FENIMORE ASSET MANAGEMENT TRUST, N-30D, 2000-02-22

FENIMORE ASSET MANAGEMENT TRUST
N-30D, 2000-02-22

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FAM

VALUE FUND

EQUITY-INCOME FUND

ANNUAL REPORT

December 31, 1999

100%
No-Load
Funds

FAM FUNDS
P.O. Box 339
Cobleskill, NY 12043
(800) 932-3271
www.famfunds.com

<PAGE>

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FAM VALUE FUND
- --------------------------------------------------------------------------------

Dear Fellow Value Shareholders:

We have been writing shareholder letters for a very long time, but this
year's is by far the most difficult. In 1999 the FAM Value Fund posted one of
its most disappointing returns since its inception in 1987. Performance was poor
on an absolute basis and even worse when measured against many broad-based
indices. The FAM Value Fund declined -4.84% for the twelve month period ending
December 31, 1999 while the S&P 500 index rose +21.0% and the Russell 2000 index
gained 21.3%. Much of the S&P 500 and the Russell 2000 advance was due to a
small number of large cap growth stocks and technology issues - two investment
sectors that are noticeably lacking in your Fund. It is worth noting that in
1999 our bias toward reasonable valuations and companies with earnings prevented
us from participating in the amazing performance of those two areas of the stock
market.

One-year performance returns always become the focus at year-end;
however, we believe the Value Fund's long-term results are more representative
of our long-term performance goals. Although dragged down by this year's
results, the FAM Value Fund's five and ten year average annual returns of 13.29%
and 13.40% respectively, are still within our longer term expectations of
12%-15% as the chart below indicates. While these may appear to be modest goals
given the recent sensational returns of the major market indices, according to
Ibbotson Associates historical stock returns over the last 72 years (1925-1998)
have averaged 11%-13% and we believe these goals represent reasonable future
expectations.

COMPARISON CHART

12% ANNUALIZED 15% ANNUALIZED FAM VALUE
-------------- -------------- ---------

1986 $10,000.00 $10,000.00 $10,000.00
1987 $11,200.00 $11,500.00 $ 8,280.00
1988 $12,544.00 $13,225.00 $11,219.00
1989 $14,049.00 $15,208.00 $13,497.00
1990 $15,735.00 $17,490.00 $12,768.00
1991 $17,623.00 $20,113.00 $18,807.00
1992 $19,738.00 $23,130.00 $23,528.00
1993 $22,106.00 $26,600.00 $23,575.00
1994 $24,759.00 $30,590.00 $25,178.00
1995 $27,730.00 $35,178.00 $30,138.00
1996 $31,058.00 $40,455.00 $33,514.00
1997 $34,785.00 $46,523.00 $46,618.00
1998 $38,959.00 $53,502.00 $49,620.00
1999 $43,634.00 $61,527.00 $47,161.00

OUR PERSPECTIVE ON THE MARKET

An analysis of the investment return for the small company Russell
indices illustrates the dilemma faced by investors. While the Russell 2000 index
gained 21.3% overall for 1999, the value stocks in the index lost -4.0%. Most,
if not all, of the gain in the Russell 2000 index was achieved by growth stocks,
evidenced by the 42.5% return of the growth stocks in the index.

The year 1999 proved to be one of real frustration to us. While stocks
never perform exactly the way you expect, logic would suggest that the stock
price of businesses with a demonstrated history of growth in

-1-

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FAM VALUE FUND
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economic value would reflect that potential in the marketplace. Nothing could
have been further from the truth in 1999. According to a researcher from Warburg
Dillon Reed if you look at all stocks on the New York Stock Exchange (NYSE),
American Stock Exchange (AMEX), and NASDAQ which HAD EARNINGS last year - they
were down (-2%). Conversely, all companies on the NYSE, AMEX and NASDAQ which
HAD NO EARNINGS were up 54% on average . . . where is the logic in that?

A very limited and narrow area of the marketplace has spawned a
feverish, almost goldrush mentality in today's market. Technology stocks,
especially those .com related, were king in 1999. It is unnerving that a number
of recent initial public offerings of small companies with no earnings and
almost no revenue have seen their stock prices soar on the first day of trading.
Some have been valued at a billion dollars or more - making them worth far more
than companies that have earnings and a predictable future. One question
remains, when market psychology becomes more rational, who will prosper and who
will be left holding a popped balloon?

We, of course, do not know what will occur in the future investment
climate. However, all past excesses in stock markets worldwide have eventually
reverted back to an investment approach that is grounded in reality. In the
early 1990s Japanese stocks were the darlings of the day. People were saying
that it was no longer appropriate to value Japanese companies based on economic
fundamentals. The Nikkei Index (the Standard & Poor's Index equivalent) was
selling at an all time high of almost 40,000 yen and stocks were going up
because Japanese culture dictated a strong economic loyalty. People would buy
SONY regardless of price because the Japanese have very long-term horizons. The
Nikkei lost 48% over the next 9 months and has yet to recover half its former
high. SONY, by the way, went from a high of $60 in 1990 to a low of $30 three
years later before starting its rebound.

We have experienced similar market environments when euphoria
outweighed common sense. In the late 1960s and early 1970s many of the "nifty
50" top holdings of the day, such as IBM, Xerox, Polaroid, etc., were selling at
50, 60, and even 80 times P/E ratios. Then the 1973-74 correction occurred. Most
of those companies took years to recover. Others, like Polaroid, have never
regained preeminence. For those who say, "This time is different.", we would
remind them of other times when one industry has dominated the investment scene.
In the 1980s biotechnology was thought to be the ultimate growth industry.
History has proven that of the many hundreds of biotech start-ups, only a
handful has been worthy of investment. Most have fallen by the wayside or have
been folded into larger companies or have even gone bankrupt. Only those
companies with solid earnings and sound business strategies have succeeded over
the long haul.

1999 PERFORMANCE DETAIL

Our disappointments this year are numerous. Some of our larger
disappointments came from businesses with the brightest future. While down this
year, ServiceMaster (-43%), Kaydon (-32%), and ConMed (-22%) are all solid
businesses. ServiceMaster and ConMed not only demonstrated positive earnings
improvement in 1999, but we expect that trend to continue in 2000.

-- Significant holdings of financial services stocks also contributed
to this year's poor performance. UNUM Provident (-44%) is the largest disability
insurance company in the country. Last year's merger of UNUM with Provident, the
strongest company in individual disability insurance, has produced a powerhouse
in the disability business. However, a merger of two dominant companies with two
distinctive cultures was almost certain to create some temporary problems.
Management, so far, has demonstrated an ability to adapt and take the
appropriate action to assure the ultimate success of the new company. And while
the future promises to be very rewarding, growing pains-coupled with interest
rate anxiety-punished the price of the stock to an extreme low in 1999.

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FAM VALUE FUND
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-- Our banks and insurance companies were impacted directly by a fear
of rising interest rates. Let's take a look at what this fear is based on.
Common theory holds that rising interest rates hurt banks and, to a lesser
degree, insurance companies, because the cost of funds (deposits) rises faster
than the companies are able to recoup them from reinvestment profit. In
practice, many well-managed banks are disciplined enough to be able to maintain
healthy profit margins and some are even able to increase them during a rising
interest rate environment. The banks we own in FAM Value Fund belong to this
latter category, yet, in 1999 all were negatively impacted by interest rate
anxiety.

