FAM
VALUE FUND
EQUITY-INCOME FUND
SEMI-ANNUAL REPORT
JUNE 30, 1998
100%
No-Load
Funds
FAM FUNDS
P.O. Box 399
Cobleskill, NY 12043
(800) 932-3271
<PAGE>
DEAR SHAREHOLDER:
The first half of 1998 has proved to be modestly rewarding. The FAM
Value Fund appreciated 9.2% and the FAM Equity-Income Fund appreciated 4.9% as
of June 30, 1998. In comparison, the S&P 500 - an index of large companies -
appreciated 17.7%, while the Russell 2000 - an unmanaged index of smaller
company stocks - appreciated 4.9%. It is always humbling to realize that
although we have held our own against one index (Russell 2000), we have been
handily beaten by the other!
Benjamin Graham, co-author of the 1934 book, SECURITY ANALYSIS, said
that the market in the short-term acts like a voting machine; however in the
long-term it is a weighing machine. Precisely our focus! The FAM Value Fund has
a trailing one-year return of 33.9%, a five-year compounded return of 17.2%, and
a ten-year compounded return of 17.4%. The FAM Equity-Income Fund, which began
on April 1, 1996, has a trailing 12-month return of 20.1%. Returns of this
magnitude and consistency are very satisfying since they are in excess of our
stated objectives of doubling money once every five to six years (a compounded
return of 12-15%). However, a little word of caution is appropriate. Using
Benjamin Graham's example, the market over the last several years has been
outstanding in demonstrating its voting nature. At some future juncture,
however, the weight of economic reality may dampen returns.
With Ben in mind, let us turn to our holding, Allied Group. Allied
Group is an original investment for the FAM Value Fund. It will soon be
purchased by Nationwide for cash and thus its appreciation (+63%) for the first
six months has made Allied Group the largest holding in the Value Fund. This
company is a great example of our investment philosophy at work and we'd like to
share the story with you.
In 1987, we started investing in a small property and casualty insurer
in Des Moines, Iowa. It was selling at an attractive price, near book value and
at a single digit P/E (price to earnings) multiple. By many measures, the price
of the stock was reasonable... but was it extraordinary? Several visits to the
company indicated that management was honest, able, and intelligent. Most
importantly John Evans, Chairman and CEO, demonstrated an entrepreneurial zeal
and vision not usually evident with other insurance management in businesses of
similar size. Throughout the years, the company grew premium volume from $89.7
million in 1986 to $547.6 million in 1997. The net profit also increased from
$8.4 million in 1986 to $65.4 million in 1997 - a 20.5% compounded growth rate.
John Evans frequently gave credit where credit was due and in 1996 he
turned over the reins to Doug Anderson as President and CEO. This year Allied
Group will be purchased by Nationwide for a cash price of $48.25. Our original
price of $4 in 1987 turned out to be an exceptionally favorable price since we
will end up with a 12 fold gain - or a 25.4% compounded rate of return. However,
along the way, FAM Value benefited from price volatility when additional
purchases were made in 1990, 1996 and 1997 - those times when the stock price
reacted negatively to events that had little to do with the long-term worth of
the business.
We have mixed emotions about the merger. While the gain has been
rewarding, we are saddened that we are losing an extraordinary investment. Good
businesses managed by capable people are not everyday occurrences. Even though
it may be difficult, we pledge to do our best to replace this gem with others of
equal merit.
- 1 -
<PAGE>
As we write this report, we have little idea what is in store for us
for the rest of 1998. Our optimism for the future, however, is bolstered mostly
by our end focus and not by short-term events. Allied Group typifies that
approach.
We wish you a pleasant summer and look forward to reporting to you at
year-end.
