Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Financial Statements
For the Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
Common and Preferred Stocks and Warrants - 80.9%
-----------------------------------------------------------------
Argentina - 1.8%
----------------------------------------------------
<S> <C> <C>
Argentina Fund * 36,000 $ 468,000
Cointel Cvt Pfd 7.00% 7,000 392,000
----------------
$ 860,000
----------------
Austria - 2.7%
----------------------------------------------------
BBAG Oestereich Brau Bete 500 $ 28,451
Brau-Union Goess-Reininghaus 600 37,892
Boehler-Uddeholm 600 46,455
Creditanstalt-Bankverein 1,600 105,821
Creditanstalt-Bkverein:Vorzu 700 35,392
Ea-Generali AG 200 59,235
EVN-Energie Versorgung 600 82,836
Flughafen Wien AG 900 61,506
Mayr-Melnhof 700 30,103
Oemv AG 1,500 151,119
Oest Elektrizatswirts Cl A 800 61,194
Radex-Heraklith Indust. AG 1,000 31,157
Va Technologie AG 800 98,209
Voest-Alpine Stahl AG 1,900 64,160
Webs-Austria 30,000 326,250
Wienerberger Baustoff Ind 400 80,933
----------------
$ 1,300,713
----------------
Brazil - 1.6%
----------------------------------------------------
Aracruz Cellulose Sa 100 $ 938
Banco Bradesco Sa Pfd 9,705,150 79,344
Banco Itau Sa Pfd 181,700 73,910
Cervejaria Brahma Pfd 95,900 57,272
Electricas Brasil On 4,500 61,875
Energetica de Minas Gerais Pfd 2,408,300 64,109
Itausa-Investimentos Itau Pfd 76,800 58,959
Patroleo Brasile Pfd 293,600 36,151
Telecomunicacoes Brasileiras 2,800 194,600
Telecomunicacoes de Sao Paolo Pfd 277,600 59,505
Usiminas Siderurg Minas 2,200 23,650
Vale Do Rio Doce-Sp 4,500 90,000
----------------
$ 800,313
----------------
Chile - 1.4%
----------------------------------------------------
Chile Fund 27,800 $ 681,100
----------------
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
Denmark - 2.7%
----------------------------------------------------
Carlsberg As Cl B 2,051 $ 120,464
Danisco As 2,469 122,738
Den Danske Bank 2,365 158,233
D/S 1912 Cl B 600 135,855
D/S Svendborg Cl B 500 163,009
FLS Industries As Cl B 659 66,193
International Service System Cl B 1,293 28,837
Novo-Nordisk As 1,003 141,727
Sophus Berendsen As Cl B 1,023 136,571
Tele Danmark Cl B 2,866 143,937
Unidanmark 2,252 104,282
----------------
$ 1,321,846
----------------
Finland - 5.4%
----------------------------------------------------
Cultor Oy 2 2,300 $ 116,892
Enso Oy Cl R 15,800 122,831
Kemira Oy 7,500 78,334
Kesko Oy Osake 8,800 130,382
Kone Corp. Cl B 700 77,935
Merita Ltd. Cl A 81,133 171,226
Metra Oy Cl A 2,400 108,536
Neste Oy 7,400 157,766
Nokia Corp. ADR A 13,200 488,400
Outokumpo Oy 12,600 211,646
Rauma Oy 4,000 79,680
Sampo Insurance Co Cl A 1,500 88,186
Stockmann Ab Cl B 1,800 92,644
Upm-Kymmeme 30,140 626,348
Valmet Cl A 5,000 84,525
----------------
$ 2,635,331
----------------
France - 4.9%
----------------------------------------------------
Air Liquide 1,075 $ 189,724
Alcatel Alsthom 1,315 114,636
Axa Co. 2,125 116,183
Banque Nationale de Paris 2,200 77,185
Carrefour Supermarche 240 134,387
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
France - (continued)
----------------------------------------------------
Carrefoure Rights 240 $ 67,194
Cie Generale des Eaux 1,852 206,757
Compagnie de Saint Goban 896 119,861
Compagnie Financierede Suez 1,449 52,975
Credit Foncier de France 815 5,301
Groupe Danone 971 146,861
Lafarge Coppee 1,490 90,119
Le Grand 550 98,243
L'Oreal 655 217,337
LVMH Louis Vitton Moet Hennesy 750 177,798
Peugeot Sa ORD 475 63,542
Rhone Poulenc 2,300 60,419
Societe Generale ORD 804 88,353
Societe National Elf-Aquitaine 2,576 189,355
Total CIE Francaise Petroles 2,000 148,257
----------------
$ 2,364,487
----------------
Germany - 4.2%
----------------------------------------------------
Allianz AG Hldg REG 83 $ 143,507
Bayer AG 6,110 215,494
Bayerische Motoren Werke AG 131 75,858
Bayerische Vereins Bank GER 2,030 56,877
Daimler Benz AG Rights 312 2,417
Daimler Benz AG 312 166,748
Deutsche Bank AG 3,440 162,520
Douglas Holding AG 770 30,669
Dresdner Bank AG 2,190 54,966
Henkel Nv Pfd 161 69,407
Hoechst AG 2,170 73,472
Linde AG 119 77,303
Mannesmann AG 346 119,420
Preussag AG 478 120,755
Rheinisch-Westfael Elecktrik Pfd Cnv 2,300 70,630
Siemens AG ORD 5,300 282,736
Veba AG 5,710 302,997
----------------
$ 2,025,776
----------------
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
India - 1.4%
----------------------------------------------------
Arvind Mills Ltd. GDR 7,587 $ 36,038
Bombay Fund 44,400 466,200
Grasim Industries Co 5,263 95,523
Reliance Industries 4,878 62,195
SIV Ind. Ltd. Warrants 2,782 8,346
S.I.V. South India Viscos 8,346 25,038
----------------
$ 693,340
----------------
Japan - 30.4%
----------------------------------------------------
Ajinomoto Co Inc 16,000 $ 191,119
Asahi Bank Ltd. 23,000 266,344
Asahi Glass Co Ltd 31,000 370,293
Bridgestone Corp. 25,000 476,429
Canon Inc. 17,000 353,424
Dai Nippon Printing Co Ltd. 19,000 367,284
Dai-Ichi Kangyo Bank 28,000 520,835
Daiwa Securities 27,000 347,132
Fuji Bank 25,000 537,978
Fuji Photo Film 10,000 315,492
Fujitsu Ltd. 29,000 264,430
Hitachi Ltd. (Hit. Seisakusho) 46,000 427,829
Industrial Bank of Japan 21,000 520,835
Ito Yokado Co 6,000 361,630
Japan Airlines 24,000 194,110
Kawasaki Steel 60,000 216,103
Kinki Nippon Railway 39,860 286,765
Matsushita Electric Industries 23,000 427,829
Mitsubishi Bank 24,000 555,849
Mitsubishi Chemical Corp. 45,000 207,623
Mitsubishi Corp. Pfd 24,000 315,127
Mitsubishi Estate Co Ltd 13,000 178,992
Mitsubishi Heavy 77,000 669,107
Mitsubishi Trust 13,000 219,294
Mitsui Engineering 50,000 152,275
Mitsui & Co 36,000 325,960
Nec Corp 13,000 141,060
Nippon Denso Ltd. 12,000 260,418
Nippon Express Co. 22,000 214,644
Nippon Steel Corp. 94,000 322,276
Nissan Motors 24,000 212,930
NKK Corp. 107,000 323,917
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
Japan - continued
----------------------------------------------------
Nomura Securities Co Ltd. 10,000 $ 195,131
Sakura Bank Ltd. 33,000 367,101
Sankyo Co Ltd. 14,000 362,542
Seven Eleven Japan Ltd. 5,000 318,683
Shimizu Corp. 48,000 529,589
Sumitomo Bank 27,000 521,929
Sumitomo Corp. 31,000 275,317
Sumitomo Heavy Industries 36,000 157,235
Takeda Chemical Industries Ltd 13,000 229,963
Teijin Limited 53,000 287,544
Tokai Bank 20,000 258,959
Tokyo Gas 59,000 215,191
Toyota Motor Co 19,000 474,697
----------------
$ 14,739,214
----------------
Korea - 1.4%
----------------------------------------------------
Korea Equity Fund 56,700 $ 481,950
Korean Investment Fund Inc. 18,500 185,000
----------------
$ 666,950
----------------
Malaysia - 1.0%
----------------------------------------------------
Edaran Otomobil Nasional Berhad 2,000 $ 19,162
Genting Berhad 6,000 46,903
Magnum Corp. 9,000 15,225
Malayan Banking Berhad 10,000 96,212
Malaysian International Shipping Corp. 6,000 18,641
Public Bank Berhad 7,000 11,786
Resorts World Berhad 8,000 45,861
Sime Darby Berhad 19,200 53,109
Systems Telekom Malaysia 8,000 71,200
Technology Resource Industries Cl A 8,000 27,901
Tenaga National Berhad 10,000 42,093
United Engineers 7,000 48,547
----------------
$ 496,640
----------------
Norway - 7.5%
----------------------------------------------------
Bergesen A 8,723 $ 180,945
Christiania Bank Og Kreditkass 110,500 259,776
Den Norske Bank 109,100 330,245
Dyno Industrier 4,544 100,542
Hafslund Nycomed As A 14,263 101,908
Kvaerner Cl B 7,367 284,125
Norsk Hydro 17,979 878,493
Norske Skogindustrier Cl A 5,324 160,339
Nycomed Asa Cl B 14,263 204,912
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
Norway - continued
----------------------------------------------------
Orkla Borregaard 5,337 $ 280,459
Petroleum Geo Services 4,700 134,325
Saga Petroleum As Cl A 20,000 293,480
Transocean Drilling 8,600 222,661
Uni Storebrand As Cl A 49,300 221,195
----------------
$ 3,653,405
----------------
Poland - 0.5%
----------------------------------------------------
Poland Fund 25,000 $ 250,000
----------------
Portugal - 1.5%
----------------------------------------------------
Portugal Fund 60,200 $ 752,500
----------------
Singapore - 1.8%
----------------------------------------------------
City Developments 10,000 $ 77,931
Cycle & Carriage Ltd. 3,000 32,094
Development Bank of Singapore 7,000 87,283
Fraser And Neave Ltd. 4,000 41,374
Inchcape Berhad 7,000 22,317
Keppel Corp.Ltd. 7,000 58,519
Overseas Chinese Banking Corp. 9,000 105,207
Overseas Chinese Banking Rights 900 2,959
Singapore Airlines Ltd. 14,000 147,786
Singapore Press Holdings Ltd. 4,000 78,498
Singapore Telecom Ltd. 26,000 69,260
Straits Trading Company Ltd. 13,000 34,077
United Industrial Corp. 25,000 25,505
United Overseas Bank 9,000 86,079
----------------
$ 868,889
----------------
Spain - 5.1%
----------------------------------------------------
Acerinox Sa 424 $ 44,251
Alba Finance Corp. Sa 824 68,463
Argentaria Sa 3,447 150,185
Autopistas Acesa 6,557 76,149
Banco Bilbao Vizcaya 5,702 230,658
Banco Central Sa 3,756 76,408
Banco de Santander 3,981 185,552
Corporacion Mapfre 964 49,139
Ebro Agricolas 3,238 37,352
Empresa Nacional Elec 6,488 404,046
Formanto de Construcciones y Contra 419 34,617
Gas Natural Sdg Sa 1,005 210,713
Iberdrola I S.A. 22,374 229,320
<PAGE>
Value
Security Shares (Note 1A)
---------------------------------------------------- -------------- ----------------
Spain - continued
----------------------------------------------------
Inmobiliaria Metrop Vasco- Central 1,312 $ 44,841
Repsol SA 7,158 248,549
Telefonica Nacional de Espana 22,174 407,877
----------------
$ 2,498,120
----------------
Supra National - 0.6%
----------------------------------------------------
Latin America Investment Fund 8,200 $ 137,350
Latin American Equity Fund Inc 9,000 135,000
----------------
$ 272,350
----------------
Sweden - 1.9%
----------------------------------------------------
Abbb Ab Cl A 700 $ 74,043
AGA Ab 2,700 46,313
Astra Ab Cl A 4,600 202,796
Atlas Copco Ab Cl A 1,400 26,015
Autoliv Ab 1,000 30,394
Electrolux 500 25,090
Ericsson Ab Cl B 7,700 165,676
Hennes & Mauritz 400 37,014
Mo Och Domsjo 1,200 30,695
Skandinaviska Enskilda Bankn Cl A 4,900 39,076
Skanska Cl B 1,400 49,397
Skf Ab Cl B 1,100 25,902
Stora Kopparbergs Bergs Cl A 1,900 25,015
Svenska Handelsbanken 2,600 54,182
Svenska 260 3,130
Swedish Match Ab 3,300 10,229
Volvo Aktiebolag Cl B 3,300 74,976
----------------
$ 919,943
----------------
Taiwan - 1.8%
----------------------------------------------------
Taiwan Index Fund 73,700 $ 884,400
----------------
Thailand - 1.3%
----------------------------------------------------
The Thai Fund Inc. 27,100 $ 640,238
----------------
United Kingdom - 0.0%
----------------------------------------------------
Railtrack Group Plc (Partially Paid) 5,000 $ 16,987
----------------
Total Common and Preferred Stocks and
Warrants (Identified Cost $35,540,024) $ 39,342,542
----------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
---------------------------------------------------- ----------- ------------- -------------- ----------------
India - 0.4%
----------------------------------------------------
Industrial Credit & Investment Cvt 144A ++ 2.5% 4/03/2000 $ 180,000 $ 147,600
Sterlite Industries Ltd. Cvt 144A ++ 3.50 6/30/1999 50,000 40,750
----------------
Total Bonds (Identified Cost $224,842) $ 188,350
----------------
Short-Term Investments - 14.8%
----------------------------------------------------
U.S. Government
----------------------------------------------------
U.S. Treasury Bill * 4.24 7/25/1996 2,500,000 $ 2,492,175
U.S. Treasury Bill * 4.99 9/19/1996 4,750,000 4,696,610
----------------
Total Short-Term Investments (Identified Cost $7,154,329) $ 7,188,785
----------------
TOTAL INVESTMENTS (Identified Cost $42,919,195) - 96.1% $ 46,719,677
Other Assets, less liabilities - 3.9% 1,913,235
----------------
NET ASSETS - 100.0% $ 48,632,912
================
++ This security is restricted but eligible for resale under 144A
*Denotes all or part of security pledged as a margin deposit (See Note 6)
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Investments, at value (Note 1A) (identified cost, $42,919,195) $46,719,677
Cash and foreign currency, at value (cost, $1,378,338) 1,382,421
Receivable for investments sold 443,979
Interest and dividends receivable 136,773
Unrealized appreciation on forward foreign currency exchange contracts (Note 6) 137,073
Receivable for foreign dividend tax reclaims 77,264
Receivable for daily variation margin on financial futures contracts (Note 6) 42,580
Receivable from investment adviser (Note 2) 102,655
Other assets 1,460
-----------------
Total assets $49,043,882
Liabilities
Distribution payable $307,344
Payable for Fund shares redeemed 2,500
Unrealized depreciation on forward foreign currency exchange contracts (Note 6) 72,792
Accrued trustee fees ( Note 2) 526
Accrued expenses and other liabilities 27,808
-----------------
Total liabilities 410,970
-----------------
Net Assets $48,632,912
=================
Net Assets consist of
Paid-in capital $42,455,301
Undistributed net investment income 161,195
Accumulated undistributed net realized gain (loss) 2,102,830
Net unrealized appreciation (depreciation) 3,913,586
-----------------
Total $48,632,912
=================
Shares of beneficial interest outstanding 1,990,174
=================
Net asset value, offering price, and redemption price per share $24.44
=================
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Investment income
Dividend income (net of foreign withholding taxes of $81,333) $530,331
Interest income 224,951
-----------------
Total income $755,282
Expenses
Investment advisory fee (Note 2) $218,031
Trustee fees (Note 2) 1,228
Accounting, custody and transfer agent fees 84,899
Registration costs 1,702
Audit services 24,435
Legal fees 7,572
Insurance expense 1,293
Miscellaneous 1,227
-----------------
Total expenses $340,387
Deduct:
Waiver of investment advisory fee (Note 2) 204,856
-----------------
Net expenses 135,531
-----------------
Net investment income $619,751
-----------------
Realized and unrealized gain (loss)
Net realized gain (loss)
Investment securities $1,538,636
Financial futures 745,594
Foreign currency and foreign exchange contracts (85,864)
-----------------
Net realized gain (loss) $2,198,366
Change in net unrealized appreciation (depreciation)
Investment securities $1,083,566
Financial futures (154,480)
Translation of assets and liabilities in foreign currencies,
and foreign exchange contracts 135,844
-----------------
Change in net unrealized appreciation (depreciation) 1,064,930
-----------------
Net gain (loss) $3,263,296
-----------------
Net increase (decrease) in net assets from operations $3,883,047
=================
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Statements of Changes in Net Assets
Six MonYearEEnded
June 30December 31,
(unaudited) 1995
----------------- ------------------
Increase (decrease) in Net Assets
From operations
Net investment income $619,751 $1,535,925
Net realized gain (loss) 2,198,366 555,805
Change in net unrealized appreciation (depreciation) 1,064,930 (1,331,247)
----------------- ------------------
Net increase (decrease) in net assets from operations $3,883,047 $760,483
----------------- ------------------
Distributions to shareholders
From net investment income ($561,582) ---
From net realized capital gains (1,060,286) ($293,380)
----------------- ------------------
Total distributions to shareholders ($1,621,868) ($293,380)
----------------- ------------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $416,554 $12,167,766
Net asset value of shares issued to shareholders in
payment of distributions declared 1,314,523 272,750
Cost of shares redeemed (14,832,610) (57,868,870)
----------------- ------------------
Increase (decrease) in net assets from Fund share transactions ($13,101,533) ($45,428,354)
----------------- ------------------
Net increase (decrease) in net assets ($10,840,354) ($44,961,251)
Net assets
At beginning of period 59,473,266 104,434,517
----------------- ------------------
At end of period (including undistributed net investment income
of $161,195 and $103,026, at June 30, 1996 and
December 31, 1995, respectively) $48,632,912 $59,473,266
================= ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Financial Highlights
Six Months Ended
June 30, 1996 Year ended December 31,
-------------------------------------------------------------
(unaudited) 1995 1994 1993 1992* 1991*
-------------------------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $23.54 $23.12 $26.74 $19.78 $22.20 $20.16
------------ ---------- ------------ ---------- ----------- -----------
Income from investment operations
Net investment income $0.** $0.04 $0.21 $0.26 $0.26 $0.33
Net realized and unrealized gain (loss) on
investments 1.41 0.45 (2.08) 7.29 (2.47) 2.02
------------ ---------- ------------ ---------- ----------- -----------
Total from investment operations $1.74 $0.49 ($1.87) $7.55 ($2.21) $2.35
------------ ---------- ------------ ---------- ----------- -----------
Less distributions declared to shareholders
From net investment income ($0.29) --- ($0.12) ($0.23) ($0.21) ($0.30)
In excess of net investment income --- --- --- (0.36) --- ---
From net realized capital gain (0.55) (0.07) (1.63) --- --- (0.01)
------------ ---------- ------------ ---------- ----------- -----------
Total distributions declared to shareholders ($0.84) ($0.07) ($1.75) ($0.59) ($0.21) ($0.31)
------------ ---------- ------------ ---------- ----------- -----------
Net asset value - end of period $24.44 $23.54 $23.12 $26.74 $19.78 $22.20
============ ========== ============ ========== =========== ===========
Total return 7.38% 2.14% (6.99%) 38.27% (9.95%) 11.73%
Net assets at end of period (000 omitted) $48,633 $59,473 $104,435 $92,419 $56,539 $47,077
Ratios (to average daily net assets)/Supplemental Data
Expenses 0.**,t 1.22% 1.23% 1.34% 1.53% 1.54%
Net investment income 2.**,t 1.76% 1.52% 1.09% 1.18% 1.30%
Portfolio turnover 34% 108% 75% 98% 98% 27%
Average Broker Commission $0.013
t Computed on an annualized basis.
