STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND,
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND,
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
STANDISH TAX-SENSITIVE EQUITY FUND
Financial Statements for the Period Ended
September 30, 1998
[LOGO]
<PAGE>
Standish, Ayer & Wood Investment Trust
Financial Statements
Table of Contents
Page
Chairman's Message.............................................1
Selected Financial Information.................................2
Performance Highlights.........................................3
Management Discussion and Analysis:
Standish Massachusetts Intermediate Tax Exempt Bond Fund...4
Standish Intermediate Tax Exempt Bond Fund.................4
Standish Small Cap Tax-Sensitive Equity Fund...............6
Standish Tax-Sensitive Equity Fund.........................8
Statements of Assets and Liabilities..........................10
Statements of Operations......................................11
Statements of Changes in Net Assets:
Standish Massachusetts Intermediate Tax Exempt Bond Fund..12
Standish Intermediate Tax Exempt Bond Fund................13
Standish Small Cap Tax-Sensitive Equity Fund..............14
Standish Tax-Sensitive Equity Fund........................15
Financial Highlights:
Standish Massachusetts Intermediate Tax Exempt Bond Fund..16
Standish Intermediate Tax Exempt Bond Fund................17
Standish Small Cap Tax-Sensitive Equity Fund..............18
Standish Tax-Sensitive Equity Fund........................19
Schedule of Investments:
Standish Massachusetts Intermediate Tax Exempt Bond Fund..20
Standish Intermediate Tax Exempt Bond Fund................23
Standish Small Cap Tax-Sensitive Equity Fund..............28
Standish Tax-Sensitive Equity Fund........................32
Notes to Financial Statements.................................35
Report of Independent Accountants.............................41
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
November 25, 1998
Dear Standish Funds Shareholder:
Enclosed you will find the annual statement for your Standish Fund for the
fiscal year ending September 30, 1998.
As of that date, Standish, Ayer & Wood, Inc., the advisor, together with its
affiliate, Standish International Management Company, L.P., had approximately
$45 billion of assets under management including the $6.4 billion of assets
represented by the Standish Funds. Our principal clients are corporate pension
trusts, governmental pension funds, insurance companies, endowments and
foundations, and high net worth individuals. Standish, Ayer & Wood remains
independent and is owned by investment professionals active in the business.
Both assets under management and the professional staff grew considerably over
the past year, while the investment team and the clientele have remained
constant.
During the twelve months ending September 30, 1998, investment returns have
generally been positive. For example, larger capitalization U.S. common stocks
as reflected in the Standard and Poor's 500 Index provided a total return of
9.05%, while higher grade domestic taxable bonds as represented by the Lehman
Aggregate returned 11.49%. However, within the twelve-month period there has
been considerable volatility. The quarter ending September 30, 1998 was a
particularly difficult period for U.S. equities, especially smaller
capitalization U.S. stocks, emerging market bonds, and domestic bonds with
perceived credit risk.
Recent dramatic events have included Russia's de facto default on its debt,
extreme pressures on a very large hedge fund, trading losses by major financial
institutions, and disarray in the currency and credit markets. A major change
has taken place in investor perception of risk and in rapid deleveraging of the
global financial system.
Clearly all financial market participants are operating in a more difficult
environment. Standish, Ayer & Wood is devoted to producing superior long-term
returns through very disciplined investment philosophies designed to uncover
value. We remain confident we have the capability to do a superior job by
adhering to our disciplines.
We appreciate the opportunity to serve you and hope you will find the following
information helpful.
Sincerely yours,
/s/ Ted Ladd
Edward H. Ladd
Chairman
1
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Standish, Ayer & Wood Investment Trust
Selected Financial Information
For the Year Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standish
Massachusetts Standish Standish
Intermediate Intermediate Small Cap Standish
Tax Exempt Tax Exempt Tax-Sensitive Tax-Sensitive
Bond Fund Bond Fund Equity Fund Equity Fund
- ------------------------------------------------------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Year $ 21.18 $ 21.78 $ 32.61 $ 35.24
Income from investment operations
Net investment income * 0.94 0.96 (0.15) 0.29
Net realized and unrealized gain (loss) 0.60 0.58 (6.42) (2.77)
--------- -------- -------- ---------
Total from investment operations 1.54 1.54 (6.57) (2.48)
--------- -------- -------- ---------
Less distributions declared to shareholders
From net investment income (0.94) (0.96) (0.01) (0.26)
From net realized gains -- (0.06) (0.14) --
--------- -------- -------- ---------
Net Asset Value - End of Year $ 21.78 $ 22.30 $ 25.89 $ 32.50
========= ======== ======== =========
Total Return 7.45% 7.24% (20.16)% (7.13)%
Ratios to average net assets
Expenses * 0.65% 0.65% 0.75% 0.50%
Net investment income * 4.40% 4.37% (0.51)% 0.78%
Net Assets, End of Year (000's omitted) $ 53,600 $78,579 $66,458 $ 31,659
Portfolio turnover 19% 29% 102% 33%
</TABLE>
- -----------------------
* The investment adviser voluntarily did not impose a portion of its fee and/or
reimbursed the Funds for a portion of their operating expenses. Please refer
to the Financial Highlights for additional disclosure regarding these ratios.
The accompanying notes are an integral part of the financial statements.
2
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STANDISH, AYER & WOOD INVESTMENT TRUST
Performance Highlights
for the One-Year Period Ended September 30, 1998
Total Return
- --------------------------------------------------------------------------------
Tax Exempt Funds
Standish Mass. Intermediate Tax Exempt Bond Fund 7.45%
Standish Intermediate Tax Exempt Bond Fund 7.24%
Lehman Muni 3-5-7-10 Index 7.27%
Lipper Intermediate Muni Debt Index 7.02%
Tax-Sensitive Funds
Standish Small Capitalization Tax-Sensitive Equity Fund (20.16%)
Russell 2000 Growth Index (24.83%)
Standish Tax-Sensitive Equity Fund (7.13%)
S&P 500 Index 9.05%
The S&P 500 Index is generally considered to be representative of the
performance of unmanaged common stocks publicly traded on the U.S. markets.
The Russell 2000 Index is generally considered to be representative of unmanaged
small capitalization stocks in the U.S. markets. The Russell 2000 Growth Index
contains those Russell 2000 securities with a greater-than-average growth
orientation. Securities in this index tend to exhibit higher price-to-book and
price-earnings ratios, lower dividend yields and higher forecasted growth value.
The Lehman Brothers Municipal Bond 3, 5, 7 and 10 Year Index is actually a
subset of a broader index--the Lehman Brothers Municipal Bond Index. The
Municipal Bond Index is unmanaged and designed to be a composite measure of the
total return performance of the municipal bond market, and includes over 33,000
bond issues (rated BBB or better, including bonds in the following sectors:
general obligations, prerefunded, electrics, hospital, state housing, industrial
development/pollution control, and transportation).
The Lipper Intermediate Muni Debt Index consists of the 30 largest intermediate
municipal debt funds, which invest in municipal debt issues with dollar-weighted
average maturities of five to ten years.
Past performance is not predictive of future performance.
3
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STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
Management Discussion and Analysis
The bond markets generally enjoyed an excellent environment during the
twelve-month period ending September 30, 1998. Municipal bond investors earned a
very satisfactory return over the period and enjoyed the tax-exempt benefit of
municipal bond income as well. The Standish Intermediate Tax Exempt Bond Fund
produced a total return of 7.24% for the period after all expenses, in-line with
our benchmark performance index (Lehman Muni 3,5,7, and 10-Year Index) return of
7.27%. In addition, the return exceeded that of a peer group of municipal bond
funds, as measured by the Lipper Intermediate Muni Bond Fund Index, which
returned 7.02%. The Standish Massachusetts Intermediate Tax Exempt Bond Fund
returned 7.45%, which compares favorably to both the indices (note that the
Massachusetts Fund only invests in double tax exempt Massachusetts bonds,
whereas the benchmark indices are "national" in scope).
The last year was characterized by a continuation of the trend of favorable
circumstances for most fixed income investments: moderate economic growth and a
benign inflationary environment. An important change from the previous year was
the impact of Asia on the financial scene. Investors were focused on the
economic meltdown in parts of Asia during the fourth quarter of 1997, with
interest waning as the New Year started. By the third quarter of 1998, however,
Asia was again in the spotlight and "global deflation" was the new watchword on
Wall Street. Over the period, interest rates changed to reflect these new
perceptions of the economy, with intermediate term municipal yields dropping
about 45 basis points.
Intermediate Tax Exempt Bond Fund
The Fund generally tracked the market and outpaced its peer group by a small
amount. This reflects the general condition of tight quality spreads and a
relative lack of value opportunities when compared to past years. The Fund held
a yield advantage above the index, and California and New York holdings
continued to perform well. As the fiscal year drew to a close, our healthcare
and housing positions lagged the market a bit due to some modest spread
widening. The flat yield curve also made it difficult to outperform the
benchmark. In sum, we are pleased to have provided a favorable return without
accepting the risk that many of our competitors incur, i.e. a substantial
interest rate bet.
Intermediate Tax Exempt Bond Fund
Our Massachusetts portfolio exceeded national market returns for the year,
helped by our yield advantage, upgrades in the credit rating of the
Commonwealth, and generally excellent credit conditions for most of the state's
issuers. The Massachusetts market may become more challenging (and present
greater opportunity) as the economy slows. The Boston area is more dependent
than ever on financial services, and the Commonwealth is facing the challenge of
financing the "Big Dig."
In both of our portfolios, we continue to employ a philosophy which emphasizes
security selection over predicting the short-term movements of interest rates.
This has proven effective over the now nearly six years that we have been
managing the Funds. It is a strategy that seeks to minimize volatility for
investors while still providing attractive relative returns.
Thank you for your continued support of the Standish Tax Exempt Bond Funds.
Sincerely,
/s/ Maria D. Furman /s/ Raymond J. Kubiak
Maria D. Furman Raymond J. Kubiak
4
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STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
Comparison of Change in Value of $100,000 Investment in
Standish Massachusetts Intermediate Tax Exempt Bond Fund, the Lehman
Muni 3, 5, 7, and 10 Index, and the Lipper Intermediate Muni Debt Index
[The following table was originally a line graph in the printed materials.]
Standish Massachusetts
Intermediate Lehman Muni Lipper Intermediate
Tax Exempt Fund 3-5-7-10 Index Muni Debt Index
--------------- -------------- ---------------
Inception 11/2/92 100000 100000 100000
11/30/92 101305 101290 101680
12/31/92 102271 102141 102575
1/31/93 103357 103448 103754
2/28/93 106612 106241 106867
3/31/93 105229 105147 105649
4/30/93 106229 105873 106504
5/31/93 106517 106201 106856
6/30/93 108089 107762 108309
7/31/93 108333 107870 108266
8/31/93 110126 109552 110193
9/30/93 111047 110517 111449
10/31/93 111453 110760 111628
11/30/93 110850 110106 110947
12/31/93 112755 111901 112766
1/31/94 114008 113020 113928
2/28/94 111819 110906 111512
3/31/94 108020 108189 108390
4/30/94 108815 109011 108845
5/31/94 109620 109633 109705
6/30/94 109114 109457 109387
7/30/94 110452 110848 110754
8/30/94 110814 111335 111175
9/30/94 109664 110433 110030
10/31/94 108348 109506 108820
11/30/94 106924 108290 107198
12/31/94 108420 109611 108796
1/31/95 110702 111398 110906
2/28/95 112714 113593 113213
3/31/95 113693 114819 114209
4/30/95 113792 115141 114461
5/31/95 116267 117870 117150
6/30/95 115984 117781 116787
7/31/95 117232 119260 117850
8/31/95 118537 120521 119005
9/30/95 119107 120988 119600
10/31/95 120378 121928 120736
11/30/95 121656 123148 122016
12/31/95 122127 123788 122797
1/31/96 122871 124952 123755
2/29/96 122408 124636 123371
3/31/96 121361 123655 122125
4/30/96 121021 123525 121905
5/31/96 121211 123407 121881
6/30/96 122293 124305 122624
7/31/96 123029 125259 123691
8/31/96 123036 125350 123703
9/30/96 124205 126403 124755
10/31/96 125492 127639 125915
11/30/96 127445 129528 127741
12/31/96 127093 129239 127345
1/31/97 127352 129734 127651
2/28/97 128291 130704 128582
3/31/97 126833 129318 127232
4/30/97 127649 130004 127868
5/31/97 129137 131538 129352
6/30/97 130328 132656 130516
7/31/97 133077 135335 133322
8/31/97 132137 134523 132242
9/30/97 133584 135855 133591
10/31/97 134337 136561 134179
11/30/97 134970 137043 134674
12/31/97 136490 138533 136353
1/31/98 137821 139825 137499
2/28/98 137821 139982 137540
3/31/98 137937 140045 137567
4/30/98 137409 139454 136893
5/31/98 139331 141301 138728
6/30/98 139641 141771 139149
8/31/98 141891 144138 141474
9/30/98 143530 145737 142974
Comparison of Change in Value of $100,000 Investment in
Standish Intermediate Tax Exempt Bond Fund, the Lehman Muni
3, 5, 7, and 10 Index, and the Lipper Intermediate Muni Debt Index
[The following table was originally a line graph in the printed materials.]
