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, 1999
[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................24
Standish Small Cap Tax-Sensitive Equity Fund..............28
Standish Tax-Sensitive Equity Fund........................31
Notes to Financial Statements.................................34
Report of Independent Accountants.............................39
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
November 25, 1999
Dear Standish Funds Shareholder:
Enclosed you will find the annual statement for your Standish Fund for the
fiscal year ended September 30, 1999.
During the twelve months ended September 30, 1999, returns from most equity
investments have been very strong. For example, large capitalization U.S.
stocks, as reflected in the Standard and Poor's 500 Index, provided a total
return of 27.79%; smaller cap U.S. stocks, as measured by the Russell 2000
Index, a return of 19.08%; and international stocks, as recorded by the Morgan
Stanley Capital International EAFE Index, a total return of 30.94%. Within the
market, growth issues have generally performed better than value stocks, and
larger capitalization issues have generally performed better than smaller
capitalization issues. The past year's results combined with those of prior
years have produced very good returns. Specifically, the Standard and Poor's 500
Index annual total return for the five years ending September 30, 1999 was
25.03%, about two and one-half times the very long-term average return for U.S.
stocks.
The financial crisis that gripped the world's capital market in the fall of 1998
has waned, and economic growth, especially in the U.S., remains strong. Some
acceleration of growth has appeared in Western Europe, as has evidence of a
bottoming of the economy in Japan. Corporate profit growth has generally been
strong. Although inflation has been quiescent, interest rates have increased
reflecting the stronger economic growth. The Federal Reserve has recently
tightened monetary policy, reversing the easing that took place a year ago.
Standish Ayer & Wood is devoted to producing superior long-term returns through
very disciplined investment philosophies designed to uncover value. We remain
confident that we have the capability to do a superior job by adhering to our
disciplines. As of September 30, 1999, Standish, Ayer & Wood, Inc., advisor to
Standish Funds, together with its affiliate, Standish International Management
Company, L.P., had approximately $45 billion of assets under management,
including $6 billion of assets in 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. The professional staff, now 287, has grown over the last year and
includes 111 professionals who hold the Chartered Financial Analyst designation.
We appreciate the opportunity to serve you and hope you will find the attached
information helpful.
Sincerely yours,
/s/ Ted Ladd
Edward H. Ladd
Chairman
Standish, Ayer & Wood, Inc.
1
<PAGE>
SELECTED FINANCIAL INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<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 $ 21.78 $ 22.30 $ 25.89 $ 32.50
----------- ----------- ----------- -----------
FROM INVESTMENT OPERATIONS:
Net investment income (loss)* 0.90 0.92 (0.21) 0.22
Net realized and unrealized gain (loss) on
investments (0.93) (0.99) 15.02 4.49
----------- ----------- ----------- -----------
Total income(loss) from investment operations (0.03) (0.07) 14.81 4.71
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.90) (0.92) -- (0.22)
From net realized loss on investments -- (0.20) -- --
----------- ----------- ----------- -----------
Total distributions to shareholders (0.90) (1.12) -- (0.22)
----------- ----------- ----------- -----------
NET ASSET VALUE, END OF YEAR $ 20.85 $ 21.11 $ 40.70 $ 36.99
=========== =========== =========== ===========
TOTAL RETURN (0.18)% (0.33)% 57.03% 14.46%
RATIOS:
Expenses (to average daily net assets)* 0.65% 0.63% 0.78% 0.50%
Net investment income (loss) (to average
daily net assets)* 4.19% 4.24% (0.60)% 0.59%
Portfolio Turnover 22% 43% 168% 50%
Net Assets, End of Year (000's omitted) $ 63,005 $ 81,918 $ 143,075 $ 29,569
</TABLE>
- -----------------
* The investment adviser voluntarily did not impose a portion of its fee.
Please refer to the Financial Highlights for additional disclosure
regarding these ratios.
2
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STANDISH, AYER & WOOD INVESTMENT TRUST
Performance Highlights
for the One-Year Period Ended September 30, 1999
Total Return
- --------------------------------------------------------------------------------
Tax Exempt Funds
Standish Mass. Intermediate Tax Exempt Bond Fund (.18%)
Standish Intermediate Tax Exempt Bond Fund (.33%)
Lehman Muni 3-5-7-10 Index 1.08%
Lipper Intermediate Muni Debt Index (.51%)
Tax-Sensitive Funds
Standish Small Capitalization Tax-Sensitive Equity Fund 57.03%
Russell 2000 Growth Index 32.64%
Standish Tax-Sensitive Equity Fund 14.46%
S&P 500 Index 27.79%
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
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
Management Discussion and Analysis
The past twelve-month period ended September 30, 1999 was a particularly
difficult one for the bond markets. Municipal bond investors, while enjoying the
benefit of a tax-exempt income from their portfolios, found themselves subject
to modest declines in the overall value of their bonds. The Standish
Intermediate Tax Exempt Bond Fund produced a negative return of (.33)% for the
period, after all expenses, versus our benchmark performance index (Lehman Muni
3,5,7, and 10 Year Index) return of 1.08%. The fund did outperform its peer
group of mutual funds, as measured by the Lipper Intermediate Muni Bond Fund
Index, where the negative return was (.51)%. The Standish Massachusetts
Intermediate Tax Exempt Bond Fund produced a negative return of (.18)% for the
period, after all expenses. Note that the Massachusetts Fund invests only in
bonds that are double tax exempt in Massachusetts, whereas the benchmark indices
are national in scope. While returns may have been disappointing, the
conservative intermediate term investment philosophy employed by the funds
prevented the much more severe declines that many municipal bond fund investors
realized.
After a period of several years of very favorable total return performance, the
bond markets recorded a quite poor 12-month period. Ten-year municipal bond
yields reached a low of 3.85% on October 6, 1998, following a flight to quality
due to global financial problems and subsequent reductions in rates by the
Federal Reserve Board. From that point on, however, the news was generally bad
for bond investors. As the global economy recovered, the U.S. economic engine
moved back into high gear. Investors lost interest in municipal bonds, focusing
once again on highflying equity markets. Municipals recovered a bit in January,
only to be faced with further declines in February as economic data suggested
that the economy would continue to grow, raising the threat that the Federal
Reserve would raise rates. Although inflation data were generally benign, the
Fed was thought to be focusing on employment related numbers and the possibility
of wage increases in a potentially overheated economy. By the time the Fed
actually raised interest rates in late June, the market shifted focus to whether
additional increases would be necessary. Ten-year municipal rates peaked in
mid-August at about 5.0% and have remained close to that level since.
Intermediate Tax Exempt Bond Fund
The fund trailed its benchmark index for most of the period, as did most of its
peer group. Because our duration posture (i.e., the fund's sensitivity to
changes in interest rates) was a bit longer than that of the index, the fund was
subject to greater declines in price as interest rates rose. An underweight to
the pre-refunded sector, which typically does well in declining markets, also
was a negative for the fund. The fund did outperform its peer group averages,
indicating that it was a difficult year across the board for municipal bond
funds and that the fund was reasonably well positioned versus the competition.
Our premium coupon bias helped to protect the fund, and its broad-based
diversification continues, we believe, to be a benefit to shareholders.
Massachusetts Intermediate Tax Exempt Bond Fund
Our Massachusetts portfolio exceeded returns of our national portfolio,
reflecting continued quality spread tightening in parts of the Massachusetts
market. As is true of the national market, spreads are at generally tight
levels. Health care is the only major problematic sector where spreads have
widened. The Massachusetts Fund lagged the returns of the benchmark for much the
same reasons as the national portfolio, that is a duration longer than that of
the index and fewer prerefunded bonds.
We feel that the outlook is positive for both our portfolios. We believe that
inflation remains under control, economic growth will moderate next year, and at
current yields bonds provide quite attractive returns. Municipal bonds, for high
tax ratepayers, are particularly compelling, given the current after-tax yield
advantage relative to taxable bonds. The funds are well positioned as we move
into the new year. Our posture will take full advantage of a stabilized rate
environment, yet we are conservatively invested in high quality, high income
producing bonds.
It has been our privilege to manage the funds for the past seven years and we
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
<PAGE>
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
-----------------------------------------------------------------------
Average Annual Total Return
(for periods ended 9/30/99)
Since
Inception
1 Year 3 Year 5 Year 11/02/1992
----------- ---------- --------- --------------------
(0.18)% 4.87% 5.49% 5.34%
-----------------------------------------------------------------------
[The following table was represented as a mountain graph in the printed
materials.]
Standish Massachusetts
Intermediate Tax Exempt Fund Lehman Muni 3-5-7-10 Lipper Int. Muni
---------------------------- -------------------- ----------------
100000 100000 100000
101305 101290 101680
102271 102141 102575
103357 103448 103754
106612 106241 106867
105229 105147 105649
106229 105873 106504
106517 106201 106856
108089 107762 108309
108333 107870 108266
110126 109552 110193
111047 110517 111449
1 Year 111453 110760 111628
110850 110106 110947
112755 111901 112766
114008 113020 113928
111819 110906 111512
108020 108189 108390
108815 109011 108845
109620 109633 109705
109114 109457 109387
110452 110848 110754
110814 111335 111175
109664 110433 110030
2 Year 108348 109506 108820
106924 108290 107198
108420 109611 108796
110702 111398 110906
112714 113593 113213
113693 114819 114209
113792 115141 114461
116267 117870 117150
115984 117781 116787
117232 119260 117850
118537 120521 119005
119107 120988 119600
3 Year 120378 121928 120736
121656 123148 122016
122127 123788 122797
122871 124952 123755
122408 124636 123371
121361 123655 122125
121021 123525 121905
121211 123407 121881
122293 124305 122624
123029 125259 123691
123036 125350 123703
124205 126403 124755
4 Year 125492 127639 125915
127445 129528 127741
127093 129239 127345
127352 129734 127651
128291 130704 128582
126833 129318 127232
127649 130004 127868
129137 131538 129352
130328 132656 130516
133077 135335 133322
132137 134523 132242
133584 135855 133591
5 Year 134337 136561 134179
134970 137043 134674
136490 138533 136353
137821 139825 137499
137821 139982 137540
137937 140045 137567
137409 139454 136893
139331 141301 138728
139641 141771 139149
139949 142197 139466
141891 144138 141474
143530 145737 142974
6 Year 143569 146087 142977
143943 146449 143291
144377 146855 143750
146207 148676 145360
145380 148137 144589
145272 148171 144561
145568 148585 144951
144918 147939 144096
142714 146075 142136
143559 146973 142797
142900 146782 142154
YTD 143269 147314 142240
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
-----------------------------------------------------------------------
Average Annual Total Return
(for periods ended 9/30/99)
Since
Inception
1 Year 3 Year 5 Year 11/02/1992
----------- ---------- --------- --------------------
(0.33)% 4.99% 5.68% 5.83%
-----------------------------------------------------------------------
[The following table was represented as a mountain graph in the printed
materials.]