* Audited by other auditors
** The investment adviser voluntarily waived a portion of its investment advisory fee.
Had this action not been undertaken, the net investment income per share and the
ratios would have been:
Net investment income per share $0.23
Ratios (to average daily net assets)
Expenses 1.26% t
Net investment income 1.53% t
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Equity Fund Series
Notes to Financial Statements
(Unaudited)
(1).....Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (Trust) is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish International Equity Fund (Fund) is a separate,
diversified investment series of the Trust. The following is a summary
of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements. The preparation of
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale price, or if no sale price, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued at amortized
cost. If the Fund acquires a short term instrument with more than sixty
days remaining to its maturity, it is valued at current market value
until the sixtieth day prior to maturity and will then be valued at
amortized cost based upon the value on such date unless the trustees
determine during such sixty-day period that amortized cost does not
represent fair value.
B...Securities transactions and income--
Securities transactions are recorded as of trade date. Interest income
is determined on the basis of interest accrued, adjusted for
amortization of premium or discount on debt securities when required
for federal income tax purposes. Dividend income is recorded on the
ex-dividend date. Realized gains and losses from securities sold are
recorded on the identified cost basis. The Fund does not isolate that
portion of the results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising from
changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from
investments.
C...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year.
D...Foreign currency transactions--
Investment security valuations, other assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars based
upon current exchange rates. Purchases and sales of foreign investment
securities and income and expenses are converted into U.S. dollars
based upon currency exchange rates prevailing on the respective dates
of such transactions. Section 988 of the Internal Revenue Code provides
that gains or losses on certain transactions attributable to
fluctuations in foreign currency exchange rates must be treated as
ordinary income or loss. For financial statement purposes, such amounts
are included in net realized gains or losses.
E...Distributions to shareholders--
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid-in capital.
<PAGE>
(2).....Investment Advisory Fee:
The investment advisory fee paid to Standish International Management
Company L.P. (SIMCO), for overall investment advisory and
administrative services, and general office facilities, is paid monthly
at the annual rate of 0.8% of the Fund's average daily net assets. The
investment adviser has agreed that total Fund operating expenses for
any fiscal year will not exceed 1.6% of the Fund's average daily net
assets. For the six months ended June 30, 1996, the investment adviser
voluntarily waived a portion of its investment advising fee in the
amount of $204,856. The Fund pays no compensation directly to its
trustees who are affiliated with the investment adviser or to its
officers, all of whom receive remuneration for their services to the
Fund from the investment adviser. Certain of the trustees and officers
of the Trust are partners or officers of SIMCO.
(3).....Purchases and Sales of Investments:
Purchases and proceeds from sales of investments, other than short-term
investments, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------------------- ---------------------
<S> <C> <C>
Investments (non-U.S. government securities) $8,900,290 $22,607,147
==================== =====================
U.S. government securities $8,463,278 $500,000
==================== =====================
(4).....Shares of Beneficial Interest:
</TABLE>
The Declaration of Trust permits the trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows:
<TABLE>
<CAPTION>
Six Months EnYear Ended
June 30, 1996 December 31,
(unaudited) 1995
--------------------- ---------------------
<S> <C> <C>
Shares sold 17,259 535,762
Shares issued to shareholders in
payment of distributions declared 53,786 12,155
Shares redeemed (607,036) (2,539,577)
--------------------- ---------------------
Net increase (decrease) (535,991) (1,991,660)
===================== =====================
</TABLE>
(5).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate cost $42,919,195
=====================
Gross unrealized appreciation $5,416,282
Gross unrealized depreciation (1,615,800)
---------------------
Net unrealized appreciation (depreciation) $3,800,482
=====================
<PAGE>
(6).....Financial Instruments:
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks and objectives of these investments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following financial instruments with off-balance
sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in securities prices and foreign currencies, as
well as to enhance returns. Options, both held and written by the Fund,
are reflected in the accompanying Statement of Net Assets and
Liabilities at market value. Premiums received from writing options
which expire are treated as realized gains. Premiums received from
writing options which are exercised or are closed are added to or
offset against the proceeds or amount paid on the transaction to
determine the realized gain or loss. If a put option written by the
Fund is exercised, the premium reduces the cost basis of the securities
purchased by the Fund. The Fund, as writer of an option, has no control
over whether the underlying securities may be sold (call) or purchased
(put) and as a result bears the market risk of an unfavorable change in
the price of the security underlying the written option. At June 30,
1996 the fund had no open written option contracts.
........Forward currency exchange contracts--
The Fund may enter into forward foreign currency and cross currency
exchange contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements
in the value of a foreign currency relative to the U.S. dollar and
other foreign currencies. The forward foreign currency and cross
currency exchange contracts are marked to market using the forward
foreign currency rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized
until the contract settlement date. Forward currency exchange contracts
are used by the fund primarily to protect the value of the Fund's
foreign securities from adverse currency movements. At June 30, 1996,
the Fund held the following forward foreign currency exchange
contracts:
<TABLE>
<CAPTION>
Local U.S. $ U.S. $
Principal Contract U.S. $ Aggregate Unrealized
Contracts to Receive Amount Value Date Market Value Face Amount Gain/(Loss)
- - ----------------------------------------- ------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
German Deutsche Mark 1,129,790 7/1/96 - 9/17/96 $744,935 $739,888 $5,047
Italian Lira 10,542,899,962 7/1/96 - 10/2/96 6,843,358 6,744,096 99,262
Japanese Yen 296,462,154 7/1/96 - 9/1/96 2,731,780 2,758,922 (27,142)
--------------- ---------------- ---------------
$10,320,073 $10,242,906 $77,167
=============== ================ ===============
Local U.S. $ U.S. $
Principal Contract U.S. $ Aggregate Unrealized
Contracts to Deliver Amount Value Date Market Value Face Amount Gain/(Loss)
- - ----------------------------------------- ------------- --------------- ---------------- ---------------
Italian Lira 3,620,000,000 7/2/96 - 7/10/96 $2,357,702 $2,313,343 ($44,359)
Spanish Peseta 37,663,024 7/2/96 293,488 292,197 (1,291)
Japanese Yen 131,627,072 7/1/96 - 9/1/96 1,208,266 1,241,030 32,764
--------------- ---------------- ---------------
$3,859,456 $3,846,570 ($12,886)
=============== ================ ===============
</TABLE>
<PAGE>
.........Futures contracts--
The Fund may enter into financial futures contracts for the delayed
sale or delivery of securities or contracts based on financial indices
at a fixed price on a future date. The Fund is required to deposit
either in cash or securities an amount equal to a certain percentage of
the contract amount. Subsequent payments are made or received by the
Fund each day, dependent on the daily fluctuations in the value of the
underlying security, and are recorded for financial statement purposes
as unrealized gains or losses by the Fund. There are several risks in
connection with the use of futures contracts as a hedging device. The
change in value of futures contracts primarily corresponds with the
value of their underlying instruments or indices, which may not
correlate with changes in the value of hedged investments. In addition,
there is the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market. The Fund enters
into financial futures transactions primarily to manage its exposure to
certain markets and to changes in securities prices and foreign
currencies.
At June 30, 1996, the Fund held the following futures contracts:
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Contract Position Date Amount at Value Gain/(Loss)
- - ----------------------------------- --------------- ---------------- ---------------------------------
<S> <C> <C> <C> <C>
Topix Futures (13 contracts) Long 9/12/96 $2,050,183 ($9,518)
MIB30 Index Futures (55 contracts) Long 9/20/96 5,624,040 49,243
DAX Futures (5 contracts) Long 9/20/96 839,957 5,015
---------------- ----------------
$8,514,180 $44,740
================ ================
</TABLE>
At June 30, 1996, the Fund had segregated sufficient cash and/or
securities to cover margin requirements on open futures contracts.
.........Interest rate swap contracts--
Interest rate swaps involve the exchange by the Fund with another party
of their respective commitments to pay or receive interest, e.g., an
exchange of floating rate payments for fixed rate payments with respect
to a notional amount of principal. Credit and market risk exist with
respect to these instruments. The Fund expects to enter into these
transactions primarily for hedging purposes including, but not limited
to, preserving a return or spread on a particular investment or portion
of its portfolio, protecting against currency fluctuations, as a
duration management technique or protecting against an increase in the
price of securities the Fund anticipates purchasing at a later date. At
June 30, 1996, the Fund had no open interest rate swap contracts.
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Financial Statements
For the Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Expected Par Value
Security Rate Maturity Maturity Value (Note 1A)
- - ------------------------------------------------------- --------- ------------------------------------------ -----------------
Bonds and Notes - 97.1%
- - -------------------------------------------------------
Asset Backed - 26.6%
- - -------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Advanta Home Equity Trust Loan 1993-4 A1 5.5% 8/25/1999 3/25/2010 845,479 778,369
Advanta Home Equity Trust Loan 1994-3 A1 7.27 10/1/1996 11/25/2008 625,333 624,160
Aircraft Lease Portfolio Trust 1994-1 A2 7.15 11/29/1997 9/15/2004 3,790,975 3,811,115
Beneficial California Incorporated Home Equity 1994-1 B (a) 6.04 7/28/1996 3/29/2044 2,091,933 2,101,723
Capital Home Equity 1990-1B (a) 6.44 7/30/1996 12/31/1997 1,474,414 1,482,244
Capital Home Equity 1992-1 (a) 5.98 7/25/1996 12/25/2012 644,987 645,894
Case Equipment Trust Loan 1995-BA2 5.95 10/31/1996 9/15/2000 2,589,640 2,592,049
Contimortgage Home Equtiy 1994-4A 7.96 5/15/1997 9/15/2009 5,739,868 5,775,742
Equacredit Home Equity 1993-4 5.73 6/15/1998 12/15/2008 2,423,733 2,336,630
Equacredit Home Equity 1994-1A 5.80 9/15/1998 3/15/2009 777,896 747,752
Equacredit Home Equity 1994-3 6.34 8/14/1996 1/15/2004 677,788 678,000
Equicon Home Equity 1994-1 A1 5.15 10/8/1996 9/18/2011 738,446 735,677
Equicon Home Equity 1995-2 A1 6.45 5/18/1997 7/18/2010 2,138,319 2,134,978
Equicon Home Equity 1995-4 A1 6.15 1/15/1997 7/15/2004 4,457,012 4,447,958
Greentree Financial Corp. 6.10 6/7/1997 4/15/2018 2,201,235 2,188,160
Greentree Financial Corp. 1993-3 5.20 4/15/1997 10/15/2018 5,000,000 4,942,150
Greentree Financial Corp. 1995-DA1 6.05 2/5/1997 9/15/2025 3,540,367 3,541,465
Greentree Securities Trust 1994-A 6.90 5/16/1998 2/15/2004 2,691,523 2,665,449
Greentree Securities Trust 1995-A 7.25 4/15/1998 7/15/2005 1,910,726 1,906,943
Home Equity Loan 1992-2 A1 (a) 5.88 7/20/1996 10/20/2007 476,949 478,886
Home Equity Loan Trust 1992-2A 6.65 5/27/1998 11/20/2012 758,579 751,467
Industry Mortgage Corp. Home Equity 1995-2 A1 144a 7.02 9/25/1996 3/25/2008 1,063,010 1,063,010
Merrill Lynch Asset Backed 1992-B A2 8.05 1/15/1997 4/15/2012 2,993,923 3,015,419
Merrill Lynch Home Equity 1991-2A2 (a) 5.91 7/15/1996 4/15/2006 594,927 595,296
Merrill Lynch Home Equity 1993-1B (a) 6.44 7/15/1996 2/15/2003 1,320,543 1,325,495
Old Stone Credit Corp. Home Equity Trust 1992-4 Cl A 6.55 9/25/1998 11/25/2007 747,553 736,106
Olympic Auto Receivables Trust 1995-D A2 5.80 10/15/1996 10/15/1998 3,566,728 3,566,728
Security Pacific Home Equity Cl 1991-1 Cl A 7.85 10/15/1996 5/15/1998 222,178 223,960
Security Pacific Home Equity Cl 1991-2 4 8.10 11/21/1996 6/15/2020 1,263,531 1,275,939
Security Pacific Home Equity Cl 1991-2 B 8.15 7/15/1997 6/15/2020 2,346,079 2,379,804
The Money Store Home Equity 1994-A A1 4.88 3/25/1997 3/15/2008 3,199,152 3,154,164
The Money Store Home Equity 1994-C A1 6.78 10/30/1996 9/15/2007 461,964 462,253
The Money Store Home Equity 1995-B A2 6.50 11/3/1996 10/15/2006 3,904,985 3,903,765
TransAmerica Leasing 1995-1 A 6.40 4/15/1997 9/15/2001 1,587,418 1,589,898
UCFC Home Equity Loan Trust 1994 D1 A2 8.38 12/10/1996 3/10/2007 1,400,000 1,410,938
UCFC Home Equity Loan Trust 1995 B1 A1 6.75 11/10/1996 10/10/2004 2,932,845 2,936,970
-----------------
Total Asset-Backed (Identified Cost $73,493,158) 73,006,556
-----------------
<PAGE>
Expected Par Value
Security Rate Maturity Maturity Value (Note 1A)
- - ------------------------------------------------------- --------- ------------------------------------------ -----------------
Corporate - 38.4%
- - -------------------------------------------------------
Basic Industry - 0.4%
- - -------------------------------------------------------
Georgia Pacific Corp. 9.8% 6/15/1997 6/15/1997 1,025,000 1,055,586
-----------------
Consumer Cyclical - 6.9%
- - -------------------------------------------------------
Chrysler Financial Corp. 8.06 1/27/1997 1/27/1997 600,000 606,624
Chrysler Financial Corp. 5.02 1/27/1997 1/27/1997 2,000,000 1,988,740
Chrysler Financial Corp. 7.89 2/10/1997 2/10/1997 3,300,000 3,334,518
Dayton Hudson Corp. 9.55 4/15/1997 4/15/1997 800,000 820,640
Dayton Hudson Corp. 9.77 6/12/1997 6/12/1997 2,200,000 2,270,004
Ford Motor Credit Corp. (a) 6.08 8/8/1996 11/09/1998 2,800,000 2,804,060
General Motors Acceptance Corp. 7.75 2/20/1997 2/20/1997 5,700,000 5,757,456
Owens Corning Fiberglass (a) 5.79 12/15/1996 12/15/2005 1,500,000 1,493,745
-----------------
19,075,787
-----------------
Financial - 26.9%
- - -------------------------------------------------------
Advanta National Bank (a) 5.84 3/14/1997 3/14/1997 2,500,000 2,493,000
Bank of Boston (a) 5.55 8/30/1996 8/28/1998 3,000,000 2,987,940
Bear Stearns Co (a) 5.79 7/16/1996 1/14/1999 2,800,000 2,786,000
Capital One Bank Co. 8.63 1/15/1997 1/15/1997 5,500,000 5,570,015
Centura Bank 6.00 4/7/1997 4/07/1997 5,125,000 5,125,000
Citicorp (a) 5.51 7/30/1996 1/30/1998 4,100,000 4,090,160
Dean Witter Discover 5.51 9/11/1996 3/10/1999 2,800,000 2,753,940
Discover Credit 7.81 3/18/1997 3/18/1997 2,400,000 2,421,720
Discover Credit 7.82 5/13/1997 5/13/1997 1,000,000 1,010,180
Discover Credit 7.76 5/13/1997 5/13/1997 2,000,000 2,019,360
First Interstate 12.75 5/1/1997 5/01/1997 1,305,000 1,373,095
First USA Bank 8.10 2/21/1997 2/21/1997 2,350,000 2,377,213
Fleet Mortgage Group Inc. 6.13 8/15/1997 8/15/1997 1,000,000 996,430
Goldman Sachs Inc. 144A (a) (b) 5.88 7/26/1996 1/26/1999 3,000,000 3,011,250
Great Western Bank 9.50 7/1/1997 7/01/1997 3,800,000 3,919,434
Heller Financial 7.75 5/15/1997 5/15/1997 3,350,000 3,392,780
International Lease Finance 5.50 4/1/1997 4/01/1997 5,400,000 5,371,920
KeyCorp. 7.90 4/1/1997 4/01/1997 1,000,000 1,011,580
Merrill Lynch Cmt (a) 5.43 7/'7/1996 4/07/1997 6,150,000 6,141,636
Morgan Stanley 7.32 1/'15/1997 1/15/1997 2,000,000 2,014,360
Morgan Stanley 5.65 6/'15/1997 6/15/1997 650,000 646,523
Nations Bank 4.75 8/'15/1996 8/15/1996 2,330,000 2,324,175
Norwest Corp. 9.25 5/'1/1997 5/01/1997 1,140,000 1,168,112
Salomon Brothers Inc. 5.47 8/'29/1997 8/29/1997 4,000,000 3,957,320
Wells Fargo & Co. 8.20 11'/1/1996 11/01/1996 1,000,000 1,007,135
Wells Fargo & Co. (a) 5.75 7/'25/1996 6/25/1997 4,000,000 4,012,640
-----------------
73,982,918
-----------------
<PAGE>
Expected Par Value
Security Rate Maturity Maturity Value (Note 1A)
- - ------------------------------------------------------- --------- ------------------------------------------ -----------------
Health Care - 1.0%
- - -------------------------------------------------------
Health & Rehab Property (a) 6.2% 10/13/1996 7/13/1999 2,900,000 2,854,035
-----------------
Real Estate - 3.2%
- - -------------------------------------------------------
Equity Residential Property Operating LP (a) 6.25 8/21/1996 12/22/1997 5,800,000 5,767,810
Taubman Realty (a) 6.00 8/16/1996 11/03/1997 3,025,000 3,012,235
-----------------
8,780,045
-----------------
Total Corporate (Identified Cost $105,756,329) 105,748,371
-----------------
U.S. Government Agency - 5.6%
- - -------------------------------------------------------
Pass Thru Securities
- - -------------------------------------------------------
Federal Home Mortgage Corp. 7.82 5/1/1998 2/01/2023 614,562 623,399
FHLMC 7.00 2/16/1997 8/01/1999 2,677,331 2,691,554
FHLMC 8.00 9/30/1996 2/01/2000 - 7/01/2000 4,454,559
FNMA 7.29 2/14/1997 2/14/1997 960,000 968,554
Resolution Trust Corp. 1992 Cl B 7.15 6/30/1997 12/25/2020 2,447,359 2,440,476
Resolution Trust Corp. 1992-12 A-A2 7.50 9/15/1997 8/25/1023 675,097 670,667
Resolution Trust Corp. 1992-7 A3 7.45 3/30/1999 3/25/2022 857,763 855,083
SKW Ltd. Partnership 7.45 9/30/1996 10/15/1996 2,775,000 2,776,734
-----------------
TOTAL U.S. Government Agency (Identified Cost $15,586,140) 15,481,026
-----------------
U.S. Treasury Obligations - 26.5%
- - -------------------------------------------------------
Treasury Bonds - 11.3%
- - -------------------------------------------------------
U.S. Treasury Bond 5.63 6/30/1997 6/30/1997 31,175,000 31,126,367
-----------------
Treasury Notes - 15.2%
- - -------------------------------------------------------
U.S. Treasury Note 6.50 4/30/1997 4/30/1997 3,395,000 3,415,676
U.S. Treasury Note 6.50 5/15/1997 5/15/1997 3,190,000 3,210,448
U.S. Treasury Note 6.13 5/31/1997 5/31/1997 24,100,000 24,175,192
U.S. Treasury Note 5.50 7/31/1997 7/31/1997 6,995,000 6,968,769
U.S. Treasury Note 5.88 7/31/1997 7/31/1997 3,900,000 3,901,209
-----------------
41,671,294
-----------------
TOTAL U.S. Treasury Obligations (Identified Cost $73,059,400) 72,797,661
-----------------
TOTAL BONDS and NOTES (Identified Cost $267,892,577) 267,033,614
-----------------
<PAGE>
Expected Par Value
Security Rate Maturity Maturity Value (Note 1A)
- - ------------------------------------------------------- --------- ------------------------------------------ -----------------
Short-Term Investments - 1.8%
- - -------------------------------------------------------
Commercial Paper - 1.4%
- - -------------------------------------------------------
Hasbro Inc. 5.3% - 10/11/1996 4,000,000 3,936,800
-----------------
Repurchase Agreements - 0.0%
- - -------------------------------------------------------
Prudential-Bache Repurchase Agreement, dated 6/28/96,
4.77% due 7/1/96, to pay $62,967 (Collateralized by FNMA
with a rate of 9% and a maturity date of 9/1/22 with
a market value of $64,201. 62,942 62,942
-----------------
U.S. Government Agency - 0.4%
- - -------------------------------------------------------
Federal Farm Credit Bank 5.35 - 11/27/1996 300,000 293,580
Federal Home Loan Bank 5.34 - 10/04/1996 700,000 690,046
-----------------
983,626
-----------------
TOTAL Short-Term Investments (Identified Cost $4,984,453) 4,983,368
-----------------
TOTAL INVESTMENTS (Identified Cost $272,877,030) - 98.9% 272,016,982
-----------------
Principal
Amount of
Contracts
---------------
Written Options - 0.0%
- - -------------------------------------------------------
Deliver/Receive, Exercise Price, Expiration
- - -------------------------------------------------------
UST Call 6.00% 5/98, Str 100.125, 7/8/96 (143,000) (11,172)
-----------------
TOTAL Written Options (Premiums Received $14,523)
Other Assets, less liabilities - 1.1% 3,093,787
-----------------
NET ASSETS - 100.0% 275,099,597
=================
The following abbreviations are used in this portfolio:
FHLMC - Federal Home Loan Mortgage Corp.