-- On a positive note, Citigroup and American Express were up (+69.7%)
and (+63.4%) respectively. This should come as no surprise since these are two
well managed large companies which were handsomely rewarded by the favoritism
the market bestowed on large, growth companies. Both companies have been in the
portfolio for some time. American Express was originally purchased in 1993 at a
price of $29 when it was out of favor and Citigroup is a result of our original
purchase of Salomon in 1987. In 1998, Salomon was merged into Citicorp which
then became Citigroup. Whew! Both investments are characteristic of our style of
investing; of buying well managed businesses that have strong, if not dominant,
market positions when they are out of favor or reasonably priced. And we hold on
to the positions as long as the economic growth of a company continues to
produce future value which has not been fully priced in the marketplace. This
buy and hold strategy produces very tax efficient long-term returns.

-- Our best performing stock was C-COR.Net. We have known this supplier
of equipment to the cable industry for some years. And while it has been well
managed there have been some bumps along the way. At the end of 1998 C-COR was
one of the most maligned securities in our portfolio. The stock price had been
as high as $36 in 1996, and it was trading around $13 on December 31, 1998. At
year-end 1999, C-COR.Net's price had risen an astounding +457%! What changed to
create an almost 6 fold gain in one year? At year-end 1998 C-COR was generating
approximately $160 million in revenues and $9 million in net profit. At a price
of $13 C-COR had a market value of approximately $123 million and the stock was
selling at 14 times earnings (P/E). In 1999 C-COR purchased two small network
cable related businesses - Convergence.com and Silicon Valley Communications.
These higher growth businesses will add approximately $3 million to the bottom
line in 2000. One little event we failed to mention - in 1999 management made
the decision to change its name from C-COR Electronics to C-COR.Net. C-COR's
price rose from $13 to a year-end price of $76. Its market valuation went from
$123 million to $1.1 billion. While earnings may rise from $9 million at year
end 1999 and to $11-$12 million in 2000, we do not feel that the near term
future value of C-COR will justify a market value that is 9X what it was at the
beginning of 1999 and whose P/E expanded from 14X to 80X. Could it be that a
simple name change created such exuberance? We do not know the answer, but we
are aware that emotions often carry stock prices to extremes in both directions.

2000 AND BEYOND

If you had reviewed year-end company report cards with the CEOs (Chief
Executive Officer) of each of our companies (as we have) and did not look at
stock prices - your holdings had a great year! They are stronger today than they
were a year ago. On average, revenues and earnings grew +19% and 13%
respectively for the last three years. Earnings growth is expected to continue
at a 14% to 15% rate for the year 2000. Returns on Equity (the profit return
based on the net worth of the company) averages a respectable 17%. During the
year we worked diligently to improve the quality of the portfolio. With the
portfolio selling at a 13-14X P/E ratio (based on our expectations for 2000) we
feel confident that the future is bright.

-3-
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FAM VALUE FUND
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OPPORTUNITY

The stocks that you own represent strong, viable businesses. Many of
these businesses have grown and become more profitable while their stock prices
have languished. For you and for us this creates a two-fold opportunity. Your
stocks are cheap. They represent bargains that have great future potential. But
you don't have to take our word for it. Our businesses and their management
teams have continued to buy back thousands of shares, often very aggressively.
Of the total number of stocks we own in FAM Value, approximately one half of
these companies have put their personal and/or corporate capital to work this
year by buying shares. To our way of thinking, this is an extraordinary
endorsement of the future value of holdings. Secondly, management's confidence
reaffirms that the price levels of the stocks in your portfolio represent a
reasonable margin of safety in an over exuberant market environment. As Benjamin
Graham, the father of value investing, often emphasized, "We base our
expectations not on optimism but on arithmetic."

PERFORMANCE OVER THE LONG TERM

In every past period of disappointing performance, we have recovered as
the market began to more accurately recognize the underlying business values and
earnings prospects of our companies. We do not know exactly what the future
holds, but our long-term focus has not changed. Ultimately, business valuation
will matter. Profitability, return on investment, and able management teams will
make a difference.

Long-term performance is not about what a business is or is not earning
today, but how much that business can earn over time. What is the business
opportunity? What is the cost of attracting and retaining customers? How much
revenue will customers produce and will pricing allow profitability? Is there a
protective moat in place that makes the business less vulnerable to competition?
These are the questions we routinely ask your companies and their positive
responses serve to underline our confidence in them.

Our enthusiasm for the future lies in the fact that the companies you
own have actually created more economic value. With sustained patience we are
confident valuations will follow.

May your New Year be blessed with happiness and prosperity!

Sincerely,

/S/ THOMAS O. PUTNAM /S/ DIANE VAN BUREN MARKLEY
- -------------------- ---------------------------
Thomas O. Putnam Diane Van Buren Markley

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FAM VALUE FUND
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PERFORMANCE SUMMARY

Annual Total Investment Returns: January 2, 1987 to December 31, 1999
------------------------------------------------------------------------
FAM Value Fund Russell 2000 Index S&P 500 Index
Fiscal Year Total Return Total Return Total Return
------------------------------------------------------------------------
1987 -17.2% - 8.8% 5.3%
1988 35.5% 24.9% 16.6%
1989 20.3% 16.2% 31.7%
1990 - 5.4% -19.5% - 3.1%
1991 47.3% 46.1% 30.5%
1992 25.1% 18.4% 7.6%
1993 0.2% 18.9% 10.1%
1994 6.8% - 1.8% 1.3%
1995 19.7% 28.4% 37.5%
1996 11.2% 16.6% 22.9%
1997 39.1% 22.2% 33.4%
1998 6.2% -2.6% 28.6%
1999 -4.8% 21.3% 21.0%

------------------------------------------------------------------------

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN FAM VALUE FUND, THE S&P 500, AND THE RUSSELL 200 INDEX.

FAM VALUE RUSSELL 2000 S&P 500
--------- ------------ -------

1987 8,280 9,123 10,526
1988 11,219 11,394 12,274
1989 13,497 13,245 16,163
1990 12,768 10,661 15,659
1991 18,807 15,571 20,433
1992 23,528 18,437 21,990
1993 23,575 21,923 24,201
1994 25,178 21,523 24,519
1995 30,138 27,645 33,722
1996 33,514 32,216 41,460
1997 46,618 39,422 55,287
1998 49,620 38,409 71,086
1999 47,161 46,584 86,041

Past performance is not indicative of future results. Investment return and
principal value fluctuate; the value of your investment upon redemption may be
more or less than the initial amount invested.

