[LOGO] STANDISH FUNDS(R)
Standish Small Cap
Financial Report Value Fund
--------------------------------------------------------------------------------
Period Ended
March 31, 2000
(Unaudited)
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Note 1A) (identified cost,
$1,866,605) $2,340,451
Cash 49,425
Interest and dividends receivable 4,274
Prepaid expenses 4,451
----------
Total assets 2,398,601
LIABILITIES
Accrued accounting, custody and transfer agent fees $ 7,740
Accrued trustees' fees and expenses (Note 2) 556
Accrued expenses and other liabilities 4,957
---------
Total liabilities 13,253
----------
NET ASSETS $2,385,348
==========
NET ASSETS CONSIST OF:
Paid-in capital $1,791,985
Accumulated net realized gain 117,618
Undistributed net investment income 1,899
Net unrealized appreciation 473,846
----------
TOTAL NET ASSETS $2,385,348
==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 183,019
==========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE
(Net Assets/Shares outstanding) $ 13.03
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH MARCH 31,
2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 5,185
Interest income 294
--------
Total investment income 5,479
EXPENSES
Investment advisory fee (Note 2) $ 2,864
Accounting, custody and transfer agent fees 7,741
Legal and audit services 4,320
Registration fees 684
Trustees' fees and expenses (Note 2) 556
Miscellaneous 741
-------
Total expenses 16,906
Deduct:
Reimbursement of Fund operating expenses (Note 2) (10,462)
Waiver of investment advisory fee (Note 2) (2,864)
-------
Total expense deductions (13,326)
-------
Net expenses 3,580
--------
Net investment income 1,899
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain
Investment security transactions 117,618
-------
Net realized gain 117,618
Change in unrealized appreciation (depreciation)
Investment securities 237,694
-------
Net change in unrealized appreciation
(depreciation) 237,694
--------
Net realized and unrealized gain 355,312
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS $357,211
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 1, 2000
(COMMENCEMENT OF
OPERATIONS) TO
MARCH 31, 2000
(UNAUDITED)
----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS
Net investment income $ 1,899
Net realized gain 117,618
Change in unrealized appreciation (depreciation) 237,694
----------
Net increase in net assets from investment operations 357,211
----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Proceeds from shares issued in reorganization of
Standish U.S. Small Cap Value Fund L.P. 1,936,087
Net proceeds from sale of shares 129,225
Cost of shares redeemed (37,175)
----------
Net increase in net assets from Fund share
transactions 2,028,137
----------
TOTAL INCREASE IN NET ASSETS 2,385,348
NET ASSETS
At beginning of period --
----------
At end of period (including undistributed net
investment income of $1,899) $2,385,348
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 1, 2000
COMMENCEMENT OF
OPERATIONS) TO
MARCH 31, 2000
(UNAUDITED)(1)
----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.05
---------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.01
Net realized and unrealized gain on investments 1.97
---------
Total from investment operations 1.98
---------
NET ASSET VALUE, END OF PERIOD $ 13.03
=========
TOTAL RETURN+++ 17.92%++
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net assets)* 1.00%+
Net Investment Income (to average daily net
assets)* 0.53%+
Portfolio Turnover 17%
Net Assets, End of Period (000's omitted) $ 2,385
</TABLE>
----------
* For the period 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 the Fund's operating expenses. If this voluntary action
had not been taken, the net investment income per share and ratios would
have been:
<TABLE>
<S> <C>
Net investment income per share $ (0.06)
Ratios (to average daily net assets):
Expenses 4.71%+
Net investment loss (3.18)%+
</TABLE>
(1) Calculated based on average shares outstanding.
+ 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.
