[LOGO] STANDISH FUNDS(R)
Standish International
Financial Report Small Cap Fund
--------------------------------------------------------------------------------
Period Ended
March 31, 2000
(Unaudited)
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Note 1A) (identified cost,
$13,620,656) $15,305,909
Cash 573,526
Foreign currency, at value (cost $555,682) 556,359
Receivable for investments sold 314,873
Receivable from investment adviser (Note 2) 417
Interest and dividends receivable 47,973
Unrealized appreciation on forward foreign currency
exchange contracts (Note 6) 1,639
Tax reclaim receivable 10,801
Prepaid expenses 11,883
-----------
Total assets 16,823,380
LIABILITIES
Payable for investments purchased $1,127,973
Unrealized depreciation on forward foreign currency
exchange contracts (Note 6) 170
Accrued accounting, custody and transfer agent fees 20,003
Accrued trustees' fees and expenses (Note 2) 556
Accrued expenses and other liabilities 36,027
----------
Total liabilities 1,184,729
-----------
NET ASSETS $15,638,651
===========
NET ASSETS CONSIST OF:
Paid-in capital $13,647,445
Accumulated net realized gain 271,348
Undistributed net investment income 30,585
Net unrealized appreciation 1,689,273
-----------
TOTAL NET ASSETS $15,638,651
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,460,979
===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE
(Net Assets/Shares outstanding) $ 10.70
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP 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 (net of foreign withholding taxes of
$7,307) $ 50,855
Interest income 5,789
--------
Total investment income 56,644
EXPENSES
Investment advisory fee (Note 2) $20,847
Accounting, custody and transfer agent fees 20,040
Legal and audit services 5,308
Registration fees 2,951
Trustees' fees and expenses (Note 2) 556
Miscellaneous 988
-------
Total expenses 50,690
Deduct:
Waiver of investment advisory fee (Note 2) (20,847)
Reimbursement of Fund operating expenses (Note 2) (3,784)
-------
Total expense deductions (24,631)
-------
Net expenses 26,059
--------
Net investment income 30,585
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain
Investment security transactions 264,347
Foreign currency transactions and forward foreign
currency exchange contracts 7,001
-------
Net realized gain 271,348
Change in unrealized appreciation (depreciation)
Investment securities 578,433
Foreign currency and forward foreign currency
exchange contracts 6,232
-------
Net change in unrealized appreciation
(depreciation) 584,665
--------
Net realized and unrealized gain 856,013
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS $886,598
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP 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 $ 30,585
Net realized gain 271,348
Net change in unrealized appreciation (depreciation) 584,665
-----------
Net increase in net assets from investment operations 886,598
-----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Proceeds from shares issued in reorganization of SIMCO
International Small Cap Fund, L.P. 10,796,305
Net proceeds from sale of shares 3,990,664
Cost of shares redeemed (34,916)
-----------
Net increase in net assets from Fund share transactions 14,752,053
-----------
TOTAL INCREASE IN NET ASSETS 15,638,651
NET ASSETS
At beginning of period --
-----------
At end of period (including undistributed net investment