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PORTFOLIO PROFILE
As of December 31, 1999

TOP TEN HOLDINGS
(% OF TOTAL NET ASSETS)
------------------------------------------------------------
CONMED Corporation 5.6% Watson Pharmaceutical 3.5%
ReliaStar Financial 5.5% Reynolds & Reynolds 3.4%
Kaydon Corporation 4.8% Berkshire Hathaway 3.2%
White Mountains 4.3% Brown & Brown 3.0%
Protective Life Farm Family Holdings 2.9%
Corporation 4.1%
------------------------------------------------------------

FAM RUSSELL S&P
COMPARATIVE VALUATIONS VALUE 2000 500
- -------------------------------------------------------
Number of Stocks 47 1857 500
Median Market Cap $1.4B $760M $7.0B
Price/Earnings Ratio 15.2 25.9 36.0
Price/Book Ratio 3.2 5.3 8.9
Earnings Growth Rate 14.1% 20.1% 17.3%
Turnover Rate 16.2% N/A N/A
- -------------------------------------------------------

FAM RUSSELL S&P
VOLATILITY MEASURES VALUE 2000 500
- -------------------------------------------------------
R-Squared 0.63 1.00 1.00
Beta 0.78 1.00 1.00
- -------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURNS
FOR THE YEAR ENDED DECEMBER 31, 1999
- -------------------------------------------------------
1 Year 5 Year 10 Year
- -------------------------------------------------------
FAM Value Fund -4.8% 13.4% 13.3%
Russell 2000 21.3% 16.7% 13.4%
S&P 500 21.0% 28.5% 18.2%
- -------------------------------------------------------

FAM VALUE FUND
COMPOSITION OF NET ASSETS
- --------------------------------------
Other 24.8%
Finanicial Services 20.0%
Banking 13.4%
Machinery & Equipment 11.2%
Cash/Short Term Obligations 8.5%
Life Insurance 6.8%
Property & Casualty Insurance 6.0%
Healthcare 5.6%
Printing 3.7%
- --------------------------------------

TOTAL RETURN
10 YEARS ENDED DECEMBER 31, 1999
- ---------------------------------------------------------
COMPOUNDED FINAL VALUE OF
ANNUAL A $10,000
GROWTH RATE INITIAL INVESTMENT
- ----------------------------------------------------------
FAM Value Fune 13.3% $34,980
Russell 2000 13.4% $35,171
S&P 500 18.2% $53,233
- ----------------------------------------------------------

For an explanation of the terms used in the above tables, please see page 33.
Datasource: Morningstar

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FAM VALUE FUND
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STATEMENT OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>

SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (95.8%)
BANKING (14.0%)
Bank North Group .......................................................... 205,730 $ 5,503,278
- multi-bank holding company in Burlington, VT
Centura Banks ............................................................. 178,255 7,865,502
- bank holding company located in North Carolina
M & T Bancorp ............................................................. 17,300 7,166,525
- bank holding company located in Buffalo, NY
North Folk Bancorp ........................................................ 316,950 5,546,625
- a bank holding company located on Long Island, NY
Peoples Heritage Financial Group .......................................... 323,750 4,876,484
- a leading bank in New England
+ Plumas Bank ............................................................... 85,536 951,588
- bank holding company located in Northern Callifornia
SouthTrust Corporation .................................................... 213,000 8,054,063
- bank holding company headquartered in Alabama
TrustCo Bank Corporation NY ............................................... 373,514 4,949,061
- regional bank in the upstate New York area
U.S. Bancorp .............................................................. 209,747 4,994,600
- bank holding company headquartered in Minneapolis, Minnesota -----------
49,907,726
-----------

CHEMICAL (1.5%)
RPM, Inc. ................................................................. 417,300 4,251,244
- specialized chemical protective coatings
WD-40 Company ............................................................. 50,800 1,123,950
- manufactures and distributes lubricant products -----------
5,375,194
-----------

COMPUTER SOFTWARE & SERVICES (3.5%)
Reynolds & Reynolds ....................................................... 559,900 12,597,750
- software for automotive dealers and business forms -----------

DIVERSIFIED MANUFACTURING (2.4%)
CLARCOR, Inc. ............................................................. 273,750 4,927,500
- manufactures filtration and container products
+ Raven Industries .......................................................... 238,441 3,487,200
- manufactures plastics, electronics, and sewn products -----------
8,414,700
-----------
See Notes to Financial Statements.

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FAM VALUE FUND
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STATEMENT OF INVESTMENTS (cont'd)
December 31, 1999

SHARES VALUE
------ -----
ELECTRICAL/ELECTRONICS (2.8%)
* American Power Conversion ................................................. 72,000 $ 1,899,000
- a manufacturer of power protection equipment for computers
* C-COR.Net. ................................................................ 106,700 8,175,888
- electronic equipment for cable and broadband data transmission systems -----------
10,074,888
-----------

FINANCIAL SERVICES (20.9%)
American Express .......................................................... 57,000 9,476,250
- financial, travel, and information services firm
Citigroup ................................................................. 158,825 8,824,714
- diversified financial services
Financial Secs Assurance Hldgs. Ltd. ...................................... 76,800 4,003,200
- financial guaranty insurer of municipal bonds and asset-backed securities
Franklin Resources ........................................................ 262,950 8,430,834
- investment mgmt. co., offers Franklin Templeton & Mutual Series Funds
H & R Block ............................................................... 30,000 1,312,500
- leader in individual and small business tax preparation
ReliaStar Financial ....................................................... 527,250 20,661,609
- life insurance, annuities, and mutual funds
Waddell & Reed ............................................................ 141,400 3,835,475
- an underwriter and distributor of mutual fund portfolios
Waddell & Reed Class B Shares ............................................. 79,200 1,989,900
- an underwriter and distributor of mutual fund portfolios
White Mountains ........................................................... 133,275 16,059,638
- financial guaranty, personal property and casualty, and reinsurance -----------
74,594,120
-----------

HEALTHCARE (5.9%)
*+ CONMED Corporation ........................................................ 807,562 20,895,667
- orthopedics electrosurgical and disposable medical products -----------

INSURANCE AGENCY (3.2%)
Brown & Brown ............................................................. 295,162 11,308,394
- one of the largest independent general insurance agencies in the U.S. -----------

LIFE INSURANCE (7.1%)
Protective Life Corporation ............................................... 479,900 15,266,819
- individual and group life/dental and guaranteed investment contracts
UNUM Provident Corp. ...................................................... 314,460 10,082,374
- leading provider of disability insurance in the U.S. -----------
25,349,193
-----------

See Notes to Financial Statements.

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STATEMENT OF INVESTMENTS (cont'd)
December 31, 1999

SHARES VALUE
------ -----

MACHINERY & EQUIPMENT (11.7%)
IDEX Corporation .......................................................... 343,000 $10,418,625
- proprietary, highly engineered industrial products & pumps
Kaydon Corporation ........................................................ 665,800 17,851,763
- custom-engineered products including bearings, filters, and piston rings
+ MOCON ..................................................................... 416,718 2,500,308
- precision measurement, process sensing, and control instruments/systems
Regal-Beliot Corporation .................................................. 208,100 4,292,063
- supplier of power transmission equipment and electric motors
Tennant Corporation ....................................................... 201,400 6,595,850
- commercial and institutional floor maintenance equipment and products -----------
41,658,609
-----------

MISCELLANEOUS SERVICES (3.6%)
* Labor Ready, Inc. ......................................................... 183,300 2,222,513
- nation's largest provider of temporary manual labor
ServiceMaster ............................................................. 873,825 10,758,970
- commercial and residential service company .............................. -----------
12,981,483
-----------

NUTRITIONAL PRODUCTS (1.3%)
* Whole Food Markets ........................................................ 103,475 4,798,653
- national grocery store selling organic and natural products -----------

PHARMACEUTICALS (3.7%)
* Watson Pharmaceutical ..................................................... 366,100 13,110,956
- manufacturers proprietary & off-patent pharmaceutical products -----------

PRINTING (3.9%)
* CSS Industries, Inc. ...................................................... 241,500 5,162,063
- giftware, bows, Halloween and Easter novelty products
Deluxe Corporation ........................................................ 52,800 1,448,700
- leading producer of checks and deposit tickets in the U.S.,
banking software
New England Business Services ............................................. 293,025 7,160,798
- leading supplier of business forms/printed products to
small businesses in U.S. ................................................ -----------
13,771,561
-----------

PROPERTY AND CASUALTY INSURANCE (6.3%)
* Berkshire Hathaway ........................................................ 210 11,781,000
- holding company for various insurance and industrial companies
* Farm Family Holdings ...................................................... 255,150 10,780,088
- insurance for members of Farm Bureau .................................... -----------
22,561,088
-----------

See Notes to Financial Statements.