Standish Intermediate Lehman Muni Lipper Intermediate
Tax Exempt Fund 3-5-7-10 Index Muni Debt Index
--------------- -------------- ---------------
Inception 11/2/92 100000 100000 100000
11/30/92 101801 101290 101680
12/31/92 102793 102141 102575
1/31/93 104194 103448 103754
2/28/93 107837 106241 106867
3/31/93 106346 105147 105649
4/30/93 107351 105873 106504
5/31/93 107657 106201 106856
6/30/93 109142 107762 108309
7/31/93 109502 107870 108266
8/31/93 111260 109552 110193
9/30/93 112344 110517 111449
10/31/93 112618 110760 111628
11/30/93 112004 110106 110947
12/31/93 113872 111901 112766
1/31/94 114967 113020 113928
2/28/94 112863 110906 111512
3/31/94 109373 108189 108390
4/30/94 110287 109011 108845
5/31/94 111348 109633 109705
6/30/94 111196 109457 109387
7/31/94 112496 110848 110754
8/30/94 112980 111335 111175
9/30/94 112274 110433 110030
10/31/94 111216 109506 108820
11/30/94 109615 108290 107198
12/31/94 110830 109611 108796
1/31/95 112944 111398 110906
2/28/95 114912 113593 113213
3/31/95 115946 114819 114209
4/30/95 116141 115141 114461
5/31/95 118555 117870 117150
6/30/95 118214 117781 116787
7/31/95 119290 119260 117850
8/31/95 120782 120521 119005
9/30/95 121480 120988 119600
10/31/95 122643 121928 120736
11/30/95 124158 123148 122016
12/31/95 124848 123788 122797
1/31/96 125763 124952 123755
2/29/96 125219 124636 123371
3/31/96 124321 123655 122125
4/30/96 124238 123525 121905
5/31/96 124341 123407 121881
6/30/96 125453 124305 122624
7/31/96 126454 125259 123691
8/31/96 126558 125350 123703
9/30/96 127879 126403 124755
10/31/96 129190 127639 125915
11/30/96 131226 129528 127741
12/31/96 130795 129239 127345
1/31/97 131197 129734 127651
2/28/97 132209 130704 128582
3/31/97 130777 129318 127232
4/30/97 131799 130004 127868
5/31/97 133387 131538 129352
6/30/97 134662 132656 130516
7/31/97 137839 135335 133322
8/31/97 136979 134523 132242
9/30/97 138456 135855 133591
10/31/97 139106 136561 134179
11/30/97 139753 137043 134674
12/31/97 141349 138533 136353
1/31/98 142706 139825 137499
2/28/98 142711 139982 137540
3/31/98 142681 140045 137567
4/30/98 142290 139454 136893
5/31/98 143984 141301 138728
6/30/98 144514 141771 139149
8/31/98 146761 144138 141474
9/30/98 148481 145737 142974
5
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STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
Management Discussion and Analysis
Small capitalization stocks began the year on the upswing, but since April have
turned in one of the weakest performance records in recent history. Not only
have small capitalization stocks performed poorly compared to the stocks of
larger companies, in absolute terms small caps have declined precipitously. For
the full year from October 1, 1997 through September 30, 1998 the Standish Small
Cap Tax-Sensitive Equity Fund declined 20.16% compared to a decline of 24.83%
for the Russell 2000 Growth Index.
Small cap stocks have underperformed large caps for more than five years, with
some notable sharp rallies as exceptions. In calendar year 1998, while earnings
forecasts have come down in concert with slower expected economic growth, the
stocks have experienced a more extreme correction. Investors have abandoned the
new issues market, raising the bar small companies must jump to raise equity
capital. Mutual fund cash inflows have slowed and in some weeks were net
outflows, offsetting the benefits of a slack IPO market. While these trends may
continue in the current risk-averse markets, we believe that small caps have
very attractive characteristics.
Small cap companies, while not isolated from world events, are primarily
domestic in their operations, can grow earnings more rapidly than large caps,
and are often more flexible and entrepreneurial. It is our opinion that small
caps are underowned, oversold, neglected, and subject to very low expectations.
Over the intermediate term we believe the prospects for small caps are
excellent.
Volatility has been above norms and months like August make analysis of
performance for the year difficult. Our stock selection made a strong
contribution for most of the year, except for the very weakest periods, when the
impact of absolute size was of overriding importance. Our focus on smaller
companies within the small cap segment of the market has hurt performance during
the past year. Our sector emphasis continues to be technology, healthcare, and
business services. Our investments in technology include software, the Internet,
communications, and media companies. In healthcare we are focused on
biotechnology and service companies. Business services include a wide variety of
industries: transaction processing, broadcasting, publishing, transportation,
and education. We target the highest quality companies, defined by business
position, management focus and intensity, balance sheet strength, and
competitive advantage. We then look for favorable valuation to initiate an
investment position. We are very price sensitive in both investing and profit
taking.
The Standish Small Cap investment team is functioning smoothly. Portfolio
management responsibilities for this fund are performed by me, while research
efforts are led by Drew Beja and Jonathan Stone. We have considerable research
expertise in the key sectors mentioned above, and our team approach ensures that
every investment receives team review. This summer Sarah Griffin joined our team
as our expert in performance attribution, quantitative support, and client
liaison. Sarah has been at Standish in various capacities prior to joining the
Small Cap team. More recently, Michael Fechter has joined Standish and will be
part of the Small Cap team specializing in marketing and client communications.
Michael was at Putnam Investments for seven years where he specialized in client
service.
In closing, it is important to remind you of the volatility of small cap
investments, particularly in the growth part of the small cap market. We attempt
to offset this volatility through diversification, sector concentration limits,
and particular attention to business quality, balance sheet strength, and stock
valuation. Nonetheless, we are typically fully invested and therefore are
broadside to market volatility in the small cap arena. We remain optimistic
about the outlook for small cap stocks despite the recent challenges. We are
very appreciative of your support and thank you for your interest in the
Standish Small Cap Tax-Sensitive Equity Fund.
Sincerely,
/s/ Nicholas S. Battelle
Nicholas S. Battelle
6
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STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
Comparison of Change in Value of $100,000 Investment in
Standish Small Capitalization Tax-Sensitive Equity Fund, the S&P 500 Index,
the Russell 2000 Index, and the Russell 2000 Growth Index
[The following table was originally a line graph in the printed materials.]
Standish Small
Capitalization
Tax Sensitive Russell 2000 Russell 2000
Equity Fund Index S&P 500 Index Growth Index
----------- ----- ------------- ------------
100000 100000 100000 100000
1/31/96 99750 99892 103404 99172
2/29/96 102750 103006 104363 103694
3/31/96 107550 105135 105368 105744
4/30/96 120900 110756 106921 113862
5/31/96 128800 115121 109678 119701
6/30/96 120750 110394 110096 111923
7/31/96 104386 100753 105232 98259
8/31/96 113194 106602 107451 105534
9/30/96 117948 110768 113499 110969
10/31/96 111292 109061 116629 106181
11/30/96 112994 113555 125445 109134
12/31/96 121231 116531 122960 111262
1/31/97 126141 118859 130642 114042
2/28/97 117174 115977 131667 107155
3/31/97 108557 110504 126237 99593
4/30/97 108407 110812 133781 98438
5/31/97 125990 123146 141929 113233
6/30/97 135058 128429 148287 118090
7/31/97 142221 134400 160091 124137
8/31/97 146880 137478 151126 126757
9/30/97 163362 147542 159407 136873
10/31/97 151990 141060 154083 128652
11/30/97 152491 140147 161217 125585
12/31/97 149858 142600 163986 125655
1/31/98 147189 140350 165799 123979
2/28/98 161188 150727 177758 134925
3/31/98 168288 156943 186861 140585
4/30/98 174432 157811 188741 141447
5/31/98 161188 159311 185496 131171
6/30/98 163625 149625 193031 132511
8/31/98 117127 110808 163365 93417
9/30/98 130421 119484 173830 102889
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
Management Discussion and Analysis
Returns from the stocks of U.S. companies have been quite turbulent over the
last twelve months. In this environment, the Tax-Sensitive Equity Fund trailed
the Standard and Poor's 500 Index, declining 7.13% versus a 9.05% rise for the
index.
Through much of the last twelve months, the economic environment remained quite
supportive for equity investing with high consumer optimism, low inflation and
steady economic growth. But by the end of summer, Russia had virtually defaulted
on its debt, Japan seemed incapable of curing a sick banking system and our own
economic growth seemed more precarious. Capital markets, at very high
valuations, began to react predictably, with price declines and a flight by
investors to more comfortable assets.
Ordinarily, investors agonize over stock selection and the weightings given to
individual economic sectors within their portfolios. Indeed, our fund had its
stocks with outstanding performance over the last twelve months invested in
healthcare stocks, Schering Plough and Watson Pharmaceutical up 103% and 71%
respectively, while takeover candidates like Allied Group and American Bankers
returned over 50% for the period. Yet capitalization, that is the dollar value
of a company's stock in the stock market, and not stock selection or sector
weighting, has been the single most important influence on returns. The bigger a
company, the more investors have felt comfortable owning its shares.
A very narrow group of large U.S. companies have had outstanding results, while
the rest of the market has drifted downward. While the S&P managed a 9.05%
return over the past 12 months, the S&P Mid Cap Index declined 6.18% while the
even smaller cap Russell 2000 Index was off 19.02%.
We believe that markets, using size as the important measure of safety, have
driven these largest capitalization stocks to excessively high valuations. Our
portfolio is comprised of 57 companies with earnings growth which exceeds the
broad market by 37% per year, while selling at a combined price/earnings ratio
which is at a 34% discount to the market. We sincerely believe our stocks will
reward investors over a longer run and we have no intention of throwing in our
lot with the current fashion.
We are happy to report that, as of September 30, our Fund had no realized
capital gains to distribute to our shareholders.
We appreciate your support.
Sincerely,
/s/ Laurence A. Manchester
Laurence A. Manchester
8
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
Comparison of Change in Value of $100,000 Investment in
Standish Tax-Sensitive Equity Fund and the S&P 500 Index
[The following table was originally a line graph in the printed materials.]