income of $30,585.) $15,638,651
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 1, 2000
(COMMENCEMENT OF
OPERATIONS) TO
MARCH 31, 2000
(UNAUDITED)(1)
----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.02
Net realized and unrealized gain on investments 0.68
-------
Total from investment operations 0.70
-------
NET ASSET VALUE, END OF PERIOD $ 10.70
=======
TOTAL RETURN+++ 7.00%++
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net assets)* 1.25%+
Net Investment Income (to average daily net assets)* 1.46%+
Portfolio Turnover 26%
Net Assets, End of Period (000's omitted) $15,639
</TABLE>
-----------------
* For the period indicated, the investment adviser voluntarily agreed not to
impose any 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>
Net investment income per share $ 0.00
Ratios (to average daily net assets):
Expenses 2.42%+
Net investment income 0.29%+
</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 INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 97.9%
AUSTRALIA -- 2.4%
David Jones Ltd. 54,800 $ 42,314
North Ltd. 46,000 80,268
Seven Network 15,600 69,239
Suncorp-Metway Ltd. 12,300 56,836
Toll Holdings Ltd. 13,600 72,187
United Energy Ltd. 27,900 55,979
-----------
376,823
-----------
BELGIUM -- 0.7%
Creyf's NV * 2,900 63,217
Icos Vision Systems NV 1,500 50,250
-----------
113,467
-----------
CANADA -- 4.8%
AEterna Laboratories, Inc. 2,850 30,367
AGF Management Ltd., Class B 3,600 88,883
Atco Ltd. Class I 3,200 63,448
Baytex Energy Ltd. 13,500 108,931
Cryptologic, Inc. 2,300 63,825
Dofasco, Inc. 3,800 66,566
GTC Transcontl Group, Class A 6,600 78,290
Gildan Activewear, Inc. 2,100 68,069
Premdor, Inc. 9,000 67,345
Slocan Forest Products Ltd. 7,400 64,559
Toromontindustries Ltd. 4,700 47,648
-----------
747,931
-----------
DENMARK -- 0.9%
Danske Traelast 860 77,306
Jyske Bank A/S 3,500 60,677
-----------
137,983
-----------
FINLAND -- 1.4%
Amer-Yhthymae Oy-Class A 2,700 72,281
Elcoteq Network Corp. 2,100 59,230
Kone Corp. Class B * 1,400 80,982
-----------
212,493
-----------
FRANCE -- 8.6%
A Novo 350 90,351
Avenir Telecom* 250 87,005
Beneteau 1,850 194,389
CNP Assurances 3,050 95,357
Colas SA 400 74,576
Credit Lyonnais SA* 1,400 52,404
Eramet Sln 850 43,235
GrandVision SA 2,600 74,576
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
FRANCE (CONTINUED)
Groupe Partouche 500 $ 37,288
Legris Industries SA 1,220 52,490
Manitou Bf SA 680 68,266
NRJ SA 115 85,212
Natexis Banques Populaires Foreign 900 67,979
Publicis SA 110 58,896
Remy Cointreau* 3,550 71,209
Rhodia SA 2,500 44,698
Soc Generale D'Enterprises 1,000 38,158
Transiciel SA 580 106,249
-----------
1,342,338
-----------
GERMANY -- 7.4%
Apcoa Parking AG 880 64,028
Bankgesellschaft Berlin AG* 5,000 81,508
Beiersdorf 1,200 82,607
DBV - Winterhur Holding 2,470 90,448
Deutsche Pfandbrief & Hypobk 720 68,839
Heyde AG Beratung Software* 570 90,466
Hugo Boss AG 590 78,974
Intershop Communications AG* 140 70,943
Intertainment AG Aktien 700 68,868
Kali Und Salz Beteiligun 4,800 63,562
Kloeckner Werke AG Ordinary Shares 540 57,309
M.A.N. AG Dm50* 1,800 65,741
Porsche NV 30 87,770
Rhoen-Klinikum AG -Vorzugsakt Preferred Stock 1,560 67,118
Singulus Technologies 1,300 127,960
-----------
1,166,141
-----------
GREECE -- 0.4%
Elval SA 7,500 59,337
-----------
HONG KONG -- 1.5%
Bank of East Asia Hong Kong 24,000 53,321
Dah Sing Financial Holdings Ordinary Shares 22,800 80,521