Standish Intermediate
Tax Exempt Fund Lehman Muni 3-5-7-10** Lipper Int Muni
--------------- ---------------------- ---------------
100000 100000 100000
101801 101290 101680
102793 102141 102575
104194 103448 103754
107837 106241 106867
106346 105147 105649
107351 105873 106504
107657 106201 106856
109142 107762 108309
109502 107870 108266
111260 109552 110193
112344 110517 111449
1 Year 112618 110760 111628
112004 110106 110947
113872 111901 112766
114967 113020 113928
112863 110906 111512
109373 108189 108390
110287 109011 108845
111348 109633 109705
111196 109457 109387
112496 110848 110754
112980 111335 111175
112274 110433 110030
2 Year 111216 109506 108820
109615 108290 107198
110830 109611 108796
112944 111398 110906
114912 113593 113213
115946 114819 114209
116141 115141 114461
118555 117870 117150
118214 117781 116787
119290 119260 117850
120782 120521 119005
121480 120988 119600
3 Year 122643 121928 120736
124158 123148 122016
124848 123788 122797
125763 124952 123755
125219 124636 123371
124321 123655 122125
124238 123525 121905
124341 123407 121881
125453 124305 122624
126454 125259 123691
126558 125350 123703
127879 126403 124755
4 Year 129190 127639 125915
131226 129528 127741
130795 129239 127345
131197 129734 127651
132209 130704 128582
130777 129318 127232
131799 130004 127868
133387 131538 129352
134662 132656 130516
137839 135335 133322
136979 134523 132242
138456 135855 133591
5 Year 139106 136561 134179
139753 137043 134674
141349 138533 136353
142706 139825 137499
142711 139982 137540
142681 140045 137567
142290 139454 136893
143984 141301 138728
144514 141771 139149
144846 142197 139466
146761 144138 141474
148481 145737 142974
6 Year 148477 146087 142977
148666 146449 143291
148992 146855 143750
150798 148676 145360
149890 148137 144589
150002 148171 144561
150312 148585 144951
149526 147939 144096
147429 146074 142136
148097 142797 142797
147515 142154 142154
YTD 147988 147314 142240
Past performance is not predictive of future performance.
5
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
Management Discussion and Analysis
The Standish Small Capitalization Tax-Sensitive Equity Fund outperformed the
Russell 2000 Growth Index for the year ended September 30, 1999, returning
57.03% versus 32.64% for the benchmark respectively -- a strong showing for the
Fund in what continues to be a challenging environment for small cap investors.
Volatility and neglect continued to characterize small cap stocks over the
12-month period ended September 30, 1999. Results have improved considerably
over 1998, yet emerging companies remain entrenched in a cycle of inferior
relative performance that began over five years ago. Investors continue to
disregard the small cap market as demonstrated by the recent decline in mutual
fund flows. This dynamic has penalized small cap stocks while fueling the
dramatic rise in big cap market averages. Narrow leadership - technology and
Internet oriented companies have dominated the market - and interest rate
apprehension have made for a precarious small cap investment environment. With
the added burden of disappointing earnings in individual companies, a broader
turnaround has been slow to develop.
Notwithstanding an erratic small cap market, Standish Small Capitalization
Tax-Sensitive Equity provided investors with competitive performance over the
past year. During the period, growth-oriented companies led the small cap
market, helped by the ongoing, albeit volatile, rise in technology and Internet
issues. This type of environment favors our investment strategy; we focus on
industries that are revolutionizing the economy and companies that demonstrate
sustainable earnings power, solid management, and an enviable competitive
position. The Fund's overweight in technology and the Internet contributed to
successful fiscal year results, as did strong stock selection in services, a
sector that has also stimulated today's economic growth. During the past year
the health care sector slightly detracted from the Fund's performance. Typical
of the current market, companies in the lower end of the small cap range -
generally less than $500 million - labored under the popularity of larger
issues. The market cap effect was overshadowed by the positive benefits of
sector allocation and stock selection, which greatly contributed to absolute and
relative performance.
Looking forward, we are optimistic that investors will come to recognize the
attractive valuations, reasonable earnings growth, and compelling innovation
available in the small cap market. Though volatility is inherent to small cap
investing, historically emerging companies have commensurately rewarded
investors. We remain committed to capturing the potential of smaller, optimally
positioned, and fundamentally sound companies over a long-term investment
horizon.
On a final note, we would like to introduce Ken Winston, the newest member of
our small cap team. Ken comes to Standish from investment banker Needham & Co.,
where he served as a research analyst for Internet and business service
companies. His unique perspective on the Fund's primary economic sectors
complements the skill and experience of our group.
As always, we are dedicated to assisting you reach your investment goals and
appreciate your support of the Standish Small Capitalization Tax-Sensitive
Equity Fund.
Sincerely,
/s/ Nicholas S. Battelle
Nicholas S. Battelle
6
<PAGE>
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,
and the Russell 2000 Growth Index
[The following table was represented as a mountain graph in the printed
materials.]
Standish Small Cap
Tax-Sensitive Equity Fund Russell 2000 Growth
------------------------- -------------------
$100,000 $100,000
99,750 99,172
102,750 103,694
107,550 105,744
120,900 113,862
128,800 119,701
120,750 111,923
104,386 98,259
113,194 105,534
117,948 110,969
111,292 106,181
112,994 109,134
1 Year 121,231 111,262
126,141 114,042
117,174 107,155
108,557 99,593
108,407 98,438
125,990 113,233
135,058 117,071
142,221 123,065
146,880 126,757
163,362 136,873
151,990 128,652
152,491 125,585
2 Year 149,858 125,655
147,189 123,979
161,188 134,925
168,288 140,585
174,432 141,447
161,188 131,171
163,756 132,511
151,671 121,447
117,127 93,417
130,421 102,889
137,269 108,260
148,549 116,661
3 Year 165,821 127,219
181,532 132,944
165,116 120,779
186,769 125,079
189,488 136,124
189,186 136,339
YTD 206,861 143,524
200,365 139,089
201,271 133,887
204,796 136,471
-----------------------------------------------------------------------
Average Annual Total Return
(for periods ended 9/30/99)
Since
Inception
1 Year 3 Year 01/02/1996
----------- ---------- -------------
57.03% 20.19% 21.07%
-----------------------------------------------------------------------
Past performance is not predictive of future performance.
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
Management Discussion and Analysis
The Standish Tax-Sensitive Equity Fund trailed the Standard and Poor 500 Index
over the past twelve months, returning 14.46% versus 27.79% for the broader
market. Our style, which focuses on searching for attractive valuations across
the large capitalization spectrum, did well during the fourth quarter, 1998 and
the second quarter, 1999 but has been generally out of favor for the past two
years.
The U.S. economy has provided an excellent backdrop for equity investing over
the last twelve months. Economic growth has continued to be stronger than
anticipated and inflation has remained surprisingly low. Consumer income and
optimism grew and economies outside the U.S. began to show much better progress.
Yet even in this environment, investors agonized over the appearance of the
predecessors to inflation: low unemployment, a declining dollar, a robust U.S.
housing market, and rising energy and healthcare costs. Their response has been
to stick to a very narrow group of already highly overvalued growth stocks.
Good returns within the Tax-Sensitive Equity Fund came from our capital goods
and energy sectors, which rose 40% and 28% over the past twelve months
respectively. The best result came from the technology sector, which rose 88%
during the period. Certain technology stocks rose dramatically, with Intel up
75% and Sun Microsystems up 215%. Clear difficulties arose in areas that trailed
the market such as the financial and consumer stable groups. Our consumer sector
was concentrated in smaller capitalization, value stocks that underperformed,
while our bank and insurance company positions declined as interest rates rose.
The most important question facing our future strategy: how much longer can a
narrow group of stocks outperform the market? It is our conviction that this
segment remains dramatically overvalued and that the greatest risk going forward
is not the return lost by our more cautious approach but the potential losses
embedded in the current market leaders.
We are happy to report that as of September 30, our fund had no realized capital
gains to report to shareholders.
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 represented as a mountain graph in the printed
materials.]
Standish Tax-Sensitive Equity Fund S&P 500 Index
---------------------------------- -------------
100000 100000
103400 103404
105950 104363
106600 105368
109050 106921
110950 109678
110250 110096
105763 105232
111813 107451
118971 113499
120836 116629
129608 125445
1 Year 130612 122960
138785 130642
138227 131667
134369 126257
140511 133781
151425 141929
157671 148287
173188 160091
169870 151126
179875 159407
174362 154083
178547 161217
2 Year 180077 163986
180231 165799
195446 177758
208100 186861
207230 188741
202209 185496
204522 193031
199690 190976
161191 163365
167051 173830
182728 187962
194550 199353
3 Year 207743 210836
208568 219649
193103 212817
193000 221330
201403 229896
204960 224475
211780 236933
204388 229543
198030 228345
191207 222135
-----------------------------------------------------------------------
Average Annual Total Return
(for periods ended 9/30/99)
Since
Inception
1 Year 3 Year 01/02/1996
----------- ---------- -------------
14.46% 17.14% 18.87%
-----------------------------------------------------------------------
Past performance is not predictive of future performance.
