[LOGO] STANDISH FUNDS(R)
Standish Group of
Financial Reports Tax-Sensitive Funds
--------------------------------------------------------------------------------
Six Months Ended Standish Massachusetts
March 31, 2000 Intermediate Tax Exempt Bond Fund
(Unaudited)
Standish Intermediate Tax Exempt
Bond Fund
Standish Small Cap
Tax-Sensitive Equity Fund
Standish Tax-Sensitive
Equity Fund
<PAGE>
Financial Reports
Table of Contents
Selected Financial Information................................................1
Statements of Assets and Liabilities..........................................2
Statements of Operations......................................................3
Statements of Changes in Net Assets:
Standish Massachusetts Intermediate Tax Exempt Bond Fund.................4
Standish Intermediate Tax Exempt Bond Fund...............................5
Standish Small Cap Tax-Sensitive Equity Fund.............................6
Standish Tax-Sensitive Equity Fund.......................................7
Financial Highlights:
Standish Massachusetts Intermediate Tax Exempt Bond Fund.................8
Standish Intermediate Tax Exempt Bond Fund...............................9
Standish Small Cap Tax-Sensitive Equity Fund............................10
Standish Tax-Sensitive Equity Fund......................................11
Schedule of Investments:
Standish Massachusetts Intermediate Tax Exempt Bond Fund................12
Standish Intermediate Tax Exempt Bond Fund..............................16
Standish Small Cap Tax-Sensitive Equity Fund............................20
Standish Tax-Sensitive Equity Fund......................................23
Notes to Financial Statements................................................25
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
SELECTED FINANCIAL INFORMATION
FOR THE PERIOD ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<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 PERIOD $ 20.85 $ 21.11 $ 40.70 $ 36.99
---------- ---------- ----------- ----------
FROM INVESTMENT OPERATIONS:
Net investment income (loss)* 0.46 0.47 (0.21) 0.13
Net realized and unrealized gain (loss) on
investments (0.19) (0.13) 40.07 4.78
---------- ---------- ----------- ----------
Total income from investment operations 0.27 0.34 39.86 4.91
---------- ---------- ----------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.46) (0.47) -- (0.14)
From net realized gain on investments -- (0.06) (1.37) --
---------- ---------- ----------- ----------
Total distributions to shareholders (0.46) (0.53) (1.37) (0.14)
---------- ---------- ----------- ----------
NET ASSET VALUE, END OF PERIOD $ 20.66 $ 20.92 $ 79.19 $ 41.76
========== ========== =========== ==========
TOTAL RETURN+++ 1.30%++ 1.64%++ 99.86%++ 13.33%++
RATIOS:
Expenses (to average daily net assets)* 0.65%+ 0.62%+ 0.81%+ 0.50%+
Net investment income (loss) (to average
daily net assets)* 4.41%+ 4.54%+ (0.63)%+ 0.69%+
Portfolio Turnover 14% 17% 107% 15%
Net Assets, End of Period (000's omitted) $ 62,515 $ 80,511 $ 307,832 $ 27,473
</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.
+ Computed on an annualized basis.
++ Not annualized.
+++ Total return would have been lower in absence of expense waivers.
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<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)* $ 61,218,741 $ 80,340,139 $ 293,715,264 $ 27,588,727
Receivable for investments sold 204,000 60,000 24,492,993 186,937
Receivable for Fund shares sold 1,850,000 -- 81,422 2,500
Receivable from investment advisor -- 8,524 -- --
Interest and dividends receivable 997,951 1,333,268 1,981 24,723
Receivable for variation margin on open
financial futures contracts (Note 6) -- -- 260,095 --
Deferred organizational costs (Note 1E) -- -- 2,863 2,873
Prepaid expenses 1,807 10,554 16,468 10,144
---------------- ---------------- ----------------- ----------------
Total assets 64,272,499 81,752,485 318,571,086 27,815,904
LIABILITIES
Payable for investments purchased 1,592,329 535,000 10,638,190 230,022
Payable for Fund shares redeemed 10,000 512,000 50,000 85,000
Distribution payable 123,256 164,237 -- --
Accrued accounting, custody and transfer
agent fees 14,959 16,007 33,428 11,321
Accrued trustees' fees and expenses (Note
2) 2,844 3,460 5,006 1,866
Accrued expenses and other liabilities 13,979 11,162 12,471 14,476
---------------- ---------------- ----------------- ----------------
Total liabilities 1,757,367 1,241,866 10,739,095 342,685
---------------- ---------------- ----------------- ----------------
NET ASSETS $ 62,515,132 $ 80,510,619 $ 307,831,991 $ 27,473,219
================ ================ ================= ================
NET ASSETS CONSIST OF:
Paid-in capital $ 63,756,579 $ 82,061,866 $ 120,600,402 $ 20,605,614
Accumulated net realized gain (loss) (371,996) (425,214) 92,879,945 (1,121,501)
Accumulated undistributed net investment
income (loss) 1,180 16,790 (775,175) 45,899
Net unrealized appreciation (depreciation) (870,631) (1,142,823) 95,126,819 7,943,207
---------------- ---------------- ----------------- ----------------
TOTAL NET ASSETS $ 62,515,132 $ 80,510,619 $ 307,831,991 $ 27,473,219
================ ================ ================= ================
SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,026,395 3,848,186 3,887,033 657,847
================ ================ ================= ================
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(Net Assets/Shares outstanding) $ 20.66 $ 20.92 $ 79.19 $ 41.76
================ ================ ================= ================
* Identified cost of investments $ 62,089,372 $ 81,482,962 $ 198,485,860 $ 19,645,520
================ ================ ================= ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<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 $ 1,546,757 $ 2,045,104 $ 210,203 $ 152,345
Dividend income -- -- 6,285 21,223
--------------- --------------- ----------------- ---------------
Total investment income 1,546,757 2,045,104 216,488 173,568
EXPENSES
Investment advisory fee (Note 2) 122,225 158,459 848,388 72,956
Accounting, custody and transfer agent fees 49,597 52,820 89,547 32,455
Legal and audit services 14,200 12,998 20,498 13,915
Amortization of organization expenses (Note
1E) -- -- 1,887 1,887
Registration fees 727 8,398 14,350 7,375
Insurance expense 2,868 3,233 2,608 1,755
Trustees' fees and expenses (Note 2) 3,925 4,250 7,865 2,560
Miscellaneous 4,511 6,212 6,520 3,980
--------------- --------------- ----------------- ---------------
Total expenses 198,053 246,370 991,663 136,883
Deduct:
Waiver of investment advisory fee (Note 2) -- -- -- (63,927)
--------------- --------------- ----------------- ---------------
Total expense deductions -- -- -- (63,927)
--------------- --------------- ----------------- ---------------
Net expenses 198,053 246,370 991,663 72,956
--------------- --------------- ----------------- ---------------
Net investment income (loss) 1,348,704 1,798,734 (775,175) 100,612
--------------- --------------- ----------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)
Investment security transactions (267,872) (425,194) 91,951,992 818,746
Financial futures contracts -- -- 1,082,080 --
--------------- --------------- ----------------- ---------------
Net realized gain (loss) (267,872) (425,194) 93,034,072 818,746
Change in unrealized appreciation
(depreciation)
Investment securities (310,886) (76,337) 56,309,925 2,532,529
Financial futures contracts -- -- 20,095 --
--------------- --------------- ----------------- ---------------
Net change in unrealized appreciation
(depreciation) (310,886) (76,337) 56,330,020 2,532,529
--------------- --------------- ----------------- ---------------
Net realized and unrealized gain (loss) (578,758) (501,531) 149,364,092 3,351,275
--------------- --------------- ----------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 769,946 $ 1,297,203 $ 148,588,917 $ 3,451,887