Sincerely,
/s/ THOMAS O. PUTNAM /s/ DIANE C. VAN BUREN /s/ PAUL C. HOGAN
____________________ ______________________ __________________
Thomas O. Putnam Diane C. Van Buren Paul C. Hogan, CFA
- 2 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (97.1%) SHARES VALUE
------ -----
BANKING (12.5%)
<S> <C> <C>
Bank North Group ........................................ 115,430 $ 4,270,910
- - multi-bank holding company in Burlington, Vt
Centura Banks ........................................... 118,250 7,390,625
- - bank holding company located in North Carolina
First Empire Corporation ................................ 17,300 9,584,200
- - bank holding company located in Buffalo, NY
One Valley Bancorp ...................................... 104,093 3,786,383
- - largest bank holding company in West Virginia
Plumas Bank ............................................. 57,024 1,104,840
- - bank holding company located in Northern California
SouthTrust Corporation .................................. 213,000 9,265,500
- - bank holding company headquartered in Alabama
TrustCo Bank Corporation NY ............................. 162,398 4,262,948
- - operates 48 bank offices in the Upstate NY region
U.S. Bancorp ............................................ 62,772 2,699,196
- - bank holding company headquartered in ----------
Minneapolis, Minnesota 42,364,602
----------
CHEMICAL (0.4%)
WD-40 Company ........................................... 50,800 1,377,950
- - manufactures and distributes lubricant products ----------
COMPUTER SOFTWARE & SERVICES (1.8%)
Reynolds & Reynolds ..................................... 326,700 5,941,856
- - software for automotive dealers and business forms ----------
CONSUMER SERVICES (1.1%)
*Franklin Covey Company ................................. 190,800 3,672,900
- - time management products and training seminars ----------
DIVERSIFIED MANUFACTURING (7.8%)
CLARCOR, Inc. ........................................... 273,750 5,748,750
- - manufactures filtration and container products
*+ESSEF Corporation ..................................... 746,207 15,343,881
- - water treatment and systems, swimming pool,
and spa equipment
+Raven Industries ....................................... 274,441 5,248,684
- - manufactures plastics, electronics, ----------
and sewn products 26,341,315
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 3 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONT'D)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
ELECTRICAL/ELECTRONICS (6.0%)
<S> <C> <C>
*C-COR Electronics, Inc. ........................ 420,600 $7,991,400
- - electronic equipment for cable and
broadband data transmission systems
*+IFR Systems ................................... 684,050 12,312,900
- - communications, test and measurement, ------------
avionics, fiber optic test instruments 20,304,300
------------
FINANCIAL SERVICES (12.5%)
American Express ................................ 99,500 11,343,000
- - financial, travel, and information
services firm
*Berkshire Hathaway ............................. 26 2,035,930
- - holding company for various insurance
& industrial companies
Financial Secs Assurance Hldgs. Ltd. ............ 51,800 3,043,250
- - financial guaranty insurer of municipal
bonds and asset-backed securities
Fund American Enterprises Hldgs., Inc. .......... 111,975 16,572,300
- - financial guaranty, personal property
and casualty, and reinsurance
Travelers Group, Inc. ........................... 152,550 9,248,344
- - P & C insurance, life insurance, ------------
Smith Barney & Salomon Brothers 42,242,824
------------
HEALTHCARE (5.9%)
*+CONMED Corporation ............................ 807,562 18,573,926
- - advanced electrosurgical and
disposable medical products
*+Hycor Biomedical .............................. 653,364 1,306,728
- - specializes in allergy diagnostic ------------
products 19,880,654
------------
INSURANCE AGENCY (2.2%)
Poe & Brown, Inc. ............................... 199,612 7,423,071
- - one of the largest independent ------------
general insurance agencies in the U.S.
