[LOGO] STANDISH FUNDS(R)
Standish International
Financial Report Equity Fund
--------------------------------------------------------------------------------
Six Months Ended
March 31, 2000
(Unaudited)
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Note 1A) (identified cost,
$37,686,571) $42,306,704
Foreign currency, at value (cost $655,485) 655,025
Receivable for investments sold 898,291
Interest and dividends receivable 115,549
Receivable for variation margin on open financial
futures contracts (Note 6) 110
Unrealized appreciation on forward foreign currency
exchange contracts (Note 6) 5,903
Tax reclaim receivable 47,862
Prepaid expenses 4,233
-----------
Total assets 44,033,677
LIABILITIES
Payable for investments purchased $ 1,286,898
Unrealized depreciation on forward foreign currency
exchange contracts (Note 6) 5,113
Due to custodian 201,717
Accrued accounting, custody and transfer agent fees 29,358
Accrued trustees' fees and expenses (Note 2) 2,022
Accrued expenses and other liabilities 19,057
-----------
Total liabilities 1,544,165
-----------
NET ASSETS $42,489,512
===========
NET ASSETS CONSIST OF:
Paid-in capital $36,180,195
Accumulated net realized gain 1,641,047
Undistributed net investment income 40,488
Net unrealized appreciation 4,627,782
-----------
TOTAL NET ASSETS $42,489,512
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,722,398
===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE
(Net Assets/Shares outstanding) $ 24.67
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend income (net of foreign withholding taxes of
$31,520) $ 265,122
Interest income 51,105
----------
Total investment income 316,227
EXPENSES
Investment advisory fee (Note 2) $ 166,007
Accounting, custody and transfer agent fees 90,838
Legal and audit services 18,631
Registration fees 3,509
Insurance expense 2,926
Trustees' fees and expenses (Note 2) 2,732
Miscellaneous 4,540
---------
Total expenses 289,183
Deduct:
Waiver of investment advisory fee (Note 2) (81,561)
---------
Net expenses 207,622
----------
Net investment income 108,605
----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)
Investment security transactions 1,631,634
Financial futures contracts 398,445
Foreign currency transactions and forward foreign
currency exchange contracts (27,112)
---------
Net realized gain 2,002,967
Change in unrealized appreciation (depreciation)
Investment securities 2,539,194
Financial futures contracts 46,027
Foreign currency and forward foreign currency
exchange contracts 22,044
---------
Net change in unrealized appreciation
(depreciation) 2,607,265
----------
Net realized and unrealized gain 4,610,232
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $4,718,837
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL 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 $ 108,605 $ 475,507
Net realized gain 2,002,967 2,575,469
Change in unrealized appreciation (depreciation) 2,607,265 4,604,532
----------- -----------
Net increase in net assets from investment operations 4,718,837 7,655,508
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1E)
From net investment income (468,269) (563,638)
From net realized gains on investments (2,551,830) (567,620)
----------- -----------
Total distributions to shareholders (3,020,099) (1,131,258)
----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)
Net proceeds from sale of shares 2,676,946 3,622,377
Value of shares issued to shareholders in payment of
distributions declared 2,731,779 827,848