=============== =============== ================= ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 1,348,704 $ 2,436,564
Net realized gain (loss) (267,872) 172,363
Change in unrealized appreciation (depreciation) (310,886) (2,765,327)
--------------- ---------------
Net increase (decrease) in net assets from investment
operations 769,946 (156,400)
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (1,348,704) (2,436,564)
--------------- ---------------
Total distributions to shareholders (1,348,704) (2,436,564)
--------------- ---------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 9,487,228 19,533,943
Value of shares issued to shareholders in payment of
distributions declared 617,250 1,085,435
Cost of shares redeemed (10,015,970) (8,621,088)
--------------- ---------------
Net increase in net assets from Fund share
transactions 88,508 11,998,290
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (490,250) 9,405,326
NET ASSETS
At beginning of period 63,005,382 53,600,056
--------------- ---------------
At end of period (including undistributed net
investment income of $1,180 and $1,180,
respectively) $ 62,515,132 $ 63,005,382
=============== ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 1,798,734 $ 3,527,125
Net realized gain (loss) (425,194) 361,582
Change in unrealized appreciation (depreciation) (76,337) (4,200,130)
------------ ------------
Net increase (decrease) in net assets from investment
operations 1,297,203 (311,423)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (1,790,210) (3,527,125)
From net realized gains on investments (218,599) (723,687)
------------ ------------
Total distributions to shareholders (2,008,809) (4,250,812)
------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 17,688,893 36,937,409
Value of shares issued to shareholders in payment of
distributions declared 1,086,309 2,316,211
Cost of shares redeemed (19,471,422) (31,352,116)
------------ ------------
Net increase (decrease) in net assets from Fund share
transactions (696,220) 7,901,504
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,407,826) 3,339,269
NET ASSETS
At beginning of period 81,918,445 78,579,176
------------ ------------
At end of period (including undistributed net
investment income of $16,790 and $8,266,
respectively) $ 80,510,619 $ 81,918,445
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment loss $ (775,175) $ (668,847)
Net realized gain 93,034,072 6,278,877
Change in unrealized appreciation (depreciation) 56,330,020 39,513,446
------------ ------------
Net increase in net assets from investment operations 148,588,917 45,123,476
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net realized gains on investments (4,903,158) --
------------ ------------
Total distributions to shareholders (4,903,158) --
------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 61,621,072 43,866,832
Value of shares issued to shareholders in payment of
distributions declared 4,578,060 --
Cost of shares redeemed (45,127,535) (12,373,955)
------------ ------------
Net increase in net assets from Fund share
transactions 21,071,597 31,492,877
------------ ------------
TOTAL INCREASE IN NET ASSETS 164,757,356 76,616,353
NET ASSETS
At beginning of period 143,074,635 66,458,282
------------ ------------
At end of period (including net investment loss of
$775,175 and $0, respectively.) $307,831,991 $143,074,635
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 100,612 $ 224,282
Net realized gain (loss) 818,746 (1,097,849)
Change in unrealized appreciation (depreciation) 2,532,529 5,465,603
----------- ------------
Net increase in net assets from investment operations 3,451,887 4,592,036
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1F)
From net investment income (114,809) (221,630)
----------- ------------
Total distributions to shareholders (114,809) (221,630)
----------- ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 3,542,833 15,452,943
Value of shares issued to shareholders in payment of
distributions declared 86,629 181,126
Cost of shares redeemed (9,061,881) (22,094,521)
----------- ------------
Net decrease in net assets from Fund share
transactions (5,432,419) (6,460,452)
----------- ------------
TOTAL DECREASE IN NET ASSETS (2,095,341) (2,090,046)
NET ASSETS
At beginning of period 29,568,560 31,658,606
----------- ------------
At end of period (including undistributed net
investment income of $45,899 and $60,096,
respectively) $27,473,219 $ 29,568,560
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS YEAR ENDED
ENDED YEAR ENDED SEPTEMBER 30, ENDED DECEMBER 31,
MARCH 31, 2000 ------------------------------- SEPTEMBER 30, --------------------
(UNAUDITED)(1) 1999(1) 1998 1997 1996 1995 1994
-------------- ----------- -------- -------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.85 $ 21.78 $ 21.18 $ 20.63 $ 21.02 $ 19.55 $ 21.31
------- ------- ------- ------- ------- ------- -------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.46 0.90 0.94 0.97 0.74 0.94 0.94
Net realized and unrealized gain
(loss) on investments (0.19) (0.93) 0.60 0.55 (0.39) 1.47 (1.75)
------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.27 (0.03) 1.54 1.52 0.35 2.41 (0.81)
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.46) (0.90) (0.94) (0.97) (0.74) (0.94) (0.94)
From net realized gain on investments -- -- -- -- -- -- (0.01)
------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders (0.46) (0.90) (0.94) (0.97) (0.74) (0.94) (0.95)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 20.66 $ 20.85 $ 21.78 $ 21.18 $ 20.63 $ 21.02 $ 19.55
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN+++ 1.30%++ (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% 0.65%
Net Investment Income (to average
daily net assets)* 4.41%+ 4.19% 4.40% 4.67% 4.78%+ 4.71% 4.67%
Portfolio Turnover 14% 22% 19% 25% 35% 77% 84%
Net Assets, End of Period (000's
omitted) $62,515 $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> <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.
++ Not annualized.
+++ Total return would have been lower in absence of expense waivers.
(1) Calculated based on average shares outstanding.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS YEAR ENDED
ENDED YEAR ENDED SEPTEMBER 30, ENDED DECEMBER 31,
MARCH 31, 2000 ------------------------------- SEPTEMBER 30, --------------------
(UNAUDITED)(1) 1999(1) 1998 1997 1996 1995 1994
-------------- ----------- -------- -------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.11 $ 22.30 $ 21.78 $ 21.12 $ 21.40 $ 19.91 $ 21.44
------- ------- ------- ------- ------- ------- -------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.47 0.92 0.96 1.01 0.79 0.98 0.95
Net realized and unrealized gain
(loss) on investments (0.13) (0.99) 0.58 0.74 (0.28) 1.49 (1.51)
------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.34 (0.07) 1.54 1.75 0.51 2.47 (0.56)
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.47) (0.92) (0.96) (1.01) (0.79) (0.98) (0.95)
From net realized gain on investments (0.06) (0.20) (0.06) (0.08) -- -- (0.02)
------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders (0.53) (1.12) (1.02) (1.09) (0.79) (0.98) (0.97)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 20.92 $ 21.11 $ 22.30 $ 21.78 $ 21.12 $ 21.40 $ 19.91
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN+++ 1.64%++ (0.33)% 7.24% 8.27% 2.43%++ 12.65% (2.68)%
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net
assets)* 0.62%+ 0.63% 0.65% 0.65% 0.65%+ 0.65% 0.65%
Net Investment Income (to average
daily net assets)* 4.54%+ 4.24% 4.37% 4.74% 4.99%+ 4.75% 4.62%
Portfolio Turnover 17% 43% 29% 23% 43% 140% 157%
Net Assets, End of Period (000's
omitted) $80,511 $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> <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.