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STATEMENT OF INVESTMENTS (cont'd)
December 31, 1999

SHARES VALUE
------ -----

PUBLISHING (0.9%)
Meredith Corporation ...................................................... 75,000 $ 3,126,563
- media company involved in magazine publishing & tv broadcasting -----------

RECREATION AND ENTERTAINMENT (0.1%)
* International Speedway Corporation ........................................ 6,000 302,250
- owns and operates auto racing tracks including Daytona Speedway -----------

REGISTERED INVESTMENT COMPANY (2.5%)
Allied Capital Corporation ................................................ 488,891 8,952,817
- small business loan and venture capital corporation -----------

TELECOMMUNICATIONS (0.4%)
* ADC Telecommunications .................................................... 21,700 1,574,606
- provides voice, video & data systems for communications related companies -----------

TOTAL COMMON STOCKS (COST $237,586,996) ................................... 341,356,218
-----------

PRINCIPAL
SHORT TERM OBLIGATIONS (4.2%) ---------
U.S. Treasury Bills, 4.7%, with maturities to 2/17/00
(Cost $14,909,913) ..................................................... $15,000,000 14,909,913
-----------
TOTAL INVESTMENTS (COST $252,496,909) ..................................... $356,266,131
============

*Non-income producing
+See Note 5

See Notes to Financial Statements.

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STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999

ASSETS
Investment in securities at market value
(Cost $252,496,909) ......................................... $356,266,131
Cash at interest .................................................... 17,029,644
Receivable for shares purchased ..................................... 254,483
Dividends and interest receivable ................................... 355,345
------------
Total Assets ........................................ 373,905,603
------------
LIABILITIES
Payable for shares redeemed ......................................... 181,934
Accrued management fees ............................................. 319,465
Accrued expenses .................................................... 126,984
------------
Total Liabilities ................................... 628,383
------------
NET ASSETS Source of Net Assets:
Net capital paid in on shares of
beneficial interest ....................$269,507,998
Undistributed net investment income ............ --
Accumulated net realized gains ................. --
Net unrealized appreciation .................... 103,769,222
------------

Net Assets .......................................... $373,277,220
============

Net asset value, offering and redemption price per share;
11,906,579 shares of beneficial interest outstanding (Note 3) $ 31.35
============

</TABLE>

See Notes to Financial Statements.

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STATEMENT OF OPERATIONS
Year Ended December 31, 1999

<TABLE>

INVESTMENT INCOME
Income:
<S> <C>
Dividends ......................................... $ 5,357,078
Interest .......................................... 2,926,810
------------
Total Income .................................. 8,283,888
------------

Expenses:
Investment advisory fee (Note 2) .................. 3,961,336
Administrative fee (Note 2) ....................... 198,066
Shareholder servicing and related expenses (Note 2) 333,396
Printing and mailing .............................. 121,157
Professional fees ................................. 115,802
Registration fees ................................. 65,457
Custodial fees .................................... 45,519
Trustees .......................................... 27,347
Other ............................................. 18,836
------------
Total Expenses ................................ 4,886,916
------------
Net Investment Income ......................... 3,396,972
------------

REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments .......................... 12,712,000
Unrealized depreciation of investments .................... (36,370,162)
------------
Net Loss on Investments ....................... (23,658,162)
------------

NET DECREASE IN NET ASSETS FROM OPERATIONS ........................ $(20,261,190)
============

</TABLE>

See Notes to Financial Statements.

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STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>

1999 1998
---- ----
CHANGE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income ...................................... $ 3,396,972 $ 1,996,085
Net realized gain on investments ........................... 12,712,000 32,029,307
Unrealized depreciation of investments ..................... (36,370,162) (10,390,510)
------------- -------------
Net Increase (Decrease) in Net Asset From Operations (20,261,190) 23,634,882

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ...................................... (3,397,011) (1,995,464)
Net realized gain on investments ........................... (12,712,034) (32,028,673)

CAPITAL SHARE TRANSACTIONS (Note 3): ............................... 30,378,852 56,499,164
------------- -------------
Total Increase (Decrease) in Net Assets ............ (5,991,383) 46,109,909

NET ASSETS:
Beginning of year .......................................... 379,268,603 333,158,694
------------- -------------
End of year ................................................ $ 373,277,220 $ 379,268,603
============= =============

</TABLE>

See Notes to Financial Statements.

-13-
<PAGE>

--------------
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

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 year ended December
31, 1999. 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 $2.00 per shareholder account.
Additionally, FSS serves as the fund administrative agent for which it
received a fee equal, on an annual basis, to .05% of the Fund's
average daily net assets.

-14-
<PAGE>

--------------
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

NOTE 3. SHARES OF BENEFICIAL INTEREST
At December 31, 1999, an unlimited number of $.001 par value shares of
beneficial interest were authorized. Transactions were as follows:

Years Ended December 31,
1999 1998

Shares Amount Shares Amount

Shares sold 4,349,591 $145,366,999 3,874,977 $140,367,004
Shares issued on
reinvestment
of dividends 482,726 14,732,786 938,933 31,689,009
Shares redeemed (3,938,708) (129,720,933) (3,118,717) (115,556,849)
---------- ------------ ---------- ------------
Net increase 893,609 $30,378,852 1,695,193 $56,499,164
========== ============ ========== ============

NOTE 4. INVESTMENT TRANSACTIONS
During the year ended December 31, 1999, purchases and sales of
investment securities, other than short term obligations, were
$110,803,552 and $53,526,161. 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 $116,439,335
Unrealized depreciation (12,670,113)
Net unrealized appreciation $103,769,222

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 December 31, 1999, amounted to $27,834,762. For the year
ended December 31, 1999, dividend income of $303,235 was received from
affiliated companies, as well as realized gains of $234,343 from the
sale of such companies.