LIFE INSURANCE (15.8%)
+Allied Life .................................... 369,850 10,679,419
- - specializes in universal and
term life insurance, and annuity products
Protective Life Corporation ..................... 334,400 12,268,300
- - individual and group life/health ins
and guaranteed investment contracts
ReliaStar Financial ............................. 466,200 22,377,600
- - life insurance, annuities,
and mutual funds
UNUM Corporation ................................ 146,760 8,145,180
- - leading provider of disability ------------
insurance in the U.S. and United Kingdom 53,470,499
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 4 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONT'D)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
MACHINERY & EQUIPMENT (11.8%)
<S> <C> <C>
IDEX Corporation ................................ 156,600 $5,402,700
- - proprietary, highly engineered
industrial products & pumps
Kaydon Corporation .............................. 595,000 21,010,938
- - custom-engineered products including
bearings, filters, and piston rings
+ Modern Controls, Inc. ......................... 416,718 3,125,385
- - precision measurement, process sensing, and
control instruments/systems
Regal-Beloit Corporation ........................ 53,300 1,519,050
- - supplier of power transmission equipment
and cutting tools
Tennant Corporation ............................ 201,400 8,911,950
- - commercial and institutional floor maintenance ----------
equipment and products 39,970,023
----------
NUTRITIONAL PRODUCTS (0.4%)
* Natural Alternatives .......................... 69,000 1,380,000
- - manufactures nutritional supplements for ----------
private label accounts
PRINTING (3.4%)
* CSS Industries, Inc. .......................... 241,500 7,909,125
- - giftware, bows, Halloween and Easter
novelty products
Deluxe Corporation .............................. 25,300 906,056
- - leading producer of checks and deposit tickets
in the U.S., banking software
New England Business Services ................... 81,550 2,629,988
- - leading supplier of business forms/printed -----------
products to small businesses in U.S. 11,445,169
-----------
PROPERTY AND CASUALTY INSURANCE (12.3%)
Allied Group, Inc. .............................. 523,287 24,496,373
- - regional holding company which writes auto and
homeowners insurance
* Farm Family Holdings .......................... 175,600 6,837,425
- - insurance for members of Farm Bureau
General RE Corporation .......................... 4,000 1,014,000
- - global property and casualty reinsurance
+ Intercargo Corporation ........................ 459,250 5,396,188
- - specialty marine insurer
Vesta Insurance Group, Inc. ..................... 187,000 3,985,438
- - P & C reinsurance and personal auto insurance ----------
41,729,424
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 5 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONT'D)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
REAL ESTATE INVESTMENT TRUSTS (0.5%)
<S> <C> <C>
Redwood Trust ................................... 101,900 $1,789,619
- - acquires & manages residential real estate ----------
mortgage assets throughout U.S. ...............
REGULATED INVESTMENT COMPANIES (2.7 %)
Allied Capital Corporation ...................... 369,991 9,064,780
- - small business loan and venture -----------
capital corporation
TOTAL COMMON STOCKS (COST $156,224,798) ......... 328,398,986
-----------
SHORT TERM OBLIGATIONS (2.9%) ................... PRINCIPAL
U.S. Treasury Bills, 4.9%, with maturities to ---------
8/6/98 (Cost $9,951,648) $10,000,000 9,951,648
------------
TOTAL INVESTMENTS (COST $166,176,446) (100%) $338,350,634
============
<FN>
* Non-income producing
+ See Note 5
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 6 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (Unaudited)
<TABLE>
ASSETS
<S> <C>
Investment in securities at market value
(Cost $166,176,446) ....................................... $338,350,634
Cash at interest ............................................ 28,276,217
Dividends and interest receivable ........................... 353,941
------------
Total Assets ........................................... 366,980,792
------------
LIABILITIES
Payable for investment securities purchased ................. 120,540
Accrued management fees ..................................... 297,629
Accrued expenses ............................................ 177,133
------------
Total Liabilities ...................................... 595,302
------------
NET ASSETS
Source of Net Assets:
Net capital paid in on shares of
beneficial interest .................. $183,583,068
Undistributed net investment income ...... 887,226
Accumulated net realized gains ........... 9,741,008
Net unrealized appreciation .............. 172,174,188
-----------
Net Assets .......................................... $366,385,490
============
Net asset value per share; 9,380,926 shares of
beneficial interest outstanding (Note 3) ............... $ 39.06