++ Not annualized.
+++ Total return would have been lower in absence of expense waivers.
(1) Calculated based on average shares outstanding.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 -----------------------------------------------
(UNAUDITED)(1) 1999(1) 1998(1) 1997 1996(2)
-------------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 40.70 $ 25.89 $ 32.61 $ 23.57 $20.00
-------- -------- ------- ------- ------
FROM INVESTMENT OPERATIONS:
Net investment income (loss)* (0.21) (0.21) (0.15) 0.02 0.04
Net realized and unrealized gain
(loss) on investments 40.07 15.02 (6.42) 9.05 3.55
-------- -------- ------- ------- ------
Total from investment operations 39.86 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 (1.37) -- (0.14) -- --
-------- -------- ------- ------- ------
Total distributions to shareholders (1.37) -- (0.15) (0.03) (0.02)
-------- -------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 79.19 $ 40.70 $ 25.89 $ 32.61 $23.57
======== ======== ======= ======= ======
TOTAL RETURN+++ 99.86%++ 57.03% (20.16)% 38.50% 17.95%++
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net
assets)* 0.81%+ 0.78% 0.75% 0.21% -- +
Net Investment Income (Loss) (to
average daily net assets)* (0.63)%+ (0.60)% (0.51)% 0.08% 0.41%+
Portfolio Turnover 107% 168% 102% 102% 57%
Net Assets, End of Period (000's
omitted) $307,832 $143,075 $66,458 $32,761 $6,896
</TABLE>
----------
* For the periods indicated, the investment adviser voluntarily agreed not to
impose a portion of its investment advisory fee and/or reimbursed the Fund
for a portion of its operating expenses. If this voluntary action had not
been taken, the investment income per share and ratios would have been:
<TABLE>
<S> <C> <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.
++ Not annualized.
+++ Total return would have been lower in absence of expense waivers.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 --------------------------------------------------
(UNAUDITED)(1) 1999(1) 1998(1) 1997(1) 1996(2)
-------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 36.99 $ 32.50 $ 35.24 $ 23.60 $20.00
------- ------- ------- ------- ------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.13 0.22 0.29 0.39 0.28
Net realized and unrealized gain
(loss) on investments 4.78 4.49 (2.77) 11.58 3.50
------- ------- ------- ------- ------
Total from investment operations 4.91 4.71 (2.48) 11.97 3.78
------- ------- ------- ------- ------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.14) (0.22) (0.26) (0.33) (0.18)
------- ------- ------- ------- ------
Total distributions to shareholders (0.14) (0.22) (0.26) (0.33) (0.18)
------- ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 41.76 $ 36.99 $ 32.50 $ 35.24 $23.60
======= ======= ======= ======= ======
TOTAL RETURN+++ 13.33%++ 14.46% (7.13)% 51.19% 18.97%++
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net
assets)* 0.50%+ 0.50% 0.50% 0.20% -- +
Net Investment Income (to average
daily net assets)* 0.69%+ 0.59% 0.78% 1.31% 2.27%+
Portfolio Turnover 15% 50% 33% 25% 17%
Net Assets, End of Period (000's
omitted) $27,473 $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> <C>
Net investment income per share $ 0.05 $ 0.09 $ 0.09 $ (0.07) $(0.36)
Ratios (to average daily net assets):
Expenses 0.94%+ 0.85% 1.05% 1.73% 5.15%+
Net investment income (loss) 0.25%+ 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.
++ Not annualized.
+++ Total return would have been lower in absence of expense waivers.
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
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 96.2%
GENERAL OBLIGATIONS -- 17.7%
Amesbury MA State Qualified 5.300% 06/01/2003 $ 750,000 $ 758,437
Brockton MA State Qualified 5.550% 12/15/2003 270,000 272,362
Brockton MA State Qualified 5.650% 12/15/2004 300,000 303,375
Brockton MA State Qualified 5.700% 06/15/2002 160,000 161,800
Brockton MA State Qualified 6.125% 06/15/2018 250,000 252,500
Commonwealth of Massachusetts 5.000% 11/01/2009 1,000,000 992,500
Commonwealth of Massachusetts 7.500% 06/01/2004 700,000 758,625
Lawrence MA State Qualified 5.000% 09/15/2002 250,000 250,937
Lawrence MA State Qualified 5.125% 09/15/2003 1,500,000 1,511,250
Mass Bay Transportation Authority 6.000% 03/01/2005 350,000 365,750
Mass Bay Transportation Authority 7.000% 03/01/2011 1,000,000 1,147,500
Mass St College Bldg Authority Project 7.500% 05/01/2006 500,000 563,125
Mass St College Bldg Authority Project 7.500% 05/01/2007 450,000 514,125
Mass St College Bldg Authority Project 7.500% 05/01/2008 250,000 289,062
Mass State Conservation Loan 5.250% 08/01/2009 900,000 909,000
Massachusetts NCL 6.000% 11/01/2011 850,000 908,437
University of Mass Building Authority State
Guarantee 6.625% 05/01/2007 1,000,000 1,092,500
------------
Total General Obligations (Cost $11,061,292) 11,051,285
------------
GOVERNMENT BACKED -- 3.4%
Mass HEFA Carney Hospital Prerefunded-Series
D 6.100% 07/01/2014 700,000 744,625
Mass HEFA Melrose Wakefield Hospital 6.350% 07/01/2006 310,000 330,150
Massachusetts Water Resource Authority
Prerefunded-Series A 6.000% 08/01/2020 500,000 528,750
Plymouth County Ctfs Partnership 7.000% 04/01/2022 500,000 535,625
------------
Total Government Backed (Cost $2,107,001) 2,139,150
------------
HOUSING REVENUE -- 8.7%
Mass HFA Residential Development FNMA 5.600% 05/15/2004 250,000 255,312
Mass HFA Residential Development FNMA 6.250% 11/15/2012 1,000,000 1,038,750
Mass HFA Residential Development FNMA 6.875% 11/15/2011 1,000,000 1,051,250
Mass HFA Residential Development FNMA 6.875% 11/15/2011 1,000,000 1,051,250