-15-
<PAGE>

--------------
FAM VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

NOTE 6. FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>

PER SHARE INFORMATION YEARS ENDED DECEMBER 31,
(For a share outstanding throughout
the year) 1999 1998 1997 1996 1995
----------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............ $ 34.44 $ 35.76 $ 26.53 $ 24.58 $ 21.04
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ................. 0.29 .20 0.08 0.18 0.21
Net realized and unrealized gain (loss)
on investments ..................... (2.00) 1.94 10.29 2.58 3.94
-------- -------- -------- -------- --------
Total from investment operations ...... (1.71) 2.14 10.37 2.76 4.15
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.29) (.20) (0.08) (0.18) (0.21)
Distributions from net realized gains . (1.09) (3.26) (1.06) (0.63) (0.40)
-------- -------- -------- -------- --------
Total distributions ................... (1.38) (3.46) (1.14) (0.81) (0.61)
-------- -------- -------- -------- --------
Change in net asset value for the year ........ (3.09) (1.32) 9.23 1.95 3.54
-------- -------- -------- -------- --------
Net asset value, end of year .................. $ 31.35 $ 34.44 $ 35.76 $ 26.53 $ 24.58
======== ======== ======== ======== ========
Total Return .................................. (4.84%) 6.19% 39.06% 11.23% 19.71%

Ratios/supplemental data
Net assets, end of year (000) ................. $373,277 $379,269 $333,159 $253,378 $267,158

Ratios to average net assets of:
Expenses .............................. 1.23% 1.19% 1.24% 1.27% 1.25%
Net investment income ................. 0.86% 0.57% 0.25% 0.64% 0.92%
Portfolio turnover rate ....................... 16.16% 16.67% 9.47% 12.48% 9.67%

</TABLE>

-16-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------

Dear Fellow Equity-Income Shareholder:

The FAM Equity-Income Fund had a tough year and declined 7% for the year
ended December 31, 1999. Most value stocks were sadly out of synch with the rest
of the market, including those in your Fund, where stocks that pay relatively
high dividends were especially hard hit.

The S&P 500, an index composed of the largest 500 companies in the US,
advanced 21.0%, driven largely by growth companies. But since the Fund is made
up primarily of small companies, the S&P 500 is not the most appropriate index
against which to compare our performance. The Russell 2000, an index of small
companies, is a more apt comparison for the Fund. This index posted similar
gains of 21.3% for the year. In order to even more accurately understand the
performance of the Equity-Income Fund, we dissect the Russell 2000 into its
growth and value components. The majority of the gain of the Russell 2000 came
from growth stocks (+42%) whereas the Russell 2000 Value Index (-4%) was down
for the year. The divergence of the two indices clearly illustrates that value
stocks languished unappreciated as investors narrowed their focus on companies
with accelerated growth.

The disparity between growth and value stocks explains most of the
Fund's performance for the year, but there were other short-term factors that
negatively effected performance. For example, some companies in the Fund
reported a temporary slowdown in earnings growth. In the current market
environment consistency of earnings growth is handsomely rewarded, but investors
quickly jump ship from any company that does not keep pace. The specter of
rising short-term interest rates also depressed some of the bank holdings, as
did tax selling pressure in late November and December. Together these events
contributed to a 2% decline in the Fund from mid-November alone. Lastly, the
Fund is not invested in technology companies because their lofty valuations
carry too high a degree of risk.

MARKET OVERVIEW
The fuel for the market in 1999 was largely technology stocks. These
companies were bid up to spectacular levels as investors literally bought into
the idea that technology is changing the world, the world of rational stock
valuations included. 1999 was also a banner year for companies which went public
through initial public offerings (IPOs). There were over 500 IPOs in 1999, a new
record for Wall Street. Most of these companies are technology related or
Internet start-up companies. What we find especially bewildering is that the
average IPO was expected to lose money in '99 and is also expected to lose money
in 2000. Despite not earning a cent of profit, the average performance of these
companies beat the NASDAQ 100 Index of high tech companies, which do post
earnings. We don't call this investing. In our book it is pure speculation.

For an example of what can happen to a company when valuations get too
high, we need only consider Coke and Gillette, which had a couple of the best
long-term track records on Wall Street - until 18 months ago. Coke and Gillette
are two companies which people wanted to own in their portfolios at any price.
Each company is in a unique position to grow its business through global
expansion. The global opportunities are still there, yet their stock prices fell
13% and 14% respectively for the year. Part of the problem is that earnings fell
below expectations at a time when the stocks were selling at premiums of more
than 50 times earnings, an inflated valuation. The moral of the story? -
valuation does matter and companies must deliver on what they promise. If the
stock prices of Coke and Gillette can fall, then the prices of high-flying tech
stocks can fall as well. It remains to be seen whether technology stocks will be
able to turn promises into earnings and sustain their valuations.

-17-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------

BEST AND WORST PERFORMING STOCKS IN 1999
IDEX Corp (+26.3%) was the best performing stock in the Fund. We started
buying stock in mid 1998 after the stock fell 25% from its high. The stock
ultimately fell as much as 40% off its high at which time we bought as much as
we could. We knew management had re-focused on growing earnings and had a
10-year track record of increasing earnings by 21% per year. In addition, IDEX's
products hold the #1 or #2 market share position in their markets. We expect
this specialty pump and fluid management company to continue its recovery and
further bolster its growth with strategic acquisitions.

MOCON (+21.5%), formerly known as Modern Controls was the second best
performing stock in the Fund. This was also an opportunity purchase when the
stock fell out of bed in `98, losing almost 60% of its market value. The stock
was selling below $5.00 per share and had over $1.00 per share in cash sitting
in the bank. Taking the cash into account, we were really buying the stock for
less than $4.00 per share, which was less than 10 times our earnings estimate.
Considering MOCON's recovering earnings growth, large stock repurchases, and
sterling balance sheet we couldn't resist taking a position in the company. We
expect the company to grow its earnings by15% again this year (which is
conservative compared to management's expectations).

Hickory Tech (+18.8), isn't a technology company but a local phone
company that does business in rural Minnesota and Iowa. The company has a
100-year history and over 40,000 local phone subscribers. A few years ago they
started offering their customers cellular phone service by buying cellular
properties. In addition, the company started offering competitive local phone
service in nearby US West territories. This expansion of services has had a
dramatic impact on the value of the company, which is just starting to be
reflected in its stock price. Telecommunications has been a red-hot area of the
market and Hickory Tech is beginning to participate as the communications market
continues to consolidate.

As favorable as these and other stocks were, their performance was not
enough to offset the disappointments in the portfolio. New England Business
Services (-35.5%), was one of the best performing stock in the Fund for the
previous two years. This year, however, the stock was punished because earnings
growth was lower than the previous year. Despite the stock performance, earnings
of the company continued to grow and were 6% above the previous year. The
company is on track to grow their earnings at a faster rate in the current
fiscal year and still only trades at 12 times estimated earnings.

RPM (-33.4%), is best known for their do-it-yourself coating products
such as Rust-Oleum, Bondo, and Zinsser. The company has a long history of
acquiring brand name products and then improving their profitability through
tighter management controls and better capital allocation. In May the company
completed its 52nd year of consecutive earnings growth and in August the company
purchased DAP, another brand name line. The stock price, however, tells another
story. Even though the company posted record earnings, the growth of those
earnings over the previous year was anemic at best. To address this issue
management is restructuring the company (a common occurrence in corporate
America). Under the restructuring plan 23 manufacturing facilities will be
closed and headcount will be reduced by 10%. These actions alone will save the
company an estimated $23 million each year. In addition, management is
transitioning to the next generation, which we think is positive since they will
take a more active approach to growing the business.

-18-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------

Landauer (-28.1%) is the leading provider of personal radiation
monitoring services to people who work around radiation, such as x-ray
technicians. The company provides employees with badges that are used to record
the amount of radiation exposure a person has had over a four-week period. The
market for Landauer products is stable because the government mandates
monitoring for all employees who come into contact with radiation. The stock is
down because earnings were reported 10% below the previous year. The company is
in the process of rolling out new technology for radiation monitoring that is
more efficient, more accurate, and more profitable. However, while the rollout
is underway the company must support both the new and the old technologies. This
means their operating expenses are temporarily inflated and earnings are
temporarily depressed. We expect the transition to the new badge technology to
be completed in the coming months. Earnings will then return to normal levels.
We view this business as an annuity because employees will be required to wear
the badges as long as they work around radiation. In addition, government
standards are becoming increasingly stringent so that a greater number of
employees will require radiation monitoring. Landauer is also growing its
international presence where radiation monitoring is still in its infancy.