Cost of shares redeemed (3,636,385) (8,772,044)
----------- -----------
Net increase (decrease) in net assets from Fund share
transactions 1,772,340 (4,321,819)
----------- -----------
TOTAL INCREASE IN NET ASSETS 3,471,078 2,202,431
NET ASSETS
At beginning of period 39,018,434 36,816,003
----------- -----------
At end of period (including undistributed net
investment income of $40,488 and $400,152,
respectively) $42,489,512 $39,018,434
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED NINE MONTHS
ENDED SEPTEMBER 30, ENDED YEAR 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 $ 23.77 $ 20.17 $ 23.57 $ 23.25 $ 23.54 $ 23.12 $ 26.74
------- ------- ------- ------- ------- ------- --------
FROM INVESTMENT OPERATIONS:
Net investment income* 0.06 0.27 0.32 0.39 0.47 0.04 0.21
Net realized and unrealized gain
(loss) on investments 2.67 3.98 (1.17) 1.44 1.28 0.45 (2.08)
------- ------- ------- ------- ------- ------- --------
Total from investment operations 2.73 4.25 (0.85) 1.83 1.75 0.49 (1.87)
------- ------- ------- ------- ------- ------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.28) (0.33) (0.31) (0.30) (0.51) -- (0.12)
From net realized gain on investments (1.55) (0.32) (2.24) (1.21) (1.53) (0.07) (1.63)
------- ------- ------- ------- ------- ------- --------
Total distributions to shareholders (1.83) (0.65) (2.55) (1.51) (2.04) (0.07) (1.75)
------- ------- ------- ------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD $ 24.67 $ 23.77 $ 20.17 $ 23.57 $ 23.25 $ 23.54 $ 23.12
======= ======= ======= ======= ======= ======= ========
TOTAL RETURN+++ 11.96%++ 21.26% (2.92)% 7.65%++ 7.44% 2.14% (6.99)%
RATIOS/SUPPLEMENTAL DATA:
Expenses (to average daily net
assets)* 1.00%+ 1.00% 1.00% 0.84%+ 0.50% 1.22% 1.23%
Net Investment Income (to average
daily net assets)* 0.52%+ 1.20% 1.30% 1.78%+ 1.80% 1.76% 1.52%
Portfolio Turnover 61% 195% 206% 155% 163% 108% 51%
Net Assets, End of Period
(000's omitted) $42,490 $39,018 $36,816 $49,497 $47,739 $59,473 $104,435
</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 the Fund's operating expenses. If this voluntary
action had not been taken, the net investment income per share and the
ratios would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income per share $ 0.02 $ 0.18 $ 0.22 $ 0.29 $ 0.27 -- --
Ratios (to average daily net assets):
Expenses 1.39%+ 1.41% 1.42% 1.42%+ 1.29% -- --
Net investment income 0.13%+ 0.79% 0.88% 1.20%+ 1.01% -- --
</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.
4
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
------------------------------------------------------------------------------
<S> <C> <C>
EQUITIES -- 99.4%
AUSTRALIA -- 3.7%
Broken Hill Proprietary 16,200 $ 175,737
Cable & Wireless Optus Ltd.* 57,500 230,736
David Jones Ltd. 167,000 128,951
John Fairfax Holdings 51,200 185,221
National Australia Bank Ltd. 22,200 285,879
North Ltd. 143,200 249,878
Qantas Airways Ltd. 72,000 150,589
Westpac Banking Corp. Ordinary Shares 26,900 168,671
------------
1,575,662
------------
BELGIUM -- 1.6%
Arbed 1,600 145,327
Fortis B 11,400 292,108
Solvay Et Cie A NPV 3,200 229,464
------------
666,899
------------
DENMARK -- 1.8%
Novo Nordisk A/S-B 2,200 296,641
Tele Danmark Ordinary Shares 5,400 485,412
------------
782,053
------------
FINLAND -- 3.3%
Amer-Yhthymae Oy-Class A 12,500 334,635
Enso Oy-A Shares* 21,500 235,368
Kone Corp. Class B * 2,200 127,257
Nokia AB 3,320 701,510
------------
1,398,770
------------
FRANCE -- 7.8%