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 7 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1998 (Unaudited)
<TABLE>
INVESTMENT INCOME
INCOME:
<S> <C>
Dividends ............................................... $ 2,035,243
Interest ................................................ 1,019,448
-----------
Total Income ........................................ 3,054,691
-----------
EXPENSES:
Investment advisory fee (Note 2) ........................ 1,776,075
Administrative fee (Note 2) ............................. 44,402
Shareholder servicing and related expenses (Note 2) ..... 140,298
Printing and mailing .................................... 75,331
Professional fees ....................................... 37,941
Registration fees ....................................... 40,290
Custodial fees .......................................... 17,024
Trustees ................................................ 10,718
Other ................................................... 25,587
-----------
Total Expenses ...................................... 2,167,666
-----------
Net Investment Income ............................... 887,025
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments ........................ 9,740,068
Unrealized appreciation of investments .................. 21,644,294
-----------
Net Gain on Investments ............................. 31,384,362
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $32,271,387
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 8 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended June 30, 1998 (Unaudited)
and Year Ended December 31, 1997
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
------------ -------------
CHANGE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income ....................... $ 887,025 $ 675,281
Net realized gain on investments ............ 9,740,068 9,525,635
Unrealized appreciation of investments ...... 21,644,294 79,137,694
------------ -------------
Net Increase in Net Asset From Operations 32,271,387 89,338,610
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ....................... -- (675,363)
Net realized gain on investments ............ -- (9,525,314)
CAPITAL SHARE TRANSACTIONS (Note 3): ............ 955,409 642,392
------------ -------------
Total Increase (Decrease) in Net Assets.. 33,226,796 79,780,325
------------ -------------
NET ASSETS:
Beginning of period ........................ 333,158,694 253,378,369
------------ -------------
End of period .............................. $366,385,490 $ 333,158,694
============ =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 9 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. SUMMARY OF ACCOUNTING POLICIES
FAM Value Fund (the "Fund") is a series of Fenimore Asset Management
Trust, a no-load, diversified, open-end management investment company
registered under the Investment Company Act of 1940. The investment
objective of the Fund is to seek a high long term total return,
consisting of appreciation and dividend income from investments in
equity related securities. The following is a summary of significant
accounting policies followed in the preparation of its financial
statements.
a) VALUATION OF SECURITIES-- Securities traded on a national
securities exchange or admitted to trading on NASDAQ are valued at
the last reported sales price. Common stocks for which no sale was
reported, and over-the-counter securities, are valued at the last
reported bid price. Short-term securities are carried at amortized
cost, which approximates market value.
b) FEDERAL INCOME TAXES-- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income
to its shareholders. Therefore, no provision for federal income
tax is required.
c) 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 increases and decreases in
net assets from operations during the reporting period. Actual
results could differ from those estimates.
d) OTHER-- Securities transactions are recorded on the trade date
basis. Interest income is accrued as earned and dividend income is
recorded on the ex-dividend date. Distributions to shareholders,
which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
NOTE 2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Investment Advisory Contract, the Fund pays an investment
advisory fee to Fenimore Asset Management, Inc. (the "Advisor") equal,
on an annual basis, to 1% of the Fund's average daily net assets.
Certain officers and trustees of the Fund are also officers and
directors of the Advisor. The Advisor is required to reimburse the Fund
for its expenses to the extent that such expenses, including the
advisory fee, for any fiscal year exceed 2% of the average daily net
assets. No such reimbursement was required for the six months ended June
30, 1998. FAM Shareholder Services, Inc. (FSS), a company under common
control with the Advisor, serves as a shareholder servicing agent for
which it received a monthly fee of $1.75 per shareholder account.
Additionally, FSS serves as the fund administrative agent for which it
received a fee equal, on an annual basis, to .025% of the Fund's average
daily net assets.