OUTLOOK
1999 was, admittedly, a less than stellar year for the Fund, but we
believe that 2000 and beyond will show marked improvement for several reasons.
First, valuations of the companies in the Fund are depressed right now. We
haven't seen valuations this low since the early 90s. When interest returns to
value stocks - and it always has in the past - the Fund will benefit. In fact,
when we go through the exercise of comparing the current value of the Fund to a
value assumption that each holding returns just to its 52-week high, the
appreciation potential is dramatic.

Second, we upgraded the quality of the holdings in the Fund. We sold
three weak sisters that had either ceased to grow or we became disillusioned
with the management team. We also took advantage of pricing opportunities to add
four companies that we feel are of exceptional quality. These new additions are
growing faster than the average company in the Fund and have higher returns on
equity. Furthermore, we took larger positions in some existing holdings where we
feel they have above average long-term prospects.

Third, the financial stocks in the Fund should perform better in the
coming year. With Y2K concerns behind us, the environment is ripe for merger and
acquisition activity to heat up again. This tends to boost all companies in the
group. Also, the rewriting of the Glass-Steagall Act late last year ushers in a
new era where banks can now own insurance companies. This, too, should drive
merger activity and bring the group back into focus. Our only short-term concern
is the Fed raising short-term interest rates. But once any rate increases are
out of the way the banks will be free to move up. This happened in `94 when the
Fed raised rates several times. While the banking industry under-performed the
market until the rate increases took effect, the next several years of economic
expansion was a boon for the banking industry and made it one of the best
performing groups for the following four years. We believe a similar pattern may
be ahead.

Lastly, some of the companies in the Fund are starting to come out of
cyclical downturns. Many of the end markets for these companies have improved
significantly from early '99. We need only look at gas prices at the pump to see
the recovery in prices from the spring. As these commodity prices improve
producers are spurred to upgrade their production capabilities, which in turn
helps the companies that sell equipment to the oil and gas producers. We expect
to see their earnings improve each quarter this year.

-19-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------

To summarize, the year was a great disappointment but we have never felt
as good going into a year as we do today. Throughout the year we improved the
overall portfolio, which will ultimately be reflected in performance.
Furthermore, there are several catalysts at work that should improve the
long-term performance. Given the current value of the Equity-Income Fund, we are
more certain than ever that we will achieve our goal of doubling your assets in
a 5-6 year period. Sincerely,

/S/ THOMAS O. PUTNAM /S/ PAUL C. HOGAN
- -------------------- -----------------
Thomas O. Putnam Paul C. Hogan, CFA

-20-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY

Annual Total Investment Returns: April 1, 1996 to December 31, 1999

- --------------------------------------------------------------------------------

FAM Equity-Income Russell 2000 Index S&P 500 Index
Fiscal Year Total Return Total Return Total Return
- --------------------------------------------------------------------------------
4/1/96-12/31/96 11.8% 10.3% 15.2%
1997 26.9% 22.2% 33.4%
1998 4.7% -2.6% 28.6%
1999 -7.0% 21.3% 21.0%
- --------------------------------------------------------------------------------

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN FAM EQUITY-INCOME FUND, THE S&P 500, AND THE RUSSELL 2000 INDEX

FAM Equity-Income Russell 2000 Index S&P 500 Index
- --------------------------------------------------------------------------------

4/1/96-12/31/96 11,190 11,085 11,668
1997 14,200 13,564 15,560
1998 14,865 13,215 20,006
1999 13,823 16,028 24,215
- --------------------------------------------------------------------------------

-21-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
As of December 31, 1999

- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
(% of Total Net Assets)

Waddell & Reed 6.1% New England Bus. Svcs. 5.1%
Reynolds & Reynolds 6.1% ServiceMaster 5.0%
IDEX Corporation 5.7% ReliaStar Financial 4.7%
Allied Capital Kaydon Corporation 4.6%
Corporation 5.7% Deluxe Corporation 4.5%
Brown & Brown 5.4%
- --------------------------------------------------------------------------------

FAM
EQUITY- RUSSELL S&P
COMPARATIVE VALUATIONS INCOME 2000 500
- --------------------------------------------------------------------------------
Number of Stocks 23 1857 500
Median Market Cap $894M $760M $7.0B
Price/Earnings Ratio 13.7 25.9 36.0
Price/Book Ratio 2.6 5.3 8.9
Earnings Growth Rate 9.8% 20.1% 17.3%
Turnover Rate 13.5% N/A N/A
- --------------------------------------------------------------------------------

FAM
EQUITY- RUSSELL S&P
VOLATILITY MEASURES INCOME 2000 500
- --------------------------------------------------------------------------------
R-Squared 0.49 1.00 1.00
Beta 0.55 1.00 1.00
- --------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURNS
FOR THE YEAR ENDED DECEMBER 31, 1999
-----------------------------------------------------------------
SINCE
1 YEAR 3 YEAR INCEPTION
(4/1/96)
-----------------------------------------------------------------
FAM Equity-Income Fund -7.0% 7.3% 9.0%
Russell 2000 21.3% 13.1% 13.4%
S&P 500 21.0% 27.6% 26.6%
-----------------------------------------------------------------

FAM VALUE FUND
COMPOSITION OF NET ASSETS
- --------------------------------------
Machinery & Equipment 18.5%
Other 18.3%
Banking 14.4%
Printing 9.6%
Cash/Short Term Obligations 6.2%
Computer Software & Services 6.1%
Finanicial Services 6.1%
Registered Investment Co. 5.7%
Insurance Agency 5.4%
Miscellaneous Services 5.0%
Life Insurance 4.7%
- --------------------------------------

For an explanation of the terms used in the above tables, please see page 33.
Datasource: Morningstar

-22-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>

SHARES VALUE
------ -----
COMMON STOCKS (96.9%)
BANKING (14.8%)
<S> <C> <C>
Home Port Bank .................................................................. 8,000 $ 206,000
- - bank holding company for Nantucket Saving Bank
North Fork Bancorp .............................................................. 4,800 84,000
- - bank holding company located on Long Island, NY
Peoples Heritage Financial ...................................................... 15,300 230,456
- - a leading bank in New England
SouthTrust Corporation .......................................................... 3,900 147,469
- - bank holding company headquartered in Alabama
TrustCo Bank Corporation NY ..................................................... 21,530 285,273
- - regional bank in the upstate New York area .................................... ---------
953,198
---------

CHEMICAL (4.7%)
RPM, Inc. ....................................................................... 23,625 240,680
- - specialized chemical protective coatings
WD-40 Company ................................................................... 2,900 64,163
- - manufactures and distributes lubricant products ............................... ---------
304,843
---------

COMPUTER SOFTWARE & SERVICES (6.3%)
Reynolds & Reynolds ............................................................. 18,000 405,000
- - software for automotive dealers and business forms ---------

DIVERSIFIED MANUFACTURING (2.8%)
Raven Industries ................................................................ 12,400 181,350
- - manufactures plastics, electronics, and sewn products ---------

FINANCIAL SERVICES (11.2%)
ReliaStar Financial ............................................................. 8,000 313,500
- - life insurance, annuities, and mutual funds
Waddell & Reed .................................................................. 15,000 406,875
- - an underwriter and distributor of mutual fund portfolio ....................... ---------
720,375
---------

HEALTH CARE (3.7%)
Landauer, Inc. .................................................................. 10,900 238,438
- - leader in radiation testing and personal dosimeters ---------

INSURANCE AGENCY (5.5%)
Brown & Brown, Inc. ............................................................. 9,300 356,306
- - one of the largest independent general insurance agencies in the U.S. ......... ---------

See Notes to Financial Statements.