AGF Assurances Generale France 3,900 201,541
AXA Company Frf60 1,700 240,717
Banque National De Paris 3,350 264,242
France Telecom SA 1,300 223,727
Groupe Danone 460 101,595
Michelin B French Regular Shares 4,170 133,722
Pernod-Ricard SA 2,500 120,110
Peugeot SA FF35 2,100 453,765
Remy Cointreau* 7,300 146,431
Rhodia SA 12,900 230,640
Societe Generale France Ordinary Shares 1,700 338,727
Suez Lyonnaise Des Eaux-Dumex 1,300 223,230
Total SA Series B 4,215 630,689
------------
3,309,136
------------
GERMANY -- 7.3%
BASF AG 6,800 322,473
Bankgesellschaft Berlin AG* 15,400 251,043
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
------------------------------------------------------------------------------
<S> <C> <C>
GERMANY (CONTINUED)
Bayerische Motoren Werke AG 13,200 $ 415,846
Bewag Aktiengesellschaft 30,100 296,420
Buderus AG 7,200 121,157
DBV - Winterhur Holding 7,200 263,654
Deutsche Telekom AG 4,300 346,166
Dresdner Bank AG 4,600 186,918
GEHE AG 6,300 210,218
M.A.N. AG Dm50* 4,500 164,354
Schering AG 2,100 283,101
Siemans AG Registered Shares 1,750 251,813
------------
3,113,163
------------
HONG KONG -- 2.2%
Cheung Kong 28,000 418,914
Guoco Group Ltd. Ordinary Shares 51,000 113,635
Legend Holdings Ltd.* 148,000 230,929
Regal Hotel International* 800 53
Sun Hung Kai Properties 18,000 156,033
Sunevision Holdings Ltd.* 1,085 1,811
------------
921,375
------------
IRELAND -- 2.7%
Bank Of Ireland 41,000 290,081
Eircom PLC Ordinary Shares 74,100 327,313
Independent Newspapers 16,000 156,800
Jefferson Smurfit Group PLC 46,100 107,987
Kerry Group PLC - A 19,200 249,657
------------
1,131,838
------------
ITALY -- 2.1%
Banca Nazionale Lavoro Ordinary Shares* 57,500 195,549
Credito Italiano Ordinary Shares 25,000 100,008
ENI Spa 64,900 325,209
Tecnost Spa* 69,500 264,267
------------
885,033
------------
JAPAN -- 24.8%
Aisin Seiki Co. Ltd. 14,000 186,812
Daiichi Kangyo Bank Ltd. 17,000 158,294
Daiichi Pharmaceutical 15,000 232,298
Daimaru, Inc. 51,000 172,368
Dainippon Ink & Chemical, Inc. 36,000 284,718
Daito Trust Construction Ordinary Shares 29,000 496,279
Daiwa House Industry 22,000 150,638
Daiwa Securities Group, Inc. 7,000 131,587
Fuji Television Network, Inc. 110 190,708
Hitachi Chemical 10,000 256,648
House Foods Corp. 16,000 236,875
Industrial Bank of Japan 44,000 401,987
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
------------------------------------------------------------------------------
<S> <C> <C>
JAPAN (CONTINUED)
Kyocera Corp. 4,200 $ 701,977
Mitsubishi Electric 38,000 358,274
Mitsubishi Motor Corp. 33,000 299,240
Murata Manufacturing Co. Ltd. 1,000 243,012
Nikko Securities Co. Ltd. 21,000 317,853
Nippon Shinpan Co. Ordinary Shares 125,000 312,896
Nippon Telegraph and Telephone Corp. 170 269,894
Ntt Mobile Communcations 270 1,107,139
Onward Kashiyama Co. Ltd. 10,000 120,775
Ricoh Corp. Ltd. 24,000 514,269
Sanyo Electric Co. Ltd. 93,000 554,359
Sharp Corp. 25,000 534,479
Shikoku Electric Power 13,000 159,920
Skylark Co. 8,000 217,396
Sumitomo Bank 13,000 193,727
Sumitomo Realty & Development Co. Ltd. 74,000 250,102
Taisho Pharmaceutical Co. Ltd. 4,000 137,918
Toyo Seikan Kaisha 20,000 341,677
Toyo Suisan Kaisha Ltd. 41,000 323,064
Toyota Motor Co. 3,000 156,911
Yokogawa Electric 56,000 520,347
------------
10,534,441
------------
NETHERLANDS -- 5.1%
ABN Amro Holdings 7,700 171,460
ASM Lithography Holding NV 1,700 189,681
ING Groep 5,376 290,924
Koninklijke Boskalis Westminster NV 16,900 345,783
Koninklijke Philips Electonics Ordinary Shares 4,472 750,809