9
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MASSACHUSETTS SMALL CAP TAX-
INTERMEDIATE INTERMEDIATE TAX- SENSITIVE
TAX EXEMPT TAX EXEMPT SENSITIVE EQUITY
BOND FUND BOND FUND EQUITY FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (Note 1A)* $ 62,045,744 $ 80,744,242 $ 142,314,452 $ 29,584,322
Receivable for investments sold 45,963 115,000 6,951,945 --
Receivable for Fund shares sold 90,000 -- 86,094 --
Interest and dividends receivable 974,477 1,358,023 502 31,751
Receivable for variation margin on open
financial futures contracts (Note 6) -- -- 3,020 --
Other receivables -- -- 917 --
Deferred organizational costs (Note 1E) -- -- 4,751 4,760
Prepaid expenses 3,362 3,833 4,506 3,734
--------------- --------------- --------------- ---------------
Total assets 63,159,546 82,221,098 149,366,187 29,624,567
LIABILITIES
Payable for investments purchased -- -- 6,137,264 --
Payable for Fund shares redeemed -- 10,574 104,935 20,300
Distribution payable 110,148 146,107 -- --
Due to custodian -- 100,286 -- --
Accrued accounting, custody and transfer
agent fees 16,889 20,763 23,291 12,670
Accrued trustees' fees and expenses
(Note 2) 2,198 2,581 3,783 1,450
Accrued expenses and other liabilities 24,929 22,342 22,279 21,587
--------------- --------------- --------------- ---------------
Total liabilities 154,164 302,653 6,291,552 56,007
--------------- --------------- --------------- ---------------
NET ASSETS $ 63,005,382 $ 81,918,445 $ 143,074,635 $ 29,568,560
=============== =============== =============== ===============
NET ASSETS CONSIST OF:
Paid-in capital $ 63,668,071 $ 82,758,086 $ 99,528,805 $ 26,038,033
Accumulated net realized gain (loss) (104,124) 218,579 4,749,031 (1,940,247)
Accumulated undistributed net investment
income 1,180 8,266 -- 60,096
Net unrealized appreciation (depreciation) (559,745) (1,066,486) 38,796,799 5,410,678
--------------- --------------- --------------- ---------------
TOTAL NET ASSETS $ 63,005,382 $ 81,918,445 $ 143,074,635 $ 29,568,560
=============== =============== =============== ===============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,022,260 3,880,328 3,515,711 799,329
=============== =============== =============== ===============
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(Net Assets/Shares outstanding) $ 20.85 $ 21.11 $ 40.70 $ 36.99
=============== =============== =============== ===============
*Identified cost of investments $ 62,605,489 $ 81,810,728 $ 103,394,973 $ 24,173,644
=============== =============== =============== ===============
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MASSACHUSETTS SMALL CAP TAX-
INTERMEDIATE INTERMEDIATE TAX- SENSITIVE
TAX EXEMPT TAX EXEMPT SENSITIVE EQUITY
BOND FUND BOND FUND EQUITY FUND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 2,816,471 $ 4,051,804 $ 135,328 $ 38,659
Dividend income -- -- 74,961 377,002
------------ ------------ ------------ ------------
Total investment income 2,816,471 4,051,804 210,289 415,661
EXPENSES
Investment advisory fee (Note 2) 232,763 332,383 673,023 191,380
Accounting, custody and transfer agent fees 101,157 122,526 138,777 73,991
Legal and audit services 26,161 33,191 30,041 23,975
Amortization of organization expenses (Note
1E) -- -- 3,774 3,774
Registration fees 1,572 16,697 21,313 13,826
Insurance expense 5,717 6,450 5,201 3,500
Trustees' fees and expenses (Note 2) 7,666 8,490 12,780 5,338
Miscellaneous 4,871 4,942 7,831 7,379
------------ ------------ ------------ ------------
Total expenses 379,907 524,679 892,740 323,163
Deduct:
Waiver of investment advisory fee (Note 2) -- -- (13,604) (131,784)
------------ ------------ ------------ ------------
Total expense deductions -- -- (13,604) (131,784)
------------ ------------ ------------ ------------
Net expenses 379,907 524,679 879,136 191,379
------------ ------------ ------------ ------------
Net investment income (loss) 2,436,564 3,527,125 (668,847) 224,282
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)
Investment security transactions 173,855 361,582 6,193,314 (1,097,849)
Financial futures contracts (1,492) -- 85,563 --
------------ ------------ ------------ ------------
Net realized gain (loss) 172,363 361,582 6,278,877 (1,097,849)
Change in unrealized appreciation
(depreciation):
Investment securities (2,765,327) (4,200,130) 39,636,126 5,465,603
Financial futures contracts -- -- (122,680) --
------------ ------------ ------------ ------------
Net change in unrealized appreciation
(depreciation) (2,765,327) (4,200,130) 39,513,446 5,465,603
------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) (2,592,964) (3,838,548) 45,792,323 4,367,754
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS $ (156,400) $ (311,423) $ 45,123,476 $ 4,592,036
============ ============ ============ ============
</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, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 2,436,564 $ 1,972,853
Net realized gain 172,363 138,343
Change in unrealized appreciation (depreciation) (2,765,327) 1,169,361
----------- -----------
Net increase (decrease) in net assets from investment
operations (156,400) 3,280,557
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (2,436,564) (1,972,853)
----------- -----------
Total distributions to shareholders (2,436,564) (1,972,853)
----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 19,533,943 18,573,069
Value of shares issued to shareholders in payment of
distributions declared 1,085,435 831,218
Cost of shares redeemed (8,621,088) (5,512,563)
----------- -----------
Net increase in net assets from Fund share
transactions 11,998,290 13,891,724
----------- -----------
TOTAL INCREASE IN NET ASSETS 9,405,326 15,199,428
NET ASSETS
At beginning of year 53,600,056 38,400,628
----------- -----------
At end of year (including undistributed net
investment income of $1,180 and $1,180,
respectively) $63,005,382 $53,600,056
=========== ===========
</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, SEPTEMBER 30,
1999 1998
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 3,527,125 $ 2,894,070
Net realized gain 361,582 589,639
Change in unrealized appreciation (depreciation) (4,200,130) 1,186,782
------------ ------------
Net increase (decrease) in net assets from investment
operations (311,423) 4,670,491
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (3,527,125) (2,894,070)
From net realized gains on investments (723,687) (151,703)
------------ ------------
Total distributions to shareholders (4,250,812) (3,045,773)
------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 36,937,409 40,952,159
Value of shares issued to shareholders in payment of
distributions declared 2,316,211 1,514,041
Cost of shares redeemed (31,352,116) (18,235,034)
------------ ------------
Net increase in net assets from Fund share
transactions 7,901,504 24,231,166
------------ ------------
TOTAL INCREASE IN NET ASSETS 3,339,269 25,855,884
NET ASSETS
At beginning of year 78,579,176 52,723,292
------------ ------------
At end of year (including undistributed net
investment income of $8,266 and $8,266,
respectively) $ 81,918,445 $ 78,579,176
============ ============
</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, SEPTEMBER 30,
1999 1998
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment loss $ (668,847) $ (246,456)
Net realized gain (loss) 6,278,877 (1,446,306)
Change in unrealized appreciation (depreciation) 39,513,446 (9,201,341)
------------ ------------
Net increase (decrease) in net assets from investment
operations 45,123,476 (10,894,103)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income -- (7,582)
From net realized gains on investments -- (170,781)
------------ ------------
Total distributions to shareholders -- (178,363)
------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 43,866,832 54,482,660
Value of shares issued to shareholders in payment of
distributions declared -- 164,809
Cost of shares redeemed (12,373,955) (9,877,238)
------------ ------------
Net increase in net assets from Fund share
transactions 31,492,877 44,770,231
------------ ------------
TOTAL INCREASE IN NET ASSETS 76,616,353 33,697,765
NET ASSETS
At beginning of year 66,458,282 32,760,517
------------ ------------
At end of year $143,074,635 $ 66,458,282
============ ============
</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, SEPTEMBER 30,
1999 1998
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 224,282 $ 199,875
Net realized loss (1,097,849) (726,922)
Change in unrealized appreciation (depreciation) 5,465,603 (3,234,659)
------------ ------------
Net increase (decrease) in net assets from investment
operations 4,592,036 (3,761,706)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (221,630) (161,305)
------------ ------------
Total distributions to shareholders (221,630) (161,305)
------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 15,452,943 26,303,287
Value of shares issued to shareholders in payment of
distributions declared 181,126 139,790
Cost of shares redeemed (22,094,521) (3,680,400)
------------ ------------
Net increase (decrease) in net assets from Fund share
transactions (6,460,452) 22,762,677
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,090,046) 18,839,666
NET ASSETS
At beginning of year 31,658,606 12,818,940
------------ ------------
At end of year (including undistributed net
investment income of $60,096 and $62,979,
respectively) $ 29,568,560 $ 31,658,606
============ ============
</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
YEAR ENDED SEPTEMBER 30, NINE MONTHS DECEMBER 31,
-------------------------------------- ENDED -----------------------
1999(1) 1998 1997 SEPTEMBER 30, 1996 1995 1994
-------- -------- -------- ------------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 21.78 $ 21.18 $ 20.63 $ 21.02 $ 19.55 $ 21.31
-------- -------- -------- -------- -------- --------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.90 0.94 0.97 0.74 0.94 0.94
Net realized and unrealized gain
(loss) on investments (0.93) 0.60 0.55 (0.39) 1.47 (1.75)
-------- -------- -------- -------- -------- --------
Total from investment operations (0.03) 1.54 1.52 0.35 2.41 (0.81)
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.90) (0.94) (0.97) (0.74) (0.94) (0.94)
From net realized gain on investments -- -- -- -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total distributions to shareholders (0.90) (0.94) (0.97) (0.74) (0.94) (0.95)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 20.85 $ 21.78 $ 21.18 $ 20.63 $ 21.02 $ 19.55
======== ======== ======== ======== ======== ========
TOTAL RETURN (0.18)% 7.45% 7.55% 1.70% 12.64% (3.84)%
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)* 4.19% 4.40% 4.67% 4.78%+ 4.71% 4.67%
Portfolio Turnover 22% 19% 25% 35% 77% 84%
Net Assets, End of Year (000's
omitted) $ 63,005 $ 53,600 $ 38,401 $ 32,136 $ 32,565 $ 27,776
</TABLE>
- -----------------
* For the periods indicated, the investment adviser did not impose a portion
of its advisory fee and/or reimbursed a portion of the Fund's operating
expenses. If this voluntary reduction had not been taken, the investment
income per share and the ratios would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net investment income per share $ -- $ 0.92 $ 0.95 $ 0.72 $ 0.95 $ 0.91
Ratios (to average daily net assets):
Expenses -- 0.77% 0.75% 0.73%+ 0.72% 0.78%
Net investment income -- 4.28% 4.57% 4.70%+ 4.64% 4.54%
</TABLE>
+ Computed on an annualized basis.