Mass HFA SFM 6.500% 12/01/2014 10,000 10,031
Massachusetts St Housing Finance Agency 5.750% 12/01/2017 10,000 9,925
Massachusetts St Housing Finance Agency 6.300% 10/01/2013 950,000 977,312
Massachusetts St Housing Finance Agency MFU
FNMA 6.250% 11/15/2012 1,000,000 1,038,750
------------
Total Housing Revenue (Cost $5,457,584) 5,432,580
------------
INDUSTRIAL DEVELOPMENT -- 2.9%
City of Boston Industrial Development Finance
Authority 5.875% 04/01/2030 450,000 455,062
City of Boston Industrial Development Finance
Authority 7.375% 05/15/2015 865,000 895,275
Mass DFA Resource Recovery 6.900% 12/01/2029 500,000 498,750
------------
Total Industrial Development (Cost $1,857,517) 1,849,087
------------
INSURED BOND -- 33.1%
Brockton MA MBIA 6.000% 04/01/2007 1,010,000 1,070,600
Chelsea MA School District AMBAC 6.000% 06/15/2004 750,000 782,812
Chelsea MA School District AMBAC 7.000% 06/15/2003 265,000 281,894
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED BOND (CONTINUED)
Holyoke MA FSA 6.000% 06/15/2006 $ 600,000 $ 634,500
Holyoke MA FSA 6.000% 06/15/2007 800,000 849,000
Mass Bay Transportation Authority FGIC 5.500% 03/01/2011 1,000,000 1,025,000
Mass Bay Transportation Authority FSA 5.250% 03/01/2012 500,000 512,500
Mass DFA Curry College 4.100% 03/01/2004 165,000 155,512
Mass DFA Northern Berkshire Retirement
Development 5.750% 08/15/2009 425,000 423,938
Mass DFA Northern Berkshire Retirement
Development 5.750% 08/15/2010 450,000 447,750
Mass HEFA Cath Health AMBAC 5.000% 11/15/2007 300,000 297,375
Mass HEFA Hallmark Health FSA 5.250% 07/01/2007 1,000,000 1,006,250
Mass HEFA Harvard Pilgrim FSA 5.250% 07/01/2006 1,100,000 1,068,375
Mass HEFA Mass Eye and Ear ACA 5.000% 07/01/2005 660,000 652,575
Mass HEFA NE Medical FGIC 6.000% 07/01/2003 400,000 412,500
Mass HEFA Partners FSA 5.500% 07/01/2007 635,000 646,906
Mass State Development Finance Agency Revenue 5.500% 09/01/2002 175,000 177,188
Mass State Development Finance Agency Revenue 5.500% 09/01/2003 265,000 268,644
Mass State Development Finance Agency Revenue 5.500% 09/01/2004 280,000 284,200
Mass State Development Finance Agency Revenue 5.500% 09/01/2005 175,000 177,844
Mass State General Obligation MBIA 4.750% 04/01/2018 500,000 447,500
Mass State Revenue AMBAC 5.750% 08/01/2010 2,500,000 2,629,295
Massachusetts Port Authority MBIA 5.750% 07/01/2007 500,000 516,875
Nantucket MA MBIA 6.000% 07/15/2007 500,000 531,250
New Bedford MA AMBAC 6.000% 10/15/2005 575,000 606,625
Puerto Rico Commonwealth FSA 5.500% 07/01/2012 1,400,000 1,456,000
Puerto Rico Commonwealth Highway &
Transportation Authority MBIA 5.500% 07/01/2013 1,140,000 1,177,050
Springfield MA AMBAC 6.250% 08/01/2006 1,000,000 1,071,250
Upper Blackstone Water AMBAC 6.500% 08/01/2005 430,000 462,250
Worcester MA FSA NCL 5.500% 04/01/2010 600,000 616,500
------------
Total Insured Bond (Cost $21,014,266) 20,689,958
------------
LEASE REVENUE -- 1.2%
Puerto Rico Housing Bank Appropriation 5.125% 12/01/2005 750,000 752,813
------------
Total Lease Revenue (Cost $743,570) 752,813
------------
LOC GIC -- 1.2%
Mass IFA Amesbury LOC: State Street 5.350% 09/01/2005 320,000 320,669
Mass IFA Orchard Cove Project LOC: Fleet
National Bank 5.000% 05/01/2026 415,000 413,963
------------
Total LOC GIC (Cost $735,000) 734,632
------------
REVENUE BONDS -- 24.8%
Mass DFA Massachusetts College of Pharmacy 5.750% 07/01/2006 280,000 278,250
Mass DFA Williston School 6.000% 10/01/2013 500,000 463,125
Mass HEFA Cape Cod Healthcare 5.125% 11/15/2009 600,000 546,750
Mass HEFA Central New England Health Systems 5.750% 08/01/2003 360,000 349,650
Mass HEFA Childrens Hospital 6.125% 10/01/2012 550,000 563,750
Mass HEFA Dana Farber Notes NCL 6.500% 12/01/2006 650,000 682,500
Mass HEFA Jordan Hospital 5.000% 10/01/2004 305,000 293,944
Mass HEFA Jordan Hospital 5.000% 10/01/2005 325,000 309,969
Mass HEFA Jordan Hospital 5.000% 10/01/2008 665,000 609,306
Mass HEFA Milford Hospital 5.250% 07/15/2007 600,000 556,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE BONDS (CONTINUED)
Mass HEFA No. Adams Regional Hospital 6.750% 07/01/2009 $ 600,000 $ 600,750
Mass HEFA Partners HealthCare 5.000% 07/01/2009 500,000 467,500
Mass HEFA Youville Hospital FHA Secured 6.125% 02/15/2015 625,000 633,594
Mass IFA Berkshire Retirement Development(a) 5.125% 07/01/2018 530,000 530,000
Mass IFA Brooks School 5.600% 07/01/2005 245,000 255,106
Mass IFA Brooks School 5.900% 07/01/2013 410,000 430,500
Mass IFA Clark University 6.450% 07/01/2001 300,000 305,625
Mass IFA Resource Recovery 6.150% 07/01/2002 1,000,000 1,013,750
Mass IFA Resource Recovery Ogden 4.800% 12/01/2004 1,150,000 1,105,438
Mass IFA Springfield College 5.625% 09/15/2010 750,000 739,688
Mass IFA Wentworth Institute 5.050% 10/01/2005 290,000 283,113
Mass IFA Wentworth Institute 5.100% 10/01/2006 305,000 297,375
Mass Water Resource Authority 5.250% 03/01/2013 500,000 490,000
Massachusetts Port Authority 5.750% 07/01/2012 700,000 733,250
Massachusetts Port Authority 6.000% 07/01/2011 1,000,000 1,065,000
Massachusetts Water Pollution Trust 5.250% 02/01/2008 650,000 663,000
Massachusetts Water Trust New Bedford NCL 5.250% 02/01/2011 330,000 330,825
Puerto Rico Industrial Tour Ed Anamendez Univ 5.000% 02/01/2005 250,000 247,500
Puerto Rico Industrial Tour Ed Anamendez Univ 5.000% 02/01/2006 650,000 641,063
------------
Total Revenue Bonds (Cost $15,950,263) 15,486,821
------------
SPECIAL REVENUES -- 3.2%
Massachusetts St Special Obligation 5.500% 06/01/2013 1,000,000 1,020,000
Virgin Islands Public Finance Authority 5.625% 10/01/2010 1,000,000 996,250
------------