Kingboard Chemicals Holdings 78,000 27,046
Shui on Construction 63,000 76,456
-----------
237,344
-----------
IRELAND -- 1.1%
Golden Vale PLC 35,000 39,487
Heiton Holdings PLC 17,700 54,154
Jurys Doyle Hotel Group PLC 11,000 73,094
-----------
166,735
-----------
ITALY -- 4.5%
Banca Popolare di Milano 10,000 68,935
Banco Di Napoli 64,800 70,133
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
ITALY (CONTINUED)
Compagnia Assicuratice Unipol 42,500 $ 80,253
Gruppo Editoriale L'Espresso 3,300 66,763
Industria Macchine Automatic 9,700 69,454
Industrie Zignagos Margherita Ordinary Shares 7,800 82,220
Italgas Spa 14,500 65,851
Magneti Marelli Spa 21,500 79,573
Milano Assicurazioni Spa 27,800 76,151
Unicem Spa Azione Nom* 5,000 38,282
-----------
697,615
-----------
JAPAN -- 20.0%
Amano Corp. 13,000 107,500
Aoi Advertising Promotion 7,200 133,242
Arrk Corp. 2,000 75,972
Asahi Denka Kogyo Kk 22,000 173,780
Credit Saison 7,000 115,905
Daimaru, Inc. 25,000 84,494
Dainippon Ink & Chemical, Inc. 10,000 79,088
Daisyo Corp. 8,500 89,082
Fast Retailing 600 263,855
Fujitsu Devices, Inc. 3,000 93,503
Hogy Medical Co. 1,400 100,769
Koito Manufacturing Co. Ltd. 14,000 72,816
Konami Company Ltd. 750 51,135
Meiji Milk Products 18,000 109,925
Meiwa Estate Co. Ltd. 3,600 84,328
Ministop Co., Ltd. 3,800 88,643
Net One Systems Co. Ltd. 30 108,113
Nichirei Corp. 33,000 91,604
Nifco 8,000 84,231
Nitto Kohki Co. Ltd. 3,000 78,017
Park24 Co. Ltd. 800 103,243
Rengo Co. Ltd. 22,000 125,996
Rinnai Corp. 4,000 73,634
San-in Godo Bank Ltd. 9,000 44,268
Shin-Etsu Polymer Co. Ltd. 15,000 93,942
Takasago Electric Industries 1,200 73,634
The Higo Bank Ltd. 18,000 80,471
Tokai Rika Co. Ltd. 9,000 86,608
Tokyo Denpa Co. Ltd. 2,200 197,136
Torii Pharmaceutical Co. Ltd. 2,700 65,745
Toyo Communication Equipment Co. Ltd. 4,000 93,698
-----------
3,124,377
-----------
NETHERLANDS -- 5.4%
DSM NV 2,100 75,835
Geveke NV 1,890 70,474
Grontmij 2,000 56,984
Heijmans Cva 3,400 53,637
ICT Automatisering NV 2,800 114,311
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
NETHERLANDS (CONTINUED)
Koninklijke Boskalis Westminster NV 3,700 $ 75,704
Koninklijke Wessanen NV 8,700 83,181
Randstad Holdings 1,900 70,665
Unique International NV 3,900 77,186
Unit 4* 2,900 169,689
-----------
847,666
-----------
NEW ZEALAND -- 0.4%
Fletcher Challenge Ltd. 36,300 39,322
Sanford Ltd. 13,100 31,896
-----------
71,218
-----------
NORWAY -- 0.9%
Norske Skogindustrier- A 1,300 48,385
Sparebanken Nor Cap Ctf 4,850 91,117
-----------
139,502
-----------
PORTUGAL -- 0.3%
Portucel Industrial Empresa 7,700 51,534
-----------
SINGAPORE -- 0.6%
Datapulse Tech Ltd. 90,000 37,853
Natsteel Broadway 28,500 53,607
-----------
91,460
-----------
SPAIN -- 2.7%
Acerinox SA 1,700 67,128
Aguas De Barcelona 4,800 75,494
Aumar Ordinary Shares 2,700 41,897
Banco Pastor 1,980 78,752
Grupo Empresarial Ence SA 2,700 54,082
NH Hoteles SA* 8,900 104,494
-----------
421,847
-----------
SWEDEN -- 0.9%
Elanders AB-B Shares 2,200 73,692
Rottneros AB 62,500 69,303
-----------
142,995
-----------
SWITZERLAND -- 7.1%
Bank Sarasin & Cie-Reg B 42 116,022
Bt Industries AB 2,600 61,865
Ems-Chemie Holding AG* 21 91,809
Galenica Holding AG Regular Shares "B" 120 86,476
Grands Magasins Jelmoli SA 83 119,575
Hilti AG-PC 140 108,455
Mikron Holding 202 161,945
Publigroupe SA 97 106,716
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
SWITZERLAND (CONTINUED)
Straumann Holding AG Reg 120 $ 100,889