(1) Calculated based on average shares outstanding.
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>
NINE MONTHS YEAR ENDED
YEAR ENDED SEPTEMBER 30, ENDED DECEMBER 31,
----------------------- SEPTEMBER 30, ---------------------------------------
1999(1) 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 22.30 $ 21.78 $ 21.12 $ 21.40 $ 19.91 $ 21.44
-------- -------- -------- -------- -------- --------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.92 0.96 1.01 0.79 0.98 0.95
Net realized and unrealized gain
(loss) on investments (0.99) 0.58 0.74 (0.28) 1.49 (1.51)
-------- -------- -------- -------- -------- --------
Total from investment operations (0.07) 1.54 1.75 0.51 2.47 (0.56)
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.92) (0.96) (1.01) (0.79) (0.98) (0.95)
From net realized gain on investments (0.20) (0.06) (0.08) -- -- (0.02)
-------- -------- -------- -------- -------- --------
Total distributions to shareholders (1.12) (1.02) (1.09) (0.79) (0.98) (0.97)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 21.11 $ 22.30 $ 21.78 $ 21.12 $ 21.40 $ 19.91
======== ======== ======== ======== ======== ========
TOTAL RETURN (0.33)% 7.24% 8.27% 2.43% 12.65% (2.68)%
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net
assets)* 0.63% 0.65% 0.65% 0.65%+ 0.65% 0.65%
Net Investment Income (to average
daily net assets)* 4.24% 4.37% 4.74% 4.99%+ 4.75% 4.62%
Portfolio Turnover 43% 29% 23% 43% 140% 157%
Net Assets, End of Year (000's
omitted) $ 81,918 $ 78,579 $ 52,723 $ 34,843 $ 32,865 $ 20,514
</TABLE>
- -----------------
* For the periods indicated, the investment adviser did not impose a portion
of its advisory fee and/or reimbursed a portion of the Fund's operating
expenses. If this voluntary reduction had not been taken, the investment
income per share and the ratios would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net investment income per share $ -- $ 0.95 $ 0.99 $ 0.76 $ 0.95 $ 0.90
Ratios (to average daily net assets):
Expenses -- 0.69% 0.74% 0.82%+ 0.79% 0.89%
Net investment income -- 4.33% 4.65% 4.82%+ 4.61% 4.38%
</TABLE>
+ Computed on an annualized basis.
(1) Calculated based on average shares outstanding.
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,
------------------------------------------------------------
1999(1) 1998(1) 1997 1996(2)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 25.89 $ 32.61 $ 23.57 $ 20.00
-------- -------- -------- --------
FROM INVESTMENT OPERATIONS:
Net investment income (loss)* (0.21) (0.15) 0.02 0.04
Net realized and unrealized gain (loss) on
investments 15.02 (6.42) 9.05 3.55
-------- -------- -------- --------
Total from investment operations 14.81 (6.57) 9.07 3.59
-------- -------- -------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- (0.01) (0.03) (0.02)
From net realized gain on investments -- (0.14) -- --
-------- -------- -------- --------
Total distributions to shareholders -- (0.15) (0.03) (0.02)
-------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 40.70 $ 25.89 $ 32.61 $ 23.57
======== ======== ======== ========
TOTAL RETURN 57.03% (20.16)% 38.50% 17.95%
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net assets)* 0.78% 0.75% 0.21% 0.00%+
Net Investment Income (Loss) (to average
daily net assets)* (0.60)% (0.51)% 0.08% 0.41%+
Portfolio Turnover 168% 102% 102% 57%
Net Assets, End of Year (000's omitted) $143,075 $ 66,458 $ 32,761 $ 6,896
</TABLE>
- -----------------
* For the periods indicated, the investment adviser did not impose a portion
of its advisory fee and/or reimbursed a portion of the Fund's operating
expenses. If this voluntary reduction had not been taken, the investment
income per share and the ratios would have been:
<TABLE>
<S> <C> <C> <C> <C>
Net investment income per share $ (0.22) $ (0.22) $ (0.16) $ (0.28)
Ratios (to average daily net assets):
Expenses 0.79% 0.97% 1.24% 3.45%+
Net investment loss (0.61)% (0.73)% (0.95)% (3.04)%+
</TABLE>
(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.
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,
------------------------------------------------------------
1999(1) 1998(1) 1997(1) 1996(2)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 32.50 $ 35.24 $ 23.60 $ 20.00
-------- -------- -------- --------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.22 0.29 0.39 0.28
Net realized and unrealized gain (loss) on
investments 4.49 (2.77) 11.58 3.50
-------- -------- -------- --------
Total from investment operations 4.71 (2.48) 11.97 3.78
-------- -------- -------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.22) (0.26) (0.33) (0.18)
-------- -------- -------- --------
Total distributions to shareholders (0.22) (0.26) (0.33) (0.18)
-------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 36.99 $ 32.50 $ 35.24 $ 23.60
======== ======== ======== ========
TOTAL RETURN 14.46% (7.13)% 51.19% 18.97%
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net assets)* 0.50% 0.50% 0.20% 0.00%+
Net Investment Income (to average daily net
assets)* 0.59% 0.78% 1.31% 2.27%+
Portfolio Turnover 50% 33% 25% 17%
Net Assets, End of Year (000's omitted) $ 29,569 $ 31,659 $ 12,819 $ 2,843
</TABLE>
- -----------------
* For the periods indicated, the investment adviser did not impose a portion
of its advisory fee and/or reimbursed a portion of the Fund's operating
expenses. If this voluntary reduction had not been taken, the investment
income per share and the ratios would have been:
<TABLE>
<S> <C> <C> <C> <C>
Net investment income per share $ 0.09 $ 0.09 $ (0.07) $ (0.36)
Ratios (to average daily net assets):
Expenses 0.85% 1.05% 1.73% 5.15%+
Net investment income/loss 0.24% 0.23% (0.22)% (2.88)%+
</TABLE>
(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.
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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 98.5%
GENERAL OBLIGATIONS -- 20.8%
Amesbury MA State Qualified 5.300% 06/01/2003 $ 750,000 $ 764,062
Brockton MA State Qualified 5.550% 12/15/2003 270,000 276,750
Brockton MA State Qualified 5.650% 12/15/2004 300,000 309,000
Brockton MA State Qualified 5.700% 06/15/2002 160,000 163,800
Brockton MA State Qualified 6.125% 06/15/2018 250,000 254,375
Commonwealth of Massachusetts 5.000% 11/01/2009 1,000,000 1,000,000
Commonwealth of Massachusetts 7.500% 06/01/2004 700,000 769,125
Lawrence MA State Qualified 5.000% 09/15/2002 250,000 254,062
Lawrence MA State Qualified 5.125% 09/15/2003 1,500,000 1,531,875
Mass Bay Transportation Authority 7.000% 03/01/2011 1,000,000 1,157,500
Mass St College Bldg Authority Project 7.500% 05/01/2006 500,000 574,375
Mass St College Bldg Authority Project 7.500% 05/01/2007 450,000 522,562
Mass St College Bldg Authority Project 7.500% 05/01/2008 250,000 293,125
Mass State Conservation Loan 5.250% 08/01/2009 1,100,000 1,122,000
Massachusetts Bay Transportation Authority 5.250% 03/01/2007 775,000 793,406
Massachusetts Bay Transportation Authority 6.000% 03/01/2005 350,000 371,875
Massachusetts NCL 6.000% 11/01/2011 850,000 912,687
Massachusetts St Govt Ld Bk 5.250% 02/01/2007 900,000 920,250
University of Mass Building Authority State
Guarantee 6.625% 05/01/2007 1,000,000 1,105,000
-----------
Total General Obligations (Cost $13,062,460) 13,095,829
-----------
GOVERNMENT BACKED -- 2.6%