Total Special Revenues (Cost $2,096,714) 2,016,250
------------
TOTAL BONDS (COST $61,023,207) 60,152,576
------------
SHORT-TERM INVESTMENTS -- 1.7%
SHORT TERM BONDS -- 1.6%
Mass HEFA Capital Asset Program 3.900% 07/01/2005 300,000 300,000
Mass HEFA Harvard University 3.600% 02/01/2016 700,000 700,000
-------------
1,000,000
-------------
REPURCHASE AGREEMENTS -- 0.1%
Morgan Stanley Repurchase Agreement, dated
3/31/00, due 4/03/00, with a maturity value
of $66,195 and effective yield of 5.30%,
collateralized by a U.S. Government Agency
Obligation with a rate of 6.58%, a maturity
date of 8/01/18 and aggregate market value of
$67,489. 66,165
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,066,165) 1,066,165
-------------
TOTAL INVESTMENTS -- 97.9% (COST $62,089,372) $ 61,218,741
OTHER ASSETS, LESS LIABILITIES -- 2.1% 1,296,391
-------------
NET ASSETS -- 100.0% $ 62,515,132
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
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 3/31/00.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS -- 98.5%
GENERAL OBLIGATIONS -- 9.4%
Alpine Utah School District 5.000% 03/15/2011 $ 25,000 $ 24,562
Alpine Utah School District 5.000% 03/15/2012 1,000,000 976,250
Commonwealth of Massachusetts 7.500% 06/01/2004 500,000 541,875
Conroe Texas Independant School District 5.500% 02/15/2013 700,000 714,875
District of Columbia 5.800% 06/01/2004 250,000 254,062
Grand Central NY District Management 5.000% 01/01/2006 25,000 24,844
Honolulu HI City & County 5.400% 09/27/2007 500,000 508,750
Hudson County NJ Import Authority 7.600% 08/01/2025 875,000 898,730
King County WA 412 School District 5.250% 12/01/2010 1,495,000 1,500,606
Lawrence MA State Qualified 5.375% 09/15/2005 500,000 506,875
Massachusetts NCL 6.000% 11/01/2011 500,000 534,375
Midland TX Independent School District 5.000% 02/15/2017 600,000 549,750
New York State NCL 5.000% 03/01/2005 15,000 15,000
Washington State 4.750% 07/01/2020 600,000 519,750
-------------
Total General Obligations (Cost $7,748,875) 7,570,304
-------------
GOVERNMENT BACKED -- 4.1%
Cincinnati OH Public Schools 6.150% 06/15/2002 600,000 613,500
District of Columbia 5.800% 06/01/2004 250,000 257,500
District of Columbia Medlantic Hospital
Prerefunded 7.000% 08/15/2005 500,000 526,250
Mashantucket CT Western Pequot 6.500% 09/01/2005 995,000 1,074,600
Met Peoria IL Prerefunded 6.250% 07/01/2017 300,000 324,375
Texas State Turnpike Prerefunded 12.625% 01/01/2020 395,000 467,087
-------------
Total Government Backed (Cost $3,174,457) 3,263,312
-------------
HOUSING REVENUE -- 10.9%
California Housing Authority 5.050% 02/01/2017 420,000 415,275
California Housing Authority MBIA 5.650% 08/01/2025 225,000 225,562
Colorado HFA Multi Family Insured Mortgage 7.900% 10/01/2000 225,000 227,783
Colorado HFA Single Family Insured Mortgage 5.250% 10/01/2007 500,000 496,875
Florida Housing Finance Agency 0.000% 07/15/2016 155,000 23,056
Florida Housing Finance Corp. 5.750% 01/01/2017 535,000 530,987
Hawaii Housing Finance and Development Corp 7.000% 07/01/2031 550,000 569,250
Mass HFA Residential Development FNMA 6.875% 11/15/2011 400,000 420,500
Michigan Housing Development Authority AMBAC 6.400% 04/01/2005 250,000 261,250
New Mexico Mortgage Finance Authority 5.750% 07/01/2014 295,000 297,581
New Mexico Mortgage Finance Authority 6.250% 07/01/2029 995,000 1,018,631
New York Mortgage Agency 5.750% 04/01/2004 650,000 664,625
North Carolina Housing Finance Agency 7.600% 03/01/2021 575,000 593,998
Ohio HFA SFM Amt NCL 4.300% 09/01/2002 500,000 490,625
Pennsylvania Housing Finance Agency 5.350% 10/01/2008 295,000 296,844
Rhode Island Housing & Mortgage 4.950% 10/01/2016 320,000 316,800
Texas Dept Housing & Community 6.950% 07/01/2023 450,000 466,312
Virginia Housing Development Authority 0.000% 11/01/2017 180,000 36,310
Virginia Housing Development Authority
Commission 6.100% 07/01/2001 1,300,000 1,324,375
Washington Housing Finance Agency 7.100% 07/01/2022 55,000 56,719
-------------
Total Housing Revenue (Cost $8,878,018) 8,733,358
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT -- 8.9%
Alaska Industrial Development and Export
Authority 5.500% 04/01/2001 $ 500,000 $ 505,505
Alaska Industrial Development and Export
Authority 6.200% 04/01/2003 150,000 154,500
California Statewide Equity Residential(a) 5.200% 12/01/2029 1,000,000 976,250
Dayton OH Special Facilities Emery 6.050% 10/01/2009 500,000 505,000
Dayton OH Special Facilities Emery 6.050% 10/01/2009 1,000,000 1,010,000
Eddyville IA Pollution Control Revenue
Cargill 5.400% 10/01/2006 500,000 504,375
Gloucester NJ Resource Recovery 6.850% 12/01/2029 500,000 502,500
Hendersonville TN Kroger 5.950% 12/15/2008 395,000 390,062
Mass DFA Resource Recovery 6.900% 12/01/2029 500,000 498,750
Matagorda County TX Pollution Control Revenue 4.900% 05/01/2030 500,000 499,375
Murray KY Industrial Development Kroger 7.250% 09/01/2012 350,000 370,563
New York NY Tsasc Inc. 6.000% 07/15/2019 1,000,000 991,250
Weld County CO Industrial Development Conagra 6.750% 12/15/2001 275,000 281,188
-------------
Total Industrial Development (Cost $7,269,814) 7,189,318
-------------
INSURED BOND -- 35.7%
Chicago IL Board of Education AMBAC 6.750% 12/01/2009 465,000 521,381
Chicago IL FGIC 5.250% 01/01/2012 1,000,000 997,500
Chicago IL Park District Parking Facility 5.750% 01/01/2010 1,000,000 1,026,250
Cook County IL Community College FGIC 8.750% 01/01/2006 1,000,000 1,183,750
Cook County IL FGIC 6.000% 11/15/2006 1,000,000 1,055,000
Cow Creek Band Umpqua OR AMBAC 4.250% 07/01/2003 800,000 782,000
Denver CO Airport MBIA 7.500% 11/15/2006 500,000 557,500