4
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 98.1%
BASIC INDUSTRY -- 4.9%
Centec Construction Products 500 $ 13,125
Cytec Industries, Inc.* 800 24,500
Fuller H B Co. 400 15,975
OM Group, Inc. 600 27,300
Steel Dynamics* 800 9,250
Westvaco Corp. 800 26,700
----------
116,850
----------
CAPITAL GOODS -- 6.9%
Advanced Energy Industries* 200 10,200
C&D Technology, Inc. 800 47,200
Landstar System, Inc.* 300 16,425
Manitowoc Co., Inc. 500 13,531
Navistar International* 400 16,050
Paccar, Inc. 300 15,000
Shaw Group, Inc.* 800 28,200
Terex Corp.* 600 8,625
URS Corp.* 700 9,187
----------
164,418
----------
CONSUMER STABLE -- 4.9%
Adolph Coors Co. 600 28,687
Canandaigua Brands, Inc., Class A* 400 20,400
Hain Food Group, Inc.* 400 11,325
IBP, Inc. 500 7,875
International Home Foods, Inc.* 900 14,400
McCormick & Co., Inc. 400 12,900
NBTY, Inc.* 1,600 21,900
----------
117,487
----------
EARLY CYCLICAL -- 2.6%
Centex Corp. 500 11,906
Crossmann Communities, Inc.* 500 7,922
Monaco Coach Corp.* 900 17,100
NVR, Inc.* 300 16,200
Salton, Inc.* 200 8,675
----------
61,803
----------
ENERGY -- 3.4%
Cascade Natural Gas 900 14,512
Devon Energy Corp. 400 19,425
Equitable Resources, Inc. 400 17,925
MDU Resources Group, Inc. 500 10,375
Piedmont Natural Gas Co. 700 18,244
----------
80,481
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- 11.7%
Affiliated Managers Group, Inc.* 700 $ 33,250
Americredit* 1,400 22,837
Andover Bancorp, Inc. 600 17,137
Commonwealth Bancorp, Inc. 900 11,419
Dime Bancorp, Inc. 1,100 20,350
Federated Investors, Inc., Class B 1,200 32,775
First Financial Holdings 700 9,887
FirstFed Financial Corp.* 900 11,925
Flushing Financial Corp. 900 12,206
Investment Technology Group* 600 21,150
Northfork Bancorp 1,300 23,237
Renaissance Re Holdings Ltd. 400 16,350
Texas Regional Bancshares, Class A 500 12,719
The PMI Group, Inc. 450 21,347
Webster Financial Corp. 500 11,500
----------
278,089
----------
GROWTH CYCLICAL -- 7.9%
Ames Department Stores, Inc.* 600 14,737
BJ's Wholesale Club, Inc.* 400 15,450
Children's Place* 600 8,550
Coldwater Creek, Inc.* 800 13,600
Fossil, Inc.* 900 21,094
Linens 'N Things, Inc.* 1,000 34,250
MGM Grand, Inc. 600 14,400
Rare Hospitality International, Inc.* 900 17,494
Talbots, Inc. 500 29,437
Zale Corp.* 400 18,875
----------
187,887
----------
HEALTH CARE -- 8.8%
Bindley Western Industries, Inc. 666 9,033
C.R. Bard, Inc. 500 19,344
Haemonetics Corp.* 800 18,000
Polymedica Industries, Inc.* 800 47,000
Priority Healthcare Corp., Class B* 400 20,100
Quest Diagnostics, Inc.* 600 23,850
Rehabcare Corp.* 600 14,812
Sunquest Information Systems* 1,000 11,250
Zoll Medical Corp.* 900 46,125
----------
209,514
----------
OTHER -- 1.5%
S&P 400 Mid-Cap Depositary Receipts 400 36,500
----------
REAL ESTATE -- 7.1%
Bradley Real Estate, Inc., REIT 1,500 25,594
CBL & Associates Properties, REIT 1,000 20,437
Colonial Properties Trust, REIT 1,000 23,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
REAL ESTATE (CONTINUED)
General Growth Properties, REIT 700 $ 21,306
Glimcher Realty Trust, REIT 1,500 20,250
Liberty Property Trust, REIT 900 21,544
Parkway Properties, Inc., REIT 500 14,719
Prentiss Properties Trust, REIT 1,000 22,313
----------
169,913
----------
SERVICES -- 7.8%
Advo Systems* 500 12,500
Copart, Inc.* 2,000 35,000
Dycom Industries, Inc.* 600 29,250
Profit Recovery Group International* 900 16,650
Readers Digest Association, Inc. 600 21,225
SEI Investment Co. 200 22,688
United Stationers* 900 32,119
Valassis Communications, Inc.* 500 16,656
----------
186,088
----------
TECHNOLOGY -- 27.1%
Adaptec, Inc.* 600 23,175
Adobe Systems, Inc. 400 44,525
Amphenol Corp., Class A* 300 30,675
Cypress Semiconductor Corp.* 800 39,450
DII Group, Inc.* 300 33,919
DSP Group, Inc.* 600 39,600
Hadco Corp.* 300 19,388
Infocus Systems, Inc.* 1,300 46,556
Informix Corp.* 1,400 23,713
Intervoice, Inc.* 1,600 46,200
Kulicke & Soffa Industries* 400 25,625
Lam Research Corp.* 900 40,556
Pinnacle Systems, Inc.* 1,400 46,550
Plantronics, Inc.* 200 18,638