Massachusetts Water Pollution Abatement 6.000% 02/01/2005 500,000 531,875
Plymouth County Ctfs Partnership 7.000% 04/01/2022 1,000,000 1,091,250
-----------
Total Government Backed (Cost $1,630,782) 1,623,125
-----------
HOUSING REVENUE -- 9.1%
Mass HFA Residential Development FNMA 6.250% 11/15/2012 1,000,000 1,050,000
Mass HFA Residential Development FNMA 6.875% 11/15/2011 1,000,000 1,063,750
Mass HFA Residential Development FNMA 6.875% 11/15/2011 1,000,000 1,063,750
Mass HFA SFM 6.500% 12/01/2014 10,000 10,086
Massachusetts St Housing Finance Agency 5.750% 12/01/2017 10,000 10,000
Massachusetts St Housing Finance Agency 6.300% 10/01/2013 950,000 988,000
Massachusetts St Housing Finance Agency MFU
FNMA 6.250% 11/15/2012 1,000,000 1,050,000
Virgin Islands HFA 4.000% 06/01/2000 500,000 500,270
-----------
Total Housing Revenue (Cost $5,732,261) 5,735,856
-----------
INDUSTRIAL DEVELOPMENT -- 1.4%
City of Boston Industrial Development Finance
Authority 7.375% 05/15/2015 865,000 905,006
-----------
Total Industrial Development (Cost $918,372) 905,006
-----------
INSURED BOND -- 33.5%
Brockton MA MBIA 6.000% 04/01/2007 1,010,000 1,083,225
Chelsea MA School District AMBAC 6.000% 06/15/2004 750,000 796,875
Chelsea MA School District AMBAC 7.000% 06/15/2003 265,000 287,525
Holyoke MA FSA 5.250% 08/01/2008 485,000 495,306
Holyoke MA FSA 6.000% 06/15/2006 600,000 642,750
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED BOND (CONTINUED)
Holyoke MA FSA 6.000% 06/15/2007 $ 800,000 $ 859,000
MA DFA Curry College 4.100% 03/01/2004 200,000 195,500
Mass HEFA Cath Health AMBAC 5.000% 11/15/2007 300,000 300,750
Mass HEFA Hallmark Health FSA 5.250% 07/01/2007 1,000,000 1,018,750
Mass HEFA Harvard Pilgrim FSA 5.250% 07/01/2006 1,100,000 1,124,750
Mass HEFA Mass Eye and Ear ACA 5.000% 07/01/2005 660,000 662,475
Mass HEFA NE Medical FGIC 6.000% 07/01/2003 400,000 420,000
Mass HEFA Northeastern University MBIA 5.500% 10/01/2009 500,000 516,875
Mass HEFA Partners FSA 5.500% 07/01/2007 635,000 656,431
Mass St Turnpike Authority AMBAC 5.125% 01/01/2009 875,000 878,281
Mass State Development Finance Agency Revenue 5.500% 09/01/2002 175,000 179,594
Mass State Development Finance Agency Revenue 5.500% 09/01/2003 265,000 272,619
Mass State Development Finance Agency Revenue 5.500% 09/01/2004 280,000 288,750
Mass State Development Finance Agency Revenue 5.500% 09/01/2005 175,000 180,250
Mass State General Obligation MBIA 4.750% 04/01/2018 500,000 434,375
Mass State Revenue AMBAC 5.750% 08/01/2010 1,000,000 1,056,250
Massachusetts Bay Transportation Authority FGIC 5.500% 03/01/2011 1,000,000 1,030,000
Massachusetts Bay Transportation Authority FSA 5.250% 03/01/2012 500,000 519,375
Massachusetts Port Authority MBIA 5.750% 07/01/2007 500,000 521,875
Nantucket MA MBIA 6.000% 07/15/2007 500,000 537,500
New Bedford MA AMBAC 6.000% 10/15/2005 575,000 616,687
Puerto Rico Commonwealth FSA 5.500% 07/01/2012 1,400,000 1,457,750
Puerto Rico Commonwealth Highway &
Transportation Authority MBIA 5.500% 07/01/2013 1,140,000 1,169,925
Springfield MA AMBAC 6.250% 08/01/2006 1,000,000 1,087,500
Springfield MA FSA 5.650% 09/01/2007 700,000 737,625
Upper Blackstone Water AMBAC 6.500% 08/01/2005 430,000 470,850
Worcester MA FSA NCL 5.500% 04/01/2010 600,000 617,250
-----------
Total Insured Bond (Cost $21,337,448) 21,116,668
-----------
LEASE REVENUE -- 1.2%
Puerto Rico Housing Bank Appropriation 5.125% 12/01/2005 750,000 758,437
-----------
Total Lease Revenue (Cost $743,097) 758,437
-----------
LOC GIC -- 1.2%
Mass IFA Amesbury LOC: State Street 5.350% 09/01/2005 320,000 322,346
Mass IFA Orchard Cove Project LOC: Fleet
National Bank 5.000% 05/01/2026 415,000 416,556
-----------
Total LOC GIC (Cost $735,000) 738,902
-----------
PREREFUNDED -- 1.4%
Mass HEFA Melrose Wakefield Hospital 6.350% 07/01/2006 310,000 335,575
Prerefunded Cons Ln-Series A 6.000% 06/01/2013 500,000 521,875
-----------
Total PreRefunded (Cost $832,514) 857,450
-----------
REVENUE BONDS -- 23.0%
MA DFA Williston School 6.000% 10/01/2013 500,000 477,500
Mass HEFA Cape Cod Healthcare 5.125% 11/15/2009 600,000 575,250
Mass HEFA Central New England Health Systems 5.750% 08/01/2003 360,000 360,000
Mass HEFA Childrens Hospital 6.125% 10/01/2012 550,000 570,625
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE BONDS (CONTINUED)
Mass HEFA Dana Farber Notes NCL 6.500% 12/01/2006 $ 650,000 $ 694,688
Mass HEFA Jordan Hospital 5.000% 10/01/2005 325,000 320,125
Mass HEFA Jordan Hospital 5.000% 10/01/2008 665,000 638,400
Mass HEFA Milford Hospital 5.250% 07/15/2007 600,000 585,000
Mass HEFA No. Adams Regional Hospital 6.750% 07/01/2009 600,000 639,750
Mass HEFA Partners HealthCare 5.000% 07/01/2009 500,000 480,000
Mass HEFA Youville Hospital FHA Secured 6.125% 02/15/2015 665,000 687,444
Mass IFA Berkshire Retirement Development(a) 5.125% 07/01/2018 530,000 530,975
Mass IFA Brooks School 5.600% 07/01/2005 245,000 259,088
Mass IFA Brooks School 5.900% 07/01/2013 410,000 437,675
Mass IFA Clark University 6.450% 07/01/2001 300,000 309,750
Mass IFA Resource Recovery 6.150% 07/01/2002 1,000,000 1,026,250
Mass IFA Resource Recovery Ogden 4.800% 12/01/2004 1,000,000 986,250
Mass IFA Wentworth Institute 5.050% 10/01/2005 290,000 285,650
Mass IFA Wentworth Institute 5.100% 10/01/2006 305,000 299,281
Mass St HEFA Jordan Hospital 5.000% 10/01/2004 305,000 302,713
Mass Water Resource Authority 5.250% 03/01/2013 500,000 488,750
Mass Water Resource Authority 7.250% 04/01/2001 200,000 206,998
Massachusetts IFA Springfield College 5.625% 09/15/2010 750,000 736,875
Massachusetts Port Authority 5.750% 07/01/2012 700,000 726,250
Massachusetts Water Pollution Trust 5.250% 02/01/2008 650,000 667,063
Massachusetts Water Trust New Bedford NCL 5.250% 02/01/2011 330,000 329,175
Puerto Rico Industrial Tour Ed Anamendez Univ 5.000% 02/01/2005 250,000 249,688
Puerto Rico Industrial Tour Ed Anamendez Univ 5.000% 02/01/2006 650,000 645,938
-----------
Total Revenue Bonds (Cost $14,742,980) 14,517,151
-----------
SPECIAL REVENUES -- 4.3%
Massachusetts Grant Anticipation Notes 5.000% 12/15/2008 650,000 650,813
Massachusetts Grant Anticipation Notes 5.250% 06/15/2008 1,000,000 1,018,750
Massachusetts St Special Obligation 5.500% 06/01/2013 1,000,000 1,013,750
-----------
Total Special Revenues (Cost $2,856,568) 2,683,313
-----------
TOTAL BONDS (COST $62,591,482) 62,031,737
-----------
SHORT-TERM INVESTMENTS -- 0.0%
REPURCHASE AGREEMENTS -- 0.0%
Prudential-Bache Repurchase Agreement, dated 9/30/99, due
10/01/99, with a maturity value of $14,009 and an effective yield
of 4.48%, collateralized by a U.S. Government Agency Obligation
with a rate of 6.00%, a maturity date of 3/01/13 and an aggregate
market value of $14,287. $ 14,007
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $14,007) 14,007
-----------
TOTAL INVESTMENTS -- 98.5% (COST $62,605,489) $62,045,744
OTHER ASSETS, LESS LIABILITIES -- 1.5% 959,638
-----------
NET ASSETS -- 100.0% $63,005,382
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS:
ACA - American Capital Access Corp.
AMBAC - American Municipal Bond Assurance Corp.
DFA - Development Financial Agency
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
MFU - Multi-Family Unit
NCL - Non-callable
SFM - Single Family Mortgage
(a) Variable Rate Security; rate indicated is as of 9/30/99.