District of Columbia MBIA 5.750% 06/01/2010 25,000 25,875
District of Columbia MBIA 6.000% 06/01/2011 1,275,000 1,341,938
District of Columbia Medlantic Hospital MBIA 7.000% 08/15/2005 500,000 525,000
Florida Educational Facilities Authority
Revenues Univiversity Tampa Asset Guarentee 5.750% 04/01/2018 1,000,000 1,005,000
Georgia Municipal Electric Authority AMBAC 6.000% 01/01/2006 1,300,000 1,366,625
Georgia Municipal Electric Authority Power
FGIC 6.250% 01/01/2012 1,150,000 1,250,625
Grand River Dam Authority Oklahoma AMBAC 5.500% 06/01/2013 385,000 394,144
Greater Detroit MI Resource Recovery AMBAC 6.250% 12/13/2007 400,000 428,500
Henderson NV FGIC 5.000% 09/01/2016 1,000,000 925,000
Hot Springs AK Sales & Use Tax FSA 4.950% 12/01/2008 95,000 94,288
Illinois Health Facilities Authority Revenue
Asset Guaranty 6.250% 05/01/2011 1,300,000 1,337,375
Intercommunity HFA ACA 5.000% 11/01/2005 2,020,000 2,022,525
Jefferson County OH Asset Guaranty 6.625% 12/01/2005 250,000 261,875
Maine Government Facility Authority FSA 5.750% 10/01/2010 1,000,000 1,046,250
Michigan Strategic Fd Ltd. FGIC 6.950% 09/01/2021 1,000,000 1,038,750
NC Eastern Municipal Power Agency ACA 6.000% 01/01/2006 1,000,000 1,027,500
Nassau County NY FGIC 6.000% 07/01/2010 25,000 26,531
New York Dormitory Authority AMBAC 4.400% 08/01/2013 500,000 495,000
New York Dormitory Authority AMBAC 5.250% 07/01/2008 1,890,000 1,904,175
New York Dormitory Authority Asset Guaranty 5.250% 07/01/2005 1,000,000 1,018,750
Oklahoma IDA Baptist Med Center AMBAC 7.000% 08/15/2006 500,000 554,375
Orange County CA Recovery MBIA 5.800% 07/01/2016 400,000 409,500
Palm Beach County FL Solid Waste AMBAC 6.000% 10/01/2009 500,000 531,925
Tampa FL Health MBIA 5.500% 11/15/2012 1,000,000 1,020,000
Teton County WY St John Hospital ACA 5.000% 12/01/2004 535,000 531,656
Tucson AZ COP Asset Guaranty 6.000% 07/01/2004 460,000 475,525
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED BOND (CONTINUED)
Washington DC Convent Center Authority AMBAC 5.250% 10/01/2014 $1,000,000 $ 968,750
Washington HCFA MBIA 5.000% 08/15/2018 700,000 625,625
-------------
Total Insured Bond (Cost $29,332,847) 28,776,463
-------------
LEASE REVENUE -- 5.8%
Battery Park NY Authority Junior Lien 5.200% 11/01/2023 215,000 202,369
Kentucky Property & Buildings Commission 6.000% 02/01/2005 1,000,000 1,043,750
NY Metropolitan Transportation Authority 5.750% 07/01/2015 500,000 501,875
New York Dormitory Authority 5.500% 02/15/2005 1,000,000 1,008,750
New York Dormitory Authority 6.000% 07/01/2006 500,000 521,250
New York State Urban Development Corp. 5.000% 01/01/2005 1,155,000 1,150,669
New York State Urban Development Corp. 6.000% 01/01/2004 250,000 257,500
-------------
Total Lease Revenue (Cost $4,711,701) 4,686,163
-------------
LOC GIC -- 1.3%
Michigan Housing Authority LOC: Sumitomo Bank 5.500% 06/01/2018 525,000 524,727
New York Dormitory Authority LOC: Fleet Bank 5.500% 07/01/2003 500,000 505,625
-------------
Total LOC GIC (Cost $1,031,168) 1,030,352
-------------
REVENUE BONDS -- 19.9%
Baxter County AZ Hospital 5.375% 09/01/2014 1,000,000 842,500
California HFA Odd Fellows Home 5.700% 08/15/2014 1,000,000 991,250
Camden NJ Cooper Hospitals 5.600% 02/15/2007 240,000 184,500
Florida State Mid-Bay Bridge Authority 4.000% 10/01/2022 1,000,000 1,012,500
Foothills CA Transportation Agency 0.000% 01/01/2007 500,000 410,000
Illinois Educational Facilities Authority
Revenues University of Chicago 5.000% 07/01/2008 685,000 686,713
Illinois HEFA Northwestern University 5.050% 11/01/2032 500,000 496,250
Maricopa County AR Industrial Development 6.650% 04/01/2026 500,000 509,555
Mass DFA Williston School 6.000% 10/01/2013 300,000 277,875
Mass IFA Berkshire Retirement Development(a) 5.125% 07/01/2018 500,000 500,000
Mass IFA Resource Recovery 6.150% 07/01/2002 700,000 709,625
Med Univ SC Hospital Facility Revenue 5.625% 07/01/2010 1,000,000 973,750
Met Govt Nashville & Davidson TN Vanderbilt 6.000% 05/01/2008 610,000 645,075
Montana Student Assistance Corp. 5.950% 12/01/2012 210,000 208,163
New Hampshire Education Authority Brewster
Academy 5.400% 06/01/2001 205,000 205,769
New Hampshire HEFA Monadnock Hospital 5.250% 10/01/2007 475,000 435,219
New Hampshire HEFA Nashua Hospital 6.250% 10/01/2008 750,000 755,625
New York Med Center Mt. Sinai FHA 5.950% 08/15/2009 140,000 141,225
New York Med Center St. Luke's FHA 5.600% 08/15/2013 440,000 438,900
North Texas Higher Education and Student Loan
Authority 6.100% 04/01/2008 750,000 764,063
Port Jervis NY IDA 5.250% 11/01/2006 100,000 100,625
Puerto Rico Industrial Tour Ed Anamendez
University 5.000% 02/01/2008 700,000 677,250
San Antonio TX Electric and Gas 4.500% 02/01/2021 500,000 415,000
Scranton PA Allied Rehabilitation 7.125% 07/15/2005 1,075,000 1,092,469
Scranton-Lackawanna PA Health 6.600% 07/15/2000 200,000 200,036
Tyler TX Health Facilities Development Corp. 5.250% 07/01/2001 835,000 833,956
Utah Student Loan AMBAC 7.450% 11/01/2008 1,200,000 1,239,996
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE BONDS (CONTINUED)
Volusia FL HEFA - Embry Riddle University 5.500% 10/15/2004 $ 270,000 $ 272,025
Wisconsin State Transportation 5.500% 07/01/2010 15,000 15,450
-------------
Total Revenue Bonds (Cost $16,335,977) 16,035,364
-------------
SPECIAL REVENUES -- 2.5%
District of Columbia Redevelopment Agency 5.625% 11/01/2010 475,000 479,156
Long Beach CA Aquarium 5.750% 07/01/2005 200,000 204,500
Los Angeles CA Community Redevelopment 5.000% 11/15/2000 500,000 501,915
New York Transitional Finance Authority 4.750% 11/15/2023 1,000,000 850,000