FNMA - Federal National Mortgage Assoc.
(a) Variable Interest Rate Securities
(b) This security is restricted but eligible for resale under 144a.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Investments, at value (Note 1A) (identified cost, $272,877,030) $272,016,982
Receivable for investments sold 120,014
Receivable for Fund shares sold 68,643
Interest receivable 3,320,790
Other assets 5,728
-----------------
Total assets $275,532,157
Liabilities
Distribution payable $225,281
Written options outstanding, at value (premiums received, $14,5211,172te 7)
Accrued investment advisory fee (Note 3) 168,461
Accrued trustee fees (Note 3) 2,826
Accrued expenses and other liabilities 24,820
----------------
Total liabilities $432,560
-----------------
Net Assets $275,099,597
=================
Net Assets consist of
Paid - in capital $286,771,222
Distributions in excess of net investment income (74,571)
Accumulated undistributed net realized gain (loss) (10,740,357)
Net unrealized appreciation (depreciation) (856,697)
-----------------
Total $275,099,597
=================
Shares of beneficial interest outstanding 14,137,148
=================
Net asset value, offering price, and redemption price per share $19.46
=================
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Income
Interest income $8,196,011
Expenses
Investment advisory fee (Note 3) $338,458
Trustees fees (Note 3) 6,323
Accounting, custody and transfer agent fees 70,175
Registration costs 14,492
Audit services 14,062
Legal fees 16,914
Insurance expense 4,221
Miscellaneous 4,856
---------------
Total expenses 469,500
-----------------
Net investment income $7,726,511
-----------------
Realized and unrealized gain (loss)
Net realized gain (loss)
Investment securities ($28,156)
Written option transactions 58,064
---------------
Net realized gain (loss) $29,908
Change in net unrealized appreciation (depreciation)
Investment securities ($1,393,476)
Written options 2,805
---------------
Change in net unrealized appreciation (depreciation) (1,390,671)
-----------------
Net gain (loss) ($1,360,763)
-----------------
Net increase (decrease) in net assets from operations $6,365,748
=================
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Statements of Changes in Net Assets
Six Months Ended Year Ended
June 30, 1996 December 31,
(Unaudited) 1995
------------------ ------------------
Increase (decrease) in Net Assets
From operations:
Net investment income $7,726,511 $16,422,079
Net realized gain (loss) 29,908 91,489
Change in net unrealized appreciation (depreciation) (1,390,671) 4,729,922
------------------ ------------------
Net increase (decrease) in net assets from operations $6,365,748 $21,243,490
------------------ ------------------
Distributions to shareholders
From net investment income ($7,728,992) ($16,408,848)
In excess of net investment income --- ($72,090)
------------------ ------------------
Total distributions to shareholders ($7,728,992) ($16,480,938)
------------------ ------------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $128,507,501 $224,454,605
Net asset value of shares issued to shareholders in
payment of distributions declared 5,766,555 11,942,616
Cost of shares redeemed. (101,310,735) (274,677,022)
------------------ ------------------
Increase (decrease) in net assets from Fund share transactions $32,963,321 ($38,279,801)
------------------ ------------------
Net increase (decrease) in net assets $31,600,077 ($33,517,249)
Net Assets
At beginning of period 243,499,520 277,016,769
------------------ ------------------
At end of period (including distributions in excess of net investment income of
$74,571 and $72,090 at June 30, 1996, and December 31, 1995, respectively) $275,099,597 $243,499,520
================== ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Financial Highlights
Six Months Ended
June 30, 1996 Year Ended December 31,
--------------------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 * 1991 *
------------ -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $19.55 $19.22 $19.79 $19.96 $20.46 $20.20
------------- ------------ ------------ ------------ ------------ ------------
Income from investment operations
Net investment income $0.55 $1.13 $1.01 $1.31 $1.35 $1.47
Net realized and unrealized gain (loss)
on investments (0.09) 0.33 (0.57) (0.17) (0.48) 0.37
------------ ------------ ------------ ------------ ------------ ------------
Total from investment operations $0.46 $1.46 $0.44 $1.14 $0.87 $1.84
------------- ------------ ------------ ------------ ------------ ------------
Less distributions declared to shareholders
From net investment income ($0.55) ($1.12) ($1.01) ($1.31) ($1.35) ($1.47)
In excess of net investment income 0.00 (0.01) 0.00 0.00 0.00 0.00
From net realized capital gains 0.00 0.00 0.00 0.00 (0.02) (0.11)
------------- ------------ ------------ ------------ ------------ ------------
Total distributions declared to shareholders ($0.55) ($1.13) ($1.01) ($1.31) ($1.37) ($1.58)
------------- ------------ ------------ ------------ ------------ ------------
Net asset value - end of period $19.46 $19.55 $19.22 $19.79 $19.96 $20.46
============= ============ ============ ============ ============ ============
Total return 2.41% 7.85% 2.27% 5.08% 4.33% 9.41%
Net assets at end of period (000 omitted) $275,100 $243,500 $277,017 $275,080 $289,969 $266,256
Ratios (to average daily net assets)/Supplemental Data:
Expenses 0.t5% 0.33% 0.33% 0.33% 0.37% 0.38%
Net investment income 5.t7% 5.95% 5.24% 5.82% 6.60% 7.17%
Portfolio turnover 56% 208% 154% 182% 167% 134%
t Computed on an annualized basis.
* Audited by other auditors.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Short-Term Asset Reserve Fund Series
Notes to Financial Statements
(Unaudited)
(1).....Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish Short-Term Asset Reserve Fund (the "Fund") is a
separate diversified investment series of the Trust. The following is a
summary of significant accounting policies consistently followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale price, or if no sale, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued on an
amortized cost basis. If the Fund acquires a short-term instrument with
more than sixty days remaining to its maturity, it is valued at current
market value until the sixtieth day prior to maturity and will then be
valued at amortized cost based upon the value on such date unless the
trustees determine during such sixty-day period that amortized cost
does not represent fair value.
B...Repurchase agreements--
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund
to monitor on a daily basis, the market value of the repurchase
agreement's underlying investments to ensure the existence of a proper
level of collateral.
C...Securities transactions and income--
Securities transactions are recorded as of the trade date. Realized
gains and losses from securities sold are recorded on the identified
cost basis. Interest income is determined on the basis of interest
accrued, adjusted for accretion of discount or amortization of premiums
debt securities when required for federal income tax purposes.
D...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year. At December 31, 1995, the Fund, for federal income tax purposes,
had capital loss carryovers which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the
extent permitted by the Internal Revenue Code and thus will reduce the
amount of distributions to shareholders which would otherwise be
necessary to relieve the Fund of any liability for federal income tax.
Such capital loss carryovers are $3,071,161, $1,512,610, $5,263,400 and
$568,968 which expire on December 31, 2000, December 31, 2001, December
31, 2002 and December 31, 2003, respectively.
(2).....Distributions to Shareholders:
Dividends on shares of the Fund are declared daily from net investment
income and distributed monthly. Net capital gains, if any, are
distributed annually. Dividends from net investment income and
distributions from capital gains, if any, are automatically reinvested
in additional shares of the Fund unless the shareholder elects to
receive them in cash. Distributions to shareholders are recorded on the
ex-dividend date. Income and capital gain distributions are determined
in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are
primarily due to differing treatments for asset backed securities.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid-in capital.
<PAGE>
(3).....Investment Advisory Fee:
The investment advisory fee is paid to Standish, Ayer & Wood, Inc.
(SA&W) for overall investment advisory and administrative services, and
general office facilities, monthly at the annual rate of 0.25% of the
Fund's average daily net assets. The investment adviser has agreed that
the total Fund operating expenses for any fiscal year would not exceed
0.50% of the Fund's average net assets or the permissible limit
applicable in any state in which shares of the Fund are qualified for
sale. The Fund pays no compensation directly to its trustees who are
affiliated with the investment adviser or to its officers, all of whom
receive remuneration for their services to the Fund from the investment
adviser. Certain of the trustees and officers of the Fund are directors
or officers of SA&W.
(4).....Purchases and Sales of Investments:
Purchases and sales of investments, other than short-term obligations
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------------- ------------------
<S> <C> <C>
U.S. government securities $146,980,798 $99,061,105
================= ==================
Investments (non-U.S. government securities) $58,214,007 $42,994,823
================= ==================
</TABLE>
(5).....Shares of Beneficial Interest:
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) December 31, 1995
----------------- -----------------
<S> <C> <C>
Shares sold 6,585,501 11,547,118
Shares issued to shareholders in payment of distributions declared 295,883 614,434
Shares redeemed (5,199,242) (14,122,510)
----------------- -----------------
Net (decrease) increase 1,682,142 (1,960,958)
================= =================
</TABLE>
(6).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate Cost $273,157,434
=================
Gross unrealized appreciation $230,131
Gross unrealized depreciation (1,370,582)
-----------------
Net unrealized depreciation ($1,140,451)
=================
(7).....Financial Instruments
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks and objectives of these investments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following financial instruments with off-balance
sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in securities prices and foreign currencies, as
well as to enhance returns. Options, both held and written by the Fund,
are reflected in the accompanying Statement of Assets and Liabilities
at market value. Premiums received from writing options which expire
are treated as realized gains. Premiums received from writing options
which are exercised or are closed are added to or offset against the
proceeds or amount paid on the transaction to determine the realized
gain or loss. If a put option written by the Fund is exercised, the
premium reduces the cost basis of the securities purchased by the Fund.
The Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of
the security underlying the written option. A summary of written option
transactions for the six months ended June 30, 1996 is as follows:
Written Call Option Transactions
Number
of Contracts Premiums
-------------- ----------------
Outstanding, beginning of period 70,000 $4,922
Options written 649,150 68,760
Options exercised (50,000) (3,321)
Options expired (456,150) (50,916)
Options closed (70,000) (4,922)
-------------- ----------------
Outstanding, end of period 143,000 $14,523
============== ================
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Financial Statements
For the Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Par Value
Security Rate Maturity Value (Note 1A)
- - -------------------------------------------------------------------------------------------------- ---------------- ---------------
BONDS and NOTES - 117.3%
Asset Backed - 2.0%
- - ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Citibank Credit Card Master Trust (Identified Cost $1,073,986) 0.00% 2/07/2003 $ 1,425,000 1,044,703
--------------
Collateralized Mortgage Obligations - 2.5%
- - ------------------------------------------------------------------
FNMA P/O Trust 108 0.00 3/01/2020 1,454,669 1,103,276
Midstate Trust II A3 9.35 4/01/1998 200,000 205,313
--------------
TOTAL Collateralized Mortgage Obligations
(Identified Cost $1,390,014) 1,308,589
--------------
U.S. Government Agency - 100.9%
- - ------------------------------------------------------------------
Pass Thru Securities
- - ------------------------------------------------------------------
Chase Comm Certificate 961A1 Erisa 7.60 6/30/2028 500,000 505,715
CSFB 1995-A 144A 6.69 11/15/2005 750,000 725,156
Evans Whitycombe Trust 7.98 8/01/2001 1,000,000 1,028,300
FDIC Remic Trust 1994-C1 2C 8.45 9/25/2025 500,000 512,031
FHA Insured Project Mtg Series #15 7.45 5/01/2021 1,416,273 1,416,273
FHA #113 Puttable Project 8/3 7.43 6/01/2024 3,864,733 3,821,255
FHLMC 6.00 4/01/2011 554,574 524,765
FHLMC 6.50 12/01/2023 - 4/01/2026 3,419,639 3,209,000
FNMA 6.50 7/01/2025 - 4/01/2026 6,186,942 5,786,708
FNMA 7.00 9/01/2023 - 7/01/2026 10,368,607 10,010,254
GNMA 7.00 11/15/2022 - 6/15/2026 8,978,631 8,631,115
GNMA 7.50 10/15/2022 - 9/15/2025 1,774,112 1,754,603
GNMA 9.00 5/15/2016 - 9/15/2026 3,773,078 3,962,963
Lehman Brothers Commercial Conduit Mortgage Trust 1995-C2 7.05 9/25/2025 575,000 532,953
Ml Mtg Inv 1994-C1 Cl C 8.89 11/25/2020 1,095,000 1,122,375
Mortgage Capital Fund 1996 7.80 7/15/2028 497,000 497,000
Resolution Trust Corp. 1991-6 C-1 9.00 9/25/2028 244,976 251,713
Resolution Trust Corp. 1992-C2 A1 9.00 7/25/2001 306,312 309,184
Resolution Trust Corp. 1994-C1 D 8.00 6/25/2026 649,975 642,053
Resolution Trust Corp. 1994-C2 D AL 1 8.00 4/25/2025 720,694 714,388
Resolution Trust Corp. 1995 C1 Cl C 6.90 2/25/2027 900,000 839,250
Resolution Trust Corp. 1995-1 A2C Erisa 7.50 10/25/2028 1,000,000 996,563
Resolution Trust Corp. P-T Ser 1992-5 Sr A6 9.24 5/25/2026 2,150,000 2,192,328
Resolution Trust Corp. P-T Ser 1992-C7 A-1C 7.90 6/25/2023 73,658 72,922
Resolution Trust Corp. P-T Ser 1992-M4 A1 8.00 8/25/2023 491,499 493,342
Sears Credit Account 1987-B 8.00 5/25/2017 147,961 145,371
Structured Asset Security Corp. 1994-C1 D 6.87 8/25/2026 825,000 768,023
Structured Asset Security Corp. 1996-Cfl C 6.53 2/25/2028 200,000 190,125
--------------
TOTAL U.S. Government Agency (Identified Cost $53,595,622) 51,655,728
--------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - -------------------------------------------------------------------------------------------------- ---------------- ---------------
U.S. Treasury Obligations - 11.9%
- - ------------------------------------------------------------------
Treasury Bonds - 9.1%
- - ------------------------------------------------------------------
U.S. Treasury Bond 6.25% 4/30/2001 $ 1,475,000 1,461,172
U.S. Treasury Bond 6.50 8/15/2005 450,000 443,529
U.S. Treasury Bond 7.63 2/15/2025 1,625,000 1,750,938
U.S. Treasury Bond 8.13 8/15/2019 875,000 982,188
--------------
4,637,827
--------------
Treasury Notes - 2.8%
- - ------------------------------------------------------------------
U.S. Treasury Note 5.50 12/31/2000 1,050,000 1,011,938
U.S. Treasury Note (Strip) 0.00 8/15/2008 1,000,000 435,010
--------------
1,446,948
--------------
TOTAL U.S. Treasury Obligations (Identified Cost $48,813,486) 6,084,775
--------------
Total Bonds and Notes (Identified Cost $60,873,108) 60,093,795
--------------
Principal
Purchased Options - 0.0% Amount of
- - ------------------------------------------------------------------
- - ------------------------------------------------------------------
Deliver/Receive, Excercise Price, Expiration Contracts
- - ------------------------------------------------------------------ --------------
UST Call 5.625% 2/06, Str 97.781, 7/16/96 16,000 0
UST Call 7.625% 2/25, Str 112.484, 7/25/96 5,750 629
UST Put 6.00% 02/26, Str 86.0625, 7/26/96 5,000 1,484
UST Put 6.00% 2/26, Str 86.03125, 7/26/96 5,000 1,484
--------------
TOTAL Purchased Options (Cost $20,678) 3,597
--------------
Short-Term Investments - 2.0% Par
- - ------------------------------------------------------------------
Value
--------------
Repurchase Agreements - 1.9%
- - ------------------------------------------------------------------
Prudential-Bache Repurchase Agreement, dated 6/28/96, 4.77% due 7/1/96, to pay
$988,392 (Collateralized by FNMA with a rate 9% maturity date 9/1/22 with an
aggregate
market value of $1,007,761. 4.77 7/01/1996 $ 987,999 987,999
--------------
U.S. Government - 0.1%
- - ------------------------------------------------------------------
U.S. Treasury Bill** 5.00 9/19/1996 55,000 54,382
--------------
TOTAL Short-Term Investments (Identified Cost $1,042,363) 1,042,381
--------------
TOTAL INVESTMENTS (Identified Cost $61,936,149) - 119.3% 61,139,773
--------------
<PAGE>
Principal
Security Amount of Value
- - ------------------------------------------------------------------
Contracts (Note 1A)
---------------- ---------------
Written Options - 0.0%
- - ------------------------------------------------------------------
- - ------------------------------------------------------------------
Deliver/Receive, Excercise Price, Expiration
- - ------------------------------------------------------------------
UST Call 5.50% 12/00, Str 97.570, 8/13/96
UST Call 7.625% 2/25, Str 112.484, 7/25/96 (10,500) (3,281)
UST Put 6.875% 5/06, Str 99.1875, 7/26/96 (5,750) (629)
UST Put 6.875% 5/06, Str 99.203125, 7/26/96 (8,750) (2,803)
TOTAL Written Options (Premiums Received $31,379) (8,750) (2,734)
--------------
(9,447)
--------------
Other assets, less liabilities - (19.3%)
(9,919,456)
--------------
NET ASSETS - 100.0%
51,210,870
==============
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
FHLMC - Federal Home Loan Mortgage Corporation
FDIC - Federal Deposit Insurance Corporation
FHA - Federal Housing Authority
** Rate noted is yield to maturity
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
Assets
<S> <C> <C>
Investments, at value (Note 1A) (identified cost, $61,936,149) $61,139,773
Receivable for investments sold 2,488,009
Interest receivable 432,625
Other assets 1,278
------------------
Total assets $64,061,685
Liabilities
Distribution payable $585,419
Payable for investments purchased 2,483,890
Payable for delayed delivery transactions (Note 7) 9,699,970
Written options outstanding, at value (premiums received, $31,379) (Note 6) 9,447
Payable for daily variation margin on financial futures contracts (Note 6) 25,050
Accrued investment advisory fee (Note 2) 25,076
Accrued trustee fees (Note 2) 516
Accrued expenses and other liabilities 21,447
-----------------
Total liabilities 12,850,815
------------------
Net Assets $51,210,870
==================
Net Assets consist of
Paid-in capital $53,649,464
Undistributed net investment income 399,046
Accumulated undistributed net realized gain (loss) (2,056,665)
Net unrealized appreciation (depreciation) (780,975)
------------------
Total $51,210,870
==================
Shares of beneficial interest outstanding 2,613,230
==================
Net asset value, offering price, and redemption price per share $19.60
==================
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Investment income
Interest income $2,006,229
Expenses
Investment advisory fee (Note 2) $66,443
Trustee fees (Note 2) 1,296
Accounting, custody and transfer agent fees 44,301
Registration costs 1,384
Audit services 15,999