Standish Tax
Sensitive Equity Fund S&P 500 Index
--------------------- -------------
100000 100000
1/31/96 103400 103404
2/29/96 105950 104363
3/31/96 106600 105368
4/30/96 109050 106921
5/31/96 110950 109678
6/30/96 110250 110096
7/31/96 105763 105232
8/31/96 111813 107451
9/30/96 118971 113499
10/31/96 120836 116629
11/30/96 129608 125445
12/31/96 130612 122960
1/31/97 137675 130642
2/28/97 138227 131667
3/31/97 134369 126257
4/30/97 140511 133781
5/31/97 151425 141929
6/30/97 157671 148287
7/31/97 173188 160091
8/31/97 169870 151126
9/30/97 179875 159407
10/31/97 174362 154083
11/30/97 178547 160953
12/31/97 180077 163986
1/31/98 180231 165799
2/28/98 195446 177758
3/31/98 208100 186861
4/30/98 207230 188741
5/31/98 202209 185496
6/30/98 204522 193031
8/31/98 161191 163365
9/30/98 167051 173830
9
<PAGE>
Standish, Ayer & Wood Investment Trust
Statements of Assets and Liabilities
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Massachusetts
Intermediate Intermediate Small Cap
Tax Exempt Bond Tax Exempt Tax-Sensitive Tax-Sensitive
Fund Bond Fund Equity Fund Equity Fund
----------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Assets
Investments at value (Note 1A)* $ 52,849,641 $ 80,887,226 $ 67,114,032 $ 31,645,132
Receivable for investments sold -- 1,738,169 656,752 --
Receivable for Fund shares sold 156,849 150,000 -- 1,249
Interest and dividends receivable 740,813 1,177,440 15,055 39,830
Deferred organization costs (Note 1E) -- -- 8,525 8,534
Prepaid expenses 2,267 2,623 2,146 1,375
------------- ------------- -------------- -------------
Total assets 53,749,570 83,955,458 67,796,510 31,696,120
Liabilities
Payable for investments purchased -- 2,483,468 1,294,226 --
Payable for when-issued securities (Note 8) -- 2,705,805 -- --
Payable for Fund shares redeemed -- 5,000 -- 1,249
Distribution payable 108,039 137,023 -- --
Due to custodian -- 1,000 -- --
Accrued trustees' fees and expenses (Note 3) 1,597 2,055 1,202 1,674
Accrued accounting, custody and
transfer agent fees 12,211 12,480 11,464 8,840
Accrued expenses and other liabilities 27,667 29,451 31,336 25,751
------------- ------------- -------------- -------------
Total liabilities 149,514 5,376,282 1,338,228 37,514
------------- ------------- -------------- -------------
Net Assets $ 53,600,056 $ 78,579,176 $ 66,458,282 $ 31,658,606
============= ============= ============== =============
Net Assets consist of:
Paid-in capital $ 51,669,781 $ 74,983,272 $ 68,626,416 $ 32,498,485
Accumulated undistributed net investment
income 1,180 8,266 -- 62,979
Accumulated net realized gain (loss) (276,487) 453,994 (1,451,487) (847,933)
Net unrealized appreciation (depreciation) 2,205,582 3,133,644 (716,647) (54,925)
------------- ------------- -------------- -------------
Total Net Assets $ 53,600,056 $ 78,579,176 $ 66,458,282 $ 31,658,606
============= ============= ============== =============
Shares of beneficial interest outstanding 2,460,826 3,523,504 2,567,161 974,125
============= ============= ============== =============
Net Asset Value, offering price and
redemption price per share
(Net Assets/Shares outstanding) $ 21.78 $ 22.30 $ 25.89 $ 32.50
============= ============= ============== =============
* Identified cost of investments $ 50,644,059 $ 77,753,582 $ 67,830,679 $ 31,700,057
============= ============= ============== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Standish, Ayer & Wood Investment Trust
Statements of Operations
For the Year Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Massachusetts
Intermediate Intermediate Small Cap
Tax Exempt Tax Exempt Tax-Sensitive Tax-Sensitive
Bond Fund Bond Fund Equity Fund Equity Fund
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Investment Income
Interest income $ 2,264,228 $ 3,324,174 $ 84,461 $ 32,451
Dividend income -- -- 33,224 295,883
------------ ------------ -------------- -------------
Total investment income 2,264,228 3,324,174 117,685 328,334
Expenses
Investment advisory fee (Note 3) 179,308 264,680 291,323 128,459
Accounting, custody and transfer agent fees 92,044 98,860 93,781 61,823
Audit services 29,660 30,562 27,452 25,747
Legal fees 9,385 9,475 9,029 7,662
Trustees' fees and expenses (Note 3) 8,497 10,665 8,564 9,217
Insurance expense 5,081 5,880 4,423 2,794
Registration fees 3,825 21,016 24,499 20,771
Administration fees 3,286 4,314 3,139 1,646
Amortization of organization expenses (Note 1E) 234 309 3,774 3,774
Miscellaneous 11,169 12,278 7,420 7,960
------------ ------------ -------------- -------------
Total expenses 342,489 458,039 473,404 269,853
Deduct --
Waiver of investment advisory fee (Note 3) (51,114) (27,935) (109,263) (128,459)
Reimbursement of Fund operating expenses (Note 3) -- -- -- (12,935)
------------ ------------ -------------- -------------
Total waiver of investment advisory fee
and reimbursement of operating expenses (51,114) (27,935) (109,263) (141,394)
------------ ------------ -------------- -------------
Net expenses 291,375 430,104 364,141 128,459
------------ ------------ -------------- -------------
Net investment income (loss) 1,972,853 2,894,070 (246,456) 199,875
------------ ------------ -------------- -------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss)
Investment security transactions 123,931 589,639 (1,446,306) (726,922)
Financial futures contracts 14,412 -- -- --
------------ ------------ -------------- -------------
Net realized gain (loss) 138,343 589,639 (1,446,306) (726,922)
Change in unrealized appreciation (depreciation)
Investment securities 1,178,301 1,186,782 (9,201,341) (3,234,659)
Financial futures contracts (8,940) -- -- --
------------ ------------ -------------- -------------
Net change in unrealized appreciation
(depreciation) 1,169,361 1,186,782 (9,201,341) (3,234,659)
------------ ------------ -------------- -------------
Net realized and unrealized gain (loss) 1,307,704 1,776,421 (10,647,647) (3,961,581)
------------ ------------ -------------- -------------
Net Increase (Decrease) in Net Assets from
Operations $ 3,280,557 $ 4,670,491 $ (10,894,103) $ (3,761,706)
============ ============ ============== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Massachusetts Intermediate Tax Exempt Bond Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1998 September 30, 1997
-------------------- --------------------
<S> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income $ 1,972,853 $ 1,618,620
Net realized gain 138,343 172,925
Change in net unrealized appreciation
(depreciation) 1,169,361 724,286
------------ ------------
Net increase in Net Assets from Investment
Operations 3,280,557 2,515,831
------------ ------------
Distributions to Shareholders
From net investment income (1,972,853) (1,618,620)
------------ ------------
Total distributions to shareholders (1,972,853) (1,618,620)
------------ ------------
Fund Share (principal) Transactions (Note 5)
Net proceeds from sale of shares 18,573,069 13,888,372
Value of shares issued to shareholders in payment
of distributions declared 831,218 636,463
Cost of shares redeemed (5,512,563) (9,157,501)
------------ ------------
Increase in Net Assets from Fund share
transactions 13,891,724 5,367,334
------------ ------------
Total Increase in Net Assets 15,199,428 6,264,545
Net Assets
At beginning of year 38,400,628 32,136,083
------------ ------------
At end of year (including accumulated undistributed
net investment income of $1,180 and $0, respectively) $53,600,056 $38,400,628
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1998 September 30, 1997
--------------------- ---------------------
<S> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income $ 2,894,070 $ 2,055,758
Net realized gain 589,639 194,930
Change in net unrealized appreciation
(depreciation) 1,186,782 1,302,656
------------- ------------
Net increase in Net Assets from Investment
Operations 4,670,491 3,553,344
------------- ------------
Distributions to Shareholders
From net investment income (2,894,070) (2,055,758)
From net realized gain (151,703) (61,613)
------------- ------------
Total distributions to shareholders (3,045,773) (2,117,371)
------------- ------------
Fund Share (principal) Transactions (Note 5)
Net proceeds from sale of shares 40,952,159 23,342,391
Value of shares issued to shareholders in payment
of distributions declared 1,514,041 828,068
Cost of shares redeemed (18,235,034) (7,725,852)
------------- ------------
Increase in Net Assets from Fund share
transactions 24,231,166 16,444,607
------------- ------------
Total Increase in Net Assets 25,855,884 17,880,580
Net Assets
At beginning of year 52,723,292 34,842,712
------------- ------------
At end of year (including accumulated undistributed
net investment income of $8,266 and $8,268, respectively) $78,579,176 $52,723,292
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1998 September 30, 1997
--------------------- --------------------
<S> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income (loss) $ (246,456) $ 14,061
Net realized gain (loss) (1,446,306) 454,628
Change in unrealized appreciation (depreciation) (9,201,341) 8,125,678
------------- ------------
Net increase (decrease) in Net Assets from
Investment Operations (10,894,103) 8,594,367
------------- ------------
Distributions to Shareholders
From net investment income (7,582) (11,664)
From net realized gains on investments (170,781) --
------------- ------------
Total distributions to shareholders (178,363) (11,664)
------------- ------------
Fund Share (principal) Transactions (Note 5)
Net proceeds from sale of shares 54,482,660 18,625,615
Value of shares issued to shareholders in payment of
distributions declared 164,809 9,364
Cost of shares redeemed (9,877,238) (1,353,032)
------------- ------------
Net increase in Net Assets from Fund share
transactions 44,770,231 17,281,947
------------- ------------
Total Increase in Net Assets 33,697,765 25,864,650
Net Assets
At beginning of year 32,760,517 6,895,867
------------- ------------
At end of year (including accumulated undistributed
net investment income of $0 and $7,577, respectively) $66,458,282 $32,760,517
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Tax-Sensitive Equity Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1998 September 30, 1997
--------------------- --------------------
<S> <C> <C>
Increase (decrease) in Net Assets
From Investment Operations
Net investment income $ 199,875 $ 85,363
Net realized gain (loss) (726,922) (99,250)
Change in unrealized appreciation (depreciation) (3,234,659) 2,866,460
------------ ------------
Net increase (decrease) in Net Assets from
Investment Operations (3,761,706) 2,852,573
------------ ------------
Distributions to Shareholders
From net investment income (161,305) (73,042)
------------ ------------
Total distributions to shareholders (161,305) (73,042)
------------ ------------
Fund Share (principal) Transactions (Note 5)
Net proceeds from sale of shares 26,303,287 7,241,231
Value of shares issued to shareholders in payment of
distributions declared 139,790 61,187
Cost of shares redeemed (3,680,400) (105,951)
------------ ------------
Net increase in Net Assets from Fund share
transactions 22,762,677 7,196,467
------------ ------------
Total Increase in Net Assets 18,839,666 9,975,998
Net Assets
At beginning of year 12,818,940 2,842,942
------------ ------------
At end of year (including accumulated undistributed
net investment income of $62,979 and $24,409,
respectively) $31,658,606 $12,818,940
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Massachusetts Intermediate Tax Exempt Bond Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended December 31,
---------------------------------- --------------------------------
1998 1997 1996 (1) 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 21.18 $ 20.63 $ 21.02 $ 19.55 $ 21.31 $ 20.32
--------- --------- --------- --------- --------- ---------
Investment Operations
Net investment income * 0.94 0.97 0.74 0.94 0.94 0.92
Net realized and unrealized gain (loss)
on investments 0.60 0.55 (0.39) 1.47 (1.75) 1.13
--------- --------- --------- --------- --------- ---------
Total from investment operations 1.54 1.52 0.35 2.41 (0.81) 2.05
--------- --------- --------- --------- --------- ---------
Less distributions to shareholders
From net investment income (0.94) (0.97) (0.74) (0.94) (0.94) (0.92)
From net realized gains on investments -- -- -- -- (0.01) (0.14)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders (0.94) (0.97) (0.74) (0.94) (0.95) (1.06)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Year $ 21.78 $ 21.18 $ 20.63 $ 21.02 $ 19.55 $ 21.31
========= ========= ========= ========= ========= =========
Total Return 7.45% 7.55% 1.70% 12.64% (3.84)% 10.24%
Ratios/Supplemental Data
Expenses (to average daily net assets)* 0.65% 0.65% 0.65%+ 0.65% 0.65% 0.65%
Net investment income (to average daily
net assets)* 4.40% 4.67% 4.78%+ 4.71% 4.67% 4.35%
Portfolio Turnover 19% 25% 35% 77% 84% 94%
Net Assets, End of Year (000's omitted) $53,600 $38,401 $32,136 $32,565 $27,776 $29,627
- ---------------------------------------------
* The investment adviser voluntarily agreed not to impose a portion of its
investment advisory fee and/or reimbursed the Fund for a portion of its
operating expenses. In the absence of this agreement, the net investment
income per share and the ratios would have been:
Net investment income per share $ 0.92 $ 0.95 $ 0.72 $ 0.95 $ 0.91 $ 0.86
Ratios (to average net assets):
Expenses 0.77% 0.75% 0.73%+ 0.72% 0.78% 0.95%
Net investment income 4.28% 4.57% 4.70%+ 4.64% 4.54% 4.05%
(1) For the nine months ended September 30, 1996.
+ Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended December 31,
--------------------------------- ------------------------------
1998 1997 1996 (1) 1995 1994 1993
-------- --------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 21.78 $ 21.12 $ 21.40 $ 19.91 $ 21.44 $ 20.42
-------- --------- -------- -------- --------- ---------
Investment Operations
Net investment income * 0.96 1.01 0.79 0.98 0.95 0.93
Net realized and unrealized gain (loss) on
investments 0.58 0.74 (0.28) 1.49 (1.51) 1.24
-------- --------- -------- -------- --------- ---------
Total from investment operations 1.54 1.75 0.51 2.47 (0.56) 2.17
-------- --------- -------- -------- --------- ---------
Less distributions to shareholders
From net investment income (0.96) (1.01) (0.79) (0.98) (0.95) (0.93)
From net realized gains on investments (0.06) (0.08) -- -- (0.02) (0.22)
-------- --------- -------- -------- --------- ---------
Total distributions to shareholders (1.02) (1.09) (0.79) (0.98) (0.97) (1.15)
-------- --------- -------- -------- --------- ---------
Net Asset Value, End of Year $ 22.30 $ 21.78 $ 21.12 $ 21.40 $ 19.91 $ 21.44
======== ========= ======== ======== ========= =========
Total Return 7.24% 8.27% 2.43% 12.65% (2.68)% 10.78%
Ratios/Supplemental Data
Expenses (to average daily net assets)* 0.65% 0.65% 0.65%+ 0.65% 0.65% 0.65%
Net investment income (to average daily net
assets)* 4.37% 4.74% 4.99%+ 4.75% 4.62% 4.36%
Portfolio Turnover 29% 23% 43% 140% 157% 126%
Net Assets, End of Year (000's omitted) $78,579 $ 52,723 $34,843 $32,865 $ 20,514 $ 17,132
- ---------------------
* The investment adviser voluntarily agreed not to impose a portion of its
investment advisory fee and/or reimbursed the Fund for a portion of its
operating expenses. In the absence of this agreement, the net investment
income per share and the ratios would have been:
Net investment income per share $ 0.95 $ 0.99 $ 0.76 $ 0.95 $ 0.90 $ 0.85
Ratios (to average net assets):
Expenses 0.69% 0.74% 0.82%+ 0.79% 0.89% 1.15%
Net investment income 4.33% 4.65% 4.82%+ 4.61% 4.38% 3.86%
(1) For the nine months ended September 30, 1996.
+ Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------
1998 (1) 1997 1996 (2)
-------- -------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 32.61 $ 23.57 $20.00
-------- -------- -------
Investment Operations
Net investment income (loss) * (0.15) 0.02 0.04
Net realized and unrealized gain (loss) on
investments (6.42) 9.05 3.55
-------- -------- -------
Total from investment operations (6.57) 9.07 3.59
-------- -------- -------
Less distributions to shareholders
From net investment income (0.01) (0.03) (0.02)
From net realized gains on investments (0.14) -- --
-------- -------- -------
Total distributions to shareholders (0.15) (0.03) (0.02)
-------- -------- -------
Net Asset Value, End of Year $ 25.89 $ 32.61 $23.57
======== ======== =======
Total Return (20.16)% 38.50% 17.95%
Ratios/Supplemental Data
Expenses (to average daily net assets)* 0.75% 0.21% 0.00%+
Net investment income (loss) (to average daily
net assets) * (0.51)% 0.08% 0.41%+
Portfolio Turnover 102% 102% 57%
Net Assets, End of Year (000's omitted) $66,458 $32,761 $6,896
- ---------------------
* The investment adviser voluntarily agreed not to impose a portion of its
investment advisory fee and/or reimbursed the Fund for a portion of its
operating expenses. In the absence of this agreement, the net investment
income per share and the ratios would have been:
Net investment loss per share $ (0.22) $ (0.16) $(0.28)
Ratios (to average daily net assets):
Expenses 0.97% 1.24% 3.45%+
Net investment loss (0.73)% (0.95)% (3.04)%+
(1) Calculated based on average shares outstanding.
(2) For the period January 2, 1996, commencement of operations, to September 30, 1996.
+ Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Tax-Sensitive Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------
1998 (1) 1997 (1) 1996 (2)
-------- -------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 35.24 $ 23.60 $20.00
-------- -------- -------
Investment Operations
Net investment income * 0.29 0.39 0.28
Net realized and unrealized gain (loss) on
investments (2.77) 11.58 3.50
-------- -------- -------
Total from investment operations (2.48) 11.97 3.78
-------- -------- -------
Less distributions to shareholders
From net investment income (0.26) (0.33) (0.18)
-------- -------- -------
Total distributions to shareholders (0.26) (0.33) (0.18)
-------- -------- -------
Net Asset Value, End of Year $ 32.50 $ 35.24 $23.60
======== ======== =======
Total Return (7.13)% 51.19% 18.97%
Ratios/Supplemental Data
Expenses (to average daily net assets)* 0.50% 0.20% 0.00%+
Net investment income (to average daily net
assets)* 0.78% 1.31% 2.27%
Portfolio Turnover 33% 25% 17%
Net Assets, End of Year (000's omitted) $31,659 $12,819 $2,843
- ---------------------
* The investment adviser voluntarily agreed not to impose a portion of its
investment advisory fee and/or reimbursed the Fund for a portion of its
operating expenses. In the absence of this agreement, the net investment
income per share and the ratios would have been:
Net investment income (loss) per share $ 0.09 $ (0.07) $ (0.36)
Ratios (to average daily net assets):
Expenses 1.05% 1.73% 5.15%+
Net investment income (loss) 0.23% (0.22)% (2.88)%+
(1) Calculated based on average shares outstanding.
(2) For the period January 2, 1996, commencement of operations, to September 30, 1996.
+ Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Massachusetts Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 95.6%
General Obligations -- 23.3%
Amesbury MA State Qualified 5.30% 06/01/2003 $ 750,000 $ 785,618
Brockton MA State Qualified 5.55% 12/15/2003 270,000 288,225
Brockton MA State Qualified 5.65% 12/15/2004 300,000 323,625
Brockton MA State Qualified 5.70% 06/15/2002 160,000 169,400
Brockton MA State Qualified 6.13% 06/15/2018 250,000 268,438
Commonwealth of Massachusetts 7.50% 06/01/2004 700,000 811,125
Commonwealth of Massachusetts 5.40% 11/01/2006 600,000 657,000
Commonwealth of Massachusetts 5.00% 11/01/2009 1,000,000 1,057,500
Lawrence MA State Qualified 5.00% 09/15/2002 250,000 260,313
Lawrence MA State Qualified 5.13% 09/15/2003 1,500,000 1,576,875
Mass St College Bldg Authority Project 7.50% 05/01/2006 500,000 615,625
Mass St College Bldg Authority Project 7.50% 05/01/2007 450,000 563,063
Mass State Conservation Loan 5.25% 08/01/2009 1,100,000 1,193,500
Massachusetts Bay Transportation Authority 6.25% 03/01/2004 475,000 529,031
Massachusetts Bay Transportation Authority 6.00% 03/01/2005 550,000 612,563
Massachusetts St Govt Ld Bk 5.25% 02/01/2007 1,000,000 1,082,500
Peabody MA 5.00% 08/01/2008 500,000 536,875
University of Mass Building Authority State Guarantee 6.63% 05/01/2007 1,000,000 1,176,250
------------
Total General Obligations (Cost $11,783,601) 12,507,526
------------
Government Backed -- 1.2%
Mass HEFA Charlton Hospital 7.00% 07/01/2000 300,000 316,875
Mass HEFA Melrose Wakefield Hospital 6.35% 07/01/2006 310,000 353,400
------------
Total Government Backed (Cost $618,385) 670,275
------------
Housing Revenue -- 10.1%
Mass HFA Residential Development FNMA 6.88% 11/15/2011 2,000,000 2,195,000
Mass HFA Residential Development FNMA 7.60% 12/01/2014 490,000 516,950
Mass HFA Residential Development FNMA 6.50% 12/01/2014 325,000 335,969
Massachusetts St Housing Finance Agency 6.30% 10/01/2013 950,000 1,011,750
Massachusetts St Housing Finance Agency 6.25% 11/15/2012 1,000,000 1,082,500
Massachusetts St Housing Finance Agency 5.75% 12/01/2017 270,000 270,000
------------
Total Housing Revenue (Cost $5,300,216) 5,412,169
------------
Insured Bond -- 31.4%
Brockton MA MBIA 6.00% 04/01/2007 1,010,000 1,148,875
Chelsea MA AMBAC 7.00% 06/15/2003 265,000 300,444
Chelsea MA School District AMBAC 6.00% 06/15/2004 750,000 829,688
Commonwealth of Massachusetts MBIA 6.90% 10/01/2000 200,000 210,356
Holyoke MA FSA 6.00% 06/15/2006 600,000 678,000
Holyoke MA FSA 6.00% 06/15/2007 800,000 912,000
Holyoke MA FSA 5.25% 08/01/2008 485,000 526,831
Lynn MA MBIA 5.00% 06/01/2006 485,000 515,919
Mass HEFA Cath Health AMBAC 5.00% 11/15/2007 300,000 315,375
Mass HEFA Hallmark Health FSA 5.25% 07/01/2007 1,000,000 1,071,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Massachusetts Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured Bond (continued)
Mass HEFA Harvard Pilgrim FSA 5.00% 07/01/2005 $1,000,000 $ 1,057,500
Mass HEFA Harvard Pilgrim FSA 5.25% 07/01/2006 1,100,000 1,178,375
Mass HEFA Mass Eye and Ear ACA 5.00% 07/01/2005 660,000 689,700
Mass HEFA NE Medical FGIC 6.00% 07/01/2003 500,000 543,125
Mass HEFA Northeastern University MBIA 5.50% 10/01/2009 500,000 555,000
Mass HEFA Partners FSA 5.50% 07/01/2007 635,000 696,119
Mass IFA Suffolk University AMBAC 5.50% 07/01/2008 500,000 549,375
Massachusetts Bay Transportation Authority FSA 5.25% 03/01/2012 500,000 525,625
Massachusetts Port Authority MBIA 5.75% 07/01/2007 500,000 550,000
Nantucket MA MBIA 4.75% 07/01/2007 250,000 259,688
Nantucket MA MBIA 6.00% 07/15/2007 400,000 456,500
New Bedford MA AMBAC 6.00% 10/15/2005 575,000 646,156
Springfield MA AMBAC 6.25% 08/01/2006 1,000,000 1,148,750
Springfield MA AMBAC 5.65% 09/01/2007 700,000 782,250
Worcester Mass Municipal Purp Ln FSA 5.25% 07/01/2007 610,000 662,613
------------
Total Insured Bond (Cost $16,031,267) 16,809,514
------------
Lease Revenue -- 2.0%
Puerto Rico Housing Bank Appropriation 5.13% 12/01/2004 250,000 261,875
Puerto Rico Housing Bank Appropriation 5.13% 12/01/2005 750,000 788,438
------------
Total Lease Revenue (Cost $985,511) 1,050,313
------------
LOC GIC -- 4.8%
Mass IFA Amesbury LOC: State Street 5.35% 09/01/2005 365,000 375,494
Mass IFA Human Development LOC: Shawmut 6.25% 04/15/2009 720,000 751,500
Mass IFA Orchard Cove Project LOC: Fleet National Bank 5.00% 05/01/2026 415,000 426,931
Northborough MA IFA LOC: Bank of Boston 5.75% 09/01/2002 1,015,000 1,029,332
------------
Total LOC GIC (Cost $2,520,927) 2,583,257
------------
Revenue Bonds -- 21.8%
Mass Educational Loan Authority 5.25% 07/01/1999 370,000 373,608
Mass HEFA Cape Cod Healthcare 5.13% 11/15/2009 600,000 615,750
Mass HEFA Central New England Health Systems 5.75% 08/01/2003 500,000 511,250
Mass HEFA Jordan Hospital 5.00% 10/01/2005 325,000 334,344
Mass HEFA Jordan Hospital 5.00% 10/01/2008 665,000 683,288
Mass HEFA Milford Hospital 5.25% 07/15/2007 600,000 620,250
Mass HEFA Youville Hospital HFA Secured 6.13% 02/15/2015 735,000 796,556
Mass IFA Berkshire Retirement Development 5.13% 07/01/2018 530,000 535,963
Mass IFA Brooks School 5.60% 07/01/2005 245,000 263,988
Mass IFA Brooks School 5.90% 07/01/2013 410,000 434,600
Mass IFA Clark University 6.45% 07/01/2001 300,000 319,875
Mass IFA Loomis Project 6.50% 07/01/2002 350,000 361,564
Mass IFA Resource Recovery 6.15% 07/01/2002 1,000,000 1,063,750
Mass IFA Resource Recovery 4.80% 12/01/2004 1,000,000 1,003,750
Mass IFA Wentworth Institute 5.05% 10/01/2005 290,000 297,613
Mass IFA Wentworth Institute 5.10% 10/01/2006 305,000 313,006
Mass Water Resource Authority 7.25% 04/01/2001 200,000 214,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Massachusetts Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue Bonds (continued)
Mass Water Resource Authority 5.25% 03/01/2013 $ 500,000 $ 519,375
Massachusetts Port Authority 5.75% 07/01/2012 700,000 788,375
Massachusetts State Water Resources Authority 7.00% 04/01/1999 20,000 20,351
Massachusetts Water Pollution Trust 5.25% 02/01/2008 500,000 542,500
New England Loan Marketing MA Student Loan 5.80% 03/01/2002 1,005,000 1,061,531
------------
Total Revenue Bonds (Cost $11,277,269) 11,675,537
------------
Special Revenues -- 1.0%
Massachusetts Grant Anticipation Notes 5.00% 12/15/2005 500,000 532,500
------------
Total Special Revenues (Cost $518,333) 532,500
------------
TOTAL BONDS (COST $49,035,509) 51,241,091
------------
SHORT-TERM INVESTMENTS -- 3.0%
Short Term Bonds -- 2.6%
Mass HEFA Newton Weekly MBIA 3.07% 07/01/2025+ 1,400,000 1,400,000
------------
Total Short Term Bonds (Cost $1,400,000) 1,400,000
------------
Repurchase Agreements -- 0.4%
Prudential-Bache Repurchase Agreement, dated 9/30/98, due 10/1/98, with a
maturity value of $208,577 and an effective yield of 4.75%, collateralized by a
U.S. Government Agency Obligation with a rate of 8.00%, a maturity date of
12/01/26 and an aggregate market value of $213,347. 208,550
------------
Total Repurchase Agreements (Cost $208,550) 208,550
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,608,550) 1,608,550
------------
TOTAL INVESTMENTS-- 98.6% (COST $50,644,059) $52,849,641
Other Assets, Less Liabilities-- 1.4% 750,415
------------
NET ASSETS-- 100% $53,600,056
============
</TABLE>
Notes to the Schedule of Investments:
ACA - American Capital Access Corp.