Vontobel Holding AG 65 149,892
-----------
1,103,644
-----------
UNITED KINGDOM -- 25.9%
Abacus Polar PLC 37,000 224,916
Aggreko PLC 20,700 104,227
Alliance Unichem PLC 23,700 139,725
Amvesco PLC 5,200 70,635
Arm Holdings PLC 2,090 126,215
BPB Industries PLC 16,000 79,861
Babcock International Group PLC 51,000 65,823
Blacks Leisure Group PLC 23,400 114,467
British Vita PLC Ordinary Shares 21,950 82,891
Bryant Holdings PLC Ordinary Shares 56,500 112,478
Cairn Energy* 67,700 139,156
Chloride Group PLC 52,600 103,928
Close Brothers Group PLC 7,500 125,480
Countryside Properties PLC 43,200 83,290
Crest Nicholson 31,600 68,478
DFS Furniture 16,900 92,903
Davis Service Group PLC 16,600 83,583
Ellis & Everard PLC 36,600 97,392
Enterprise Inns PLC 10,900 56,446
Enterprise Oil PLC Ordinary Shares 13,300 95,206
Eurocamp PLC 15,900 77,779
FKI Babcock 41,700 153,155
Fairview Holdings 43,000 82,219
Gallaher Group PLC 17,100 89,166
Glynwed International PLC Ordinary Shares 20,000 72,022
Halma PLC Ordinary Shares 50,000 74,890
ITNET PLC 7,400 91,971
Iceland Group PLC 15,600 70,718
JSB Software Technologies * 1,900 62,063
Johnston Press PLC 21,700 115,947
Laird Group Public Ltd. Co. Ordinary Shares 21,100 64,216
New Look Group PLC 10,400 22,040
Northern Rock PLC 18,500 93,592
PSD Group PLC 4,000 61,123
RM PLC 6,900 76,082
Scottish Newcastle Breweries PLC Ordinary Shares 17,000 118,577
Signet Group PLC* 106,300 90,617
Singer & Friedlander PLC 30,000 104,208
Smith and Nephew Associated PLC 38,300 110,307
St. Ives PLC 10,700 85,545
TT Group PLC 55,800 82,688
Travis Perkins 4,600 38,261
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Ulster Television PLC 24,300 $ 90,217
Vardy (Reg) PLC 14,800 58,956
-----------
4,053,459
-----------
TOTAL EQUITIES (COST $13,620,656) 15,305,909
-----------
TOTAL INVESTMENTS -- 97.9% (COST $13,620,656) $15,305,909
OTHER ASSETS, LESS LIABILITIES -- 2.1% 332,742
-----------
NET ASSETS -- 100.0% $15,638,651
===========
NOTES TO SCHEDULE OF INVESTMENTS:
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP 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 International Small Cap 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 debt securities when required for
federal income tax purposes. Realized gains and losses from securities
sold are recorded on the identified cost basis. The Fund does not isolate
that portion of the results of operations resulting from changes in
foreign exchange rates on investments from the fluctuations arising from
changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from
investments.
D. FEDERAL TAXES
As a 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.
11
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
E. FOREIGN CURRENCY TRANSACTIONS
Investment security valuations, other assets, and liabilities initially
expressed in foreign currencies are converted into U.S. dollars based upon
current exchange rates. Purchases and sales of foreign investment
securities and income and expenses are converted into U.S. dollars based
upon currency exchange rates prevailing on the respective dates of such
transactions.
Section 988 of the Internal Revenue Code provides that gains or losses on
certain transactions attributable to fluctuations in foreign currency
exchange rates must be treated as ordinary income or loss. For financial
statement purposes, such amounts are included in net realized gains or
losses.