- 10 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 3. SHARES OF BENEFICIAL INTEREST
At June 30, 1998, an unlimited number of $.001 par value shares of
beneficial interest were authorized. Transactions were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
------------- -----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold ................... 1,618,177 $ 60,379,905 1,996,336 $ 66,431,872
Shares issued on reinvestment
of dividends .......... -- -- 268,172 9,587,161
Shares redeemed ............... (1,555,028) (59,424,496) (2,496,046) (75,376,641)
---------- ------------ ---------- ------------
Net increase (decrease) 63,149 $ 955,409 (231,538) $ 642,392
========== ============ ========== ============
</TABLE>
NOTE 4. INVESTMENT TRANSACTIONS
During the period ended June 30, 1998, purchases and sales of
investment securities, other than short term obligations, were
$19,085,983 and $18,832,031. The cost of securities for federal income
tax purposes is the same as shown in the investment portfolio. Realized
gains and losses are reported on an identified cost basis.
The aggregate gross unrealized appreciation and depreciation of
portfolio securities, based on cost for federal income tax purposes,
was as follows:
Unrealized appreciation ......... $177,636,275
Unrealized depreciation ......... (5,462,087)
----------
Net unrealized appreciation.... $172,174,188
============
NOTE 5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments in portfolio companies, 5% or more of whose outstanding
voting securities are held by the Fund, are defined in the Investment
Company Act of 1940 as affiliated companies. Investments in affiliated
companies as of June 30, 1998, amounted to $71,987,111. For the period
ended June 30, 1998, dividend income of $216,096 was received from
affiliated companies, as well as realized losses of ($357,988) from the
sale of such companies.
- 11 -
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 6. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PER SHARE INFORMATION Six Months Ended Years Ended December 31,
(For a share outstanding June 30, 1998 1997 1996 1995 1994 1993
throughout the period) ------------- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 35.76 $ 26.53 $ 24.58 $ 21.04 $ 20.40 $ 20.50
------------- ------------- ------------- ----------- ----------- -----------
Income from investment operations:
Net investment income ................. 0.09 0.08 0.18 0.21 0.12 0.09
Net realized and unrealized gain (loss)
on investments ................ 3.21 10.29 2.58 3.94 1.27 (0.05)
------------- ------------- ------------- ----------- ----------- -----------
Total from investment operations ...... 3.30 10.37 2.76 4.15 1.39 0.04
------------- ------------- ------------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income .. -- (0.08) (0.18) (0.21) (0.12) (0.09)
Distributions from net realized gains . -- (1.06) (0.63) (0.40) (0.63) (0.05)
------------- ------------- ----------- ----------- -----------
Total distributions ................... -- (1.14) (0.81) (0.61) (0.75) (0.14)
------------- ------------- ----------- ----------- -----------
Change in net asset value for the period . 3.30 9.23 1.95 3.54 0.64 (0.10)
Net asset value, end of period ........... $ 39.06 $ 35.76 $ 26.53 $ 24.58 $ 21.04 $ 20.40
============= ============= ============= =========== =========== ===========
TOTAL RETURN ............................. 18.20%** 39.06% 11.23% 19.71% 6.82% 0.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) .......... $ 366,385 $ 333,159 $ 253,378 $ 267,158 $ 210,579 $ 220,138
Ratios to average net assets of:
Expenses, total ....................... 1.22%** 1.24% 1.27% 1.25% 1.39% 1.39%
Net investment income ................. 0.50%** 0.25% 0.64% 0.92% 0.58% 0.57%
Portfolio turnover rate .................. 5.92% 9.47% 12.48% 9.67% 2.15% 4.83%
Average commission rate
paid (per share)* ................ $ 0.0456 $ 0.0409 $ 0.0497
<FN>
* For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate paid per share for
security trades on which commissions are charged.