AMBAC - American Municipal Bond Assurance Corp.
FSA - Financial Security Association
HEFA - Health & Educational Facilities Authority
HFA - Housing Finance Authority
MBIA - Municipal Bond Insurance Association
FGIC - Financial Guaranty Insurance Co.
FNMA - Federal National Mortgagage Association
IFA - Industrial Finance Authority
LOC - Letter of Credit
GIC - Guaranteed Investment Contract
+ Date shown reflects actual maturity date. Security puttable on a weekly basis.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 100.0%
General Obligations -- 11.1%
Alpine Utah School District 5.00% 03/15/2012 $1,000,000 $ 1,042,500
California State 6.60% 02/01/2009 1,000,000 1,203,749
California State 5.25% 06/01/2012 500,000 530,000
Commonwealth of Massachusetts 7.50% 06/01/2004 500,000 579,375
Commonwealth of Massachusetts 6.00% 11/01/2008 500,000 575,000
Detroit MI 6.00% 04/01/2000 315,000 324,056
District of Columbia 5.80% 06/01/2004 500,000 528,225
Florida Board of Education 6.00% 06/01/2008 1,000,000 1,153,750
Honolulu HI 5.40% 09/27/2007 500,000 542,500
King County WA 412 Sch Dist# 5.25% 12/01/2010 1,495,000 1,610,862
Lawrence MA State Qualified 5.38% 09/15/2005 500,000 530,000
Tuloso-Midway TX Independent School District 5.75% 08/15/2006 80,000 89,300
--------------
Total General Obligations (Cost $8,330,713) 8,709,317
--------------
Government Backed -- 3.1%
Cincinnati OH Public Schools 6.15% 06/15/2002 600,000 641,250
Mashantucket CT Western Pequot 6.50% 09/01/2005 995,000 1,140,519
Mashuntucket CT Western Pequot 6.25% 09/01/2003 135,000 148,669
Texas State Turnpike 12.63% 01/01/2020 400,000 527,000
--------------
Total Government Backed (Cost $2,333,837) 2,457,438
--------------
Housing Revenue -- 15.7%
California Housing Authority 5.65% 08/01/2025 320,000 328,000
California Housing Authority 5.05% 02/01/2017 500,000 508,750
Colorado HFA Multi Family Insured Mortgage 7.90% 10/01/2000 225,000 238,781
Colorado Housing Finance Agency 7.45% 11/01/2027 400,000 453,000
Delta CA Home Mortgage Finance 6.70% 06/01/2024 1,350,000 1,498,499
Florida Housing Finance Agency 0.00% 07/15/2016 590,000 81,863
Hawaii Housing Finance and Development Corp 7.00% 07/01/2031 550,000 590,563
Houston TX Housing Finance Corp 8.00% 06/01/2014 500,000 552,500
Mass HFA Residential Development FNMA 6.88% 11/15/2011 400,000 439,000
Mass HFA Residential Development FNMA 7.60% 12/01/2014 395,000 416,725
Michigan Housing Development Authority 0.00% 04/01/2015 350,000 50,092
Michigan Housing Development Authority 6.40% 04/01/2005 250,000 271,563
New Hampshire Housing Finance Agency 6.60% 01/01/2000 400,000 411,500
New Mexico Mortgage Finance Authority 5.75% 07/01/2014 400,000 410,500
New Mexico Mortgage Finance Authority# 6.25% 07/01/2029 1,000,000 1,095,000
North Carolina Housing Finance Agency 7.60% 03/01/2021 835,000 891,363
Pennsylvania Housing Finance Agency 5.35% 10/01/2008 410,000 427,806
Rhode Island Housing & Mortgage 4.95% 10/01/2016 485,000 494,975
Texas Dept Housing & Community 6.95% 07/01/2023 515,000 557,488
Texas Dept Housing & Community 0.00% 03/01/2015 235,000 78,431
Virginia Housing Development Authority 0.00% 11/01/2017 575,000 105,294
Virginia Housing Development Authority Commission 6.10% 07/01/2001 2,300,000 2,414,999
--------------
Total Housing Revenue (Cost $12,178,324) 12,316,692
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development -- 5.8%
Alaska Industrial Development and Export Authority 6.20% 04/01/2003 $ 150,000 $ 162,938
Alaska Industrial Development and Export Authority 5.50% 04/01/2001 500,000 520,000
California Statewide Communities 4.90% 05/15/2025 1,000,000 1,021,250
Dayton OH Special Facilities Emery 6.05% 10/01/2009 500,000 541,250
Eddyville IA Pollution Control Revenue Cargill 5.40% 10/01/2006 500,000 545,000
Hendersonville TN Kroger 5.95% 12/15/2008 445,000 482,825
Mashantucket CT Western Pequot 6.25% 09/01/2003 160,000 174,600
Murray KY Industrial Development Kroger 7.25% 09/01/2012 350,000 391,125
OH Development Commission ABS Industries 5.45% 06/01/1999 70,000 70,706
Stanislaus CA Ogden 7.63% 01/01/2010 385,000 406,656
Weld County CO Industrial Development Conagra 6.75% 12/15/2001 200,000 215,250
--------------
Total Industrial Development (Cost $4,317,256) 4,531,600
--------------
Insured Bond -- 31.3%
Bakersfield CA Convention Center MBIA 5.40% 04/01/2008 1,000,000 1,106,250
Benton County WA School District AMBAC 6.70% 12/01/2006 580,000 687,300
Bloomington MN Port Authority FSA 5.30% 02/01/2007 135,000 136,350
Chicago IL Board of Education AMBAC 6.75% 12/01/2009 465,000 566,719
Contra Costa CA Merrithew Hospital MBIA 6.00% 11/01/2006 750,000 856,875
Cow Creek Band Umpqua OR AMBAC 4.25% 07/01/2003 1,000,000 1,015,000
Denver CO Airport MBIA 7.50% 11/15/2006 500,000 592,500
District of Columbia MBIA 6.00% 06/01/2011 1,250,000 1,426,162
District of Columbia Medlantic Hospital MBIA 7.00% 08/15/2005 500,000 557,500
Grand Prairie TX Health AMBAC 6.00% 11/01/1999 565,000 592,956
Grand River Dam Authority Oklahoma AMBAC 5.50% 06/01/2013 385,000 428,794
Greater Detroit MI Resource Recovery AMBAC 6.25% 12/13/2007 400,000 461,500
Henderson, Nevada FGIC 5.00% 09/01/2016 1,000,000 1,015,000
Hot Springs AK Sales & Use Tax FSA 4.95% 12/01/2008 200,000 203,500
Illinios Health Facilities Authority Revenue Asset
Guaranty 6.25% 05/01/2011 1,300,000 1,395,874
Jefferson County OH Asset Guaranty 6.63% 12/01/2005 315,000 345,319
Kentucky State Property & Bldg MBIA 6.25% 09/01/2007 1,000,000 1,160,000
NC Eastern Municipal Power Agency ACA 6.00% 01/01/2006 1,000,000 1,097,500
Nebraska Public Power District MBIA 5.25% 01/01/2008 1,000,000 1,080,000
New York Dormitory Authority AMBAC 4.40% 08/01/2013 500,000 512,500
New York Dormitory Authority AMBAC 5.25% 07/01/2008 1,890,000 2,045,924
New York Dormitory Authority Asset Guaranty 5.25% 07/01/2005 1,000,000 1,061,250
Oklahoma IDA Baptist Med Center AMBAC 7.00% 08/15/2006 500,000 599,375
Orange County CA Recovery MBIA 5.80% 07/01/2016 400,000 441,500
Palm Beach County FL Solid Waste AMBAC 6.00% 10/01/2009 500,000 578,725
Rancho Mirage CA MBIA 5.25% 07/01/2010 750,000 810,000
South Dakota HEFA Mckennan Hospital MBIA 6.00% 07/01/2007 500,000 564,375
Tampa FL Health MBIA 5.50% 11/15/2012 1,000,000 1,106,250
Teton County WY St John Hospital ACA 5.00% 12/01/2004 535,000 557,738
Tucson AZ COP Asset Guaranty 6.00% 07/01/2004 500,000 547,500
Washington DC Convent Center Authority AMBAC 5.25% 10/01/2014 1,000,000 1,038,750
--------------
Total Insured Bond (Cost $23,487,656) 24,588,986
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lease Revenue -- 7.9%
Battery Park NY Authority Junior Lien 5.20% 11/01/2023 $ 410,000 $ 416,150
New York Dormitory Authority 6.00% 07/01/2006 500,000 557,500
New York Dormitory Authority 5.50% 02/15/2005 1,000,000 1,060,000
New York State Urban Development Corp. 5.00% 01/01/2005 1,155,000 1,204,087
New York Urban Development Corp. 6.25% 04/01/2002 500,000 536,875
New York Urban Development Corp. 6.00% 01/01/2004 750,000 816,563
NY Metropolitan Transportation Authority 5.75% 07/01/2015 500,000 528,750
Ohio State Building Authority 5.13% 10/01/2007 1,000,000 1,075,000
--------------
Total Lease Revenue (Cost $5,969,580) 6,194,925
--------------
LOC GIC -- 1.7%
Michigan Housing Authority LOC: Sumitomo Bank 5.50% 06/01/2018 475,000 478,563
New York Dormitory Authority LOC: Fleet Bank 5.50% 07/01/2003 500,000 530,000
Northborough MA IFA LOC: Bank of Boston 5.75% 09/01/2002 315,000 319,448
--------------
Total LOC GIC (Cost $1,298,289) 1,328,011
--------------
Revenue Bonds -- 19.5%
Camden NJ Cooper Hospitals 5.60% 02/15/2007 600,000 638,250
Denison TX Hospital Authority Tesoma Med Center 5.90% 08/15/2007 500,000 539,375
District of Columbia Medlantic Hospital 7.00% 08/15/2005 500,000 545,000
Florida State Mid-Bay Bridge Authority 4.00% 10/01/2022 1,000,000 1,015,000
Foothills CA Transportation Agency 0.00% 01/01/2007 500,000 390,625
Illinois Educational Facilities Authority Revenues
Univ. Chicago 5.00% 07/01/2008 685,000 727,813
Illinois HEFA Northwestern University 5.05% 11/01/2032 500,000 531,875
Mass IFA Berkshire Retirement Development 5.13% 07/01/2018 500,000 505,625
Mass IFA Loomis Project 6.50% 07/01/2002 250,000 258,260
Mass IFA Resource Recovery 6.15% 07/01/2002 700,000 744,625
Met Govt Nashville & Davidson TN Vanderbilt 6.00% 05/01/2008 610,000 699,975
Michigan Hospital Authority Sinai Hospital 5.75% 01/01/2003 450,000 476,438
Montana Student Assistance Corp. 5.95% 12/01/2012 305,000 315,294
New Hampshire HEFA Monadnock Hospital 5.25% 10/01/2007 550,000 562,375
New York Med Center Long Island FHA 6.40% 08/15/2014 465,000 516,150
New York Med Center Mt. Sinai FHA 5.95% 08/15/2009 165,000 175,313
New York Med Center St. Luke's FHA 5.60% 08/15/2013 455,000 480,594
New York State Medical Care Facilities St. Vince FHA 6.13% 02/15/2014 415,000 453,975
NH Education Authority Brewster Acadamy 5.40% 06/01/2001 305,000 314,150
NH HEFA Nashua Hospital 6.25% 10/01/2008 750,000 810,938
Philadelphia PA HEFA Jefferson Health 5.50% 05/15/2006 1,000,000 1,080,000
Scranton PA Allied Rehabilitation 7.12% 07/15/2005 500,000 549,375
Scranton-Lackawanna PA Health 6.60% 07/15/2000 200,000 204,750
Tyler TX Health Facilities Development Corp. 5.25% 07/01/2001 835,000 854,831
Utah Student Loan AMBAC 7.45% 11/01/2008 500,000 532,500
Volusia FL HEFA - Embry Riddle University 5.50% 10/15/2004 360,000 380,250
Wisconsin State Transportation 5.00% 07/01/2008 1,000,000 1,067,500
--------------
Total Revenue Bonds (Cost $14,632,217) 15,370,856
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Security Rate Maturity Value (Note 1A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Special Revenues -- 3.9%
Castle Rock CO Import Authority 5.75% 12/01/2001 $ 500,000 $ 526,875
District of Columbia Redevelopment Agency 5.63% 11/01/2010 410,000 429,988
Long Beach CA Aquarium 5.75% 07/01/2005 200,000 217,750
Los Angeles CA Community Redevelopment 5.00% 11/15/2000 500,000 511,250
Los Angeles CA Community Redevelopment 4.60% 11/15/2003 500,000 500,340
Met Peoria IL 6.25% 07/01/2017 300,000 329,625
Orange County CA Transportation Sales Tax 6.00% 02/15/2007 500,000 571,250
--------------
Total Special Revenues (Cost $2,903,387) 3,087,078
--------------
TOTAL BONDS (COST $75,451,259) 78,584,903
--------------
SHORT-TERM INVESTMENTS -- 2.9%
Short Term Bonds -- 2.9%