F. 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 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 International Management
Company, L.L.C. ("SIMCO") for overall investment advisory and
administrative services, and general office facilities, is paid monthly at
the annual rate of 1.00% of the Fund's average daily net assets. SIMCO
voluntarily agreed to limit total Fund operating expenses (excluding
litigation, indemnification and other extraordinary expenses) to 1.25% 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, SIMCO
voluntarily did not impose $20,847 of its investment advisory fee and
reimbursed the Fund for $3,784 of its operating expenses. This agreement
is voluntary and temporary and may be discontinued or revised by SIMCO at
any time. The Trust pays no compensation directly to its trustees who are
affiliated with SIMCO or to its officers, all of whom receive remuneration
for their services to the Trust from SIMCO. Certain of the trustees and
officers of the Trust are directors or officers of Standish Ayer & Wood
("SA&W"), Inc. the parent company of SIMCO.
(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) $16,749,521 $3,305,643
=========== ==========
</TABLE>
12
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
(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 SIMCO International Small
Cap Fund, L.P. 1,079,631
Shares sold 384,635
Shares redeemed (3,287)
---------
Net increase 1,460,979
=========
</TABLE>
The Fund was formed with an initial tax-free contribution of
securities-in-kind from SIMCO International Small Cap Fund L.P., which had
a historical cost of $9,613,089 and unrealized appreciation of $1,104,608
on the date of contribution.
At March 31, 2000, one shareholder held of record approximately 23% of the
total outstanding shares of the Fund.
(5) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES:
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at March 31, 2000, as computed on a federal
income tax basis, were as follows:
<TABLE>
<S> <C>
Aggregate Cost $ 13,620,656
=============
Gross unrealized appreciation 2,434,161
Gross unrealized depreciation (748,908)
-------------
Net unrealized appreciation $ 1,685,253
=============
</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.
13
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
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.
During the period ended March 31, 2000 the Fund did not write any option
transactions, nor were there any open written option transactions at
March 31, 2000.
FORWARD CURRENCY EXCHANGE CONTRACTS
The Fund may enter into forward foreign currency and cross currency
exchange contracts for the purchase or sale of a specific foreign currency
at a fixed price on a future date. Risks may arise upon entering these
contracts from the potential inability of counterparties to meet the terms
of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar and other foreign currencies.
The forward foreign currency and cross currency exchange contracts are
marked to market using the forward foreign currency rate of the underlying
currency and any gains or losses are recorded for financial statement
purposes as unrealized until the contract settlement date or upon the
closing of the contract. Forward currency exchange contracts are used by
the Fund primarily to protect the value of the Fund's foreign securities
from adverse currency movements. Unrealized appreciation and depreciation
of forward currency exchange contracts is included in the Statement of
Assets and Liabilities.
At March 31, 2000, the Fund held the following forward foreign currency
contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
LOCAL PRINCIPAL CONTRACT MARKET AGGREGATE UNREALIZED
CONTRACTS TO RECEIVE AMOUNT VALUE DATE VALUE FACE AMOUNT GAIN/(LOSS)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Euro Dollar 841 4/3/2000 $ 804 $ 809 $ (5)
Japanese Yen 6,322,441 4/3/2000 61,592 59,960 1,632
Swiss Franc 65,052 4/3/2000 39,077 39,242 (165)
------------- ------------- -----------
TOTAL $ 101,473 $ 100,011 $ 1,462
============= ============= ===========
<CAPTION>
LOCAL PRINCIPAL CONTRACT MARKET AGGREGATE UNREALIZED
CONTRACTS TO DELIVER AMOUNT VALUE DATE VALUE FACE AMOUNT GAIN
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
Euro Dollar 841 4/3/2000 $ 804 $ 809 $ 5
New Zealand Dollar 524 4/3/2000 260 262 2
------------- ------------- -----------
TOTAL $ 1,064 $ 1,071 $ 7
============= ============= ===========
</TABLE>
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
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
14
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STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL SMALL CAP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
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 had no open financial futures contracts.
15
<PAGE>
[LOGO] Standish Funds(R)
One Financial Center
Boston, MA 02111-2662
www.standishonline.com
800.729.0066
00-165