-------------
Total Special Revenues (Cost $1,980,166) 2,035,571
-------------
TOTAL BONDS (COST $80,463,023) 79,320,205
-------------
SHORT-TERM INVESTMENTS -- 1.3%
REPURCHASE AGREEMENTS -- 0.0%
Morgan Stanley Repurchase Agreement, dated
3/31/00, due 4/03/00, with a maturity value
of $19,942 and effective yield of 5.30%,
collateralized by a U.S. Government Agency
Obligation with a rate of 6.58%, a maturity
date of 8/01/18 and aggregate market value of
$20,332. 19,934
-------------
SHORT TERM BONDS -- 1.3%
Long Island Power Authority and Electric
Systems Authority 4.000% 05/01/2033 400,000 400,000
New York Energy and Pollution Control
Authority LOC: Bank One 3.950% 10/01/2029 600,000 600,000
-------------
1,000,000
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,019,939) 1,019,934
-------------
TOTAL INVESTMENTS -- 99.8% (COST $81,482,962) $ 80,340,139
OTHER ASSETS, LESS LIABILITIES -- 0.2% 170,480
-------------
NET ASSETS -- 100.0% $ 80,510,619
=============
</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
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 3/31/00.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
-----------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 92.8%
CAPITAL GOODS -- 4.0%
EGL, Inc.* 150,650 $ 3,521,444
Expeditors International Wash, Inc. 111,100 4,416,225
Mastec, Inc.* 49,100 4,369,900
-------------
12,307,569
-------------
EARLY CYCLICAL -- 1.7%
Forward Air Corp.* 223,700 5,298,894
-------------
ENERGY -- 2.3%
Cal Dive International, Inc.* 77,700 3,943,275
Core Laboratories, Inc.* 107,800 3,132,937
-------------
7,076,212
-------------
FINANCIAL -- 1.5%
Costar Group, Inc.* 126,300 4,657,312
-------------
HEALTH CARE -- 23.3%
ADAC Laboratories* 314,800 4,328,500
Alexion Pharmaceuticals, Inc.* 56,300 3,926,925
Alkermes, Inc.* 41,000 3,792,500
Angiotech Pharmaceuticals, Inc.* 57,200 2,273,700
Antigenics, Inc.* 68,600 1,397,725
COR Therapeutics, Inc.* 94,900 6,255,988
Cephalon, Inc.* 125,400 4,702,500
Coulter Pharmaceutical, Inc.* 105,900 3,229,950
Gene Logic, Inc.* 91,000 3,827,687
Ilex Oncology, Inc.* 122,300 5,136,600
ImmunoGen, Inc.* 306,500 3,678,000
Inhale Therapeutic Systems, Inc.* 67,700 5,043,650
Pharmacyclics, Inc.* 800 44,550
Polymedica Industries, Inc.* 121,000 7,108,750
Progenics Pharmeceuticals* 97,200 6,804,000
United Therapeutics* 66,900 5,201,475
Vical, Inc.* 133,400 4,468,900
eBenX, Inc.* 10,100 297,950
-------------
71,519,350
-------------
SERVICES -- 24.7%
Breakaway Solutions, Inc.* 86,500 3,935,750
Citadel Communication Corp.* 96,200 4,058,437
Corporate Executive Board Co.* 93,900 4,765,425
Data Return Corp.* 70,300 2,587,919
Digex, Inc.* 61,900 6,867,031
Digital Island, Inc.* 33,300 2,029,219
Digital River, Inc.* 77,600 1,668,400
Emmis Broadcasting Corp., Class A* 110,400 5,133,600
Futurelink Corp.* 127,900 3,213,487
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
-----------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (CONTINUED)
Hispanic Broadcasting Corp.* 31,300 $ 3,544,725
Insight Communications, Inc.* 159,600 3,291,750
Interliant, Inc.* 96,900 2,737,425
Internet Commerce Corp., Class A* 37,600 1,776,600
Paxson Communications Corp.* 324,800 2,517,200
Pinnacle Holdings, Inc.* 87,400 4,828,850
Rare Medium Group, Inc.* 66,000 2,912,250
SBS Broadcasting SA* 20,500 1,260,750
Sportsline USA, Inc.* 137,300 4,041,769
Superior Consultant Holdings* 251,300 4,224,981
Westwood One, Inc.* 99,600 3,610,500
iGATE Capital Corp.* 157,700 7,116,213
-------------
76,122,281
-------------
TECHNOLOGY -- 35.3%
ATMI, Inc.* 157,500 7,520,625
Applied Micro Circuits Corp.* 46,000 6,902,874
Blaze Software, Inc.* 10,500 299,250
Burr - Brown Corp.* 128,700 6,998,063
Caldera Systems, Inc.* 35,700 838,950
Cree Research, Inc.* 35,900 4,052,213
Cybex Corp.* 113,450 4,268,556
Delano Technology Corp.* 31,000 695,563
Emulex Corp.* 29,800 3,251,925
Entrust Technologies, Inc.* 57,800 4,917,514
Exar Corp.* 76,700 5,488,844
GSI Lumonics, Inc.* 128,200 2,195,425
Great Plains Software, Inc.* 52,200 2,786,175
International Rectifier Corp.* 118,000 4,498,750
Intertrust Technologies Corp.* 33,000 1,402,500
McAfee.com Corp.* 51,500 2,661,906
Mercury Interactive Corp.* 52,200 4,136,850
PRI Automation, Inc.* 53,700 3,282,413
Photronics, Inc.* 108,200 3,820,813
Qlogic Corp.* 47,400 6,422,700
Quicklogic Corp.* 175,100 5,931,513
Semtech Corp.* 98,900 6,335,781
SmartDisk Corp.* 64,570 1,711,105
TSI International Software Ltd.* 75,700 6,287,831
Therma-Wave, Inc.* 86,600 2,944,400
Veeco Instruments, Inc.* 78,400 5,801,600
Watchguard Technologies, Inc.* 34,800 3,132,000
-------------
108,586,139
-------------
TOTAL EQUITIES (COST $190,337,737) 285,567,757
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
SECURITY RATE MATURITY VALUE (NOTE 1A)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 2.6%
U.S. GOVERNMENT AGENCY -- 0.1%
FNMA Discount Note=/= 6.698% 06/08/2000 $500,000 $ 493,765
-------------
REPURCHASE AGREEMENTS -- 2.5%
Morgan Stanley Repurchase Agreement, dated 03/31/00, due
04/03/00, with a maturity value of $7,657,122 and an effective
yield of 5.30%, collateralized by a U.S. Government Agency
Obligation with a rate of 7.50%, a maturity date of 11/01/13 and
an aggregate market value of $7,807,063. 7,653,742
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $8,148,123) 8,147,507
-------------
TOTAL INVESTMENTS -- 95.4% (COST $198,485,860) $ 293,715,264
OTHER ASSETS, LESS LIABILITIES -- 4.6% 14,116,727
-------------
NET ASSETS -- 100.0% $ 307,831,991
=============
NOTES TO SCHEDULE OF INVESTMENTS:
</TABLE>
* Non-income producing security.