Lone Star Airport Improvement 3.45% 12/01/2014+ 200,000 200,000
Long Island Power Authority 4.10% 05/01/2033+ 900,000 900,000
SC Jobs Economic Development Authority 4.10% 07/01/2022+ 100,000 100,000
Lone Star TX Airport 2.85% 12/01/2014+ 200,000 200,000
Lone Star Airport Improvement 2.85% 12/01/2014+ 400,000 400,000
Lone Star TX Airport 3.38% 12/01/2014+ 500,000 500,000
--------------
Total Short Term Bonds (Cost $2,300,000) 2,300,000
--------------
Repurchase Agreements -- 0.0%
Prudential-Bache Repurchase Agreement, dated 9/30/98, due 10/1/98, with a
maturity value of $2,324 and an effective yield of 4.75%, collateralized by a
U.S. Government Agency Obligation with a rate of 6.14%, a maturity date of
6/01/28 and an aggregate market value of $3,038. 2,323
--------------
Total Repurchase Agreements (Cost $2,323) 2,323
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,302,323) 2,302,323
--------------
TOTAL INVESTMENTS-- 102.9% (COST $77,753,582) $ 80,887,226
Other Assets, Less Liabilities-- (2.9)% (2,308,050)
--------------
NET ASSETS-- 100% $ 78,579,176
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Intermediate Tax Exempt Bond Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
Notes to the Schedule of Investments:
ACA - American Capital Access Corp.
AMBAC - American Municipal Bond Assurance Corp.
COP - Certification of Participation
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority
FNMA - Federal National Mortgage Association
FSA - Financial Security Association
GIC - Guaranteed Investment Contract
HEFA - Health & Educational Facilities Authority
HFA - Housing Finance Authority
IFA - Industrial Finance Authority
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
# Delayed delivery contract. (Note 8)
+ Date shown reflects actual maturity date. Security puttable on a daily basis.
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 100.0%
Capital Goods -- 8.1%
AFC Cable Systems, Inc.* 26,300 $ 624,625
Aviation Sales Co.* 18,700 541,131
Eagle USA Airfreight, Inc.* 23,200 324,800
Expeditors International Wash, Inc. 14,000 388,500
Heico Corp. 24,900 415,519
Kellstrom Industries, Inc.* 27,000 374,625
Kroll-Ogara Co.* 37,400 874,225
Service Experts Inc.* 30,500 848,281
Superior Services, Inc.* 19,800 558,113
Triumph Group Inc.* 15,200 452,200
--------------
5,402,019
--------------
Consumer Stable -- 1.6%
Beringer Wine Estates* 8,700 333,319
United Natural Foods Inc.* 28,600 729,300
--------------
1,062,619
--------------
Early Cyclical -- 2.9%
Atlantic Coast Airlines, Inc.* 31,200 729,300
Excelsior-Henderson Motorcycle* 80,200 591,475
Midwest Express Holdings* 17,675 592,113
--------------
1,912,888
--------------
Energy -- 2.1%
Cal Dive International, Inc.* 34,300 617,400
Friede Goldman Intl Inc.* 27,000 425,250
Newpark Resources, Inc.* 54,000 371,250
--------------
1,413,900
--------------
Financial -- 4.1%
First Republic Bank* 12,900 393,450
First Sierra Financial, Inc.* 50,400 456,750
Greater Bay Bancorp 18,400 519,800
Indigo Aviation ADR* 45,600 393,300
Linc Capital Inc.* 51,200 492,800
West Coast Bancorp 27,000 452,250
--------------
2,708,350
--------------
Growth Cyclical -- 8.0%
American Coin Merchandising* 16,500 216,563
Central Garden & Pet Co.* 27,900 516,150
Coach USA Inc.* 41,400 1,022,062
Gadzooks Inc.* 69,500 638,531
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Cyclical (continued)
Garden Fresh Restaurant Corp.* 39,600 $ 584,100
Hibbet Sporting Goods Inc.* 13,000 325,813
Hot Topic* 30,000 435,000
ResortQuest International Inc.* 24,100 212,381
Stein Mart Inc.* 103,000 824,000
Steiner Leisure Ltd.* 19,125 298,828
Wet Seal, Inc., Class A* 15,800 273,538
--------------
5,346,966
--------------
Health Care -- 24.1%
Affymetrix Inc.* 19,500 502,125
Chirex, Inc.* 69,200 826,075
CN Bioscience Inc.* 35,500 869,750
Coulter Pharmaceutical Inc.* 30,900 768,638
Curative Health Services Inc.* 10,000 306,250
Cytyc Corp.* 73,500 744,188
Guilford Pharmaceuticals Inc.* 26,000 364,000
Ilex Oncology Inc.* 61,300 532,544
Impath Inc.* 41,900 1,246,524
Inhale Therapeutic Systems* 24,900 697,200
Ligand Pharmaceuticals, Class B* 61,500 561,188
Medimmune, Inc.* 16,400 1,061,899
Medquist, Inc.* 36,500 1,154,312
Novoste Corp.* 45,500 585,813
Parexel International Corp.* 24,300 947,699
Pharmaceutical Product Development* 31,000 868,000
Quadramed Corp.* 28,900 581,613
Res-Care Inc.* 42,700 800,625
Sepracor Inc.* 20,300 1,334,724
Transkaryotic Therapies Inc.* 30,100 722,400
Vical Inc.* 48,100 529,100
--------------
16,004,667
--------------
Other -- 3.8%
S&P 400 Mid-Cap Depository Receipt 42,200 2,524,087
--------------
Services -- 24.4%
Abacus Direct Corp.* 9,600 489,600
Bright Horizons, Inc.* 36,900 784,125
Central Parking Corp. 10,275 517,603
Charles River Associates, Inc.* 15,100 358,625
Devry, Inc.* 31,000 726,563
Emmis Broadcasting Corp., Class A* 18,700 705,925
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Services (continued)
F.Y.I. Inc.* 33,700 $ 825,650
Gray Communications Systems, Class B 22,100 549,738
Hagler Bailly* 25,900 505,050
Heftel Broadcasting Corp.* 23,000 868,250
Inspire Insurance Solutions* 13,350 315,394
Intelligroup, Inc.* 48,500 824,500
Intl Telecomm Data Systems* 24,450 709,050
Metro Networks Inc.* 18,100 662,913
Metzler Group, Inc.* 19,550 669,588
NCO Group Inc.* 30,000 834,375
On Assignment Inc. 24,000 887,999
Peterson Companies, Inc. Class A* 31,600 900,599
Renaissance Worldwide Inc.* 35,500 465,938
Rental Service Corp.* 33,900 610,200
Scandinavian Broadcast Systems Corp.* 103,300 2,195,124
Wilmar Industries Inc.* 38,500 818,125
--------------
16,224,934
--------------
Technology -- 20.9%
Applied Micro Circuits Corp.* 11,100 165,113
Aspen Technologies, Inc.* 26,900 719,575
ATMI Inc.* 71,100 986,512
Best Software, Inc.* 32,100 770,400
C-Net Inc.* 10,400 475,800
CMG Information Services, Inc.* 14,000 745,500
Davox Corp.* 35,000 328,125
Deltek Systems, Inc.* 43,500 802,031
HNC Software Inc.* 16,300 662,188
Infoseek Corp.* 34,200 842,175
Landmark Systems Corp.* 16,300 132,438
Level One Communications, Inc.* 15,225 306,403
Lycos Inc.* 26,900 909,555
Micrel, Inc.* 10,600 280,900
National Computer System, Inc. 21,600 637,200
Parlex Corp.* 30,400 279,300
Pegasystems, Inc.* 26,100 401,288
Pervasive Software, Inc.* 66,200 719,925
Photronics Inc.* 38,400 489,600
Radiant Systems, Inc.* 26,800 206,025
Sanmina Corp. 17,900 503,438
SBS Technologies Inc.* 19,400 485,000
Semtech Corp.* 39,700 739,413
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Small Cap Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology (continued)
TSI International Software Ltd.* 22,100 $ 765,213
Unitrode Corp. 50,000 531,250
--------------
13,884,367
--------------
TOTAL EQUITIES (COST $67,201,444) 66,484,797
--------------
SHORT-TERM INVESTMENTS -- 1.0%
Repurchase Agreements -- 1.0%
Prudential-Bache Repurchase Agreement, dated 9/30/98, due 10/1/98, with a
maturity value of $629,318 and an effective yield of 4.75%, collateralized by a
U.S. Treasury Obligation with a rate of 8.125%, a maturity date of 8/15/19 and
an aggregate market value of $654,856. 629,235
--------------
Total Repurchase Agreements (Cost $629,235) 629,235
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $629,235) 629,235
--------------
TOTAL INVESTMENTS-- 101.0% (COST $67,830,679) $ 67,114,032
Other Assets, Less Liabilities-- (1.0)% (655,750)
--------------
NET ASSETS-- 100% $ 66,458,282
==============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 99.8%
Capital Goods -- 10.0%
Crane Company 30,938 $ 727,031
Deere & Co. 15,000 453,750
Kaydon Corp. 27,000 710,438
Textron, Inc. 5,300 321,313
United Technologies Corp. 12,400 947,825
--------------
3,160,357
--------------
Consumer Stable -- 12.4%
Interstate Bakeries Corp. 12,000 372,000
Kroger Co.* 20,000 999,999
Lancaster Colony Corp. 23,850 733,388
Owens Illinois* 23,000 575,000
Richfood Holdings, Inc. 32,100 493,538
Universal Foods Corp. 36,000 751,500
--------------
3,925,425
--------------
Early Cyclical -- 3.3%
Clayton Homes, Inc. 51,000 863,813
Leggett & Platt, Inc. 9,000 186,750
--------------
1,050,563
--------------
Energy -- 7.5%
British Petroleum Co. PLC ADR 9,858 860,111
Mobil Corp. 9,800 744,188
Texaco Inc. 12,300 771,056
--------------
2,375,355
--------------
Financial -- 20.7%
Ace Limited 9,900 297,000
Allied Group 24,250 1,165,515
AMBAC Inc. 11,800 566,400
BankAmerica Corp. 7,200 432,900
BankBoston Corp. 2,400 79,200
Chase Manhattan Corp. 9,000 389,250
Citicorp 4,000 371,750
Conseco, Inc. 25,370 775,371
Delphi Financial Group, Inc.* 18,830 741,431
Morgan Stanley Dean Witter 5,800 249,763
Old Republic International Corp. 28,250 635,625
Reliastar Financial Corp. 21,500 838,500
--------------
6,542,705
--------------
Growth Cyclical -- 12.8%
Carnival Corp. 11,000 349,938
Claire's Stores, Inc. 17,000 306,000
Costco Companies, Inc.* 4,000 189,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Cyclical (continued)
G Tech Holdings Corp.* 27,500 $ 730,469
International Game Technology 82,000 1,522,124
Jones Apparel Group, Inc.* 12,400 284,425
Pier 1 Imports, Inc. 30,138 226,031
Ross Stores, Inc. 6,500 186,063
Tommy Hilfiger Corp.* 6,400 262,400
--------------
4,056,950
--------------
Health Care -- 9.2%
Amgen, Inc.* 13,500 1,020,093
Bristol-Myers Squibb Co. 3,300 342,788
Schering-Plough Corp. 4,800 497,100
Sofamor Danek Group, Inc.* 3,000 267,000
Steris Corp.* 6,000 169,500
Watson Pharmaceutical, Inc.* 12,000 609,000
--------------
2,905,481
--------------
Real Estate -- 2.6%
Equity Office Properties, REIT 5,875 143,938
General Growth Properties, REIT 5,600 199,500
Patriot Amer Hospitality, Inc., REIT 8,399 107,087
Prentiss Properties Trust, REIT 7,400 176,675
Starwood Hotels and Resorts, REIT 6,600 201,300
--------------
828,500
--------------
Services -- 10.0%
Ceridian Corp.* 5,300 304,088
Interim Services, Inc.* 70,800 1,455,824
Shared Medical Systems 12,100 643,569
Xerox Corp. 9,200 779,700
--------------
3,183,181
--------------
Technology -- 11.3%
American Power Conversion Corp.* 32,000 1,205,999
Computer Associates International, Inc. 12,450 460,650
Intel Corp. 3,000 257,250
Sci Sys, Inc.* 32,000 862,000
Sun Microsystems, Inc.* 15,700 782,056
--------------
3,567,955
--------------
TOTAL EQUITIES (COST $31,651,397) 31,596,472
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
Standish, Ayer & Wood Investment Trust
Standish Tax-Sensitive Equity Fund