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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 97.2%
GENERAL OBLIGATIONS -- 13.1%
GENERAL OBLIGATIONS -- 13.1%
Alpine Utah School District 5.000% 03/15/2011 $ 25,000 $ 24,656
Alpine Utah School District 5.000% 03/15/2012 1,000,000 976,250
Commonwealth of Massachusetts 6.000% 11/01/2008 500,000 536,875
Commonwealth of Massachusetts 7.500% 06/01/2004 500,000 549,375
Conroe Texas Independant School District 5.500% 02/15/2013 700,000 710,500
District of Columbia 5.800% 06/01/2004 460,000 474,950
Georgia State NCL 6.250% 04/01/2006 1,000,000 1,086,250
Grand Central NY District Management 5.000% 01/01/2006 25,000 25,000
Honolulu HI City & County 5.400% 09/27/2007 500,000 505,625
Hudson County NJ Import Authority 7.600% 08/01/2025 875,000 912,791
King County WA 412 School District 5.250% 12/01/2010 1,495,000 1,496,869
Klein TX Independent School District 5.250% 08/01/2006 1,000,000 1,028,750
Lawrence MA State Qualified 5.375% 09/15/2005 500,000 514,375
Magnolia Island Texas 5.375% 08/15/2005 1,000,000 1,037,500
Massachusetts NCL 6.000% 11/01/2011 750,000 805,312
New York State NCL 5.000% 03/01/2005 15,000 15,244
-----------
Total General Obligations (Cost $11,019,446) 10,700,322
-----------
HOUSING REVENUE -- 10.2%
California Housing Authority 5.050% 02/01/2017 420,000 417,375
California Housing Authority MBIA 5.650% 08/01/2025 260,000 260,325
Colorado HFA Multi Family Insured Mortgage 7.900% 10/01/2000 225,000 231,041
Florida Housing Finance Agency 0.000% 07/15/2016 260,000 36,400
Hawaii Housing Finance and Development Corp 7.000% 07/01/2031 550,000 573,375
Mass HFA Residential Development FNMA 6.875% 11/15/2011 400,000 425,500
Michigan Housing Development Authority AMBAC 6.400% 04/01/2005 250,000 263,750
New Hampshire Housing Finance Agency 6.600% 01/01/2000 400,000 401,796
New Mexico Mortgage Finance Authority 5.750% 07/01/2014 330,000 330,412
New Mexico Mortgage Finance Authority 6.250% 07/01/2029 1,000,000 1,042,500
New York Mortgage Agency 5.750% 04/01/2004 650,000 671,937
North Carolina Housing Finance Agency 7.600% 03/01/2021 600,000 624,000
Ohio HFA SFM Amt NCL 4.300% 09/01/2002 500,000 496,250
Pennsylvania Housing Finance Agency 5.350% 10/01/2008 325,000 328,656
Rhode Island Housing & Mortgage 4.950% 10/01/2016 350,000 348,687
Texas Dept Housing & Community 6.950% 07/01/2023 490,000 512,662
Virginia Housing Development Authority 0.000% 11/01/2017 180,000 34,882
Virginia Housing Development Authority
Commission 6.100% 07/01/2001 1,300,000 1,330,875
Washington Housing Finance Agency 7.100% 07/01/2022 60,000 61,800
-----------
Total Housing Revenue (Cost $8,500,856) 8,392,223
-----------
INDUSTRIAL DEVELOPMENT -- 5.9%
Alaska Industrial Development and Export
Authority 5.500% 04/01/2001 500,000 508,125
Alaska Industrial Development and Export
Authority 6.200% 04/01/2003 150,000 157,312
California Statewide Equity Residential(a) 5.200% 12/01/2029 1,000,000 978,750
Dayton OH Special Facilities Emery 6.050% 10/01/2009 500,000 516,250
Dayton OH Special Facilities Emery 6.050% 10/01/2009 1,000,000 1,032,500
Eddyville IA Pollution Control Revenue
Cargill 5.400% 10/01/2006 500,000 513,125
Hendersonville TN Kroger 5.950% 12/15/2008 420,000 423,675
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT (CONTINUED)
Murray KY Industrial Development Kroger 7.250% 09/01/2012 $ 350,000 $ 377,125
Weld County CO Industrial Development Conagra 6.750% 12/15/2001 275,000 284,969
-----------
Total Industrial Development (Cost $4,811,424) 4,791,831
-----------
INSURED BOND -- 35.0%
Chicago IL Board of Education AMBAC 6.750% 12/01/2009 465,000 526,031
Chicago IL FGIC 5.250% 01/01/2012 1,000,000 987,500
Cleveland Ohio Airport System FSA 5.500% 01/01/2007 1,000,000 1,032,500
Cook County IL Community College FGIC 8.750% 01/01/2006 1,000,000 1,203,750
Cow Creek Band Umpqua OR AMBAC 4.250% 07/01/2003 800,000 793,000
Denver CO Airport MBIA 7.500% 11/15/2006 500,000 566,250
District of Columbia MBIA 5.750% 06/01/2010 25,000 25,969
District of Columbia MBIA 6.000% 06/01/2011 1,275,000 1,345,125
District of Columbia Medlantic Hospital MBIA 7.000% 08/15/2005 500,000 534,375
Georgia Municipal Electric Authority Power FGIC 6.250% 01/01/2012 1,150,000 1,246,312
Grand River Dam Authority Oklahoma AMBAC 5.500% 06/01/2013 385,000 391,256
Greater Detroit MI Resource Recovery AMBAC 6.250% 12/13/2007 400,000 433,000
Harris County Texas Health Facility MBIA 5.375% 07/01/2008 1,000,000 1,021,250
Henderson, Nevada FGIC 5.000% 09/01/2016 1,000,000 921,250
Hot Springs AK Sales & Use Tax FSA 4.950% 12/01/2008 140,000 139,650
Illinois Health Facilities Authority Revenue
Asset Guaranty 6.250% 05/01/2011 1,300,000 1,342,250
Intercommunity HFA ACA 5.000% 11/01/2005 2,020,000 2,032,625
Jefferson County OH Asset Guaranty 6.625% 12/01/2005 285,000 302,456
Maine Government Facility Authority FSA 5.750% 10/01/2010 1,000,000 1,052,500
Michigan Strategic Fd Ltd. FGIC 6.950% 09/01/2021 1,000,000 1,053,750
NC Eastern Municipal Power Agency ACA 6.000% 01/01/2006 1,000,000 1,037,500
Nassau County NY FGIC 6.000% 07/01/2010 25,000 26,656
New York Dormitory Authority AMBAC 4.400% 08/01/2013 500,000 494,375
New York Dormitory Authority AMBAC 5.250% 07/01/2008 1,890,000 1,925,438
New York Dormitory Authority Asset Guaranty 5.250% 07/01/2005 1,000,000 1,020,000
New York Methodist Hospital AMBAC 5.000% 07/01/2008 1,000,000 1,001,250
Oklahoma IDA Baptist Med Center AMBAC 7.000% 08/15/2006 500,000 565,000
Orange County CA Recovery MBIA 5.800% 07/01/2016 400,000 409,000
Palm Beach County FL Solid Waste AMBAC 6.000% 10/01/2009 60,000 65,025
Palm Beach County FL Solid Waste AMBAC 6.000% 10/01/2009 440,000 472,450
Philadelphia PA AMBAC 5.125% 02/01/2008 1,050,000 1,059,188
Tampa FL Health MBIA 5.500% 11/15/2012 1,000,000 1,015,000
Teton County WY St John Hospital ACA 5.000% 12/01/2004 535,000 539,013
Tucson AZ COP Asset Guaranty 6.000% 07/01/2004 500,000 525,625
Washington DC Convent Center Authority AMBAC 5.250% 10/01/2014 1,000,000 966,250
Washington HCFA MBIA 5.000% 08/15/2018 700,000 623,875
-----------
Total Insured Bond (Cost $29,344,618) 28,696,444
-----------
LEASE REVENUE -- 5.9%
Battery Park NY Authority Junior Lien 5.200% 11/01/2023 315,000 298,463
NY Metropolitan Transportation Authority 5.750% 07/01/2015 500,000 501,250
New York Dormitory Authority 5.500% 02/15/2005 1,000,000 1,018,750
New York Dormitory Authority 6.000% 07/01/2006 500,000 530,625
New York State Urban Development Corp. 5.000% 01/01/2005 1,155,000 1,165,106
New York Urban Development Corp. 6.000% 01/01/2004 750,000 787,500
New York Urban Development Corp. 6.250% 04/01/2002 500,000 520,625
-----------
Total Lease Revenue (Cost $4,805,330) 4,822,319
-----------
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOC GIC -- 1.3%
Michigan Housing Authority LOC: Sumitomo Bank 5.500% 06/01/2018 $ 530,000 $ 530,090
New York Dormitory Authority LOC: Fleet Bank 5.500% 07/01/2003 500,000 511,250
-----------
Total LOC GIC (Cost $1,037,002) 1,041,340
-----------
PREREFUNDED -- 3.8%
Cincinnati OH Public Schools 6.150% 06/15/2002 600,000 621,000
District of Columbia 5.800% 06/01/2004 40,000 41,900
District of Columbia Medlantic Hospital 7.000% 08/15/2005 500,000 535,625
Mashantucket CT Western Pequot 6.500% 09/01/2005 995,000 1,093,256
Met Peoria IL 6.250% 07/01/2017 300,000 329,625
Texas State Turnpike 12.625% 01/01/2020 400,000 491,500
-----------
Total PreRefunded (Cost $2,993,459) 3,112,906
-----------
REVENUE BONDS -- 18.4%
Baxter County AZ Hospital 5.375% 09/01/2014 1,000,000 941,250
Camden NJ Cooper Hospitals 5.600% 02/15/2007 240,000 192,000
Florida State Mid-Bay Bridge Authority 4.000% 10/01/2022 1,000,000 1,015,000
Foothills CA Transportation Agency 0.000% 01/01/2007 500,000 396,875
Illinois Educational Facilities Authority
Revenues University of Chicago 5.000% 07/01/2008 685,000 690,994
Illinois HEFA Northwestern University 5.050% 11/01/2032 500,000 499,375
MA DFA Williston School 6.000% 10/01/2013 300,000 286,500
Mass IFA Berkshire Retirement Development(a) 5.125% 07/01/2018 500,000 500,920
Mass IFA Resource Recovery 6.150% 07/01/2002 700,000 718,375
Med Univ SC Hospital Facility Revenue 5.625% 07/01/2010 1,000,000 991,250
Met Govt Nashville & Davidson TN Vanderbilt 6.000% 05/01/2008 610,000 650,413
Met Govt Nashville TN Charity 5.000% 11/01/2007 1,000,000 990,000
Montana Student Assistance Corp. 5.950% 12/01/2012 230,000 228,275
NH Education Authority Brewster Acadamy 5.400% 06/01/2001 205,000 206,794
NH HEFA Nashua Hospital 6.250% 10/01/2008 750,000 773,438
New Hampshire HEFA Monadnock Hospital 5.250% 10/01/2007 550,000 528,688
New York Med Center Mt. Sinai FHA 5.950% 08/15/2009 150,000 153,188
New York Med Center St. Luke's FHA 5.600% 08/15/2013 445,000 448,894
Port Jervis NY IDA 5.250% 11/01/2006 100,000 99,000
Puerto Rico Industrial Tour Ed Anamendez
University 5.000% 02/01/2008 700,000 685,125
Scranton PA Allied Rehabilitation 7.125% 07/15/2005 1,075,000 1,134,125
Scranton-Lackawanna PA Health 6.600% 07/15/2000 200,000 201,192
Stanislaus CA Ogden 7.625% 01/01/2010 375,000 384,821
Tyler TX Health Facilities Development Corp. 5.250% 07/01/2001 835,000 839,175
Utah Student Loan AMBAC 7.450% 11/01/2008 1,200,000 1,254,696
Volusia FL HEFA - Embry Riddle University 5.500% 10/15/2004 270,000 275,063
Wisconsin State Transportation 5.500% 07/01/2010 15,000 15,394
-----------
Total Revenue Bonds (Cost $15,203,511) 15,100,820
-----------
SPECIAL REVENUES -- 3.6%
Castle Rock CO Import Authority 5.750% 12/01/2001 500,000 514,375
District of Columbia Redevelopment Agency 5.625% 11/01/2010 600,000 609,000
Long Beach CA Aquarium 5.750% 07/01/2005 200,000 209,250
</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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SPECIAL REVENUES (CONTINUED)
Los Angeles CA Community Redevelopment 5.000% 11/15/2000 $ 500,000 $ 505,000
Municipal Assistance Corp. NY 6.250% 07/01/2008 1,000,000 1,091,250
-----------
Total Special Revenues (Cost $2,937,920) 2,928,875
-----------
TOTAL BONDS (COST $80,653,566) 79,587,080
-----------
SHORT-TERM INVESTMENTS -- 1.4%
REPURCHASE AGREEMENTS -- 0.1%
Prudential-Bache Repurchase Agreement, dated
09/30/99, due 10/001/2099, with a maturity
value of $57,169 and an effective yield of
4.48%, collateralized by a U.S. Government
Agency Obligation with a rate of 6.00%, a
maturity date of 03/001/2013 and an aggregate
market value of $58,305 $ 57,162
-----------
SHORT TERM BONDS -- 1.3%
Grapevine TX Industrial Development Corp.++ 3.800% 12/01/2024 100,000 100,000
Lone Star Airport Improvement++ 3.450% 12/01/2014 400,000 400,000
Lone Star Airport Improvement++ 3.800% 12/01/2014 200,000 200,000
Mass Health Education Facility Authority++ 3.850% 07/01/2005 100,000 100,000
New York State Energy Research & Development++ 3.700% 06/01/2029 200,000 200,000
SC Jobs Economic Development Authority++ 4.100% 07/01/2022 100,000 100,000
-----------
1,100,000
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $1,157,162) 1,157,162
-----------
TOTAL INVESTMENTS -- 98.6% (COST $81,810,728) $80,744,242
OTHER ASSETS, LESS LIABILITIES -- 1.4% 1,174,203
-----------
NET ASSETS -- 100.0% $81,918,445
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
ACA - American Capital Access Corp.