** Annualized
</FN>
</TABLE>
- 12 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (84.4%) SHARES VALUE
------ -----
BANKING (10.1%)
<S> <C> <C>
Home Port Bank .............................................. 8,000 $200,000
- - single bank holding company for Nantucket Savings
SouthTrust Corporation ...................................... 3,900 169,650
- - bank holding company headquartered in Alabama
TrustCo Bank Corporation NY ................................. 9,361 245,726
- - regional bank in the upstate New York area --------
615,376
--------
CHEMICAL (9.4%)
RPM, Inc. ................................................... 19,125 325,125
- - specialized chemical protective coatings,
fabrics, and wall coverings
WD-40 Company ............................................... 9,000 244,125
--------
- - manufactures and distributes lubricant products ........... 569,250
--------
CONSUMER PRODUCTS (4.9%)
Jostens, Inc. ............................................... 7,300 176,113
- - school related products including class rings,
yearbooks, diplomas, etc ..................................
Enesco Group ................................................ 3,900 119,925
- - worldwide marketing firm specializing in quality -------
giftware and collectibles ................................. 296,038
-------
DIVERSIFIED MANUFACTURING (6.1%)
CLARCOR, Inc. ............................................... 6,300 132,300
- - manufactures industrial filtration and
container products
Raven Industries ............................................ 12,400 237,150
- - manufactures plastics, electronics, and --------
sewn products 369,450
--------
FINANCIAL SERVICES (3.9%)
Waddell & Reed .............................................. 10,000 239,375
- - an underwriter and distributor of 36 mutual fund portfolios --------
HEALTH CARE (6.6%)
* ADAC Laboratories ......................................... 3,500 78,750
- - leader in nuclear medicine imaging equipment
Landauer, Inc. .............................................. 10,900 325,638
- - leader in radiation testing and personal dosimeters --------
404,388
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 13 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Cont'd)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
INSURANCE AGENCY (3.8%)
<S> <C> <C>
Poe & Brown, Inc. ........................................... 6,300 $ 234,281
----------
- - one of the largest independent general
insurance agencies in the U.S.
LIFE INSURANCE (5.7%)
ReliaStar Financial.......................................... 7,200 345,600
----------
- - life insurance, annuities, and mutual funds
PRINTING (8.9%)
Deluxe Corporation........................................... 8,400 300,825
- - leading producer of checks and deposit tickets
in the U.S., banking software
New England Business Services................................ 7,400 238,650
----------
- - leading supplier of business forms/printed products
to small businesses in U.S. 539,475
----------
PROPERTY & CASUALTY INSURANCE (4.0%)
PXRE Corporation............................................. 8,200 246,000
----------
- - reinsurance company
REAL ESTATE INVESTMENT TRUSTS (10.3%)
New Plan Realty.............................................. 17,100 418,950
- - oldest REIT specializing in apartments,
strip shopping centers, factory outlets
Redwood Trust................................................ 12,000 210,750
----------
- - acquires & manages residential real estate
mortgage assets throughout U.S. 629,700
----------
REGULATED INVESTMENT COMPANIES (6.8%)
Allied Capital Corporation (NEW)............................. 17,014 416,843
----------
- - venture capital corporation for
entrepreneurs and management
TELECOMMUNICATIONS (3.9%)
Hickory Tech Corporation..................................... 5,900 234,525
----------
- - a small local telephone company in Minnesota
TOTAL COMMON STOCKS (COST $4,133,657)........................ $5,140,301
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 14 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONT'D)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- -----
SHORT TERM OBLIGATIONS (15.6%)
<S> <C> <C>
U.S. Treasury Bills, 4.9% with maturities to
8/6/98 (cost $946,941)...............................$950,000 $ 946,941
----------
TOTAL INVESTMENTS (COST $5,080,598) (100%)................... $6,087,242
==========
<FN>
* Non-income producing
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 15 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (Unaudited)
<TABLE>
ASSETS
Investment in securities at market value
<S> <C>
(Cost $5,080,598)....................................... $ 6,087,242
Cash at interest............................................. 163,060
Dividends and interest receivable............................ 16,741
Deferred organization costs.................................. 8,160
------------
Total Assets....................................... 6,275,203
------------
LIABILITIES
Payable to investment advisor................................ 69,328