Plexus Corp.* 400 26,650
Progress Software Corp.* 1,400 32,813
Qlogic Corp.* 200 27,100
Symantec Corp.* 500 37,563
Talk.com, Inc.* 1,400 22,400
Triquint Semiconductor, Inc.* 300 22,050
----------
647,146
----------
UTILITIES -- 3.5%
Calpine Corp.* 200 18,800
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (CONTINUED)
Constellation Energy Group, Inc. 1,000 $ 31,875
NSTAR 800 33,600
-------------
84,275
-------------
TOTAL EQUITIES (COST $1,866,605) 2,340,451
-------------
TOTAL INVESTMENTS -- 98.1% (COST $1,866,605) $ 2,340,451
OTHER ASSETS, LESS LIABILITIES -- 1.9% 44,897
-------------
NET ASSETS -- 100.0% $ 2,385,348
=============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
REIT - Real Estate Investment Trust
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
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 Small Cap Value Fund (the "Fund") is a separate
diversified investment series of the Trust. The Fund commenced operations
on February 1, 2000.
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation
of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
A. INVESTMENT SECURITY VALUATIONS
Securities for which quotations are readily available are valued at the
last sale price, or if no sale price, at the closing bid price in the
principal market in which such securities are primarily traded. Securities
(including illiquid 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 Fund are valued at amortized cost, which approximates
market value. If the Fund acquires a short-term instrument with more than
sixty days remaining to its maturity, it is valued at current market value
until the sixtieth day prior to maturity and will then be valued at
amortized 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 the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry
System, or to have segregated within the custodian bank's vault, all
securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund to
monitor on a daily basis, the market value and accrued interest of the
repurchase agreement's underlying investments to ensure the existence of a
proper level of collateral.
C. SECURITIES TRANSACTIONS AND INCOME
Securities transactions are recorded as of the trade date. Interest income
is determined on the basis of interest accrued, adjusted for amortization
of premium or accretion of discount on long-term debt securities when
required for federal income tax purposes. Realized gains and losses from
securities sold are recorded on the identified cost basis.
D. FEDERAL TAXES
As a regulated investment company qualified under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal year.
E. DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date.
Dividends from net investment income and distributions from capital gains
distributions, if any, are reinvested in additional shares of the Fund
unless the shareholder elects to receive them in cash. 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
9
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
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 excise 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 monthly at the annual rate of 0.80% of the
Funds average daily net assets. SA&W voluntarily agreed to limit the
Fund's total operating expenses (excluding brokerage commissions, taxes
and extraordinary expenses) to 1.00% of the Fund's average daily net
assets for the period ended March 31, 2000. Pursuant to this agreement,
for the period ended March 31, 2000, SA&W voluntarily waived all its
investment advisory fee in the amount of $2,864 and reimbursed the Fund
for a portion of its operating expenses in the amount of $10,462. This
agreement is temporary and voluntary and may be discontinued or revised by
SA&W at any time. The Trust pays no compensation directly to its trustees
who are affiliated with SA&W or to its officers, all of whom receive
remuneration for their services to the Trust from SA&W. Certain trustees
and officers of the Trust are directors or officers of SA&W.