AMBAC - American Municipal Bond Assurance Corp.
COP - Certification of Participation
DFA - Development Financial Agency
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority
FNMA - Federal National Mortgage Association
FSA - Financial Security Association
GIC - Guaranteed Investment Contract
HCFA - Health Care Facilities Authority
HEFA - Health & Educational Facilities Authority
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IFA - Industrial Finance Authority
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
NCL - Non-callable
SFM - Single Family Mortgage
(a) Variable Rate Security; rate indicated is as of 09/30/99.
=/= 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, 1999
- --------------------------------------------------------------------------------
VALUE
SECURITY SHARES (NOTE 1A)
- --------------------------------------------------------------------------------
EQUITIES -- 96.5%
CAPITAL GOODS -- 3.3%
Eagle USA Airfreight, Inc.* 87,050 $ 2,606,059
Expeditors International Wash, Inc. 64,100 2,057,213
-----------
4,663,272
-----------
EARLY CYCLICAL -- 2.5%
Forward Air Corp.* 108,800 2,570,400
Ryanair Holdings PLC ADR* 23,100 1,059,712
-----------
3,630,112
-----------
ENERGY -- 1.8%
Cal Dive International, Inc.* 44,300 1,517,275
Cooper Cameron Corp.* 28,500 1,075,875
-----------
2,593,150
-----------
FINANCIAL -- 2.0%
Costar Group, Inc.* 76,400 1,824,050
Wintrust Financial Corp.* 61,800 1,066,050
-----------
2,890,100
-----------
GROWTH CYCLICAL -- 5.3%
Cinar Corp.* 95,800 2,897,950
Global Sports, Inc.* 57,100 1,277,612
Steiner Leisure Ltd.* 44,025 1,100,625
Westwood One, Inc.* 49,800 2,247,225
-----------
7,523,412
-----------
HEALTH CARE -- 24.2%
ADAC Laboratories* 168,200 1,650,462
Alkermes, Inc.* 56,000 1,613,500
Cephalon, Inc.* 110,400 1,983,756
Chirex, Inc.* 79,200 2,044,350
Cytyc Corp.* 80,900 3,129,819
Human Genome Sciences, Inc.* 4,600 339,250
Ilex Oncology, Inc.* 82,800 1,014,300
Impath, Inc.* 63,400 1,846,525
Inhale Therapeutic Systems, Inc.* 67,700 2,056,387
Medquist, Inc.* 51,000 1,705,312
Novoste Corp.* 102,000 1,820,068
Pharmacyclics, Inc.* 74,300 3,037,012
Protein Design Labs, Inc.* 38,200 1,379,975
Transkaryotic Therapies, Inc.* 56,200 2,887,275
Triangle Pharmaceuticals, Inc.* 119,800 2,306,150
United Therapeutics* 93,200 2,691,150
Vertex Pharmaceuticals, Inc.* 48,700 1,512,744
Vical, Inc.* 121,500 1,678,219
-----------
34,696,254
-----------
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, 1999
- --------------------------------------------------------------------------------
VALUE
SECURITY SHARES (NOTE 1A)
- --------------------------------------------------------------------------------
OTHER -- 1.9%
Nasdaq-100 Shares* 22,900 $ 2,753,011
-------------
SERVICES -- 31.4%
24/7 Media, Inc.* 34,700 1,314,263
AHL Services, Inc.* 22,500 586,406
Abacus Direct Corp.* 31,000 3,778,125
Citadel Communication Corp.* 48,900 1,668,712
Concentric Network Corp.* 89,600 1,820,000
Digex, Inc.* 62,400 1,478,100
Digital River, Inc.* 67,600 1,470,300
Exodus Communications, Inc.* 29,600 2,133,050
F.Y.I., Inc.* 51,700 1,741,644
Hispanic Broadcasting Corp.* 39,800 3,029,775
Insight Communications, Inc.* 68,900 1,972,262
Luminant Worldwide Corp.* 43,300 1,331,475
Network Event Theater, Inc.* 53,200 1,190,350
On Assignment, Inc.* 23,100 554,400
Paxson Communications Corp.* 176,800 2,165,800
Pinnacle Holdings, Inc.* 87,400 2,283,325
Rowecom, Inc.* 54,400 1,509,600
SBS Broadcasting SA* 114,400 4,433,000
Saga Communications Inc., Class A* 96,200 2,212,600
Salem Communications Corp., Class A* 73,200 1,866,600
Sapient Corp.* 24,000 2,262,000
Sportsline USA, Inc.* 81,900 2,421,169
Starmedia Network, Inc.* 44,600 1,637,658
-------------
44,860,614
-------------
TECHNOLOGY -- 24.1%
ATMI, Inc.* 79,600 2,970,075
Applied Micro Circuits Corp.* 61,600 3,511,200
Bea Systems, Inc.* 65,500 2,312,969
Credence Systems Corp.* 43,400 1,947,575
Cybex Corp.* 62,300 2,079,263
Emulex Corp.* 19,800 1,700,325
National Computer System, Inc. 61,600 2,361,978
Netscout Systems, Inc.* 61,600 1,320,550
PRI Automation, Inc.* 53,700 1,939,913
Pervasive Software, Inc.* 65,700 2,266,650
Photronics, Inc.* 83,600 1,875,775
Qlogic Corp.* 31,300 2,187,088
Semtech Corp.* 111,600 4,087,350
TSI International Software Ltd.* 43,800 1,188,075
Verisign, Inc.* 25,600 2,726,400
-------------
34,475,186
-------------
TOTAL EQUITIES (COST $99,165,632) 138,085,111
-------------
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, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 3.0%
U.S. GOVERNMENT AGENCY -- 0.2%
U.S. Treasury Bill+ 4.540% 12/23/1999 $ 200,000 $ 197,828
------------
REPURCHASE AGREEMENTS -- 2.8%
Prudential-Bache Repurchase Agreement, dated
9/30/99, due 10/01/99, with a maturity value
of $4,032,015 and an effective yield of
4.48%, collateralized by a U.S. Government
Agency Obligation with a rate of 6.00%, a
maturity date of 3/01/13 and an aggregate
market value of $4,112,143 $ 4,031,513
------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,229,341) 4,229,341
------------
TOTAL INVESTMENTS -- 99.5% (COST $103,394,973) $142,314,452
OTHER ASSETS, LESS LIABILITIES -- 0.5% 760,183
------------
NET ASSETS -- 100.0% $143,074,635
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
ADR - American Depositary Receipt
* Non-income producing security.
+ Denotes all or part of security pledged as collateral to cover margin
requirements on open financial futures contracts (Note 6).
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
VALUE
SECURITY SHARES (NOTE 1A)
- --------------------------------------------------------------------------------
EQUITIES -- 95.8%
CAPITAL GOODS -- 11.2%
General Dynamics 6,500 $ 405,844
General Motors, Class H* 12,000 687,000
Ingersoll Rand Co. 13,000 714,187
Tyco International Ltd. 7,500 774,375
United Technologies Corp. 12,200 723,612
----------
3,305,018
----------
CONSUMER STABLE -- 7.4%
CVS Corp. 7,000 285,687
Fort James Corp. 17,100 456,356
Kroger Co.* 34,000 750,125
Universal Foods Corp. 30,000 688,125
----------
2,180,293
----------
EARLY CYCLICAL -- 1.9%
Clayton Homes, Inc. 30,000 260,625
Leggett & Platt, Inc. 16,200 318,937
----------
579,562
----------
ENERGY -- 6.5%
BP Amoco PLC ADR 8,363 926,725
Mobil Corp. 9,800 987,350
----------
1,914,075
----------
FINANCIAL -- 15.5%
AMBAC Inc. 12,800 606,400
Chase Manhattan Corp. 7,000 527,625
Citigroup, Inc. 13,125 577,500
Conseco, Inc. 28,370 547,896
Delphi Financial Group, Inc., Class A* 16,459 496,856
Federal National Mortgage Association 7,500 470,156
Fleet Financial Group, Inc. 8,000 293,000
Morgan Stanley Dean Witter 5,800 517,287
Reliastar Financial Corp. 16,500 548,625
----------
4,585,345
----------
GROWTH CYCLICAL -- 7.9%
Carnival Corp. 15,000 652,500
Costco Wholesale Corp.* 4,000 288,000
Jones Apparel Group, Inc.* 17,400 500,250
Ross Stores, Inc. 19,000 382,375
Tommy Hilfiger Corp.* 17,800 501,737
----------
2,324,862
----------
HEALTH CARE -- 11.7%
Abbott Laboratories 11,000 404,250
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, 1999
- --------------------------------------------------------------------------------
VALUE
SECURITY SHARES (NOTE 1A)
- --------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
Amgen, Inc.* 10,000 815,000
Bristol-Myers Squibb, Inc. 6,600 445,500
Medtronics, Inc. 9,910 351,805
Schering-Plough Corp. 9,600 418,800
Steris Corp.* 48,000 660,000
Watson Pharmaceutical, Inc.* 12,000 366,750
------------
3,462,105
------------
REAL ESTATE -- 3.3%
Boston Properties Inc., REIT 6,500 199,469
Equity Residential Properties, REIT 4,500 190,688
General Growth Properties, REIT 7,400 233,100
Prentiss Properties Trust, REIT 8,400 186,375
Starwood Hotels and Resorts, REIT 7,600 169,575
------------
979,207
------------
SERVICES -- 8.6%
Bell Atlantic Corp. 15,000 1,009,688
Ceridian Corp.* 10,600 263,675
Shared Medical Systems Corp. 14,100 659,175
Xerox Corp. 14,500 608,094
------------
2,540,632
------------
TECHNOLOGY -- 21.8%
American Power Conversion Corp.* 49,000 931,000
BMC Software, Inc.* 16,000 1,145,000
Computer Associates International, Inc. 14,750 903,438
Hewlett-Packard Company 7,700 708,400
Intel Corp. 9,500 705,969
Sci Sys, Inc.* 17,000 755,438
Sun Microsystems, Inc.* 14,000 1,302,000
------------
6,451,245
------------
TOTAL EQUITIES (COST $22,911,666) 28,322,344
------------
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, 1999
- --------------------------------------------------------------------------------
VALUE
SECURITY (NOTE 1A)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 4.3%
REPURCHASE AGREEMENTS -- 4.3%
Prudential-Bache Repurchase Agreement , dated 9/30/99, due
10/01/99, with a maturity value of $1,262,135 and an
effective yield of 4.48%, collateralized by a U.S.