Accrued expenses............................................. 2,950
------------
Total Liabilities.................................. 72,278
------------
NET ASSETS
Source of Net Assets:
Net capital paid in on shares of
beneficial interest.................. $ 5,221,499
Undistributed net investment income....... 402
Accumulated net realized gain/loss........ (25,620)
Net unrealized appreciation............... 1,006,644
------------
Net Assets......................................... $ 6,202,925
============
Net asset value per share; 453,125 shares of
beneficial interest outstanding (Note 3)................ $ 13.69
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 16 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1998 (Unaudited)
<TABLE>
INVESTMENT INCOME
INCOME:
<S> <C>
Dividends.......................................... $ 74,342
Interest........................................... 33,980
-------------
Total Income.................................. 108,322
-------------
EXPENSES:
Investment advisory fee (Note 2)................... 27,146
Administrative fee (Note 2)........................ 679
Custodian fee...................................... 1,607
Organization costs................................. 1,484
Shareholder servicing and related expenses (Note 2) 2,795
Registration fees.................................. 11,510
Professional fees.................................. 8,542
Trustees........................................... 10,719
Other.............................................. 836
-------------
Total Expenses................................ 65,318
Less: Investment advisory fee and other
expenses waived or assumed by advisor (Note 2) (24,600)
-------------
Net Expenses.................................. 40,718
-------------
Net Investment Income......................... 67,604
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized loss on investments..................... (25,570)
Unrealized appreciation of investments............... 195,925
-------------
Net Gain on Investments....................... 170,355
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS................... $ 237,959
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 17 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended June 30, 1998 (Unaudited)
and Year Ended December 31, 1997
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
-------------- ------------
CHANGE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 67,604 $ 76,411
Net realized gain (loss) on investments (25,570) 139,414
Unrealized appreciation of investments 195,925 617,264
-------------- ------------
Net Increase in Net Assets From Operations 237,959 833,089
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (67,222) (76,381)
Net realized gain on investments -- (139,385)
CAPITAL SHARE TRANSACTIONS (Note 3): 1,646,406 1,229,936
-------------- ------------
Total Increase in Net Assets 1,817,143 1,847,259
NET ASSETS:
Beginning of period 4,385,782 2,538,523
-------------- ------------
End of period $ 6,202,925 $ 4,385,782
============== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- 18 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. SUMMARY OF ACCOUNTING POLICIES
FAM Equity-Income Fund (the "Fund") is a series of Fenimore Asset
Management Trust, a no-load, diversified, open-end management investment
company registered under the Investment Company Act of 1940. The
investment objective of the Fund is to provide current income and long
term capital appreciation from investing primarily in income-producing
equity securities. The following is a summary of significant accounting
policies followed in the preparation of its financial statements.
a) VALUATION OF SECURITIES - Securities traded on a national securities
exchange or admitted to trading on NASDAQ are valued at the last
reported sales price. Common stocks for which no sale was reported,
and over-the-counter securities, are valued at the last reported bid
price. Short-term securities are carried at amortized cost, which
approximates market value.
b) FEDERAL INCOME TAXES - It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no provision for federal income tax is
required.
c) 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 increases and decreases in
net assets from operations during the reporting period. Actual
results could differ from those estimates.
d) ORGANIZATION COSTS - Organization costs have been capitalized and
are being amortized on a straight-line basis over five years.
e) OTHER - Securities transactions are recorded on the trade date
basis. Interest income is accrued as earned and dividend income is
recorded on the ex-dividend date. Distributions to shareholders,
which are determined in accordance with income tax regulations, are
recorded on the ex-dividend date.
NOTE 2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Investment Advisory Contract, the Fund pays an investment
advisory fee to Fenimore Asset Management, Inc. (the "Advisor") equal,
on an annual basis, to 1% of the Fund's average daily net assets.