Schedule of Investments - September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Security (Note 1A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
SHORT-TERM INVESTMENTS -- 0.2%
Repurchase Agreements -- 0.2%
Prudential-Bache Repurchase Agreement, dated 9/30/98, due 10/1/98, with a
maturity value of $48,666 and an effective yield of 4.75%, collateralized by a
U.S. Government Agency Obligation with a rate of 6.14%, a maturity date of
6/01/28 and an aggregate market value of $50,631. $ 48,660
--------------
Total Repurchase Agreements (Cost $48,660) 48,660
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $48,660) 48,660
--------------
TOTAL INVESTMENTS-- 100.0% (COST $31,700,057) $ 31,645,132
Other Assets, Less Liabilities-- 0.0% 13,474
--------------
NET ASSETS-- 100% $ 31,658,606
==============
</TABLE>
Notes to the Schedule of Investments:
REIT - Real Estate Investment Trust
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
Standish, Ayer & Wood Investment Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
(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 Massachusetts Intermediate Tax Exempt Bond Fund
(Massachusetts Intermediate Tax Exempt Bond Fund) is a separate
non-diversified investment series of the Trust. Standish Intermediate
Tax Exempt Bond Fund (Intermediate Tax Exempt Bond Fund), Standish
Small Cap Tax-Sensitive Equity Fund (Small Cap Tax-Sensitive Equity
Fund) and Standish Tax-Sensitive Equity Fund (Tax Sensitive Equity
Fund) are separate diversified investment series of the Trust (together
with the Massachusetts Intermediate Tax Exempt Bond Fund, individually
a "Fund" and collectively, the "Funds").
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their
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
Municipal bonds are normally valued on the basis of valuations
furnished by a pricing service. Taxable fixed income obligations, if
any, for which price quotations are readily available are normally
valued at the last sales prices on the exchange or market on which they
are primarily traded, or if not listed or no sale, at the last quoted
bid prices. Equity securities for which quotations are readily
available are valued at the last sale price or if no sale, at the
closing bid prices in the principal market in which such securities are
normally traded. Securities (including restricted securities) for which
quotations are not readily available are valued 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 Funds are valued at amortized cost. If a
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 each 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 each
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.
D. Federal taxes
As qualified regulated investment companies under Subchapter M of the
Internal Revenue Code, the Funds are not subject to income taxes to the
extent that each Fund distributes all of its taxable income for its
fiscal year. Dividends paid by the Massachusetts Intermediate Tax
Exempt Bond Fund and the Intermediate Tax Exempt Bond Fund
(collectively the "Bond Funds") from net interest earned on tax-exempt
municipal bonds are not includable by shareholders as gross income for
Federal income tax purposes because the Bond Funds intend to meet
certain requirements of the Internal Revenue Code applicable to
regulated investment companies which will enable the Bond Funds to pay
exempt-interest dividends. At September 30, 1998, the following Funds,
for federal income tax purposes, had capital loss carryovers as
follows:
35
<PAGE>
Standish, Ayer & Wood Investment Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Expiration Date September 30,
----------------------------------------------------------------------
2002 2003 2004 2005 2006 Total
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Massachusetts Intermediate Tax
Exempt Bond Fund $97,598 $178,890 ---- ---- ---- $276,488
Tax-Sensitive Equity Fund ---- ---- $2,179 $95,353 ---- $ 97,532
Small Cap Tax-Sensitive Equity
Fund ---- ---- ---- ---- $152,611 $152,611
</TABLE>
Such carryovers will reduce each 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 Funds of any liability for federal income tax.
The Small Cap Tax Sensitive Equity Fund and the Tax Sensitive Equity
Fund elected to defer to their fiscal year ending September 30, 1999
losses of $969,482 and $728,903, respectively, recognized during the
period from November 1, 1997 to September 30, 1998.
E. Deferred organization expense
Costs associated with the Funds' organization and initial registration
were amortized, on a straight-line basis, through October, 1997 for the
Massachusetts Intermediate Tax Exempt Bond Fund and the Intermediate
Tax Exempt Bond Fund and through December, 2000 for the Small Cap
Tax-Sensitive Equity Fund and the Tax-Sensitive Equity Fund.
(2) Distributions to Shareholders:
Distributions on shares of the Bond Funds are declared daily from net
investment income and distributed monthly. Dividends from net
investment income, if any, will be distributed at least annually for
the Small Cap Tax-Sensitive Equity Fund and the Tax-Sensitive Equity
Fund. Distributions on capital gains, if any, will be distributed
annually by all of the Funds. Distributions from net investment income
and capital gains, if any, are automatically reinvested in additional
shares of the applicable Fund unless the shareholder elects to receive
them in cash. Distributions 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. Permanent book and tax differences relating to
shareholder distributions will result in reclassifications to paid-in
capital.
(3) 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 at the following annual rates of
each Fund's average daily net assets: 0.40% for the Massachusetts
Intermediate Tax Exempt Bond Fund and the Intermediate Tax Exempt Bond
Fund, 0.60% for the Small Cap Tax-Sensitive Equity Fund and 0.50% for
the Tax-Sensitive Equity Fund. For the year ended September 30, 1998,
SA&W voluntarily agreed to limit the total Fund operating expenses
(excluding litigation, indemnification and other extraordinary
expenses) to the following percentages of average daily net assets:
0.65% for the Massachusetts Intermediate Tax Exempt Bond Fund and the
Intermediate Tax Exempt Bond Fund; 0.75% for the Small Cap
Tax-Sensitive Equity Fund; and 0.50% for the Tax-Sensitive Equity Fund.
For the year ended September 30, 1998, SA&W voluntarily waived $51,114,
$27,935, $109,263 and $128,459 of its advisory fee to the Massachusetts
Tax Exempt Bond Fund, Intermediate Tax Exempt Bond Fund, Small Cap
Tax-Sensitive Equity Fund and Tax-Sensitive Equity Fund, respectively,
and reimbursed operating expenses of $12,935 for the Tax-Sensitive
Equity Fund which is reflected as a reduction of expenses in the Tax
Sensitive Equity Fund's Statement of Operations. These agreements are
voluntary and
36
<PAGE>
Standish, Ayer & Wood Investment Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
temporary and may be discontinued or revised by SA&W at any time. The
Funds pay no compensation directly to the Trust's Trustees who are
affiliated with SA&W or to its officers, all of whom receive
remuneration for their services to the Funds from SA&W. Certain of the
Trustees and officers of the Trust are directors or officers of SA&W.
(4) Purchases and Sales of Investments:
Cost of purchases and proceeds from sales of investments, other than
short-term obligations, were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1998 September 30, 1997
------------------------------ -----------------------------
Purchases Sales Purchases Sales
-------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Massachusetts Intermediate Tax Exempt Bond Fund $28,223,961 $15,542,356 $14,344,251 $8,536,805
============== ============= ============= ============
Intermediate Tax Exempt Bond Fund $84,121,146 $55,019,644 $44,667,863 $24,936,103
============== ============= ============= ============
Small Cap Tax-Sensitive Equity Fund $93,341,829 $48,543,729 $33,633,673 $16,657,415
============== ============= ============= ============
Tax-Sensitive Equity Fund $31,483,795 $8,153,582 $8,248,008 $1,571,491
============== ============= ============= ============
</TABLE>
(5) Shares of Beneficial Interest:
The Declaration of Trust permits the Trust to issue an unlimited number
of full and fractional shares of beneficial interest having a par value
of one cent per share. Transactions in each Fund's shares were as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
Massachusetts Intermediate Tax Exempt Bond Fund September 30, 1998 September 30, 1997
----------------------- -----------------------
<S> <C> <C>
Shares sold 866,950 664,860
Shares issued to shareholders in
payment of distributions declared 38,776 30,459
Shares redeemed (257,536) (440,478)
----------------------- -----------------------
Net increase 648,190 254,841
======================= =======================
Intermediate Tax Exempt Bond Fund
Shares sold 1,865,702 1,093,993
Shares issued to shareholders in
payment of distributions declared 68,939 38,642
Shares redeemed (831,605) (361,805)
----------------------- -----------------------
Net increase 1,103,036 770,830
======================= =======================
</TABLE>
37
<PAGE>
Standish, Ayer & Wood Investment Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Small Cap Tax-Sensitive Equity Fund September 30, 1998 September 30, 1997
----------------------- -----------------------
<S> <C> <C>
Shares Sold 1,919,939 763,163
Shares issued to shareholders in
payment of distributions declared 5,771 387
Shares redeemed (363,050) (51,613)
----------------------- -----------------------
Net increase 1,562,660 711,937
======================= =======================
Tax-Sensitive Equity Fund
Shares Sold 706,407 244,525
Shares issued to shareholders in
payment of distributions declared 3,722 2,135
Shares redeemed (99,734) (3,376)
----------------------- -----------------------
Net increase 610,395 243,284
======================= =======================
</TABLE>
At September 30, 1998, the Massachusetts Intermediate Tax Exempt Bond
Fund had one shareholder of record owning approximately 15% of the
Fund's outstanding shares. The Small Cap Tax-Sensitive Equity Fund had
one shareholder of record owning approximately 10% of the Fund's
outstanding shares.
