------
Net realized and unrealized gain (loss) on investments (169,061)
----------
Net increase in net assets resulting from operations $ 84,980
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
for the year ended May 31, 1999 and
the period from July 2, 1997
(commencement of operations) to May 31, 1998
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Operations:
Net investment income $ 254,041 $ 96,794
Net realized gain from security transactions 68,071 1,074
Net change in unrealized appreciation on investments (237,132) 45,296
------------ -----------
Increase in net assets resulting from operations 84,980 143,164
------------ -----------
Distributions:
From net investment income (243,264) (45,459)
From net realized gain on security transactions (9,594)
------------ -----------
Decrease in net assets resulting from distributions (252,858) (45,459)
------------ -----------
Capital share transactions:
Proceeds from sale of 704,807 and 396,805 shares 7,650,095 4,112,679
Value of 22,422 and 4,334 shares issued upon reinvestment of dividends 246,663 44,776
Cost of 376,194 and 39,664 shares redeemed (4,068,598) (411,326)
------------ -----------
Increase in net assets resulting from capital share transactions 3,828,160 3,746,129
------------ -----------
Total increase in net assets 3,660,282 3,843,834
Net assets:
Beginning of year/period 3,843,834 -0-
------------ -----------
End of year/period $ 7,504,116 $ 3,843,834
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
AMERICAN PENSION INVESTORS TRUST
TREASURIES TRUST
FINANCIAL HIGHLIGHTS
for the year ended May 31, 1999 and
the period ended May 31, 1998(1)
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
For a share outstanding throughout the year/period:
Net asset value, beginning of year/period $ 10.63 $ 10.00
------- --------
Income from investment operations:
Net investment income 0.58 0.43
Net realized and unrealized gain (loss) on investments (0.02) 0.49
-------- --------
Total income from investment operations 0.56 0.92
-------- --------
Distributions:
From net investment income (0.64) (0.29)
From net realized gain on security transactions (0.02)
-------- --------
Total distributions (0.66) (0.29)
-------- --------
Net asset value, end of period $ 10.53 $ 10.63
======== ========
Total return(2) 5.11% 9.33%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $ 7,504 $ 3,844
Ratio of expenses to average net assets(3) 0.87% 0.84%
Ratio of net investment income to average net assets 5.49% 5.85%
Portfolio turnover rate 231% 3%
</TABLE>
- -----------
(1) Commencement of operations was July 2, 1997.
(2) Does not reflect contingent deferred sales charge.
(3) Without fees waived/reimbursed by the investment advisor, the ratio of
expenses to average net assets would have been 1.79% and 2.99%,
respectively.
The accompanying notes are an integral part of the financial statements.
46
<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. A 1.50% contingent
deferred sales charge is generally imposed on redemptions made within five
years of the date that fund shares are purchased.
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. U.S. Treasury securities are valued at the mean between
the bid and asked prices.
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 have been amortized evenly over two years. At May 31, 1999, no
such unamortized costs remained.
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, 1999, the aggregate cost of investments for federal income
tax purposes, the net unrealized depreciation on a federal income tax
basis, the gross unrealized appreciation and depreciation with respect to
securities where there is an excess of value over tax cost or tax cost over
value were $7,485,153, $191,836, $1,212 and $193,048, respectively.
47
<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 year ended May 31, 1999, the Advisor voluntarily
waived all of its fees in the amount of $18,515. In addition, the Advisor
voluntarily reimbursed $23,711 of the Fund's operating expenses.
4. Investment Activity:
For the year ended May 31, 1999, purchases and sales of U.S. government
obligations amounted to $13,778,854 and $10,336,708, 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, 1999, net assets consisted of:
Paid-in capital $ 7,574,289
Accumulated net investment income 62,112
Accumulated net realized gain from security transactions 59,551
Unrealized depreciation on investments (191,836)
-----------
Net assets applicable to outstanding shares of
beneficial interest $ 7,504,116
===========
48
<PAGE>
[LOGO] PRICEWATERHOUSECOOPERS
Report of Independent Accountants
To the Board of Trustees of American Pension Investors Trust
and the Shareholders of American Pension Investors Trust:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations,
statements of changes in net assets and financial highlights present fairly, in
all material respects, the financial position of American Pension Investors
Growth Fund, Capital Income Fund, Multiple Index Trust, Yorktown Classic Value
Trust, and Treasuries Trust (five portfolios of American Pension Investors Trust
and collectively referred to as the "Funds"), at May 31, 1999, the results of
each of their operations, the changes in each of their net assets and the
financial highlights for each of the fiscal periods presented in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at May 31, 1999 by
correspondence with custodian and brokers, provide a reasonable basis for the
opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Baltimore, Maryland
June 16, 1999
49
<PAGE>
SHAREHOLDER SERVICES
API Trust
P.O. Box 8595
Boston, Massachusetts 02266-8595
(888) 933-8274
For Overnight Deliveries:
API Trust
66 Brooks Drive
Braintree, Massachusetts 02184
EXECUTIVE OFFICES
American Pension Investors Trust
P.O. Box 2529
2303 Yorktown Avenue
Lynchburg, Virginia 24501
(800) 544-6060
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.
www.apitrust.com