Certain officers and trustees of the Fund are also officers and
directors of the Advisor. The Advisor is required to reimburse the Fund
for its expenses to the extent that such expenses, including the
advisory fee, for any fiscal year exceed 2% of the average daily net
assets. Although not required to do so, the Advisor further waived fees
and assumed expenses, aggregating $20,811, so as to reduce the Fund's
expense ratio to 1.5% of average daily net assets. FAM Shareholder
Services, Inc. (FSS), a company under common control with the Advisor,
serves as a shareholder servicing agent for which it received a monthly
fee of $1.75 per shareholder account. Additionally, FSS serves as the
fund administrative agent for which it received a fee equal, on an
annual basis, to .025% of the Fund's average daily net assets.
- 19 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 3. SHARES OF BENEFICIAL INTEREST
At June 30, 1998, an unlimited number of $.001 par value shares of
beneficial interest were authorized. Transactions were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
--------------------- --------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 139,429 $1,899,594 140,533 $1,699,500
Shares issued on reinvestment
of dividends 4,215 57,831 15,428 197,459
Shares redeemed (22,693) (311,019) (54,820) (667,024)
--------------------- --------------------
Net increase 120,951 $1,646,406 101,141 $1,229,935
===================== ====================
</TABLE>
NOTE 4. INVESTMENT TRANSACTIONS
During the period ended June 30, 1998, purchases and sales of investment
securities, other than short term obligations, were $1,834,035 and
$175,233. The cost of securities for federal income tax purposes is the
same as shown in the investment portfolio. Realized gains and losses are
reported on an identified cost basis.
The aggregate gross unrealized appreciation and depreciation of
portfolio securities, based on cost for federal income tax purposes, was
as follows:
Unrealized appreciation................ $ 1,054,887
Unrealized depreciation................ (48,243)
------------
Net unrealized appreciation......... $1,006,644
============
- 20 -
<PAGE>
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
April 1, 1996
Six Months Year Ended (Inception) to
PER SHARE INFORMATION Ended December 31, December 31,
(For a share outstanding June 30, 1998 1997 1996
throughout the period) ------------- ----------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period ....... $13.20 $10.99 $10.00
-------- -------- --------
Income from investment operations:
Net investment income ................. 0.17 0.27 0.19
Net realized and unrealized gain (loss)
on investments ..................... 0.49 2.65 0.99
-------- -------- --------
Total from investment operations ...... 0.66 2.92 1.18
-------- -------- --------
Less distributions:
Dividends from net investment income .. (0.17) (0.27) (0.19)
Distributions from net realized gains . -- (0.44) --
-------- -------- --------
Total distributions ................... (0.17) (0.71) (0.19)
-------- -------- --------
Change in net asset value for the period ... 0.49 2.21 0.99
-------- -------- --------
Net asset value, end of period ............. $13.69 $13.20 $10.99
======== ======== ========
TOTAL RETURN ............................... 9.88%** 26.90 15.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) ............ $6,203 $4,386 $2,539
Ratios to average net assets of:
Expenses, total ....................... 2.40%** 2.50 5.04%
Expenses, net of fees waived and
expenses assumed by advisor ........ 1.50%** 1.50 1.50%
Net investment income ................. 2.49%** 2.27 3.05%
Portfolio turnover rate .................... 4.14% 15.63% 0.00%
Average commission rate paid (per share)* .. $0.0469 $0.0535 $0.0460
<FN>
* For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate paid per share for security trades on
which commissions are charged.
** Annualized
</FN>
</TABLE>
- 21 -
<PAGE>
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<PAGE>
INVESTMENT ADVISOR
Fenimore Asset Management, Inc.
Cobleskill, NY
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
TRUSTEES
Joseph J. Bulmer, PhD
Roger A. Hannay
John W. Krueger, CLU
Fred "Chico" Lager
Thomas O. Putnam
Diane C. Van Buren
Bernard H. Zais, CLU
LEGAL COUNSEL
Dechert Price & Rhoads
Washington, DC
SHAREHOLDER SERVICING AGENT
FAM Shareholder Services, Inc.
Cobleskill, NY
FAM FUNDS
111 North Grand Street
P.O. Box 399
Cobleskill, NY 12043
(800) 932-3271
www.famfunds.com