Legal fees 3,481
Insurance expense 890
Miscellaneous 852
------------------
Total expenses 134,646
Deduct:
Preliminary waiver of investment advisory fee (Note 2) 15,690
------------------
Net expenses $118,956
------------------
Net investment income $1,887,273
------------------
Realized and unrealized gain (loss)
Net realized gain (loss)
Investment securities (652,436)
Written options 115,123
Financial futures 157,326
------------------
Net realized gain (loss) ($379,987)
Change in net unrealized appreciation (depreciation)
Investment securities ($2,067,611)
Written options 27,616
Financial futures 82,447
------------------
Change in net unrealized appreciation (depreciation) ($1,957,548)
------------------
Net gain (loss) ($2,337,535)
------------------
Net increase (decrease) in net assets from operations ($450,262)
==================
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Statements of Changes in Net Assets
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) December 31, 1995
----------------- -----------------
Increase (decrease) in Net Assets
From operations
Net investment income $1,887,273 $3,780,223
Net realized gain (loss) (379,987) 1,131,513
Change in net unrealized appreciation (depreciation) (1,957,548) 3,537,677
----------------- -----------------
Net increase (decrease) in net assets from operations ($450,262) $8,449,413
----------------- -----------------
Distributions to shareholders
From net investment income ($1,325,133) ($3,731,675)
----------------- -----------------
Total distributions to shareholders ($1,325,133) ($3,731,675)
----------------- -----------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $70,000 $1,275,000
Net asset value of shares issued to shareholders in
payment of distributions declared 154,296 591,437
Cost of shares redeemed (2,438,730) (5,162,432)
----------------- -----------------
Increase (decrease) in net assets from Fund share transaction($2,214,434) ($3,295,995)
----------------- -----------------
Net increase (decrease) in net assets ($3,989,829) $1,421,743
Net assets
At beginning of period 55,200,699 53,778,956
----------------- -----------------
At end of period (including undistributed net investment income of $399,046
and distributions in excess of net income of $163,094 at June 30, 1996 and
distributions in excess of
net investment income of $163,094 at December 31, 19$51,210,870 $55,200,699
================= =================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Financial Highlights
Six Months Ended
June 30, 1996 Year Ended December 31,
-----------------------------------------------------------------
(Unaudited) 1995 1994 1993 1992* 1991*
--------------- ----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $20.25 $18.61 $20.24 $20.14 $20.97 $20.48
--------------- ----------- ----------- ------------- ----------- -----------
Income from investment operations
Net investment income+ $0.71 $1.32 $1.42 $1.45 $1.43 $1.71
Net realized and unrealized gain (loss) on investments (0.86) 1.66 (1.86) 0.54 (0.61) 1.37
--------------- ----------- ----------- ------------- ----------- -----------
Total from investment operations ($0.15) $2.98 ($0.44) $1.99 $0.82 $3.08
--------------- ----------- ----------- ------------ ----------- -----------
Less distributions declared to shareholders
From net investment income ($0.50) ($1.34) ($1.19) ($1.48) ($1.57) ($1.55)
In excess of net investment income --- --- --- (0.05) --- ---
From net realized capital gains --- --- (0.36) (0.07) (1.04)
In excess of net realized capital gains --- --- --- --- (0.01) ---
--------------- ----------- ----------- ------------- ----------- -----------
Total distributions declared to shareholders ($0.50) ($1.34) ($1.19) ($1.89) ($1.65) ($2.59)
--------------- ----------- ----------- ------------- ----------- -----------
Net asset value - end of period $19.60 $20.25 $18.61 $20.24 $20.14 $20.97
=============== =========== =========== ============= =========== ===========
Total return (0.73%) 16.32% (2.16%) 10.02% 4.07% 15.57%
Net assets at end of period (000 omitted) $51,211 $55,201 $53,779 $78,054 $90,460 $78,570
Ratios (to average daily net assets)/Supplemental Data
Expenses + 0.t5% 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income + 7.t2% 6.78% 6.79% 6.75% 6.94% 8.03%
Portfolio turnover 112% 225% 138% 130% 301% 324%
+ The investment adviser did not impose a portion of its advisory fee. If
this voluntary reduction had not been undertaken, the net investment income
per share and the ratios would have been:
Net investment income per share $1.22 $1.22 $1.41 $1.44 $1.42 $1.70
Ratios (to average daily net assets):
Expenses 0.t0% 0.51% 0.49% 0.48% 0.51% 0.49%
Net Investment Income 6.t7% 6.72% 6.76% 6.72% 6.88% 7.99%
t Computed on an annualized basis.
* Audited by other auditors.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Securitized Fund Series
Notes to Financial Statements
(Unaudited)
(1).....Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (the Trust) is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish Securitized Fund (the Fund) is a separate
non-diversified investment series of the Trust. The following is a
summary of significant accounting policies followed by the Fund in the
preparation of the financial statements. The preparation of financial
statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale price, or if no sale price, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued on an
amortized cost basis. If the Fund acquires a short term instrument with
more than sixty days remaining to its maturity, it is valued at current
market value until the sixtieth day prior to maturity and will then be
valued at amortized cost based upon the value on such date unless the
trustees determine during such sixty-day period that amortized cost
does not represent fair value.
B...Repurchase agreements--
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund
to monitor on a daily basis, the market value of the repurchase
agreement's underlying investments to ensure the existence of a proper
level of collateral.
C...Securities transactions and income--
Securities transactions are recorded as of the trade date. Interest
income is determined on the basis of interest accrued, adjusted for
amortization of premium or discount on long-term debt securities when
required for federal income tax purposes. Realized gains and losses
from securities sold are recorded on the identified cost basis.
D...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year. At December 31, 1995, the Fund, for federal income tax purposes,
had a capital loss carryover which will reduce the Fund's taxable
income arising from net realized gain on investments, if any, to the
extent permitted by the Internal Revenue Code and thus will reduce the
amount of distributions to shareholders which would otherwise be
necessary to relieve the Fund of any liability for Federal Income Tax.
Such capital loss carryover is $1,745,441 which expires on December 31,
2002.
E...Distributions to shareholders--
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for mortgage backed securities and foreign currency
transactions. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to paid-in
capital.
<PAGE>
(2).....Investment Advisory Fee:
The investment advisory fee paid to Standish, Ayer & Wood, Inc. (SA&W)
for overall investment advisory and administrative services, and
general office facilities, is paid monthly at the annual rate of 0.25%
of the Fund's average daily net assets up to the first $500,000,000 and
0.20% of assets in excess of this amount. The investment adviser has
agreed that the total Fund operating expenses for any fiscal year will
not exceed 0.45% of the Fund's average daily net assets. The Adviser
has also agreed to limit the Fund's total operating expenses (excluding
brokerage commissions, taxes and extraordinary expenses) to the
permissible limit applicable in any state in which shares of the Fund
are then qualified for sale. For the six months ended June 30, 1996,
the investment adviser voluntarily waived $15,690 of its fee. The Fund
pays no compensation directly to its trustees who are affiliated with
the investment adviser or to its officers, all of whom receive
remuneration for their services to the Fund from the investment
adviser. Certain of the trustees and officers of the Trust are
directors or officers of SA&W.
(3).....Purchases and Sales of Investments:
Purchases and sales of investments, other than short-term obligations,
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------------ ------------------
<S> <C> <C>
U.S. government securities $65,093,486 $64,774,169
================= =================
Investments (non-U.S. government securities) $2,587,070 $2,813,297
================= =================
</TABLE>
(4).....Shares of Beneficial Interest:
The Declaration of Trust permits the trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows: At June 30, 1996, one shareholder, together with its
affiliate, was record owner of approximately 72% of the total
outstanding shares of the Fund.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) December 31, 1995 1994
------------------ ----------------------------------
<S> <C> <C> <C>
Shares sold 3,450 64,329 180,699
Shares issued to shareholders in payment of distributions declared 7,838 29,757 53,648
Shares redeemed (123,505) (258,806) (1,200,040)
------------------ ------------------ --------------
Net increase (decrease) (112,217) (164,720) (965,693)
================== ================== ==============
</TABLE>
(5).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate Cost $61,936,149
==================
Gross unrealized appreciation $570,897
Gross unrealized depreciation (1,367,273)
------------------
Net unrealized depreciation ($796,376)
==================
<PAGE>
6)......Financial Instruments
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks and objectives of these investments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following financial instruments with off-balance
sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in securities prices and foreign currencies, as
well as to enhance returns. Options, both held and written by the Fund,
are reflected in the accompanying Statement of Assets and Liabilities
at market value. Premiums received from writing options which expire
are treated as realized gains. Premiums received from writing options
which are exercised or are closed are added to or offset against the
proceeds or amount paid on the transaction to determine the realized
gain or loss. If a put option written by the Fund is exercised, the
premium reduces the cost basis of the securities purchased by the Fund.
The Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of
the security underlying the written option. A summary of written option
transactions for the six months ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
Written Put Option Transactions
Number
of Contracts Premiums
----------------- -----------------
<S> <C> <C>
Outstanding, beginning of period 27,500 $11,816
Options written 66,250 44,235
Options exercised (65,250) (29,964)
Options expired 0 0
Options closed (11,000) (4,213)
----------------- -----------------
Outstanding, end of period 17,500 $21,874
================= =================
Written Call Option Transactions
Number
of Contracts Premiums
----------------- -----------------
Outstanding, beginning of period 39,000 $26,926
Options written 169,500 85,376
Options exercised 0 0
Options expired (131,750) (59,117)
Options closed (60,500) (43,680)
----------------- -----------------
Outstanding, end of period 16,250 $9,505
================= =================
</TABLE>
.........Forward foreign currency and cross currency exchange contracts--
The Fund may enter into forward foreign currency and cross currency
exchange contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements
in the value of a foreign currency relative to the U.S. dollar and
other foreign currencies. The forward foreign currency and cross
currency exchange contracts are marked to market using the forward
foreign currency rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized
until the contract settlement date. Forward currency exchange contracts
are used by the Fund primarily to protect the Fund's foreign securities
from adverse currency movements. At June 30, 1996, there were no open
forward foreign currency contracts.
<PAGE>
.........Futures Contracts--
The Fund may enter into financial futures contracts for the delayed
sale or delivery of securities or contracts based on financial indices
at a fixed price on a future date. The Fund is required to deposit
either in cash or securities an amount equal to a certain percentage of
the contract amount. Subsequent payments are made or received by the
Fund each day, dependent on the daily fluctuations in the value of the
underlying security, and are recorded for financial statement purposes
as unrealized gains or losses by the Fund. There are several risks in
connection with the use of futures contracts as a hedging device. The
change in value of futures contracts primarily corresponds with the
value of their underlying instruments or index, which may not correlate
with changes in value of the hedged investments. In addition, there is
the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market. The Fund enters
into financial futures transactions primarily to manage its exposure to
certain markets and to changes in securities prices and foreign
currencies. At June 30, 1996, the Fund held the following futures
contracts:
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Contract Position Date Amount at Value Gain/(Loss)
- - -------------------------- ------------------------ ----------- ----------------------------------
<S> <C> <C> <C> <C>
US 10 Year Note (29 contracts) Short 9/30/96 $4,085,000 ($6,531)
=============== ================
</TABLE>
At June 30, 1996, the Fund had segregated sufficient cash and/or
securities to cover margin requirements on open futures contracts.
(7).....Delayed Delivery Transactions:
The Fund may purchase securities on a when-issued or forward commitment
basis. Payment and delivery may take place a month or more after the
date of the transactions. The price of the underlying securities and
the date when the securities will be delivered and paid for are fixed
at the time the transaction is negotiated. The Fund instructs its
custodian to segregate securities having a value at least equal to the
amount of the purchase commitment.
<TABLE>
<CAPTION>
At June 30, 1996, the Fund had entered into the following delayed
delivery transactions:
Type Security Settlement Date Amount
- - -------- -------------------------------------------------------------------------
<S> <C> <C> <C>
Buy GNMA 8/21/96 $528,438
Buy FNMA 7/15/96 8,005,066
Buy GNMA 9/19/96 1,166,466
---------------
Total Delayed delivery transactions $9,699,970
===============
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Financial Statements
For the Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Par Value
Security Rate Maturity Value (Note 1A)
- - --------------------------------------------------------------- --------------------- -------------------- -----------------
BONDS and NOTES - 87.0%
Australia - 3.9%
- - ----------------------------------------------------
Government
- - ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Govt. of Australia 10.00 % 10/15/2007 AUD 3,400,000 2,881,679
New South Wales Treasury 9.33 9/05/2005 AUD 2,300,000 796,640
New South Wales Treasury 9.43 9/03/2010 AUD 8,350,000 1,828,521
South Australia Government Finance 9.42 12/21/2015 AUD 10,200,000 1,387,505
State Electric Commission of Victoria 9.48 1/11/2011 AUD 38,500,000 8,113,043
Treasury Corp. of Victoria 9.26 8/31/2011 AUD 5,500,000 1,094,136
-----------------
16,101,524
Other
- - --------------------------------------------------
News America Holdings 8.63 2/07/2014 AUD 19,000,000 12,504,529
-----------------
Total Australia 28,606,053
-----------------
Canada - 1.9%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Govt. of Canada 7.75 9/01/1999 CAD 5,400,000 4,086,412
Govt. of Canada 8.50 3/01/2000 CAD 7,700,000 5,960,107
Govt. of Canada 8.50 4/01/2002 CAD 5,300,000 4,125,330
-----------------
Total Canada 14,171,849
-----------------
Denmark - 10.8%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Kingdom of Denmark 9.00 11/15/2000 DKK 81,600,000 15,392,295
Kingdom of Denmark 8.00 11/15/2001 DKK 39,000,000 7,095,014
Kingdom of Denmark 8.00 3/15/2006 DKK 39,875,000 7,062,761
Kingdom of Denmark 9.00 11/15/1998 DKK 37,000,000 6,831,322
-----------------
36,381,392
-----------------
<PAGE>
Par Value
Security Maturity Value (Note 1A)
- - ----------------------------------------------------- --------------------------- -------------------------------------
Other
- - --------------------------------------------------
Byggeriets Real Kredit 11.00 % 10/01/2017 DKK 147,000 27,466
Byggeriets Real Kredit 11.00 10/01/2020 DKK 104,000 19,387
Denmark Nykredit 7.00 10/01/2026 DKK 185,567,000 27,627,018
Denmark Nykredit 8.00 10/01/2026 DKK 57,781,000 9,332,272
Denmark Nykredit 9.00 10/01/2006 DKK 17,376,000 3,194,825
Denmark Realkredit 7.00 10/01/2026 DKK 14,952,000 2,226,038
Denmark Realkredit 9.00 10/01/2006 DKK 2,866,000 526,955
Kreditforningen Ser 22A 11.00 10/01/2017 DKK 335,000 62,593
Denmark Nykredit 11.00 10/01/2017 DKK 111,000 20,740
-----------------
43,037,294
-----------------
Total Denmark 79,418,686
-----------------
European Currency Unit - 0.8%
- - --------------------------------------------------
Other
- - --------------------------------------------------
Govt. of Italy (Strip) 6.52 3/07/1999 ECU 5,920,000 6,201,714
-----------------
Finland - 3.9%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Govt. of Finland 7.25 4/18/2006 FIM 75,000,000 15,990,718
Govt. of Finland 10.00 9/15/2001 FIM 52,000,000 13,052,520
-----------------
Total Finland 29,043,238
-----------------
France - 1.0%
- - --------------------------------------------------
Other
- - --------------------------------------------------
Republic of Argentina 9.88 1/06/1998 FRF 37,900,000 7,652,849
-----------------
Germany - 6.9%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Baden Wurttemberg 6.00 1/25/2006 DEM 6,900,000 4,306,841
Baden Wurttemberg 6.20 11/22/2013 DEM 16,000,000 10,368,294
Federal Republic of Germany 6.88 5/12/2005 DEM 12,610,000 8,497,684
Federal Republic of Germany 8.00 7/22/2002 DEM 10,100,000 7,312,559
Federal Republic of Germany 8.38 5/21/2001 DEM 9,530,000 6,991,168
Federal Republic of Germany 9.00 10/20/2000 DEM 8,480,000 6,309,921
-----------------
43,786,467
-----------------
Other
- - --------------------------------------------------
Province of Buenos Aires 10.00 12/07/1998 DEM 2,600,000 1,791,339
Province of Buenos Aires 10.00 3/05/2001 DEM 8,250,000 5,502,707
-----------------
7,294,046
-----------------
Total Germany 51,080,513
-----------------
<PAGE>
Par Value
Security Maturity Value (Note 1A)
- - ----------------------------------------------------- --------------------------- -------------------------------------
Ireland - 3.9%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Irish Gilts 6.25 % 4/01/1999 IEP 4,520,000 7,180,562
Irish Gilts 6.50 10/18/2001 IEP 9,250,000 14,510,313
Irish Gilts 9.25 7/11/2003 IEP 3,810,000 6,745,415
-----------------
Total Ireland 28,436,290
-----------------
Italy - 11.1%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Govt. of Italy 8.50 1/01/1999 ITL 7,350,000,000 4,820,968
Govt. of Italy 8.50 1/01/1999 ITL 6,850,000,000 4,493,011
Govt. of Italy 8.50 8/01/2004 ITL 8,100,000,000 5,108,095
Govt. of Italy 9.00 11/01/2023 ITL 9,360,000,000 5,792,892
Govt. of Italy 9.00 11/01/2023 ITL 9,360,000,000 5,792,892
Govt. of Italy 9.00 11/01/2023 ITL 4,680,000,000 2,896,446