-23-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (cont'd)
December 31, 1999

SHARES VALUE
------ -----

MACHINERY & EQUIPMENT (19.0%)
IDEX Corporation ................................................................ 12,500 $ 379,688
- - proprietary, highly engineered industrial products & pumps
Kaydon Corporation .............................................................. 11,400 305,663
- - custom-engineered products including bearings, filters, and piston rings
MOCON ........................................................................... 42,000 252,000
- - precision measurement, process sensing, and control instruments/systems
Regal-Beloit .................................................................... 14,000 288,750
- - supplier of power transmission equipment and electric motors .................. ---------
1,226,101
---------

MISCELLANEOUS SERVICES (5.2%)
ServiceMaster ................................................................... 27,000 332,438
- - commercial and residential service company ---------

PRINTING (9.9%)
Deluxe Corporation .............................................................. 10,900 299,069
- - leading producer of checks and deposit tickets in the U.S., banking software
New England Business Services ................................................... 13,900 339,681
- - leading supplier of business forms/printed products to small businesses in U.S. ---------
638,750
---------

REAL ESTATE INVESTMENT TRUSTS (4.2%)
New Plan Excel Realty ........................................................... 17,100 270,394
- - oldest REIT specializing in apartments, strip shopping centers, factory outlets ---------

REGISTERED INVESTMENT COMPANY (5.8%)
Allied Capital Corporation ...................................................... 20,514 375,663
- - small business loan and venture capital corporation ---------

TELECOMMUNICATIONS (3.7%)
Hickory Tech Corporation ........................................................ 15,700 235,500
- - a small local telephone company in Minnesota ---------

TOTAL COMMON STOCKS (COST $5,816,076) ........................................... 6,238,356
---------

SHORT TERM OBLIGATIONS (3.1%)
U.S. Treasury Bills, 4.7% with maturities to PRINCIPAL
2/17/00 (cost $198,795) ---------
$200,000 198,795
---------

TOTAL INVESTMENTS (COST $6,014,871) $ 6,437,151
===========

</TABLE>

See Notes to Financial Statements.

-24-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>

ASSETS
<S> <C>
Investment in securities at market value
(Cost $6,014,871) ........................................ $ 6,437,151
Cash at interest ................................................. 223,691
Dividends and interest receivable ................................ 22,630
Deferred organization costs ...................................... 6,675
-----------
Total Assets ..................................... 6,690,147
-----------
LIABILITIES
Payable to investment advisor .................................... 34,148
Accrued expenses ................................................. 2,988
-----------
Total Liabilities ................................ 37,136
-----------
NET ASSETS Source of Net Assets:
Net capital paid in on shares of
beneficial interest ................... $ 6,340,145
Undistributed net investment income ........... --
Accumulated net realized gain/loss ............ (109,415)
Net unrealized appreciation ................... 422,281
-----------

Net Assets ....................................... $ 6,653,011
===========

Net asset value, offering and redemption price per share;
540,584 shares of beneficial interest outstanding (Note 3) $ 12.31
===========

</TABLE>

See Notes to Financial Statements.

-25-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
<TABLE>
<CAPTION>

INVESTMENT INCOME
Income:
<S> <C>
Dividends ......................................... $ 221,659
Interest .......................................... 24,983
---------
Total Income .............................. 246,642
---------

Expenses:
Investment advisory fee (Note 2) .................. 67,556
Administrative fee (Note 2) ....................... 3,369
Custodian fee ..................................... 2,804
Organization costs ................................ 2,968
Shareholder servicing and related expenses (Note 2) 5,887
Registration fees ................................. 13,427
Professional fees ................................. 15,794
Trustees .......................................... 26,982
Printing & mailing ................................ 2,423
Other ............................................. 1,889
---------
Total Expenses ............................ 143,099
---------

Less: Investment advisory fee and other
expenses waived or assumed by
advisor (Note 2) .................. (41,765)
---------
Net Expenses .............................. 101,334
---------
Net Investment Income ..................... 145,308
---------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments .......................... (89,250)
Unrealized depreciation of investments .................... (535,796)
---------
Net Loss on Investments ................... (625,046)
---------

NET DECREASE IN NET ASSETS FROM OPERATIONS ........................ $(479,738)
=========

See Notes to Financial Statements.

</TABLE>

-26-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>

1999 1998
---- ----
CHANGE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income ....................................... $ 145,308 $ 126,135
Net realized loss on investments ............................ (89,250) (20,165)
Unrealized appreciation (depreciation) of investments ....... (535,796) 147,358
----------- -----------
Net Increase (Decrease) in Net Assets From Operations (479,738) 253,328
----------- -----------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ....................................... (145,394) (126,135)

CAPITAL SHARE TRANSACTIONS (Note 3): ................................ 553,209 2,211,959
----------- -----------
Total Increase (Decrease) in Net Assets ..................... (71,923) 2,339,152

NET ASSETS:
Beginning of year ........................................... 6,724,934 4,385,782
----------- -----------
End of year ................................................. $ 6,653,011 $ 6,724,934
=========== ===========

</TABLE>

See Notes to Financial Statements.

-27-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

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.

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. Although not required to do so, the Advisor further waived fees
and assumed expenses, aggregating $41,765, 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 $2.00 per shareholder account. Additionally, FSS serves as the
fund administrative agent for which it received a fee equal, on an
annual basis, to .05% of the Fund's average daily net assets.

-28-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

NOTE 3. SHARES OF BENEFICIAL INTEREST
At December 31, 1999, an unlimited number of $.001 par value shares of
beneficial interest were authorized. Transactions were as follows:
YEARS ENDED DECEMBER 31,
1999 1998
----------------------------------------------
SHARES AMOUNT SHARES AMOUNT

Shares sold ............. 102,315 $1,299,400 213,214 $2,838,703
Shares issued on reinvestment
of dividends .... 10,425 129,732 8,310 109,718
Shares redeemed ......... (69,364) (875,923) (56,490) (736,462)
------- ---------- ------- ----------
Net increase ............ 43,376 $553,209 165,034 $2,211,959
======= ========== ======= ==========

NOTE 4. INVESTMENT TRANSACTIONS
During the year ended December 31, 1999, purchases and sales of
investment securities, other than short term obligations, were
$1,771,619 and $836,696. 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 ............ $936,845
Unrealized depreciation ............ (514,565)
--------
Net unrealized appreciation ........ $422,280
========

-29-
<PAGE>

----------------------
FAM EQUITY-INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

NOTE 5. FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>

APRIL 1, 1996
PER SHARE INFORMATION YEARS ENDED DECEMBER 31, (INCEPTION) TO
(For a share outstanding throughout the year) 1999 1998 1997 DECEMBER 31, 1996
-------------------------------------------------------------