Royal Dutch Petroleum Co. 3,415 199,203
ST Microelectronics NV 1,300 238,643
------------
2,186,503
------------
NEW ZEALAND -- 1.3%
Fisher & Paykel Industries Ltd. 32,700 98,304
Fletcher Challenge Energy 136,500 304,543
Fletcher Challenge Ltd. 140,000 151,654
------------
554,501
------------
NORWAY -- 1.0%
Den Norske Bank ASA 36,100 138,201
Norske Hydro SA 7,600 286,909
------------
425,110
------------
PORTUGAL -- 0.9%
Portugal Telecom SA 30,000 384,352
------------
SINGAPORE -- 1.7%
Creative Technology Ltd. 13,300 421,865
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
------------------------------------------------------------------------------
<S> <C> <C>
SINGAPORE (CONTINUED)
Fraser & Neave Ltd. Ordinary Shares 52,000 $ 148,233
Keppel Corp. Ltd. Ordinary Shares 128,000 142,812
Sembcorp Industries Ltd. Ordinary Shares 153 156
------------
713,066
------------
SPAIN -- 3.7%
Endesa SA 11,428 261,904
Grupo Empresarial Ence SA 8,000 160,242
Repsol SA 12,100 265,041
Telefonica SA* 35,300 891,009
------------
1,578,196
------------
SWEDEN -- 2.6%
Ericsson AB 4,900 429,576
Europolitian Holdings 9,000 193,356
Foreningsparbanken AB - A Shares 24,900 337,940
SKF AB - A Shares 5,500 121,974
------------
1,082,846
------------
SWITZERLAND -- 7.9%
Ares-Serono Group, Class B 145 545,100
Ascom Holding AG Bearer Shares 165 649,021
Cie Finance Richemont-Uts "A" 140 355,213
Credit Suisse Group Registered Shares 1,380 274,309
Forbo Holdings AG Registered Shares 300 117,283
Grands Magasins Jelmoli SA 260 374,574
Helvetia Patria Holding Registered Shares 410 283,395
Hilti AG-PC 370 286,632
Nestle Registered Shares 180 322,123
Schweizersche Lebensversicherungs-Und Rentenanstalt 280 154,528
------------
3,362,178
------------
UNITED KINGDOM -- 17.9%
Alliance Unichem PLC 26,800 158,002
Arm Holdings PLC 3,800 229,481
Astrazeneca PLC 8,400 339,834
BP Amoco PLC 67,600 617,739
BPB Industries PLC 30,800 153,733
Barclays PLC Ordinary Shares 22,700 601,148
Barratt Developments PLC Ordinary Shares 56,600 213,291
Britannic PLC 26,000 359,806
British American Tobacco Ordinary Shares 38,000 209,046
British Telecommunications PLC 16,600 310,793
Enterprise Oil PLC Ordinary Shares 28,400 203,297
FKI Babcock 42,600 156,461
London & Scotland Marine Oil (Lasmo PLC) 152,500 293,415
Rio Tinto PLC Ordinary Shares 13,000 218,017
Royal Bank of Scotland Group PLC 39,908 586,930
Sage Group PLC 20,800 233,159
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY SHARES (NOTE 1A)
------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Scottish Newcastle Breweries PLC Ordinary Shares 27,300 $ 190,420
Signet Group PLC* 638,000 543,875
Smith and Nephew Associated PLC 112,000 322,568
Smiths Industries 20,000 243,631
Tesco PLC Ordinary Shares 100,000 332,622
United Utilities PLC 24,000 250,482
Vodafone Group PLC 109,900 610,275
Wimpey (George) PLC 139,000 224,804
------------
7,602,829
------------
TOTAL EQUITIES (COST $37,587,680) 42,207,951
------------
<CAPTION>
PAR
RATE MATURITY VALUE
------- ------------ -------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 0.2%
U.S. GOVERNMENT AGENCY -- 0.2%
FNMA Discount Note+=/= 6.698% 06/08/2000 $100,000 98,753
------------
TOTAL SHORT-TERM INVESTMENTS (COST $98,891) 98,753
------------
TOTAL INVESTMENTS -- 99.6% (COST $37,686,571) $ 42,306,704
OTHER ASSETS, LESS LIABILITIES -- 0.4% 182,808
------------
NET ASSETS -- 100.0% $ 42,489,512
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
* Non-income producing security.