Govt. of Italy 9.50 12/01/1999 ITL 9,150,000,000 6,125,044
Govt. of Italy 9.50 12/01/1999 ITL 9,150,000,000 6,125,044
Govt. of Italy 10.50 11/01/2000 ITL 6,750,000,000 4,681,672
Govt. of Italy 10.50 11/01/2000 ITL 8,166,666,667 5,664,245
Govt. of Italy 10.50 11/01/2000 ITL 2,766,666,667 1,918,907
Govt. of Italy 10.50 11/01/2000 ITL 6,750,000,000 4,681,672
Govt. of Italy 10.50 11/01/2000 ITL 8,166,666,667 5,664,245
Govt. of Italy 12.50 3/01/2001 ITL 5,165,000,000 3,822,336
Govt. of Italy 12.50 3/01/2001 ITL 5,165,000,000 3,822,336
-----------------
71,409,805
-----------------
Other
- - --------------------------------------------------
Abbey National Treasury 10.00 8/24/2000 ITL 8,791,000,000 5,728,902
Bank Nederlandse 10.50 6/18/2003 ITL 6,400,000,000 4,441,834
-----------------
10,170,736
-----------------
Total Italy 81,580,541
-----------------
Japan - 5.8%
- - --------------------------------------------------
Other
- - --------------------------------------------------
European Investment Bank 5.88 11/26/1999 JPY 700,000,000 7,207,441
Intern'l Bank Reconstruction & Development 6.75 3/15/2000 JPY 378,000,000 4,020,235
Intern'l Bank Reconstruction & Development 6.75 6/18/2001 JPY 627,000,000 6,865,727
KFW International Finance 6.00 11/29/1999 JPY 798,000,000 8,227,397
Kingdom of Belgium 5.00 12/17/1999 JPY 1,610,000,000 16,148,445
-----------------
Total Japan 42,469,245
-----------------
<PAGE>
Par Value
Security Maturity Value (Note 1A)
- - ----------------------------------------------------- --------------------------- -------------------------------------
New Zealand - 4.5%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Government Property Services 7.25 % 3/15/1999 NZD 1,500,000 961,074
Govt. of New Zealand 8.00 11/15/2006 NZD 12,700,000 8,270,906
-----------------
9,231,980
-----------------
Other
- - --------------------------------------------------
Fletcher Challenge 10.00 4/30/2005 NZD 7,000,000 4,668,960
Fletcher Challenge 14.50 9/30/2000 NZD 8,500,000 6,565,541
Fletcher Challenge Cvt 11.25 12/15/2002 NZD 13,000,000 9,189,378
Lion Nathan Ltd. 0.00 9/01/1997 NZD 5,793,293 3,511,735
-----------------
23,935,614
-----------------
Total New Zealand 33,167,594
-----------------
Norway - 1.9%
- - --------------------------------------------------
Other
- - --------------------------------------------------
Union Bank of Norway 12.75 10/26/2002 NOK 2,500,000 409,682
Uni-Storebrand Notes 11.15 1/15/2002 NOK 37,360,000 6,581,528
Vesta Forsikring 9.50 8/25/2000 NOK 20,500,000 3,386,165
Vital Forsikring 7.85 9/22/2003 NOK 25,600,000 3,889,307
-----------------
Total Norway 14,266,682
-----------------
Spain - 5.4%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Castilla Junta 8.30 11/29/2001 ESP 473,000,000 3,725,751
Junta de Andalucia 11.10 12/02/2005 ESP 1,350,000,000 11,524,033
Kingdom of Spain 10.00 2/28/2005 ESP 1,277,250,000 10,671,956
Kingdom of Spain 10.30 6/15/2002 ESP 400,500,000 3,394,729
Kingdom of Spain 11.30 1/15/2002 ESP 797,000,000 7,012,109
Kingdom of Spain 12.25 3/25/2000 ESP 365,000,000 3,232,369
-----------------
Total Spain 39,560,947
-----------------
Sweden - 8.8%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Kingdom of Sweden 9.00 4/20/2009 SEK 106,200,000 16,717,380
Kingdom of Sweden 10.25 5/05/2003 SEK 67,300,000 11,387,361
Kingdom of Sweden 13.00 6/15/2001 SEK 104,800,000 19,324,791
-----------------
47,429,532
-----------------
Other
- - --------------------------------------------------
Fulmar Mortgage Sec #1 7.65 11/01/2000 SEK 21,561,525 3,240,279
Sweden Caisse #1036 10.25 5/05/2000 SEK 83,200,000 13,829,194
-----------------
17,069,473
-----------------
Total Sweden 64,499,005
-----------------
<PAGE>
Par Value
Security Maturity Value (Note 1A)
- - ----------------------------------------------------- --------------------------- -------------------------------------
Thailand - 1.9%
- - --------------------------------------------------
Government
- - --------------------------------------------------
Thailand Investment Bills of Exchange 0.00 10/28/1996 THB 160,000,000 6,118,616
Thailand Investment Bills of Exchange 0.00 10/29/1996 THB 180,000,000 6,881,742
Thailand Investment Bills of Exchange 0.00 10/31/1996 THB 15,000,000 573,195
-----------------
13,573,553
-----------------
Other
- - --------------------------------------------------
Thai Farmers Bank 6.99 % 12/23/1996 THB 10,000,000 389,639
-----------------
Total Thailand 13,963,192
-----------------
United Kingdom - 14.1%
- - --------------------------------------------------
Government
- - --------------------------------------------------
UK Treasury 7.00 11/06/2001 GBP 10,285,000 15,690,864
UK Treasury 7.50 12/07/2006 GBP 6,650,000 10,029,227
UK Treasury 6.75 11/26/2004 GBP 8,700,000 12,635,920
UK Treasury 8.00 12/07/2000 GBP 9,550,000 15,259,362
-----------------
53,615,373
-----------------
Other
- - --------------------------------------------------
Birmnghm Midshrs Soc 9.13 1/05/2006 GBP 3,900,000 6,097,563
Hanson Trust Plc 10.00 4/18/2006 GBP 9,350,000 15,682,288
Inco Ltd. 15.75 7/15/2006 GBP 996,000 2,199,319
Lond & Scot Marine Oil Cvt 7.75 10/04/2005 GBP 250,000 355,965
Mepc Plc 12.00 6/30/2006 GBP 2,250,000 4,259,470
Royal Bank of Scotland 9.63 6/22/2015 GBP 380,000 595,389
Seeboard Plc 8.50 10/03/2005 GBP 6,400,000 9,809,478
Smithkline Beecham Corp. 8.13 11/25/1998 GBP 3,730,000 5,936,852
Woolwich Building Society 11.63 12/18/2001 GBP 2,800,000 4,995,751
-----------------
49,932,075
-----------------
Total United Kingdom 103,547,448
-----------------
Yankee Bonds - 0.5%
- - --------------------------------------------------
Govt. of Argentina 6.31 3/31/2005 USD 4,455,000 3,497,175
-----------------
Total Bonds and Notes (Identified Cost $629,317,52 641,163,021
-----------------
Principal
<PAGE>
Amount of Value
Security Contracts (Note 1A)
- - -------------------------------------------------- -------------------------------------
Purchased Options - 0.9%
- - --------------------------------------------------
Deliver/Receive, Exercise Price, Expiration
- - -------------------------------------------------------------------------------------
AUD 10.00% Call, Str 106.163, 10/25/96 13,050,000 212,885
AUD 10.00% Call, Str 107.541, 10/23/96 19,250,000 219,835
AUD 7.50% Call, Str 90.773, 10/25/96 6,700,000 107,046
CHF Put/ESB Call, Str 103.000, 8/29/96 20,100,000 107,435
CHF Put/GBP Call, Str 1.9385, 8/7/96 10,200,000 109,181
CHF Put/ITL Call, Str 1230.00, 6/17/97 20,100,000 166,770
CHF Put/USD Call, Str 1.27, 9/6/96 26,700,000 216,270
DEM 6.25% Call, Str 87.980, 11/07/96 14,150,000 129,713
DEM 6.25% Call, Str 99.00, 9/23/96 23,150,000 45,351
DEM 6.50% Call, Str 100.550, 8/20/96 23,150,000 60,769
DEM 7.375% Call, Str 105.910, 9/16/96 36,000,000 120,456
DEM Put / USD Call, Str 1.530, 10/24/96 16,400,000 209,920
DEM Put / USD Call, Str 1.535, 10/25/96 23,000,000 273,700
DEM Put/ESB Call, Str 83.550, 7/9/96 22,900,000 7,511
DEM Put/USD Call, Str 1.550, 4/22/97 14,800,000 250,120
ESB 10.15% Call, Str 105.650, 11/14/96 1,850,000,000 427,350
ESB Put/JPY Call, Str 1.200, 5/22/97 1,738,750,000 356,444
ITL 9.00% Call, Str 92.48, 9/17/96 23,400,000,000 491,400
ITL 9.00% Call, Str 95.07, 9/25/96 19,940,000,000 239,280
JPY 2.90% Call, Str 97.854, 7/3/96 1,720,000,000 1,720
JPY 3.20% Call, Str 99.512, 7/1/96 1,300,000,000 2,600
JPY 4.20% Call, Str 106.983, 7/3/96 1,720,000,000 3,440
JPY Put/ ESB Call, Str 1.180, 5/26/97 1,750,000,000 276,500
JPY Put/AUD Call, Str 85.150, 12/30/96 2,000,000,000 422,000
JPY Put/AUD Call, Str 86.400, 5/28/97 1,750,000,000 299,250
JPY Put/ESB Call, Str 1.200, 10/30/96 1,800,000,000 363,600
JPY Put/ITL Call, Str 14.555, 12/12/96 2,600,868,000 730,844
JPY Put/NZD Call, Str 72.000, 5/28/97 1,750,000,000 442,750
SEK 9% Call, Str 102.41, 9/17/96 106,200,000 445,828
USD Put/CAD Call, Str 1.35, 9/10/96 13,030,000 36,484
-----------------
Total Purchased Options (premiums paid $6,993,562) 6,776,452
-----------------
<PAGE>
Par Value
Security Maturity Value (Note 1A)
- - ----------------------------------------------------- --------------------------- -------------------------------------
Short-Term Investments - 8.8%
- - --------------------------------------------------
Commercial Paper - 0.4%
- - --------------------------------------------------
Monsanto Corp 5.30 % 7/08/1996 $ 3,000,000 2,985,425
-----------------
Repurchase Agreements - 1.3%
- - --------------------------------------------------
Prudential-Bache Repurchase Agreement, dated 6/28/96,
4.77% due 7/1/96, to pay $9,307,532 (Collateralized by
FNMA & FMAC with rates ranging from 6.0% to 8.5%
and maturity dates ranging from 3/1/06 to 6/1/26 with an
aggregate market value of $9,489,928 9,303,834 9,303,834
-----------------
U.S. Government Agency - 7.1%
- - --------------------------------------------------
Federal Farm Credit Bank 5.29 7/25/1996 2,830,000 2,818,356
Federal Farm Credit Bank 5.29 7/29/1996 4,125,000 4,105,603
Federal Home Loan Bank 0.00 9/18/1996 10,000,000 9,881,900
Federal Home Loan Bank 5.28 7/16/1996 10,000,000 9,970,667
FHLMC 5.25 7/05/1996 - 7/15/1996 9,500,000 9,457,052
FHLMC 5.26 7/15/1996 1,930,000 1,921,258
FHLMC 5.29 7/15/1996 5,405,000 5,389,115
FNMA 5.28 7/09/1996 - 7/08/1996 6,100,000 6,079,877
FNMA 5.29 7/08/1996 - 7/17/1996 3,145,000 3,136,413
-----------------
52,760,241
-----------------
TOTAL Short-Term Investments (Identified Cost $65,048,013) 65,049,500
- - ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $708,352,661) - 96.8% 712,988,973
-----------------
Principal
Written Options - (0.4%) Amount of
- - --------------------------------------------------
Deliver/Receive, Exercise Price, Expiration Contracts
- - ------------------------------------------------------------------------------------- --------------------
AUD 10.00% Call, Str 110.163, 10/25/96 (13,050,000) (69,217)
AUD 10.00% Call, Str 111.541, 10/23/96 (19,250,000) (62,813)
AUD 10.00% Put, Str 102.163, 10/25/96 (13,050,000) (53,936)
AUD 10.00% Put, Str 103.541, 10/23/96 (19,250,000) (127,223)
AUD 7.50% Call, Str 94.773, 10/25/96 (6,700,000) (29,942)
AUD 7.50% Put, Str 86.773, 10/25/96 (6,700,000) (15,202)
AUD Put/JPY Call, Str 74.000, 5/28/97 (1,750,000,000) (245,000)
CAD Put/USD Call, Str 1.38, 9/10/96 (13,030,000) (31,272)
CHF Put/USD Call, Str 1.33, 9/6/96 (26,700,000) (34,710)
DEM 6.25% Call, Str 92.130, 11/7/96 (14,150,000) (21,947)
DEM 6.25% Put, Str 83.830, 11/07/96 (14,150,000) (49,086)
DEM 6.25% Put, Str 95.640, 11/14/96 (22,130,000) (110,363)
DEM Put / USD Call, Str 1.600, 10/24/96 (16,400,000) (50,840)
DEM Put / USD Call, Str 1.605, 10/25/96 (23,000,000) (50,600)
Principal
<PAGE>
Amount of Value
Security Contracts (Note 1A)
- - -------------------------------------------------- -------------------------------------
Written Options - continued
- - --------------------------------------------------
Deliver/Receive, Exercise Price, Expiration
- - -------------------------------------------------------------------------------------
ESB 10.15% Call, Str 108.650, 11/14/96 (1,850,000,000) (192,400)
ESB Put JPY Call, Str 1.350, 5/22/97 (1,738,750,000) (104,325)
ESB Put/ JPY Call, Str 1.340, 5/26/97 (1,750,000,000) (124,250)
ESB Put/CHF Call, Str 111.000, 8/29/96 (20,100,000) (8,020)
ESB Put/JPY Call, Str 1.400, 10/30/96 (1,800,000,000) (9,000)
ITL 9.00% Call, Str 95.68, 9/17/96 (23,400,000,000) (234,000)
ITL 9.00% Call, Str 97.57, 9/25/96 (19,940,000,000) (119,640)
ITL 9.00% Put, Str 90.36, 9/17/96 (23,400,000,000) (70,200)
ITL 9.00% Put, Str 92.57, 9/25/96 (19,940,000,000) (139,580)
ITL Put/CHF Call, Str 1350.00, 6/17/97 (20,100,000) (187,634)
NZD Put/JPY Call, Str 65.000, 5/28/97 (1,750,000,000) (334,250)
SEK 9.00% Call, Str 105.66, 9/17/96 (106,200,000) (177,354)
SEK 9.00% Put, Str 99.16, 9/17/96 (106,200,000) (63,932)
USD Put/CHF Call, Str 1.140, 10/24/96 (16,400,000) (29,520)
USD Put/CHF Call, Str 1.145, 10/25/96 (23,000,000) (48,300)
USD Put/CHF Call, Str 1.176, 7/10/96 (19,700,000) (7,880)
USD Put/DEM Call, Str 1.425, 4/22/97 (14,800,000) (205,720)
-----------------
Total Written Options (Premiums Received $5,051,979 (3,008,156)
- - ---------------------------------------------------------------------------------------------------------------------------------
-----------------
Other assets, less liabilities - 3.6% 26,391,129
-----------------
Net Assets - 100.0% 736,371,946
=================
AUD - Australian Dollar ITL - Italian Lira
CAD - Canadian Dollar JPY - Japanese Yen
CHF - Swiss Franc USD - United States Dollar
DEM - German Deutschemark FNMA - Federal National Mortgage Association
ESP - Spanish Pesetas FHLMC - Federal Home Loan Mortgage Corporation
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
Assets
<S> <C> <C>
Investments, at value (Note 1A) (identified cost, $708,352,661) $712,988,973
Cash and foreign currency, at value (cost, $13,339,676) 12,741,079
Receivable for investments sold 15,308,784
Interest receivable 18,450,861
Unrealized appreciation on forward foreign currency 13,069,919
exchange contracts (Note 6) ---
Other assets 18,774
-------------------
Total assets $772,578,390
Liabilities
Distribution payable $1,977,942
Payable for investments purchased 19,718,818
Payable for Fund shares redeemed 975,000
Written options outstanding, at value (premiums received, $5,051,977) (Note 6) 3,008,157
Unrealized depreciation on forward foreign currency
exchange contracts (Note 6) 10,193,552
Payable for daily variation margin on financial futures contracts (Note 6) 16,218
Accrued investment advisory fee (Note 2) 224,393
Accrued trustee fees (Note 2) 7,325
Accrued expenses and other liabilities 85,039
------------
Total liabilities 36,206,444
-------------------
Net Assets $736,371,946
===================
Net assets consist of
Paid-in capital $677,809,924
Undistributed net investment income (loss) 17,796,549
Accumulated undistributed net realized gain (loss) 24,566,763
Net unrealized appreciation (depreciation) 16,198,710
-------------------
Total $736,371,946
===================
Shares of beneficial interest outstanding 31,341,760
===================
Net asset value, offering price, and redemption price per share $23.49
===================
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Investment income
Interest income (net of withholding taxes of $56,974) $30,006,422
Expenses
Investment advisory fee (Note 2) $1,544,630
Trustees fees (Note 2) 18,482
Accounting, custody, and transfer agent fees 338,001
Audit services 47,150
Legal fees 53,774
Insurance expense 14,901
Miscellaneous 6,159
--------------------
Total expenses 2,023,097
-------------------
Net investment income $27,983,325
-------------------
Realized and unrealized gain (loss)
Net realized gain (loss)
Investment securities $3,927,226
Written options 3,850,429
Financial futures (56,888)
Foreign currency and foreign exchange contracts 16,928,477
--------------------
Net realized gain (loss) $24,649,244
Change in net unrealized appreciation (depreciation)
Investment securities ($19,244,301)
Written options 1,513,147
Financial futures 247,786
Translation of assets and liabilities in foreign currencies, ---
and foreign exchange contracts (3,927,303)
--------------------
Change in net unrealized appreciation (depreciation) (21,410,671)
-------------------
Net gain (loss) $3,238,573
-------------------
Net increase (decrease) in net assets from operations $31,221,898
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Statements of Changes in Net Assets
Six Months Ended Year Ended
June 30, 1996 December 31,
(unaudited) 1995
----------------------- ----------------------
Increase (decrease) in Net Assets
From operations
<S> <C> <C>
Net investment income $27,983,325 $79,260,556
Net realized gain (loss) 24,649,244 18,355,655
Change in net unrealized appreciation (depreciation) (21,410,671) 62,727,279
----------------------- ----------------------
Net increase (decrease) in net assets from operations $31,221,898 $160,343,490
----------------------- ----------------------
Distributions to shareholders
From net investment income ($12,663,865) ($69,501,890)
From net realized capital gains (9,229,188)
----------------------- ----------------------
Total distributions to shareholders ($21,893,053) ($69,501,890)
----------------------- ----------------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $43,496,709 $79,384,197
Net asset value of shares issued to shareholders in
payment of distributions declared 17,996,942 47,953,848
Cost of shares redeemed (137,987,425) (484,059,233)
----------------------- ----------------------
Increase (decrease) in net assets from Fund share transactions ($76,493,774) ($356,721,188)
----------------------- ----------------------
Net increase (decrease) in net assets ($67,164,929) ($265,879,588)
Net assets:
At beginning of period 803,536,875 1,069,416,463
----------------------- ----------------------
At end of period (including undistributed net investment
income of $17,796,549 and $2,477,089, respectively) $736,371,946 $803,536,875
======================= ======================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Financial Highlights
Six MonthsEnded
June 30, 1996 Year Ended December 31,
--------------------------------------------------------------------
(unaudited) 1995 1994 1993
-------------- ------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period $23.21 $21.30 $24.22 $21.20
-------------- ------------- ---------------- -----------------
Income from investment operations
Net investment income $0.90 $1.96 $1.71 $2.03
Net realized and unrealized gain (loss) 0.08 1.84 (3.93) 2.90
-------------- ------------- ---------------- -----------------
Total from investment operations $0.98 $3.80 ($2.22) $4.93
-------------- ------------- ---------------- -----------------
Less distributions declared to shareholders
From net investment income ($0.40) ($1.89) ($0.20) ($1.53)
From net realized capital gain (0.30) --- --- (0.26)
In excess of net realized capital gains --- --- --- ---
In excess of net investment income --- --- --- (0.12)
Tax return of capital --- --- (0.50) ---
-------------- ------------- ---------------- -----------------
Total distributions declared to shareholders ($0.70) ($1.89) ($0.70) ($1.91)
-------------- ------------- ---------------- -----------------
Net asset value - end of period $23.49 $23.21 $21.30 $24.22
============== ============= ================ =================
Total return 4.25% 18.13% (9.22%) 23.77%
Net assets at end of period (000 omitted) $736,372 $803,537 $1,069,416 $1,131,201
Ratios (to average daily net assets)/Supplemental Data:
Expenses 0.t2% 0.51% 0.51% 0.51%
Net investment income 7.t3% 8.09% 7.69% 7.53%
Portfolio turnover 134% 165% 158% 98%
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Financial Highlights
(Continued)
1992* 1991 *, +
-------------- --------------
Net asset value - beginning of period $22.05 $20.00
-------------- --------------
Income from investment operations
Net investment income $2.01 $1.55
Net realized and unrealized gain (loss) (0.25) 1.44
-------------- --------------
Total from investment operations $1.76 $2.99
-------------- --------------
Less distributions declared to shareholders
From net investment income ($2.03) ($0.04)
From net realized capital gain (0.54) (0.90)
In excess of net realized capital gains (0.04) ---
In excess of net investment income --- ---
Tax return of capital --- ---
-------------- --------------
Total distributions declared to shareholders ($2.61) ($0.94)
-------------- --------------
Net asset value - end of period $21.20 $22.05
============== ==============
Total return 8.07% 15.t1%
Net assets at end of period (000 omitted) $384,660 $72,697
Ratios (to average daily net assets)/Supplemental Data:
Expenses 0.59% 0.t0%
Net investment income 8.37% 8.t0%
Portfolio turnover 175% 319%
t Computed on an annualized basis.