(3) PURCHASES AND SALES OF INVESTMENTS:
Purchases and proceeds from sales of investments, other than short-term
obligations, for the period ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------- --------
<S> <C> <C>
U.S. Government Securities $ -- $ --
======== ========
Investments (non-U.S.Government Securities) $453,086 $371,189
======== ========
</TABLE>
(4) SHARES OF BENEFICIAL INTEREST:
The Declaration of Trust permits the trustees to issue an unlimited number
of full and fractional shares of beneficial interest having a par value of
one cent per share. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 1, 2000
(COMMENCEMENT OF
OPERATIONS) TO
MARCH 31, 2000
----------------
<S> <C>
Shares issued in reorganization of Standish U.S. Small Cap
Value Fund L.P. 175,148
Shares sold 10,997
Shares redeemed (3,126)
------------
Net increase 183,019
============
</TABLE>
The Fund was formed with an initial tax-free contribution of
securities-in-kind from the Standish U.S. Small Cap Value Fund L.P., which
had a historical cost of $1,667,090 and an unrealized appreciation of
$236,152 on the date of contribution.
10
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
At March 31, 2000, three shareholders held of record approximately 16%,
16% and 11% of the total outstanding shares of the Fund, 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>
<S> <C>
Aggregate Cost $ 1,866,605
===========
Gross unrealized appreciation 610,844
Gross unrealized depreciation (136,998)
-----------
Net unrealized appreciation $ 473,846
===========
</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 enhance
potential gain in circumstances where hedging is not involved. The nature,
risks and objectives of these instruments are set forth more fully in the
Fund's Prospectus and Statement of Additional Information.
The Fund trades the following instruments with off-balance sheet risk:
OPTIONS
Call and put options give the holder the right to purchase or sell,
respectively, a security or currency at a specified price on or before a
certain date. The Fund may use options to seek to hedge against risks of
market exposure and changes in securities prices and foreign currencies,
as well as to seek to enhance returns. Writing puts and buying calls tend
to increase the Fund's exposure to the underlying instrument. Buying puts
and writing calls tend to decrease the Fund's exposure to the underlying
instrument, or hedge other Fund investments. Options, both held and
written by the Fund, are reflected in the accompanying Statement of Assets
and Liabilities at market value. The underlying face amount at value of
any open purchased options is shown in the Schedule of Investments. This
amount reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the underlying
instruments, if there is an illiquid secondary market for the contract, or
if the counterparty does not perform under the contract's terms.
Premiums received from writing options which expire are treated as
realized gains. Premiums received from writing options which are exercised
or are closed are added to or offset against the proceeds or amount paid
on the transaction to determine the realized gain or loss. Realized gains
and losses on purchased options are included in realized gains and losses
on investment securities, except purchased options on foreign currency
which are included in realized gains and losses on foreign currency
transactions. If a put option written by the Fund is exercised, the
premium reduces the cost basis of the securities purchased by the Fund.
The Fund, as writer of an option, has no control over whether the
underlying securities may be sold (call) or purchased (put) and as a
result bears the market risk of an unfavorable change in the price of the
security underlying the written option.
There were no written option contracts for the period ended March 31,
2000.
FUTURES CONTRACTS
The Fund may enter into financial futures contracts for the delayed sale
or delivery of securities or contracts based on financial indices at a
fixed price on a future date. Pursuant to the margin requirements, the
Fund deposits either cash or securities in an amount equal to a certain
percentage of the contract amount. Subsequent payments are made or
received by the Fund each day, dependent on the daily fluctuations in the
value of the underlying security, and are recorded for financial statement
purposes as unrealized gains or losses by the Fund. There are several
risks in connection with the use of futures contracts as a hedging device.
The change in value of futures contracts primarily corresponds with the
11
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
value of their underlying instruments or indices, which may not correlate
with changes in the value of hedged investments. Buying futures tends to
increase the Fund's exposure to the underlying instrument, while selling
futures tends to decrease the Fund's exposure to the underlying instrument
or hedge other Fund investments. In addition, there is the risk that the
Fund may not be able to enter into a closing transaction because of an
illiquid secondary market. Losses may arise if there is an illiquid
secondary market or if the counterparties do not perform under the
contract's terms. The Fund enters into financial futures transactions
primarily to manage its exposure to certain markets and to changes in
securities prices and foreign currencies. Gains and losses are realized
upon the expiration or closing of the futures contracts.
At March 31, 2000, the Fund held no open futures contracts.
12
<PAGE>
[LOGO] Standish Funds(R)
One Financial Center
Boston, MA 02111-2662
www.standishonline.com
800.729.0066
00-168