+ Denotes all or part of security pledged as collateral to cover margin
requirements on open financial futures contracts (Note 6).
=/= Rate noted is yield to maturity.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY 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 Equity Fund (the "Fund") is a separate,
diversified investment series of the Trust.
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. 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 accretion of discount on debt securities when required for
federal income tax purposes. Dividend income is recorded on the
ex-dividend date. 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.
C. 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.
D. 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.
10
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
E. DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date.
Dividends from net investment income and distributions from capital gains,
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 0.80% 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 1.00% of
the Fund's average daily net assets for the six months ended March 31,
2000. Pursuant to this agreement, for the six months ended March 31, 2000,
SIMCO voluntarily waived a portion of its investment advisory fee in the
amount of $81,561. 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, Inc. the parent company
SIMCO.
(3) PURCHASES AND SALES OF INVESTMENTS:
Purchases and proceeds from sales of investments, other than short-term
investments for the six months ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
U.S. Government Securities $ -- $ --
=========== ===========
Investments (non-U.S.Government Securities) $25,145,262 $24,110,452
=========== ===========
</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>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
---------------- ------------------
<S> <C> <C>
Shares sold 113,699 158,473
Shares issued to shareholders in payment of
distributions declared 118,156 36,030
Shares redeemed (151,181) (378,286)
--------- ---------
Net increase (decrease) 80,674 (183,783)
========= =========
</TABLE>
11
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
At March 31, 2000, two shareholders held of record approximately 15% and
13% 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 $ 37,686,571
=============
Gross unrealized appreciation 6,473,618
Gross unrealized depreciation (1,853,485)
-------------
Net unrealized appreciation $ 4,620,133
=============
</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 contracts 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.
During the six months ended March 31, 2000, the Fund did not write any
option transactions, nor were there any open written option contracts 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
12
<PAGE>
STANDISH, AYER & WOOD INVESTMENT TRUST
STANDISH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
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
exchange contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
LOCAL PRINCIPAL CONTRACT MARKET AGGREGATE UNREALIZED
CONTRACTS TO RECEIVE AMOUNT VALUE DATE VALUE FACE AMOUNT GAIN
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Japanese Yen 31,949,000 6/26/2000 $ 315,787 $ 309,884 $ 5,903
<CAPTION>
LOCAL PRINCIPAL CONTRACT MARKET AGGREGATE UNREALIZED
CONTRACTS TO DELIVER AMOUNT VALUE DATE VALUE FACE AMOUNT LOSS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Japanese Yen 15,500,000 6/26/2000 $ 153,268 $ 148,155 $ (5,113)
</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 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 the following open financial futures
contracts:
<TABLE>
<CAPTION>
UNDERLYING FACE
CONTRACT POSITION EXPIRATION DATE AMOUNT AT VALUE UNREALIZED GAIN
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Topix Futures (1 contract) Long 06/14/2000 $166,066 $5,369
</TABLE>
(7) LINE OF CREDIT:
The Fund, other funds in the Trust and subtrusts in the Standish Ayer &
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 this commitment fee was $350 for the
Fund. During the six months ended March 31, 2000, the Fund had no
borrowings under the credit facility.
13
<PAGE>
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One Financial Center
Boston, MA 02111-2662
www.standishonline.com
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