+ For the period from January 2, 1991 (start of business) to December 31, 1991.
* Audited by other auditors.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish International Fixed Income Fund Series
Notes to Financial Statements
(Unaudited)
1)......Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish International Fixed Income Fund (the "Fund") is a
separate non-diversified investment series of the Trust. The following
is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale, or if no sale price, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued at amortized
cost. If the Fund acquires a short term instrument with more than sixty
days remaining to its maturity, it is valued at current market value
until the sixtieth day prior to maturity and will then be valued at
amortized cost based upon the value on such date unless the trustees
determine during such sixty-day period that amortized cost does not
represent fair value.
B...Repurchase agreements--
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund
to monitor on a daily basis, the market value of the repurchase
agreement's underlying investments to ensure the existence of a proper
level of collateral.
C...Securities transactions and income--
Securities transactions are recorded as of trade date. Interest income
is determined on the basis of interest accrued, adjusted for
amortization of premium or discount on long-term debt securities when
required for federal income tax purposes. Realized gains and losses
from securities sold are recorded on the identified cost basis. The
Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
D...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year.
E...Foreign currency transactions--
Investment security valuations, other assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars based
upon current exchange rates. Purchases and sales of foreign investment
securities and income and expenses are converted into U.S. dollars
based upon currency exchange rates prevailing on the respective dates
of such transactions. Section 988 of the Internal Revenue Code provides
that gains or losses on certain transactions attributable to
fluctuations in foreign currency exchange rates must be treated as
ordinary income or loss. For financial statement purposes, such amounts
are included in net realized gains or losses.
<PAGE>
F...Distributions to shareholders-
Distributions to shareholders are recorded on the ex-dividend date.
Distributions in excess of net realized gain on investments, written
options, and foreign currency arise because of certain timing
differences. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions. Permanent book
and tax basis differences relating to shareholder distributions will
result in reclassifications to paid-in-capital.
(2).....Investment Advisory Fee:
The investment advisory fee paid to Standish International Management
Company, L.P. (SIMCO) for overall investment advisory and
administrative services, and general office facilities, is paid monthly
at the annual rate of 0.4% of the Fund's average daily net assets. The
advisory agreement provides that if the total annual operating expenses
of the Fund (excluding brokerage commissions, taxes and extraordinary
expenses) in any fiscal year exceed the lower of (a) 0.8% of the Fund's
average weekly net assets or (b) the permissible expense limitation
applicable to the Fund in any state in which shares of the Fund are
then qualified for sale, the compensation due the adviser shall be
reduced by the amount of the excess. The Fund pays no compensation
directly to its trustees who are affiliated with the investment adviser
or to its officers, all of whom receive remuneration for their services
to the Fund from the investment adviser. Certain of the trustees and
officers of the Trust are partners or officers of SIMCO.
(3).....Purchases and Sales of Investments:
Purchases and proceeds from sales of investments, other than short-term
investments, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
-------------------- --------------------
<S> <C> <C>
Investments (non-U.S. government securities) $953,442,734 $1,056,536,077
=================== ===================
U.S. government securities $9,867,125 $0
=================== ===================
</TABLE>
(4).....Shares of Beneficial Interest:
The Declaration of Trust permits the trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows:
Six Months Ended Year Ended
June 30, 1996 December 31,
(unaudited) 1995
--------------- ----------------
Shares sold 1,857,429 3,493,337
Shares issued to shareholders in
payment of distributions declared 768,762 2,095,788
Shares redeemed (5,907,838) (21,174,451)
--------------- ----------------
Net increase (decrease) (3,281,647) (15,585,326)
=============== ================
(5).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate cost $701,359,099
================
Gross unrealized appreciation $20,411,964
Gross unrealized depreciation (8,782,090)
-----------------
Net unrealized appreciation (depreciation) $11,629,874
=================
<PAGE>
(6).....Financial Instruments:
In general, the following instruments are used for hedging purposes as
described below. However, the instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks and objectives of these instruments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following instruments with off-balance sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in security prices and foreign currencies, as well
as to enhance returns. Options, both held and written by the Fund, are
reflected in the accompanying Statement of Assets and Liabilities at
market value. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which
are exercised or are closed are added to or offset against the proceeds
or amount paid on the transaction to determine the realized gain or
loss. If a put option written by the Fund is exercised, the premium
reduces the cost basis of the securities purchased by the Fund. The
Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of
the security underlying the written option. A summary of such
transactions for the six months ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
Written Put Option Transactions
- - ------------------------------------------------------------------------------------------------------
Number
of Contracts Premiums
-------------- -------------------
Outstanding, beginning of period 4 $972,358
<S> <C> <C>
Options written 21 2,230,462
Options exercised (1) (204,079)
Options expired (6) (1,147,160)
Options closed (2) (264,117)
-------------- -------------------
Outstanding, end of period 16 $1,587,464
============== ===================
Written Call Option Transactions
- - ------------------------------------------------------------------------------------------------------
Number
of Contracts Premiums
-------------- -------------------
Outstanding, beginning of period 2 $451,202
Options written 20 2,626,904
Options exercised 0 0
Options expired (5) (1,033,472)
Options closed (3) (284,567)
-------------- -------------------
Outstanding, end of period 14 $1,760,067
============== ===================
Written Cross Currency Option Transactions
- - ------------------------------------------------------------------------------------------------------
Number
of Contracts Premiums
-------------- -------------------
Outstanding, beginning of period 3 $799,386
Options written 9 2,183,766
Options exercised 0 0
Options expired 0 0
Options closed (5) (1,278,706)
-------------- -------------------
Outstanding, end of period 7 $1,704,446
============== ===================
</TABLE>
<PAGE>
.........Forward currency exchange contracts--
The Fund may enter into forward foreign currency and cross currency
exchange contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements
in the value of a foreign currency relative to the U.S. dollar and
other foreign currencies. The forward foreign currency and cross
currency exchange contracts are marked to market using the forward
foreign currency rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized
until the contract settlement date. Forward currency exchange contracts
are used by the Fund primarily to protect the value of the Fund's
foreign securities from adverse currency movements.
At June 30, 1996, the Fund held the following forward foreign currency
and cross currency exchange contracts:
<TABLE>
<CAPTION>
Forward Foreign Currency Contracts
Local U.S. $ U.S. $ U.S. $
Principal Contract Market Aggregate Unrealized
Contracts to Receive Amount Value Date Value Face Amount Gain/(Loss)
- - -------------------------- ------------ ------------------- ----------------- -------------------- ---------------
<S> <C> <C> <C> <C> <C>
Norwegian Krone 246,234,373 9/25/96-1/13/97 $37,917,976 $37,737,437 $180,539
German Deutsche Mark 120,311,683 8/7/96-8/22/96 79,381,197 79,507,984 (126,787)
Danish Krone 10,236,748 9/16/96 1,748,865 1,805,359 (56,494)
French Franc 330,421,004 8/7/96-10/23/96 64,433,842 64,054,752 379,090
Finnish Markka 108,499,440 8/26/96-1/8/97 23,516,937 23,609,263 (92,326)
Great British Pound 10,240,270 6/7/96-7/3/96 15,884,726 15,620,834 263,892
Italian Lira 27,565,993,081 7/2/96-7/10/96 17,954,538 17,844,263 110,275
Netherlands Guilder 11,928,015 8/26/96 7,009,649 7,284,729 (275,080)
European Currency Unit 8,613,436 8/9/96-10/4/96 10,742,536 10,717,870 24,666
Japanese Yen 5,255,318,809 8/13/96-8/23/96 48,277,375 50,105,831 (1,828,456)
Swedish Krona 98,191,545 7/23/96-1/8/97 14,770,744 14,607,174 163,570
----------------- -------------------- ---------------
$321,638,385 $322,895,496 ($1,257,111)
================= ==================== ===============
Local U.S. $ U.S. $
Principal Contract Market Aggregate Unrealized
Contracts to Deliver Amount Value Date Value Face Amount Gain/(Loss)
- - -------------------------- --------------- ------------------- ------------ -------------------- ---------------
Australian Dollar 42,555,993 6/28/96-8/7/96 $33,382,125 $33,667,229 $285,104
Japanese Yen 10,179,264,516 8/13/96-9/19/96 93,577,140 98,200,783 4,623,643
German Deutsche Mark 173,028,293 7/25/96-7/29/96 114,247,174 116,711,824 2,465,252
Danish Krone 483,549,190 8/16/96-11/6/96 82,681,736 84,225,245 1,543,509
Spanish Peseta 4,705,810,259 7/29/96-9/23/96 36,552,611 36,472,977 (79,634)
Finnish Markka 242,107,991 8/26/96-1/8/97 52,480,451 52,775,892 295,441
French Franc 445,736,392 8/7/96-10/24/96 86,880,371 88,017,336 1,136,965
Great British Pound 71,867,067 7/3/96-9/30/96 111,450,166 108,775,103 (2,675,063)
Italian Lira 143,267,316,789 7/2/96-12/19/96 92,988,820 90,977,650 (2,011,170)
Netherlands Guilder 36,146,328 8/26/96-9/25/96 21,270,694 21,631,260 360,566
Norwegian Krone 355,259,327 7/2/96 - 1/13/97 54,700,485 54,795,087 94,602
New Zealand Dollar 36,510,241 7/10/96 - 8/14/96 24,941,303 24,483,228 (458,075)
Swedish Krona 521,409,045 7/23/96 - 1/8/97 78,419,875 76,887,784 (1,532,091)
European Currency Unit 12,143,482 8/7/96 - 10/4/96 15,139,610 15,189,543 49,933
Canadian Dollar 17,232,912 8/9/96 - 9/25/96 12,651,643 12,657,151 5,508
Irish Pound 18,043,684 11/18/96 - 11/22/96 28,818,958 28,199,629 (619,329)
Thai Baht 346,500,000 10/22/96 13,641,284 13,498,247 (143,037)
----------------- -------------------- ---------------
$953,824,446 $957,165,968 $3,342,124
================= ==================== ===============
Forward Foreign Cross Currency Contracts
U.S. $ U.S. $ U.S. $
Market Market Contract Unrealized
Contracts to Deliver Value In Exchange For Value Value Date Gain/(Loss)
- - -------------------------- -------------------- ------------------- ----------------- -------------------- ---------------
German Deutsche Mark $7,554,788 Spanish Peseta $7,729,941 7/18/96 $175,153
Finnish Markka 23,070,090 German Deutsche Mark 22,774,080 7/25/96 - 7/29/96 (296,010)
German Deutsche Mark 29,828,702 Finnish Markka 30,664,261 7/25/96 - 8/30/96 835,559
Netherlands Guilder 14,093,412 Danish Krone 14,170,064 8/16/96 76,652
-------------------- ----------------- ---------------
$74,546,992 $75,338,346 $791,354
==================== ================= ===============
</TABLE>
<PAGE>
.........Futures contracts--
The Fund may enter into financial futures contracts for the delayed
sale or delivery of securities or contracts based on financial indices
at a fixed price on a future date. The Fund is required to deposit
either in cash or securities an amount equal to a certain percentage of
the contract amount. Subsequent payments are made or received by the
Fund each day, dependent on the daily fluctuations in the value of the
underlying security, and are recorded for financial statement purposes
as unrealized gains or losses by the Fund. There are several risks in
connection with the use of futures contracts as a hedging device. The
change in value of futures contracts primarily corresponds with the
value of their underlying instruments or indices, which may not
correlate with changes in the value of hedged investments. In addition,
there is the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market. The Fund enters
into financial futures transactions primarily to manage its exposure to
certain markets and to changes in security prices and foreign
currencies. At June 30, 1996, the Fund held the following futures
contract:
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Contract Position Date Amount at Value Gain/(Loss)
- - -------------------------------------------- ----------- ------------ --------------------- --------------
<S> <C> <C> <C> <C>
Australian 10 Year (112 contracts) Short 9/16/96 $10,647,756 $247,246
===================== ==============
</TABLE>
Interest rate swap contracts--
Interest rate swaps involve the exchange by the Fund with another party
of their respective commitments to pay or receive interest, e.g., an
exchange of floating rate payments for fixed rate payments with respect
to a notional amount of principal. Credit and market risk exist with
respect to these instruments. The Fund expects to enter into these
transactions primarily for hedging purposes including, but not limited
to, preserving a return or spread on a particular investment or portion
of its portfolio, protecting against currency fluctuations, as a
duration management technique or protecting against an increase in the
price of securities the Fund anticipates purchasing at a later date.
There were no open interest rate swap contracts at June 30, 1996.
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Financial Statements
For the Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ----------------- -------------- ---------------
BONDS and NOTES - 98.3%
Asset Backed - 3.6%
- - -------------------------------------------------
<S> <C> <C> <C> <C>
Greentree Securities Trust 1995-A 7.%5 7/15/2005 $ 78,793 $ 78,637
The Money Store Home Equity 1996-A5 Erisa 6.85 6/15/2019 100,000 98,828
The Money Store Home Equity 1996-B A5 7.18 2/15/2015 75,000 75,328
UCFC Home Equity Loan Trust 1994-D A4 8.78 2/10/2016 100,000 103,469
---------------
Total Asset Backed (Identified Cost $359,830) $ 356,262
---------------
Corporate - 43.4%
- - -------------------------------------------------
Basic Industry - 4.1%
- - -------------------------------------------------
Georgia Pacific Corp 7.38 12/01/2025 100,000 $ 91,108
Owens-Illinois Inc. 11.00 12/01/2003 200,000 215,000
Ralcorp Holdings Inc. 8.75 9/15/2004 100,000 102,809
---------------
$ 408,917
---------------
Consumer Cyclical - 1.0%
- - -------------------------------------------------
Ford Motor 8.38 1/15/2000 100,000 $ 104,637
---------------
Consumer Stable - 1.0%
- - -------------------------------------------------
ADT Operations 8.25 8/01/2000 100,000 $ 101,500
---------------
Energy - 0.7%
- - -------------------------------------------------
Kern River Funding 144A (1) 6.72 9/30/2001 75,000 $ 73,958
---------------
Financial - 19.3%
- - -------------------------------------------------
Advanta National Bank 6.45 10/30/2000 75,000 $ 73,062
Capital One Bank Co. 5.95 2/15/2001 250,000 237,835
Comdisco Inc. 5.75 2/15/2001 200,000 190,948
Fleet Financial Group 7.13 5/01/2000 100,000 100,822
Goldman Sachs Inc. 144A (1) 6.38 6/15/2000 200,000 194,876
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ----------------- -------------- ---------------
Financial -(continued)
- - -------------------------------------------------
Hanson America Inc. (144A) Cvt (1) 2.%9 3/01/2001 $ 100,000 $ 85,000
Merrill Lynch 6.00 1/15/2001 75,000 72,344
Midatlantic Bank 9.88 12/01/1999 193,000 209,656
Morgan Stanley Group Inc. 5.75 2/15/2001 100,000 95,187
New England Mutual Life 144A (1) 7.88 2/15/2024 50,000 48,174
Salomon Brothers Inc. 7.00 5/15/1999 100,000 100,051
Security Connecticut Corp. 7.13 3/01/2003 100,000 96,123
Smith Barney Holdings 6.63 6/01/2000 100,000 99,096
Suntrust Banks 6.00 2/15/2026 100,000 91,844
Union Planters Corp. 6.25 11/01/2003 50,000 46,791
United Companies Financial 9.35 11/01/1999 100,000 105,531
USF&G Corp. 8.38 6/15/2001 75,000 78,845
---------------
$ 1,926,185
---------------
Miscellaneous - 2.2%
- - -------------------------------------------------
Loewen Group Int 7.50 4/15/2001 225,000 $ 218,813
---------------
Real Estate - 7.3%
- - -------------------------------------------------
Avalon Property REIT 7.38 9/15/2002 100,000 $ 98,471
Duke Realty REIT Investments 7.38 9/22/2005 100,000 96,477
Meditrust 7.38 7/15/2000 100,000 99,750
Shopping Center Associates 6.75 1/15/2004 250,000 235,650
Spieker Properties 6.65 12/15/2000 100,000 96,973
Wellsford Residential Property 7.75 8/15/2005 100,000 100,518
---------------
$ 727,839
---------------
Services - 6.8%
- - -------------------------------------------------
Hertz Corp. 6.00 1/15/2003 100,000 $ 94,269
News America Holdings Corp. 9.50 7/15/2024 150,000 165,930
Time Warner Inc. 6.85 1/15/2026 50,000 47,894
Time Warner Inc. 9.15 2/01/2023 150,000 154,869
Viacom Inc. 7.75 6/01/2005 225,000 219,380
---------------
$ 682,342
---------------
Utilities - 1.0%
- - -------------------------------------------------
System Energy Resources Corp. 7.38 10/01/2000 100,000 $ 96,607
---------------
Total Corporate (Identified Cost $4,456,624) $ 4,340,798
---------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ----------------- -------------- ---------------
U.S. Government Agency - 33.0%
- - -------------------------------------------------
Pass Thru Securities
- - -------------------------------------------------
FHLMC 6.%0 3/01/2026 - 5/1/2026 $ 100,823 $ 94,421
FNMA 6.18 3/15/2001 75,000 73,643
FNMA 6.50 3/01/2026 - 4/01/2026 453,920 424,556
FNMA 7.00 9/01/2025 - 2/01/2026 1,097,590 1,055,740
GNMA 7.00 10/15/2025 143,106 137,202
GNMA 7.50 9/15/2025 - 10/15/2025 505,373 498,105
GNMA 9.00 4/15/2016 - 8/15/2026 663,025 697,231
Mortgage Capital Fund 1996 7.80 7/15/2028 100,000 100,000
Resolution Trust Corp. 1995-2 Ca1 7.45 5/25/2029 222,012 215,525
---------------
Total U.S. Government Agency (Identified Cost $3,339,256) $ 3,296,423
---------------
U.S. Treasury Obligations - 10.3%
- - -------------------------------------------------
Treasury Bonds - 5.3%
- - -------------------------------------------------
U.S. Treasury Bond 6.25 4/30/2001 175,000 $ 173,359
U.S. Treasury Bond 7.88 2/15/2021 250,000 274,258
U.S. Treasury Bond 8.13 8/15/2019 75,000 84,188
---------------
$ 531,805
---------------
Treasury Notes - 5.0%
- - -------------------------------------------------
U.S. Treasury Note 5.88 2/15/2004 175,000 $ 167,262
U.S. Treasury Note 6.25 2/15/2003 100,000 98,234
U.S. Treasury Note (Strip, Principle Only) 0.00 11/15/2018 500,000 102,180
U.S. Treasury Note (Strip) 0.00 8/15/2008 200,000 87,002
U.S. Treasury Strip 0.00 2/15/2019 250,000 50,078
---------------
$ 504,756
---------------
Total U.S. Treasury Obligations (Identified Cost $1,079,080) $ 1,036,561
---------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ----------------- -------------- ---------------
Yankee Bonds - 8.0%
- - -------------------------------------------------
Banponce Corp. 6.%5 12/15/2005 $ 100,000 $ 93,902
Brascan Ltd. 7.38 10/01/2002 100,000 97,979
Cominco Ltd. 6.88 2/15/2006 100,000 92,868
Fletcher Challenge 7.75 6/20/2006 100,000 101,407
Methanex Corp. 7.75 8/15/2005 100,000 98,276
Noranda Forrest Inc 6.88 11/15/2005 75,000 70,972
Se Banken 144A Euro Step Up (1) 6.63 3/29/2049 250,000 240,028
---------------
Total Yankee Bonds (Identified Cost $822,233) $ 795,432
---------------
Total Bonds and Notes (Identified Cost $10,057,023) $ 9,825,476
---------------
Principal
Purchased Options - 0.0% Amount of
- - -------------------------------------------------
Deliver/Receive, Exercise Price, Expiration Contracts
- - ----------------------------------------------------------------- --------------
UST Call 5.625% 2/06, Str 97.781, 7/16/96 1,000 $ 0
UST Put 6.00% 02/26, Str 86.0625, 7/26/96 1,000 297
UST Put 6.00% 2/26, Str 86.03125, 7/26/96 1,000 297
---------------
Total Purchased Options (Premiums Paid Cost $3,445) $ 594
---------------
Par
Short-Term Investments - 1.1% Value
- - ------------------------------------------------- --------------
Repurchase Agreements - 1.0%
- - -------------------------------------------------
Prudential-Bache Repurchase Agreement, dated 6/28/96,
4.77% due 7/1/96, to pay $97,387 (Collateralized by FNMA
with a rate of 9% and a maturity date of 9/1/22 with a
market value of $99,295. $ 97,348 $ 97,348
---------------
U.S. Government - 0.1%
- - -------------------------------------------------
U.S. Treasury Bill (2) 4.99 9/19/1996 10,000 $ 9,888
---------------
Total Short-Term Investments (Identified Cost $107,232) $ 107,236
---------------
TOTAL INVESTMENTS (Identified Cost $10,167,700) - 99.4% $ 9,933,306
---------------
Principal
Amount of
Contracts
--------------
Written Options - 0.0%
- - -------------------------------------------------
Deliver/Receive, Exercise Price, Expiration
- - -----------------------------------------------------------------
UST Put 6.875% 5/06, Str 99.1875, 7/26/96 (1,750) $ (560)
UST Put 6.875% 5/06, Str 99.203125, 7/26/96 (1,750) (547)
---------------
Total Written Options (Premiums Received $4,375) (1,107)
---------------
Other assets, less liabilities - 0.6% 64,319
---------------
NET ASSETS - 100.0% $ 9,996,518
===============
(1) This security is restricted but eligible for resale under 144a.