=/= Rate noted is yield to maturity.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 97.4%
CAPITAL GOODS -- 7.8%
Ingersoll Rand Co. 13,000 $ 575,250
Tyco International Ltd. 16,000 798,000
United Technologies Corp. 12,200 770,887
-------------
2,144,137
-------------
CONSUMER STABLE -- 4.9%
CVS Corp. 19,000 713,687
Kroger Co.* 17,000 298,562
Procter & Gamble Co. 6,000 337,500
-------------
1,349,749
-------------
EARLY CYCLICAL -- 1.2%
Leggett & Platt, Inc. 15,200 326,800
-------------
ENERGY -- 6.6%
BP Amoco PLC ADR 16,726 887,523
Exxon Mobil Corp. 11,937 928,848
-------------
1,816,371
-------------
FINANCIAL -- 15.0%
AMBAC Inc. 10,000 503,750
Chase Manhattan Corp. 5,000 435,937
Citigroup, Inc. 8,625 511,570
Conseco, Inc. 28,870 330,201
Delphi Financial Group, Inc., Class A* 15,788 479,560
Federal National Mortgage Association 7,500 423,281
Fleet Financial Group, Inc. 12,000 438,000
Morgan Stanley Dean Witter 5,500 448,594
Reliastar Financial Corp. 16,500 558,937
-------------
4,129,830
-------------
GROWTH CYCLICAL -- 5.9%
Carnival Corp. 15,000 372,187
Costco Wholesale Corp.* 8,000 420,500
Jones Apparel Group, Inc.* 17,400 554,625
Target Corp. 3,500 261,625
-------------
1,608,937
-------------
HEALTH CARE -- 14.2%
Abbott Laboratories 11,000 387,063
Amgen, Inc.* 14,000 859,250
Biomet, Inc. 10,000 363,750
Bristol-Myers Squibb, Inc. 6,600 381,150
Elan Corp., PLC ADR* 13,000 617,500
Medtronics, Inc. 8,910 458,308
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH TAX-SENSITIVE EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE (CONTINUED)
Schering-Plough Corp. 9,600 $ 352,800
Watson Pharmaceutical, Inc.* 12,000 476,250
-------------
3,896,071
-------------
REAL ESTATE -- 3.7%
Boston Properties Inc., REIT 11,500 365,844
General Growth Properties, REIT 11,400 346,988
Prentiss Properties Trust, REIT 13,400 298,988
-------------
1,011,820
-------------
SERVICES -- 11.5%
AT&T Corp. 3,000 168,938
Bell Atlantic Corp. 13,000 794,625
Centurytel, Inc. 7,500 278,438
General Motors Corp., Class H* 10,000 1,245,000
Shared Medical Systems Corp. 13,100 679,563
-------------
3,166,564
-------------
TECHNOLOGY -- 26.6%
American Power Conversion Corp.* 32,500 1,393,438
Computer Associates International, Inc. 14,750 873,016
Hewlett-Packard Company 7,700 1,020,731
Intel Corp. 9,500 1,253,406
Sci Sys, Inc.* 26,000 1,399,125
Sun Microsystems, Inc.* 12,000 1,124,437
Unisys Corp.* 10,000 255,000
-------------
7,319,153
-------------
TOTAL EQUITIES (COST $18,826,225) 26,769,432
-------------
SHORT-TERM INVESTMENTS -- 3.0%
REPURCHASE AGREEMENTS -- 3.0%
Morgan Stanley Repurchase Agreement, dated
03/31/00, due 04/03/00, with a maturity value
of $819,657 and an effective yield of 5.30%,
collateralized by a U.S. Government Agency
Obligation with a rate of 7.00%, a maturity
date of 04/01/30 and an aggregate market
value of $835,840. 819,295
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $819,295) 819,295
-------------
TOTAL INVESTMENTS -- 100.4% (COST $19,645,520) $ 27,588,727
OTHER ASSETS, LESS LIABILITIES -- (0.4%) (115,508)
-------------
NET ASSETS -- 100.0% $ 27,473,219
=============
</TABLE>
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.
24
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES:
Standish, Ayer & Wood Investment Trust (the "Trust") is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment
company. Standish 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 value based upon
the value on such date unless the trustees determine during such sixty-day
period that amortized value 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
25
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
income for Federal income tax purposes because the Bond Funds intend to
meet certain requirements of the Internal Revenue Code applicable to
regulated investment companies which will enable the Bond Funds to pay
exempt-interest dividends. At March 31, 2000, the 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 its fiscal year ending
September 30, 2000 losses of $830,223, recognized during the period from
November 1, 1998 to December 31, 1998.
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. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for foreign
currency transactions, passive foreign investment companies (PFIC),
litigation proceeds, market discount, non-taxable dividends, capital loss
carryforwards, losses deferred due to wash sales and exercise tax
regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
(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, 0.80% for the
Small Cap Tax-Sensitive Equity Fund and 0.50% for the Tax-Sensitive Equity
Fund. Prior to January 28, 2000, the Small Cap Tax Sensitive Equity Fund
paid an investment advisory fee monthly at an annual rate of 0.60% of the
Funds average daily net assets. 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 six months ended March 31, 2000. Pursuant
to this agreement, for the six months ended March 31, 2000, SA&W
voluntarily waived a portion of its advisory fee to the Tax-Sensitive
Equity Fund in the amount of $63,927. This agreement is voluntary and
temporary and may be discontinued or revised by SA&W at any time. The
26
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
Funds pay no compensation directly to the Trust's Trustees who are
affiliated with SA&W or to its officers, all of whom receive remuneration
for their services to the Funds from SA&W. Certain of the Trustees and
officers of the Trust are directors or officers of SA&W.
(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>
PERIOD ENDED
MARCH 31, 2000
--------------------------
PURCHASES SALES
------------ ------------
<S> <C> <C>
Massachusetts Intermediate Tax Exempt Bond Fund $ 8,273,522 $ 8,715,258
============ ============
Intermediate Tax Exempt Bond Fund $ 12,965,937 $ 12,870,970
============ ============
Small Cap Tax-Sensitive Equity Fund $242,874,166 $243,839,431
============ ============
Tax-Sensitive Equity Fund $ 4,294,072 $ 9,198,259
============ ============
</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>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
----------------- ------------------
<S> <C> <C>
MASSACHUSETTS INTERMEDIATE TAX EXEMPT BOND FUND
Shares sold 460,957 754,858
Shares issued to shareholders in payment of
distributions declared 29,991 40,334
Shares redeemed (486,813) (365,904)
--------- -----------
Net increase 4,135 429,288
========= ===========
INTERMEDIATE TAX EXEMPT BOND FUND
Shares sold 851,838 1,550,662
Shares issued to shareholders in payment of
distributions declared 52,117 92,432
Shares redeemed (936,097) (1,339,693)
--------- -----------
Net increase/decrease (32,142) 303,401
========= ===========
SMALL CAP TAX-SENSITIVE EQUITY FUND
Shares sold 851,752 1,188,251
Shares issued to shareholders in payment of
distributions declared 87,719 --
Shares redeemed (568,149) (287,283)
--------- -----------
Net increase 371,322 900,968
========= ===========
TAX-SENSITIVE EQUITY FUND
Shares sold 93,086 394,885
Shares issued to shareholders in payment of
distributions declared 2,149 4,581
Shares redeemed (236,717) (415,674)
--------- -----------
Net decrease (141,482) (16,208)
========= ===========
</TABLE>
27
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
At March 31, 2000, the Massachusetts Intermediate Tax Exempt Bond Fund had
one shareholder of record owning approximately 22% 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 19% and 12% of the Fund's outstanding shares,
respectively.
(5) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at March 31, 2000, 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 $ 62,089,372 $ 338,517 $ (1,209,148) $ (870,631)
Intermediate Tax Exempt Bond Fund $ 81,482,962 $ 602,276 $ (1,745,099) $(1,142,823)
Small Cap Tax-Sensitive Equity Fund $198,485,860 $109,797,525 $(14,568,121) $95,229,404
Tax-Sensitive Equity Fund $ 19,645,520 $ 9,273,491 $ (1,330,284) $ 7,943,207
</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.
28
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
At March 31, 2000, the Small Cap Tax-Sensitive Equity Fund had the
following open financial futures contracts:
<TABLE>
<CAPTION>
NET UNREALIZED
UNDERLYING FACE APPRECIATION/
CONTRACT POSITION EXPIRATION DATE AMOUNT AT VALUE DEPRECIATION
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------
S&P Mid Cap 400
(16 contracts) Long 6/30/2000 $ 4,042,800 $ 102,640
Nasdaq 100
(7 contracts) Long 6/30/2000 3,120,145 (205,225)
--------------
$ (102,585)
==============
</TABLE>
(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 March 31, 2000, 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 Standish Ayer and
Wood Master Portfolio (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 six months ended
March 31, 2000, the expense related to the commitment fee was $541, $759,
$2,019 and $264 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 six
months ended March 31, 2000 the funds had no borrowings under the credit
facility.
29
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[LOGO] Standish Funds(R)
One Financial Center
Boston, MA 02111-2662
www.standishonline.com
800.729.0066
00-164