Government Agency Obligation with a rate of 6.00%, a
maturity date of 3/01/13 and an aggregate market value of
$1,287,218. $ 1,261,978
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $1,261,978) 1,261,978
-----------
TOTAL INVESTMENTS -- 100.1% (COST $24,173,644) $29,584,322
OTHER ASSETS, LESS LIABILITIES -- (0.1%) (15,762)
-----------
NET ASSETS -- 100.0% $29,568,560
===========
NOTES TO SCHEDULE OF INVESTMENTS:
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
33
<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 its financial statements. The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A. INVESTMENT SECURITY VALUATIONS
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 the Fund to
monitor on a daily basis, the market value of the repurchase agreement's
underlying investments to ensure the existence of a proper level of
collateral.
C. SECURITIES TRANSACTIONS AND INCOME
Securities transactions are recorded as of trade date. Interest income is
determined on the basis of interest accrued, adjusted for amortization of
premium or discount on long-term debt securities when required for federal
income tax purposes. Realized gains and losses from securities sold are
recorded on the identified cost basis.
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 (together the "Bond Funds")
from net interest earned on tax-exempt municipal bonds are not includable
by shareholders as gross
34
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 following
Funds, for federal income tax purposes, had capital loss carryovers:
<TABLE>
<CAPTION>
EXPIRATION DATE SEPTEMBER 30,
-------------------------------------------------------------------------
2003 2004 2005 2006 2007 TOTAL
---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Massachusetts Intermediate Tax Exempt
Bond Fund $ 104,125 -- -- -- -- $ 104,125
Tax-Sensitive Equity Fund -- $ 1,162 $ 95,353 -- $1,003,879 $1,100,394
</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 Tax Sensitive Equity Fund elected to defer to their fiscal year ending
September 30, 2000 losses of $830,223, recognized during the period from
November 1, 1998 to September 30, 1999.
E. DEFERRED ORGANIZATION EXPENSE
Costs associated with the organization and initial registration of the
Small Cap Tax-Sensitive Equity Fund and Tax-Sensitive Equity Fund are
being amortized, on a straight-line basis, through December 2000.
F. 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.
(2) INVESTMENT ADVISORY FEE:
The investment advisory fee paid to Standish, Ayer & Wood, Inc. (SA&W) for
overall investment advisory and administrative services, and general
office facilities, is paid 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 Tax-Sensitive Equity Fund, SA&W voluntarily agreed to limit
the total Fund operating expenses (excluding litigation, indemnification
and other extraordinary expenses) to 0.50% of average daily net assets for
the year ended September 30, 1999. For the Small Cap Tax-Sensitive Equity
Fund, SA&W voluntarily agreed to limit the total Fund operating expenses
(excluding litigation, indemnification and other extraordinary expenses)
to 0.75% of average daily net assets through December 31, 1998; Commencing
January 1, 1999 the total operating expenses (excluding litigation,
indemnification and other extraordinary expenses) were limited to 1.00% of
average daily net assets. For the year ended September 30, 1999, SA&W
voluntarily waived $131,784 and $13,604 of its advisory fee to the
Tax-Sensitive Equity Fund and Small CapTax-Sensitive Equity Fund,
respectively. These agreements are voluntary and temporary and may be
discontinued or revised by SA&W at any time. The Funds pay no compensation
directly to the Trusts 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.
35
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(3) 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
SEPTEMBER 30, 1999
--------------------------
PURCHASES SALES
------------ ------------
<S> <C> <C>
Massachusetts Intermediate Tax Exempt Bond Fund $ 26,390,635 $ 12,372,856
============ ============
Intermediate Tax Exempt Bond Fund $ 40,580,406 $ 35,139,859
============ ============
Small Cap Tax-Sensitive Equity Fund $210,551,236 $184,780,461
============ ============
Tax-Sensitive Equity Fund $ 18,469,078 $ 26,110,953
============ ============
</TABLE>
(4) 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
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
Shares sold 754,858 866,950
Shares issued to shareholders in payment of
distributions declared 40,334 38,776
Shares redeemed (365,904) (257,536)
---------- ----------
Net increase 429,288 648,190
========== ==========
INTERMEDIATE TAX EXEMPT BOND FUND
Shares sold 1,550,662 1,865,702
Shares issued to shareholders in payment of
distributions declared 92,432 68,939
Shares redeemed (1,339,693) (831,605)
---------- ----------
Net increase 303,401 1,103,036
========== ==========
SMALL CAP TAX-SENSITIVE EQUITY FUND
Shares sold 1,188,251 1,919,939
Shares issued to shareholders in payment of
distributions declared -- 5,771
Shares redeemed (287,283) (363,050)
---------- ----------
Net increase 900,968 1,562,662
========== ==========
TAX-SENSITIVE EQUITY FUND
Shares sold 394,885 706,407
Shares issued to shareholders in payment of
distributions declared 4,581 3,722
Shares redeemed (415,674) (99,734)
---------- ----------
Net increase (decrease) (16,208) 610,395
========== ==========
</TABLE>
At September 30, 1999, the Massachusetts Intermediate Tax Exempt Bond Fund
had one shareholder of record owning approximately 24% of the Fund's
outstanding shares. The 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 two shareholders of
record owning approximately 31% of the Fund's outstanding shares. The
Tax-Sensitive Equity Fund had one shareholder of record owning
approximately 19% of the Fund's outstanding shares.
36
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(5) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at September 30, 1999, as computed on a
federal income tax basis, were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
GROSS UNREALIZED GROSS UNREALIZED APPRECIATION
AGGREGATE COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Massachusetts Intermediate Tax Exempt Bond
Fund $ 62,605,489 $ 535,066 $ (1,094,811) $ (559,745)
Intermediate Tax Exempt Bond Fund $ 81,810,728 $ 693,915 $ (1,760,401) $ (1,066,486)
Small Cap tax-Sensitive Equity Fund $103,667,743 $ 40,155,965 $ (1,509,256) $ 38,646,709
Tax-Sensitive Equity Fund $ 24,181,099 $ 7,014,290 $ (1,611,067) $ 5,403,223
</TABLE>
(6) 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, 1999, the Small Cap Tax-Sensitive Equity Fund had the
following open financial futures contracts:
<TABLE>
<CAPTION>
EXPIRATION UNDERLYING FACE NET UNREALIZED
CONTRACT POSITION DATE AMOUNT AT VALUE DEPRECIATION
--------------------------------------------- -------- ---------- --------------- --------------
<S> <C> <C> <C> <C>
S&P Mid Cap 400 (18 contracts) Long 12/17/99 $3,468,600 $(122,680)
</TABLE>
37
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(7) 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, 1999, the Funds were not parties to any delayed delivery
transactions.
(8) LINE OF CREDIT:
The Funds, other funds in the trust and subtrusts in the Portfolio Trust
are parties to a committed line of credit facility, which enables each
portfolio/fund to borrow, in the aggregate, up to $25 million. Interest is
charged to each participating portfolio/fund based on its borrowings at a
rate equal to the Federal Funds effective rate plus 1/2 of 1%. In
addition, a commitment fee, computed at an annual rate of .065 of 1% on
the daily unused portion of the facility, is allocated ratably among the
participating portfolios/funds at the end of each quarter. For the year
ended September 30, 1999, the expense related to the commiment fee was
$995, $1,390, $1,820 and $690 for the Massachusetts Intermediate Tax
Exempt Bond Fund, the Intermediate Tax Exempt Bond Fund, the Small Cap
Tax-Sensitive Equity Fund and the Tax-Sensitive Equity Fund, respectively.
During the year ended September 30, 1999, the funds had no borrowings
under the credit facility.
- --------------------------------------------------------------------------------
TAX INFORMATION - UNAUDITED
Pursuant to section 852 of the Internal Revenue Code, the Standish
Intermediate Tax Exempt Bond Fund designated $644,345 as capital gain
dividends for the year ended September 30, 1999. All of this amount
represents a 20% tax rate gain distribution. Of the distributions paid by
the Bond Funds from net investment income for the year ended September 30,
1999, amounts that were tax exempt for federal income tax purposes are as
follows:
Massachusetts Intermediate Tax Exempt Bond Fund $2,430,803
Intermediate Tax Exempt Bond Fund $3,521,430
38
<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, 1999, 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
(hereafter referred to as "financial statements") are the responsibility of the
Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1999, by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 19, 1999
39
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