(2) Rate noted is yield to maturity
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Investments, at value (Note 1A) (identified cost, $10,167,700) $9,933,306
Receivable for investments sold 291,792
Interest receivable 136,787
Deferred organization expenses (Note 1E) 9,955
Receivable from investment adviser (Note 2) 33,280
Receivable from daily variation margin on financial futures contracts (Note 6) 516
Other assets 182
------------------
Total assets $10,405,818
Liabilities
Distribution payable $10,818
Payable for investments purchased 275,193
Payable for delayed delivery transactions (Note 7) 79,266
Written options outstanding, at value (premiums received $4,375) (Note 6) 1,107
Accrued trustee fees (Note 2) 100
Accrued expenses and other liabilities 42,816
------------------
Total liabilities 409,300
------------------
Net Assets $9,996,518
==================
Net Assets consist of
Paid-in capital $10,248,701
Undistributed net investment income 31,931
Accumulated undistributed net realized gain (loss) (52,994)
Net unrealized appreciation (depreciation) (231,120)
------------------
Total $9,996,518
==================
Shares of beneficial interest outstanding 545,397
==================
Net asset value, offering price, and redemption price per share $18.33
==================
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Investment income
Interest income $353,537
Expenses
Investment advisory fee (Note 2) $20,459
Trustees fees (Note 2) 33
Accounting, custody and transfer agent fees 20,103
Audit services 26,137
Legal fees 3,389
Amortization of organization expense (Note 1E) 1,236
Miscellaneous 3,269
-----------------
Total expenses $74,626
Deduct:
Preliminary waiver of investment advisory fee $20,459
Reimbursement of Fund operating expenses 34,205
-----------------
Total preliminary waiver of investment advisory fee and reimbursement of
operating expenses (Note 2) $54,664
-----------------
Net expenses 19,962
-----------------
Net investment income $333,575
-----------------
Realized and unrealized gain (loss)
Net realized gain (loss)
Investment securities ($52,994)
-----------------
Change in net unrealized appreciation (depreciation)
Investment securities ($462,887)
Financial futures 3,293
-----------------
Change in net unrealized appreciation (depreciation) ($459,594)
-----------------
Net gain (loss) ($512,588)
-----------------
Net increase (decrease) in net assets from operations ($179,013)
=================
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Period
Six Months Ended July 3, 1995
June 30, 1996 (start of business) to
(unaudited) December 31, 1995
--------------------- ---------------------
Increase (decrease) in Net Assets
From operations
<S> <C> <C>
Net investment income $333,575 $707,724
Net realized gain (loss) (52,994) 806,785
Change in net unrealized appreciation (depreciation) (459,594) 228,474
--------------------- ---------------------
Net increase (decrease) in net assets from operations ($179,013) $1,742,983
--------------------- ---------------------
Distributions to shareholders
From net investment income ($301,644) ($705,113)
From net realized capital gains (632,578) (176,818)
--------------------- ---------------------
Total distributions to shareholders ($934,222) ($881,931)
--------------------- ---------------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $2,507,354 $27,181,697
Net asset value of shares issued to shareholders in
payment of distributions declared 912,586 327,947
Cost of shares redeemed (356,671) (20,324,212)
--------------------- ---------------------
Increase (decrease) in net assets from Fund share transactions $3,063,269 $7,185,432
--------------------- ---------------------
Net increase (decrease) in net assets $1,950,034 $8,046,484
Net Assets
At beginning of period 8,046,484 0
--------------------- ---------------------
At end of period (including undistributed net investment income of
$31,931 and $0 at June 30, 1996 and December 31, 1995, respectively) $9,996,518 $8,046,484
==================== =====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Financial Highlights
For the Period
Six Months Ended July 3, 1995
June 30, 1996 (start of business) to
(unaudited) December 31, 1995
--------------------- -----------------------
<S> <C> <C>
Net asset value - beginning of period $20.52 $20.00
--------------------- ---------------------
Income from investment operations
Net investment income* $0.66 $0.53
Net realized and unrealized gain (loss) (0.99) 0.64
--------------------- ---------------------
Total from investment operations ($0.33) $1.17
--------------------- ---------------------
Less distributions declared to shareholders
From net investment income $0.60 $0.53
From net realized capital gains 1.26 0.12
--------------------- ---------------------
Total distributions declared to shareholders $1.86 $0.65
--------------------- ---------------------
Net asset value - end of period $18.33 $20.52
===================== =====================
Total return (1.52%) 5.79%
Net assets at end of period (000 omitted) $9,997 $8,046
Ratios (to average daily net assets)/Supplemental Data
Expenses * 0.32% t 0.40% t
Net investment income * 5.27% t 6.64% t
Portfolio turnover 80% 389%
* The investment adviser voluntarily waived its investment advisory fee and
reimbursed the fund for a portion of its operating expenses.
Had these actions not been taken, the net investment
income per share and the ratios would have been:
Net investment income per share $0.56 $0.29
Ratios (to average daily net assets):
Expenses 1.18% t 1.29% t
Net investment income 4.41% t 5.75% t
t Computed on an annualized basis.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Fixed Income Fund II Series
Notes to Financial Statements
(Unaudited)
(1).....Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish Fixed Income Fund II (the "Fund") is a separate
diversified investment series of the Trust. The following is a summary
of significant accounting policies followed by the Fund in the
preparation of the financial statements. The preparation of financial
statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale price, or if no sale price, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued at amortized
cost basis. If the Fund acquires a short-term instrument with more than
sixty days remaining to its maturity, it is valued at current market
value until the sixtieth day prior to maturity and will then be valued
at amortized cost based upon the value on such date unless the trustees
determine during such sixty-day period that amortized cost does not
represent fair value.
B...Repurchase agreements--
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund
to monitor on a daily basis, the market value of the repurchase
agreement's underlying investments to ensure the existence of a proper
level of collateral.
C...Securities transactions and income--
Securities transactions are recorded as of the trade date. Realized
gains and losses from securities sold are recorded on the identified
cost basis. Interest income is determined on the basis of interest
accrued, adjusted for accretion of discount on debt securities when
required for federal income tax purposes.
D...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year.
E...Deferred organization expense--
Costs incurred by the Fund in connection with its organization and
initial registration are being amortized, on a straight-line basis,
through June, 2000.
F...Distributions to shareholders-
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for mortgage and asset backed securities. Permanent book and
tax basis differences relating to shareholder distributions will result
in reclassifications to paid-in-capital.
<PAGE>
(2).....Investment Advisory Fee:
The investment advisory fee paid to Standish, Ayer & Wood, Inc. (SA&W)
for overall investment advisory and administrative services, and
general office facilities, is paid monthly at the annual rate of 0.40%
of the Fund's average daily net assets. The investment adviser
voluntarily agreed to limit the Fund's total operating expense to 0.50%
annually of the Fund's average daily net assets for the six months
ended June 30, 1996. The investment adviser has also agreed to limit
the Fund's total operating expenses (excluding brokerage commissions,
taxes, and extraordinary expenses) to the permissible limit applicable
in any state in which shares of the Fund are then qualified for sale.
For the six months ended June 30, 1996, the investment adviser
voluntarily waived its investment advisory fee of $20,459, and
reimbursed the Fund for $34,205 of its operating expenses. The Fund
pays no compensation directly to its trustees who are affiliated with
the investment adviser or to its officers, all of whom receive
remuneration for their services to the Fund from the investment
adviser. Certain of the trustees and officers of the Trust are partners
or officers of SA&W.
(3).....Purchases and Sales of Investments:
Purchases and sales of investments, other than short-term obligations
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
-------------------- ---------------------
<S> <C> <C>
U.S. government securities $6,963,933 $6,250,955
==================== =====================
Investments (non-U.S. government securities) $3,533,458 $1,578,673
==================== =====================
</TABLE>
(4).....Shares of Beneficial Interest:
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows:
<TABLE>
<CAPTION>
For the Period
Six Months Ended July 3, 1995 to
June 30, 1996 (start of business) to
(unaudited) December 31, 1995
-------------------- ---------------------
<S> <C> <C>
Shares sold 121,787 1,367,590
Shares issued to shareholders in payment 49,216 16,103
of distributions declared
Shares redeemed (17,822) (991,477)
-------------------- ---------------------
Net increase 153,181 392,216
==================== =====================
</TABLE>
On August 15, 1995, securities with a fair market value of $7,132,126
were contributed to the Fund by shareholders. In return for such
securities, shareholders received shares of the Fund. On December 29,
1995, a significant investor in the Fund exchanged 974,519 shares of
the Fund for an equivalent dollar value of shares of Standish Fixed
Income Fund, a separate series of the Trust. This exchange totalled
$19,977,636 and represented approximately 71% of the Fund's net assets
immediately prior to the transaction. To facilitate the exchange
transaction and to avoid the associated brokerage commissions, the Fund
executed a series of interfund security trades aggregating $20,078,486
with the Standish Fixed Income Fund. These trades were executed at the
current market values on December 29, 1995 and in accordance with the
Funds' procedures established pursuant to Rule 17a-7 under the
Investment Company Act of 1940. At June 30, 1996, three shareholders
were record owners of approximately 38%, 32% and 23%, respectively, of
the total outstanding shares of the Fund.
<PAGE>
(5).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate cost $10,167,700
=====================
Gross unrealized appreciation $9,597
Gross unrealized depreciation (243,991)
--------------------
Net unrealized depreciation ($234,394)
====================
(6).....Financial Instruments
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks, and objectives of these instruments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following financial instruments with off-balance
sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in security prices and foreign currencies, as well
as to enhance returns. Options, both held and written by the Fund, are
reflected in the accompanying Statement of Assets and Liabilities at
market value. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which
are exercised or are closed are added to or offset against the proceeds
or amount paid on the transaction to determine the realized gain or
loss. If a put option purchased by the Fund is exercised, the premium
reduces the cost basis of the securities purchased by the Fund. The
Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of
the security underlying the written option. A summary of such
transactions for the six months ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
Written Put Option Transactions
Number
of Contracts Premiums
-------------------- ---------------------
<S> <C> <C>
Outstanding, beginning of period 0 $0
Options written 7,500 8,588
Options exercised 0 0
Options expired (4,000) (4,213)
Options closed 0 0
-------------------- ---------------------
Outstanding, end of period 3,500 $4,375
==================== =====================
Written Call Option Transactions
Number
of Contracts Premiums
-------------------- ---------------------
Outstanding, beginning of period 0 $0
Options written 2,000 250
Options exercised 0 0
Options expired (2,000) (250)
Options closed 0 0
-------------------- ---------------------
Outstanding, end of period 0 $0
==================== =====================
</TABLE>
<PAGE>
.........Futures contracts--
The Fund may enter into financial futures contracts for the delayed
sale or delivery of securities or contracts based on financial indices
at a fixed price on a future date. The Fund is required to deposit
either in cash or securities an amount equal to a certain percentage of
the contract amount. Subsequent payments are made or received by the
Fund each day, dependent on the daily fluctuations in the value of the
underlying security, and are recorded for financial statement purposes
as unrealized gains or losses by the Fund. There are several risks in
connection with the use of futures contracts as a hedging device. The
change in value of futures contracts primarily corresponds with the
value of their underlying instruments or indices, which may not
correlate with changes in the value of hedged investments. In addition,
there is the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market. The Fund enters
into financial futures transactions primarily to manage its exposure to
certain markets and to changes in security prices and foreign
currencies. At June 30, 1996, the Fund held the following futures
contracts.
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Contract Position Date Amount at Value Gain/(Loss)
- - ----------------------- ---------------- ------------------ --------------------------------------
<S> <C> <C> <C> <C>
US 5 Year Note (1 contract) Long 09/03/96 $105,750 $6
================== ==================
</TABLE>
At June 30, 1996, the fund had segregated sufficient cash and/or
securities to cover margin requirements on open futures contracts.
(7).....Delayed Delivery Transactions:
The Fund may purchase securities on a when-issued or forward commitment
basis. Payment and delivery may take place a month or more after the
date of the transactions. The price of the underlying securities and
the date when the securities will be delivered and paid for are fixed
at the time the transaction is negotiated. The Fund instructs its
custodian to segregate securities having a value at least equal to the
amount of the purchase commitment. At June 30, 1996, the Fund had
entered into the following delayed delivery transactions.