<S> <C> <C> <C> <C>
Net asset value, beginning year ......... $ 13.53 $ 13.20 $ 10.99 $ 10.00
-------- --------- --------- ----------
Income from investment operations:
Net investment income ................. 0.27 0.28 0.27 0.19
Net realized and unrealized gain (loss)
on investments ................ (1.22) (0.33) 2.65 0.99
-------- --------- --------- ----------
Total from investment operations ...... (0.95) .61 2.92 1.18
-------- --------- --------- ----------
Less distributions:
Dividends from net investment income .. (0.27) (0.28) (0.27) (0.19)
Distributions from net realized gains . -- -- (.44) --
-------- --------- --------- ----------
Total distributions ................... (0.27) (0.28) (.71) (0.19)
-------- --------- --------- ----------
Change in net asset value for the year .. (1.22) (0.33) 2.21 0.99
-------- --------- --------- ----------
Net asset value, end of year ............ $ 12.31 $ 13.53 $ 13.20 $ 10.99
======== ========= ========= ==========
Total Return ............................ (6.98%) 4.67 26.90% 15.90%

Ratios/supplemental data
Net assets, end of year (000) ........... $ 6,653 $ 6,725 $ 4,386 $ 2,539

Ratios to average net assets of:
Expenses, total ................. 2.12% 2.09% 2.50% 5.04%*
Expenses, net of fees waived and
expenses assumed by advisor ..... 1.50% 1.50% 1.50% 1.50%*
Net investment income ........... 2.15% 2.17% 2.27% 3.05%*
Portfolio turnover rate ................. 13.49% 10.55% 15.63% 0.00%

<FN>

* Annualized.

</FN>
</TABLE>

-30-
<PAGE>

--------
FAM FUND
- --------------------------------------------------------------------------------

INDEPENDENT AUDITOR'S REPORT

To the Board of Trustees and Shareholders of FAM Value Fund and
FAM Equity-Income Fund:

In our opinion, the accompanying individual statements of assets and
liabilities, including the schedules of investments, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the FAM Value Fund
and FAM Equity-Income Fund, each a series of Fenimore Asset Management Trust as
of December 31, 1999, the results of their of their operations, the changes in
each of their net assets, and the financial highlights in the year then ended,
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 December 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above. The financial statements for the year ended
December 31, 1998, including the financial highlights for each of the periods
prior to December 31, 1998, were audited by other independent accountants whose
report dated January 11, 1999 expressed an unqualified opinion on those
financial statements.

PricewaterhouseCoopers LLP

New York, New York
January 12, 2000

-31-

<PAGE>

--------
FAM FUND
- --------------------------------------------------------------------------------

CHANGE IN INDEPENDENT ACCOUNTANTS

On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as
independent auditors of the FAM Value Fund and FAM Equity-Income Fund (hearafter
referred to as the Funds) pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Funds at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Funds during the
past two fiscal years contained no adverse opinion or disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent fiscal years
and through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report. On November 1, 1999, the
Funds, with the approval of its Board of Trustees and its Audit Committee,
engaged PwC as its independent auditor.

-32-

<PAGE>

--------
FAM FUND
- --------------------------------------------------------------------------------
DEFINITION OF TERMS

BETA. Beta is a measure of a fund's sensitivity to market movements. It
measures the relationship between a fund's excess return over T-bills and the
excess return of the benchmark index.

EARNINGS GROWTH RATE. The earnings growth rate is the annual average
rate of growth in earnings over the past five years for the stocks currently in
a portfolio.

EXPENSE RATIO. The expense ratio is the percentage of a portfolio's
average net assets used to pay its annual administrative and advisory expenses.
These expenses directly reduce returns to investors.

MEDIAN MARKET CAP. The median market cap is the midpoint of market
capitalization (market price times shares outstanding) of stocks in a portfolio.

NUMBER OF STOCKS. This is an indication of diversification. The more
stocks a portfolio holds, the more diversified, and the more likely it is to
perform in line with the overall stock market.

PRICE/BOOK RATIO. The share price of a stock, divided by its net worth,
or book value, per share. For a portfolio the weighted average price/book ratio
of the stocks it holds.

PRICE/EARNINGS RATIO (P/E). We would like to take this opportunity to
review one fundamental concept, P/E, which, if not properly understood, can lead
to some confusion. This measure is included to give investors an idea of how
much is being paid for a company's earning power, and thereby, to assist in
evaluating a portfolio's risk. Typically, the higher the P/E, the more investors
are paying and the more growth they are expecting. Lower P/E stocks tend to be
in lower-growth industries, in stock groups that have fallen out of favor, or in
mature companies that have long records of earnings stability.

If you look at Morningstar, Lipper or Value Line mutual fund data, you
will most likely encounter P/E ratios that differ perhaps from each other, as
well as from the one that we have included in this report. The major reasons for
discrepancies are two-fold. One reason is that reporting services use unadjusted
data that is obtained from filed annual reports, 10Ks,10Qs and quarterly
reports; as such, this data is historically based, and does include current year
estimates. Some of this information may also come from Standard and Poors and
Comstock. While these databases are good sources for raw statistics, we have
observed that they do not carry all the data that is necessary to record every
relevant element that factors into operating earnings.

Additionally, we make adjustments to operating earnings to eliminate one
time events (if they are truly one time!). For example, we would eliminate the
gain or loss on an investment that has sold if it is obvious that the likelihood
of this recurring is remote. We also eliminate negative P/Es and P/Es of
companies where valuation has little to do with the company's reported earnings
and most to do with asset growth, i.e. Berkshire Hathaway. We believe that this
methodology is more representative of the relevant fundamentals of the P/E for
the FAM Value Fund and the FAM Equity-Income Fund and provides you with a better
understanding of what you own.

-33-

<PAGE>

--------
FAM FUND
- --------------------------------------------------------------------------------
DEFINITION OF TERMS

RETURN ON EQUITY. The rate of return generated by a company during the
past year for each dollar or shareholder's equity (net income for the year
divided by shareholder's equity). For a portfolio, the weighted average return
on equity for the companies represented in the portfolio.

R-SQUARED. R-Squared reflects the percentage of a fund's movements that
are explained by movements in its benchmark index.

TURNOVER RATE. Indicates the trading activity during the past year.
Portfolios with high turnover rates incur higher transaction costs and are more
likely to realize and distribute capital gains (which may be taxable to
investors). The average turnover rates for stock mutual funds is about 80%.

YIELD. This is the portfolio's income from interest and dividends. The
yield, expressed as a percentage of a portfolio's net asset value, is based on
income earned by the portfolio over the past 30 days and is annualized, or
projected forward for the coming year.

-34-

<PAGE>

INVESTMENT ADVISOR
- ------------------
Fenimore Asset Management, Inc.
Cobleskill, NY

CUSTODIAN
- ---------
Firstar Bank, N.A.
Cincinnati, OH

INDEPENDENT AUDITORS
- --------------------
PricewaterhouseCoopers, LLP
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 Markley
Bernard H. Zais, CLU

LEGAL COUNSEL
- -------------
Dechert Price & Rhoads
Washington, DC

SHAREHOLDER SERVICING AGENT
- ---------------------------
FAM Shareholder Services, Inc.
Cobleskill, NY