(6) Federal Income Tax Basis of Investment Securities:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at September 30, 1998, as computed on a
federal income tax basis, were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation
Aggregate Cost Appreciation Depreciation (Depreciation)
---------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Massachusetts Intermediate
Tax Exempt Bond Fund $50,644,059 $2,210,139 $(4,557) $2,205,582
Intermediate Tax Exempt Bond
Fund $77,753,582 $3,152,279 $(18,635) $3,133,644
Small Cap Tax-Sensitive
Equity Fund $68,160,073 $7,620,849 $(8,666,890) $(1,046,041)
Tax-Sensitive Equity Fund $31,721,612 $3,682,826 $(3,759,306) $(76,480)
</TABLE>
38
<PAGE>
Standish, Ayer & Wood Investment Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
(7) Financial Instruments:
In general, the following instruments are used for hedging purposes as
described below. However, these instruments may also be used to seek 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.
Since the Massachusetts Intermediate Tax Exempt Bond Fund may invest a
substantial portion of its assets in issuers located in one state, it
will be more susceptible to factors adversely affecting issuers of that
state than would be a comparable general tax-exempt mutual fund.
The Funds may trade the following financial instruments with
off-balance sheet risk:
Futures contracts
The Funds 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. Pursuant to margin requirements, the
Funds deposit either in cash or securities in an amount equal to a
certain percentage of the contract amount. Subsequent payments are made
or received by the Funds each day, dependent on the daily fluctuations
in the value of the underlying security or index, and are recorded for
financial statement purposes as unrealized gains or losses by each
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. Buying futures tends to increase a Fund's exposure to the
underlying instrument, while selling futures tends to decrease a Fund's
exposure to the underlying instrument or hedge other Fund investments.
In addition, there is the risk that a Fund may not be able to enter
into a closing transaction because of an illiquid secondary market.
Losses may arise if there is an illiquid secondary market or if the
counterparties do not perform under the contracts terms. The Funds
enter into financial futures transactions primarily to manage their
exposure to certain markets and to changes in securities prices and,
with respect to the Small Cap Tax-Sensitive Equity Fund and the
Tax-Sensitive Equity Fund, to changes in foreign currencies. Gains and
losses are realized upon the expiration or closing of the futures
contracts.
At September 30, 1998, the Funds had no open futures contracts.
(8) Delayed Delivery Transactions:
The Bond Funds 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 Funds
either segregate on their records, or instruct the custodian to
segregate, securities having a value at least equal to the amount of
the purchase commitment.
At September 30, 1998, the Intermediate Tax Exempt Bond Fund had
entered into the following delayed delivery transactions:
<TABLE>
<CAPTION>
Type Security Settlement Date Trade Amount
------------ ----------------------------------------- ---------------- ---------------
<S> <C> <C> <C>
Buy King County WA 10/06/98 $1,607,333
Buy New Mexico Mortgage Finance Authority 10/21/98 $1,098,472
---------------
$2,705,805
===============
</TABLE>
At September 30, 1998, the Massachusetts Intermediate Tax Exempt Bond
Fund, the Small Cap Tax Sensitive Equity Fund and the Tax Sensitive
Equity Fund were not parties to any delayed delivery transactions.
39
<PAGE>
Standish, Ayer & Wood Investment Trust
- --------------------------------------------------------------------------------
Tax Information - Unaudited
Pursuant to section 852 of the Internal Revenue Code, the Standish
Intermediate Tax Exempt Bond Fund designated $32,553 and the Standish
Small Cap Tax-Sensitive Equity Fund designated $110,691 as capital gain
dividends for the year ended September 30, 1998. All of this amount
represents a 28% tax rate gain distribution.
Of the distributions paid by the Bond funds from net investment income
for the year ended September 30, 1998, amounts that were tax exempt for
federal income tax purposes are as follows:
Massachusetts Intermediate Tax Exempt Bond Fund $1,935,592
Intermediate Tax Exempt Bond Fund $2,885,553
40
<PAGE>
Report of Independent Accountants
To the Trustees of Standish, Ayer & Wood Investment Trust and the
Shareholders of Standish Massachusetts Intermediate Tax Exempt Bond Fund,
Standish Intermediate Tax Exempt Bond Fund, Standish Small Cap
Tax-Sensitive Equity Fund, and Standish Tax-Sensitive Equity Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Standish, Ayer & Wood Investment Trust: Standish Massachusetts Intermediate
Tax Exempt Bond Fund, Standish Intermediate Tax Exempt Bond Fund, Standish
Small Cap Tax-Sensitive Equity Fund, and Standish Tax-Sensitive Equity Fund
(the "Funds"), at September 30, 1998, the results of operations, the
changes in net assets and the financial highlights for each of the periods
indicated therein, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (herein
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at September 30,
1998, by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 17, 1998
41
<PAGE>
[LOGO] STANDISH FUNDS(R)
One Financial Center
Boston, MA 02111-2662
(800) 729-0066
www.standishfunds.com
98-388
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000799295
<NAME> Standish Mass. Int. Tax Exempt Bond Fund Series
<SERIES>
<NUMBER> 8
<NAME> Standish Mass. Int. Tax Exempt Bond Fund Series
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 50,644,059
<INVESTMENTS-AT-VALUE> 52,849,641
<RECEIVABLES> 897,662
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,267
<TOTAL-ASSETS> 53,749,570
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 149,514
<TOTAL-LIABILITIES> 149,514
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 51,669,781
<SHARES-COMMON-STOCK> 2,460,826
<SHARES-COMMON-PRIOR> 1,812,636
<ACCUMULATED-NII-CURRENT> 1,180
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (276,487)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,205,582
<NET-ASSETS> 53,600,056
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,264,228
<OTHER-INCOME> 0
<EXPENSES-NET> 291,375
<NET-INVESTMENT-INCOME> 1,972,853
<REALIZED-GAINS-CURRENT> 138,343
<APPREC-INCREASE-CURRENT> 1,169,361
<NET-CHANGE-FROM-OPS> 3,280,557
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,972,853)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 866,950
<NUMBER-OF-SHARES-REDEEMED> 257,536
<SHARES-REINVESTED> 38,776
<NET-CHANGE-IN-ASSETS> 15,199,428
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (414,831)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 179,308
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 342,489
<AVERAGE-NET-ASSETS> 44,868,446
<PER-SHARE-NAV-BEGIN> 21.18
<PER-SHARE-NII> 0.94
<PER-SHARE-GAIN-APPREC> 0.60
<PER-SHARE-DIVIDEND> (0.94)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.78
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000799295
<NAME> Standish Intermediate Tax Exempt Bond Fund Series
<SERIES>
<NUMBER> 9
<NAME> Standish Intermediate Tax Exempt Bond Fund Series
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 77,753,582
<INVESTMENTS-AT-VALUE> 80,887,226
<RECEIVABLES> 3,065,609
<ASSETS-OTHER> 2,623
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 83,955,458
<PAYABLE-FOR-SECURITIES> 5,189,273
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,009
<TOTAL-LIABILITIES> 5,376,282
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74,983,272
<SHARES-COMMON-STOCK> 3,523,504
<SHARES-COMMON-PRIOR> 2,420,468
<ACCUMULATED-NII-CURRENT> 8,266
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 453,994
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,133,644
<NET-ASSETS> 78,579,176
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,324,174
<OTHER-INCOME> 0
<EXPENSES-NET> 430,104
<NET-INVESTMENT-INCOME> 2,894,070
<REALIZED-GAINS-CURRENT> 589,639
<APPREC-INCREASE-CURRENT> 1,186,782
<NET-CHANGE-FROM-OPS> 4,670,491
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,894,070)
<DISTRIBUTIONS-OF-GAINS> (151,703)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,865,702
<NUMBER-OF-SHARES-REDEEMED> 831,605
<SHARES-REINVESTED> 68,939
<NET-CHANGE-IN-ASSETS> 25,855,884
<ACCUMULATED-NII-PRIOR> 8,268
<ACCUMULATED-GAINS-PRIOR> 142,748
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 264,680
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 458,039
<AVERAGE-NET-ASSETS> 66,239,425
<PER-SHARE-NAV-BEGIN> 21.78
<PER-SHARE-NII> 0.96
<PER-SHARE-GAIN-APPREC> 0.58
<PER-SHARE-DIVIDEND> (0.96)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 22.30
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000799295
<NAME> Standish Small Cap Tax-Sensitive Equity Fund
<SERIES>
<NUMBER> 14
<NAME> Standish Small Cap Tax-Sensitive Equity Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 67,830,679
<INVESTMENTS-AT-VALUE> 67,114,032
<RECEIVABLES> 671,807
<ASSETS-OTHER> 10,671
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,796,510
<PAYABLE-FOR-SECURITIES> 1,294,226
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 44,002
<TOTAL-LIABILITIES> 1,338,228
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,626,416
<SHARES-COMMON-STOCK> 2,567,161
<SHARES-COMMON-PRIOR> 1,004,501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,451,487)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (716,647)
<NET-ASSETS> 66,458,282
<DIVIDEND-INCOME> 33,224
<INTEREST-INCOME> 84,461
<OTHER-INCOME> 0
<EXPENSES-NET> 364,141
<NET-INVESTMENT-INCOME> (246,456)
<REALIZED-GAINS-CURRENT> (1,446,306)
<APPREC-INCREASE-CURRENT> (9,201,341)
<NET-CHANGE-FROM-OPS> (10,894,103)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,582)
<DISTRIBUTIONS-OF-GAINS> (170,781)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,919,939
<NUMBER-OF-SHARES-REDEEMED> 363,050
<SHARES-REINVESTED> 5,771
<NET-CHANGE-IN-ASSETS> 44,770,231
<ACCUMULATED-NII-PRIOR> 7,577
<ACCUMULATED-GAINS-PRIOR> 165,588
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 291,323
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 473,404
<AVERAGE-NET-ASSETS> 48,644,446
<PER-SHARE-NAV-BEGIN> 32.61
<PER-SHARE-NII> (0.15)
<PER-SHARE-GAIN-APPREC> (6.42)
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> (0.14)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 25.89
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000799295
<NAME> Standish Tax-Sensitive Equity Fund Series
<SERIES>
<NUMBER> 15
<NAME> Standish Tax-Sensitive Equity Fund Series
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 31,700,057
<INVESTMENTS-AT-VALUE> 31,645,132
<RECEIVABLES> 41,079
<ASSETS-OTHER> 9,909
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31,696,120
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37,514
<TOTAL-LIABILITIES> 37,514
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,498,485
<SHARES-COMMON-STOCK> 974,125
<SHARES-COMMON-PRIOR> 363,730
<ACCUMULATED-NII-CURRENT> 62,979
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (847,933)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (54,925)
<NET-ASSETS> 31,658,606
<DIVIDEND-INCOME> 295,883
<INTEREST-INCOME> 32,451
<OTHER-INCOME> 0
<EXPENSES-NET> 128,459
<NET-INVESTMENT-INCOME> 199,875
<REALIZED-GAINS-CURRENT> (726,922)
<APPREC-INCREASE-CURRENT> (3,234,659)
<NET-CHANGE-FROM-OPS> (3,761,706)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (161,305)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 706,407
<NUMBER-OF-SHARES-REDEEMED> 99,734
<SHARES-REINVESTED> 3,722
<NET-CHANGE-IN-ASSETS> 18,839,666
<ACCUMULATED-NII-PRIOR> 24,409
<ACCUMULATED-GAINS-PRIOR> (121,011)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 128,459
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 269,853
<AVERAGE-NET-ASSETS> 25,743,169
<PER-SHARE-NAV-BEGIN> 35.24
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> (2.77)
<PER-SHARE-DIVIDEND> (0.26)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 32.50
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