<TABLE>
<CAPTION>
Type Security Settlement Date Amount
- - ------------------------------------------ ------------------ ------------------ -----------------
<S> <C> <C> <C>
Buy GNMA 8/21/96 $79,266
=================
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Financial Statements for the
Six Months Ended June 30, 1996
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Portfolio of Investments
June 30, 1996
(Unaudited)
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ------------------ --------------- --------------
Bonds and Notes - 98.0%
- - -------------------------------------------------
Asset Backed - 18.4%
- - -------------------------------------------------
<S> <C> <C> <C> <C>
Advanta Home Equity Trust Loan 1991-1A 9.%0 2/25/2006 $ 105,792 $ 109,032
Advanta Home Equity Trust Loan 1992-2 A1 7.15 6/25/2008 26,379 26,214
AFC Home Equity Loan Trust 1993-2 6.00 1/20/2013 21,413 20,655
Contimortgage Hel Trust 6.86 7/15/2010 100,000 100,000
Equacredit Home Equity 1993-4 5.73 12/15/2008 68,083 65,636
Equacredit Home Equity 1995-4 A2 6.35 10/15/2009 120,000 117,919
Equicon Home Equity 1995-2 Cl A2 6.50 7/18/2010 100,000 98,672
General Motors Acceptance Corp. 7.00 8/15/1997 25,000 25,196
Greentree Financial Corp. 1992-2 A2 7.05 1/15/2018 43,579 43,797
Greentree Financial Corp. 1993-2A2 6.10 7/15/2018 75,000 74,548
Greentree Financial Corp.1993-4 A2 5.85 1/15/2019 175,000 173,194
Greentree Securities Trust 1994-A 6.90 2/15/2004 101,118 100,138
Greentree Securities Trust 1995-A 7.25 7/15/2005 39,396 39,318
Home Equity Loan Trust 1992-2A 6.65 11/20/2012 12,643 12,524
MBNA Master Card Trust 1991-1 7.75 10/15/1998 50,000 50,281
Ml Mtg Inv 1992-D A2 7.40 7/15/2017 48,871 49,100
Old Stone Credit Corp. Home Equity Trust 1992-3 A2 6.30 9/25/2007 67,353 66,209
Old Stone Credit Corp. Home Equity Trust 1992-4 Cl A 6.55 11/25/2007 57,624 56,742
Rnfc Trust 1995-3A2 6.80 12/20/2007 50,000 49,578
Security Pacific Home Equity Cl 1991-2 B 8.15 6/15/2020 34,843 35,344
The Money Store Home Equity 1992-B 6.90 7/15/2007 30,159 29,895
The Money Store Home Equity 1993-D A1 5.68 2/15/2009 77,335 73,637
The Money Store Home Equity 1994-DA4 8.75 9/15/2020 25,000 25,867
The Money Store Home Equity 1996-B A3 6.82 3/15/2010 150,000 150,094
UCFC Home Equity Loan Trust 1995-B1 A2 6.60 7/10/2009 150,000 149,484
World Omni Auto Lease 1994-B 7.95 1/25/2001 41,625 42,223
--------------
Total Asset Backed (Identified Cost $1,798,328) $ 1,785,297
--------------
Collateralized Mortgage Obligations - 0.1%
- - -----------------------------------------------------------------
Collateralized Mortgage Obligation Trust 13-A (a) 5.81 1/20/2003 8,115 $ 8,080
(Identified Cost $8,024)
Corporate - 52.9%
- - -------------------------------------------------
Basic Industry - 1.9%
- - -------------------------------------------------
Georgia Pacific Corp. 9.85 6/15/1997 75,000 $ 77,238
Great Northern Nekoosa 9.125% 2/1/98 9.13 2/01/1998 100,000 103,534
--------------
$ 180,772
--------------
Capital Goods - 2.3%
- - -------------------------------------------------
Caterpillar Finance 6.10 7/15/1999 100,000 $ 98,374
WMX Technologies 6.25 4/01/1999 125,000 124,031
--------------
$ 222,405
--------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ------------------ --------------- --------------
Consumer Cyclical - 4.4%
- - -------------------------------------------------
Chrysler Financial Corp. 5.%8 10/15/1998 $ 50,000 $ 48,780
Ford Motor Credit Co 5.63 1/15/1999 125,000 122,096
General Motors Acceptance Corp. 7.50 7/22/1999 75,000 76,715
General Motors Acceptance Corp. 7.85 5/08/1997 50,000 50,690
Sears Roebuck Co 7.94 2/06/1998 50,000 51,279
Sears Roebuck Co 9.25 4/15/1998 75,000 78,472
--------------
$ 428,032
--------------
Consumer Stable - 1.9%
- - -------------------------------------------------
ADT Operations 8.25 8/01/2000 75,000 $ 76,125
Purity Supreme 11.75 8/01/1999 100,000 108,000
--------------
$ 184,125
--------------
Energy - 0.5%
- - -------------------------------------------------
Occidental Petroleum 5.90 11/09/1998 50,000 $ 49,183
--------------
Financial - 28.3%
- - -------------------------------------------------
Ahmanson H F & Co 9.88 11/15/1999 75,000 $ 81,363
Associates Corp. 6.63 11/15/1997 50,000 50,215
Associates Corp. 6.88 1/15/1997 50,000 50,218
Bank of Boston 9.50 8/15/1997 75,000 77,578
Bear Stearns Co 6.75 8/15/2000 100,000 99,536
Capital One Bank Co. 6.39 6/29/1998 50,000 49,690
Capital One Bank Co. 6.66 8/17/1998 75,000 74,849
Chase Manhattan Corp. 7.50 12/01/1997 50,000 50,738
Chase Manhattan Corp. 8.00 6/15/1999 100,000 103,340
Cit Group Hldgs 6.20 4/15/1998 150,000 149,754
Cit Group Holdings 7.63 12/05/1996 25,000 25,173
CitiCorp. Mtn 8.42 2/12/1997 125,000 126,691
Comdisco Inc. 6.50 6/15/2000 75,000 73,974
First Chicago 9.88 7/01/1999 130,000 141,066
First Union Corp. 9.45 6/15/1999 100,000 107,215
First USA Bank 5.75 1/15/1999 100,000 97,511
First USA Bank 6.38 10/23/2000 75,000 72,899
Fleet Financial Group 6.00 10/26/1998 75,000 74,243
Fleet Financial Group 7.25 10/15/1997 25,000 25,318
Goldman Sachs Group 6.75 4/20/2000 55,000 54,570
Goldman Sachs Group 6.88 9/15/1999 125,000 125,248
Greyhound Financial 8.50 2/15/1999 100,000 104,246
Hanson America Inc. (144A) Cvt (b) 2.39 3/01/2001 100,000 85,000
Hartford National Bank Corp. 9.85 6/01/1999 75,000 80,647
International Lease Finance Co. 6.13 11/01/1999 150,000 146,853
Merrill Lynch Cmt (a) 5.43 4/07/1997 50,000 49,932
Salomon Brothers Inc. 6.82 7/26/1999 75,000 74,300
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ------------------ --------------- --------------
Financial - Continued
- - -------------------------------------------------
Salomon Brothers Inc. 7.%0 1/20/1998 $ 50,000 $ 50,003
Salomon Brothers Inc. 7.00 5/15/1999 75,000 75,038
Smith Barney Holdings 5.50 1/15/1999 50,000 48,684
Smith Barney Shearson 5.63 11/15/1998 50,000 48,903
Transamerica Corp. 9.88 1/01/1998 125,000 131,119
United Companies Financial 7.00 7/15/1998 120,000 120,130
USF&G Corp. 7.00 5/15/1998 25,000 25,053
--------------
$ 2,751,097
--------------
Health Care - 0.8%
- - -------------------------------------------------
Health & Rehab Property (a) 6.26 7/13/1999 75,000 $ 73,811
--------------
Real Estate - 4.8%
- - -------------------------------------------------
Equity Residential Property Operating LP 144A (b) 8.50 5/15/1999 125,000 $ 129,144
Equity Residential Property Operating LP (a) 6.25 12/22/1997 50,000 49,723
Federal Realty Investment Trust 8.88 1/15/2000 110,000 115,515
Meditrust 7.38 7/15/2000 50,000 49,875
Spieker Properties 6.65 12/15/2000 75,000 72,730
Wellsford Residential Property 7.25 8/15/2000 50,000 50,012
--------------
$ 466,999
--------------
Services - 6.2%
- - -------------------------------------------------
Hertz Corp. 9.50 5/15/1998 125,000 $ 131,588
News America Holdings Corp. 7.50 3/01/2000 150,000 152,081
News America Holdings Corp. 12.00 12/15/2001 150,000 162,711
Time Warner Inc. 7.95 2/01/2000 150,000 153,225
--------------
$ 599,605
--------------
Technology - 1.0%
- - -------------------------------------------------
ITT Corp. 6.25 11/15/2000 100,000 $ 97,391
--------------
Utilities - 0.8%
- - -------------------------------------------------
System Energy Resources Corp. 7.38 10/01/2000 25,000 $ 24,152
System Energy Resources Corp. 7.63 4/01/1999 50,000 50,335
--------------
$ 74,487
--------------
Total Corporate (Identified Cost $5,204,253) $ 5,127,907
--------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ------------------ --------------- --------------
U.S. Government Agency - 7.2%
- - -------------------------------------------------
Pass Thru Securities
- - -------------------------------------------------
FHLMC 7.%0 8/01/1999 $ 68,443 $ 68,849
FHLMC 7.50 3/01/1997 - 8/01/2000 205,562 208,087
FHLMC 8.00 2/01/2000 27,641 28,180
FHLMC 10.50 7/01/2015 2,316 2,550
FNMA 7.00 12/01/1999 75,872 75,872
FNMA Remic Pac(11) 1994-85E 6.00 11/25/2006 75,000 72,750
GNMA 9.00 11/15/2016 - 12/15/2024 172,520 181,282
Resolution Trust Corp. 1992-7 A1 (a) 6.82 3/25/2022 49,568 48,886
Resolution Trust Corp. P-T A-1 7.75 7/25/2030 9,730 9,773
Resolution Trust Corp. P-T A-2 8.63 7/25/2030 5,548 5,626
--------------
$ 701,855
--------------
Total U.S. Government Agency (Identified Cost $709,576) $ 701,855
--------------
U.S. Treasury Obligations - 18.6%
- - -------------------------------------------------
Treasury Notes
- - -------------------------------------------------
U.S. Treasury Note 5.13 11/30/1998 45,000 $ 43,910
U.S. Treasury Note 5.38 11/30/1997 300,000 297,516
U.S. Treasury Note 5.63 1/31/1998 200,000 198,782
U.S. Treasury Note 6.38 1/15/1999 100,000 100,328
U.S. Treasury Note 6.75 5/31/1997 1,150,000 1,159,706
--------------
$ 1,800,242
--------------
Total U.S. Treasury Obligations (Identified Cost $1,811,428) $ 1,800,242
--------------
Yankee Bonds - 0.8%
- - -------------------------------------------------
Brascan Ltd. 7.38 10/01/2002 75,000 $ 73,484
--------------
Total Bonds and Notes (Identified Cost $9,606,306) $ 9,496,865
--------------
<PAGE>
Par Value
Security Rate Maturity Value (Note 1A)
- - ------------------------------------------------- ----------- ------------------ --------------- --------------
Short-Term Investments - 1.6%
- - -------------------------------------------------
Repurchase Agreement
- - -------------------------------------------------
Prudential-Bache Repurchase Agreement, dated 6/28/96,
4.77% due 7/1/96, to pay $153,348 Collateralized by FNMA
with a rate of 9% maturity date 9/1/22 with an aggregate
market value of $156,395 and a cost of $ 153,328 $ 153,328
--------------
Total Short-Term Investments (Identified Cost $153,328) $ 153,328
--------------
Total Investments (Identified Cost $9,759,634) - 99.6% $ 9,650,193
--------------
Principal
Written Options - 0.0% Amount of
- - -------------------------------------------------
Deliver/Receive, Exercise Price, Expiration Contracts
- - ----------------------------------------------------------------- ---------------
UST Call 6.00% 5/98, Str 100.125, 7/8/96 (5,000) $ (391)
--------------
TOTAL Written Options (Premiums Received $508) $ (391)
--------------
Other assets, less liabilities - 0.4% $ 34,404
--------------
Net Assets - 100.0% $ 9,684,206
==============
a - Variable rate securities
b - This security is restricted but eligible for resale under 144a.
The following abbreviations are used in this portfolio:
AFC - Alliance Funding Corporation
FHLMC - Federal Home Loan Mortgage Corporation
GNMA - Government National Mortgage Association
FNMA - Federal National Mortgage Association
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
Assets
<S> <C> <C>
Investments, at value (Note 1A)(identified cost, $9,759,634) $9,650,193
Receivable for investments sold 216
Interest receivable 131,405
Deferred organization expenses (Note 1 E) 9,395
Receivable from investment adviser (Note 2) 19,091
Other assets 201
---------------
Total assets $9,810,501
Liabilities
Distribution payable $99,771
Payable to custodian 7,202
Written options outstanding at value (premiums received $508) 391
Accrued expenses and other liabilities 18,931
---------------
Total liabilities 126,295
---------------
Net Assets $9,684,206
===============
Net Assets consist of
Paid-in capital $9,774,623
Undistributed net investment income 22,050
Accumulated net realized gain (loss) (3,143)
Net unrealized appreciation (depreciation) (109,324)
---------------
Total $9,684,206
===============
Shares of beneficial interest outstanding
486,840
===============
Net asset value, offering price, and redemption price per share
$19.89
===============
(Net assets/Shares outstanding)
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
Investment income
Interest income $321,160
Expenses
Investment advisory fee (Note 2) $16,291
Accounting, custody and transfer agent fees 28,076
Audit services 19,335
Legal fees 3,454
Amortization of organization expense (Note 1E) 1,165
Miscellaneous 1,634
---------------
Total expenses $69,955
---------------
Deduct:
Preliminary waiver of investment advisory fee $16,291
Reimbursement of Fund operating expenses 34,833
---------------
Total preliminary waiver of investment advisory fee and
reimbursement of operating expenses $51,124
---------------
Net expenses 18,831
---------------
Net investment income $302,329
---------------
Realized and unrealized gain (loss)
Realized gain (loss)
Investment securities ($3,126)
Change in net unrealized appreciation (depreciation)
Investment securities (175,385)
---------------
Net gain (loss) ($178,511)
---------------
Net increase (decrease) in net assets from operations $123,818
===============
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Statements of Changes in Net Assets
Six Months Ended For the Period July 3, 1995
June 30, 1996 (start of business)
(unaudited) to December 31, 1995
----------------------- -------------------------
Increase (decrease) in Net Assets
From operations
Net investment income $302,329 $213,340
Net realized gain (loss) (3,126) 15,239
Change in net unrealized appreciation (depreciation) (175,385) 66,061
----------------------- -------------------------
Net increase (decrease) in net assets from operations $123,818 $294,640
----------------------- -------------------------
Distributions to shareholders
From net investment income ($280,279) ($213,237)
From net realized capital gains (5,114) (10,245)
----------------------- -------------------------
Total distributions to shareholders ($285,393) ($223,482)
----------------------- -------------------------
Fund share (principal) transactions (Note 4)
Net proceeds from sale of shares $1,249,464 $9,300,102
Net asset value of shares issued to shareholders in
payment of distributions declared 93,720 68,587
Cost of shares redeemed (365,250) (572,000)
----------------------- -------------------------
Increase (decrease) in net assets from Fund share transactions $977,934 $8,796,689
----------------------- -------------------------
Net increase (decrease) in net assets $816,359 $8,867,847
Net Assets
At beginning of period 8,867,847 0
----------------------- -------------------------
At end of period (including undistributed net investment
income of $22,050 and $0 at June 30, 1996 and
December 31, 1995, respectively.) $9,684,206 $8,867,847
======================= =========================
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Financial Highlights
For the Period
Six Months Ended July 3, 1995
June 30, 1996 (start of business)
(unaudited) to December 31, 1995
Net asset value - beginning of period $20.24 $20.00
------------- ------------------------
Net investment income * $0.65 $0.57
Net realized and unrealized gain (loss) (0.39) 0.24
------------- ------------------------
$0.816
------------- ------------------------
From net investment income ($0.60) ($0.57)
From net realized capital gains (0.01) -----
------------- ------------------------
Total distributions declared to shareholders ($0.61) ($0.57)
------------- ------------------------
Net asset value - end of period $19.89 $20.24
============= ========================
1.30% 4.20%
Expenses * 0.40% y 0.40% y
Net investment income * 6.53% y 6.29% y
51% 127%
$9,684 $8,868
The investment adviser preliminarily waived its investment advisory fee and
voluntarily reimbursed the Fund for a portion of its operating expenses. Had these
actions not been taken, the net investment income per share and the ratios
would have been:
Net investment income per share $0.54 $0.38
Ratios (to average daily net assets):
Expenses 1.51% y 2.51% y
Net investment income 5.42% y 4.18% y
Computed on an annualized basis.
</TABLE>
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Controlled Maturity Fund Series
Notes to Financial Statements
(Unaudited)
(1).....Significant Accounting Policies:
Standish, Ayer & Wood Investment Trust (Trust) is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish Controlled Maturity Fund ("The Fund") is a separate
diversified investment series of the Trust. The following is a summary
of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements. The preparation of
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
A...Investment security valuations--
Securities for which quotations are readily available are valued at the
last sale price, or if no sale, at the closing bid price in the
principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are
not readily available are valued primarily using dealer-supplied
valuations or at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term instruments with less than sixty-one days
remaining to maturity when acquired by the Fund are valued on an
amortized cost basis. If the Fund acquires a short-term instrument with
more than sixty days remaining to its maturity, it is valued at current
market value until the sixtieth day prior to maturity and will then be
valued at amortized cost based upon the value on such date unless the
trustees determine during such sixty-day period that amortized cost
does not represent fair value.
B...Repurchase agreements--
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book
Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund
to monitor on a daily basis, the market value of the repurchase
agreement's underlying investments to ensure the existence of a proper
level of collateral.
C...Securities transactions and income--
Securities transactions are recorded as of the trade date. Realized
gains and losses from securities sold are recorded on the identified
cost basis. Interest income is determined on the basis of interest
accrued, adjusted for accretion of discount and amoritization of
premium on debt securities when required for federal income tax
purposes.
D...Federal taxes--
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal
year.
E...Deferred organization expense--
Costs incurred by the Fund in connection with its organization and
initial registration are being amortized, on a straight-line basis,
through June, 2000.
F...Distributions to shareholders-
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted
accounting principles. The differences are primarily due to differing
treatments for asset and mortgage backed securities. Permanent book and
tax basis differences relating to shareholder distributions will result
in reclassifications to paid-in-capital.
<PAGE>
(2).....Investment Advisory Fee:
The investment advisory fee paid to Standish, Ayer & Wood, Inc. (SA&W)
for overall investment advisory and administrative services, and
general office facilities, is paid monthly at the annual rate of 0.35%
of the Fund's average daily net assets. The investment adviser has
preliminarily agreed to limit the Fund's total operating expenses for
any fiscal year to 0.45% of the Fund's average daily net assets. For
the six months ended June 30, 1996, the investment adviser
preliminarily waived its investment advisory fee of $16,291 and
reimbursed the Fund for $34,833 of operating expenses. The investment
adviser has also agreed to limit the Fund's total operating expenses
(excluding brokerage commissions, taxes and extra ordinary expenses) to
the permissible limit applicable in any state in which shares of the
Fund are then qualified for sale. The Fund pays no compensation
directly to its trustees who are affiliated with the investment adviser
or to its officers, all of whom receive remuneration for their services
to the Fund from the investment adviser. Certain of the trustees and
officers of the Trust are partners or officers of SA&W.
(3).....Purchases and Sales of Investments:
Purchases and sales of investments, other than short-term obligations,
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Investments (non-U.S. government securities) $2,880,862 $971,231
========================= =========================
U.S. Government securities $2,240,523 $2,750,910
========================= =========================
</TABLE>
(4).....Shares of Beneficial Interest:
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest having a
par value of one cent per share. Transactions in Fund shares were as
follows:
<TABLE>
<CAPTION>
For the Period
Six Months Ended July 3, 1995
June 30, 1996 (start of business)
(unaudited) to December 31, 1995
---------------------- ---------------------
<S> <C> <C>
Shares sold 62,258 462,667
Shares issued to shareholders in payment of distributions declared 4,701 3,396
Shares redeemed (18,212) (27,970)
---------------------- ---------------------
Net increase 48,747 438,093
====================== =====================
</TABLE>
On July 3, 1995, securities with a fair market value of $4,386,455 were
contributed to the Fund by a shareholder. In return for such
securities, the shareholder received shares of the Fund. At June 30,
1996, one shareholder was record owner of approximately 42% of the
total outstanding shares of the Fund.
(5).....Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1996, as
computed on a federal income tax basis, are as follows:
Aggregate cost $9,759,634
=========================
Gross unrealized appreciation $5,185
Gross unrealized depreciation (114,626)
-------------------------
Net unrealized depreciation ($109,441)
=========================
<PAGE>
(6).....Financial Instruments
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to enhance
potential gain in circumstances where hedging is not involved. The
nature, risks, and objectives of these instruments are set forth more
fully in the Fund's Prospectus and Statement of Additional Information.
The Fund trades the following financial insturments with off-balance
sheet risk:
.........Options--
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before
a certain date. The Fund uses options to hedge against risks of market
exposure and changes in security prices and foreign currencies, as well
as to enhance returns. Options, both held and written by the Fund, are
reflected in the accompanying Statement of Assets and Liabilities at
market value. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which
are exercised or are closed are added to or offset against the proceeds
or amount paid on the transaction to determine the realized gain or
loss. If a put option purchased by the Fund is exercised, the premium
reduces the cost basis of the securities purchased by the Fund. The
Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of
the security underlying the written option. A summary of such
transactions for the six months ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
Written Call Option Transactions
Number
of Contracts Premiums
-------------------------- --------------------------
<S> <C> <C>
Outstanding, beginning of period 0 $0
Options written 20,000 2,032
Options exercised 0 0
Options expired (15,000) (1,524)
Options closed 0 0
-------------------------- --------------------------
Outstanding, end of period 5,000 $508
========================== ==========================
</TABLE>