Registration No. 33-25301
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X /
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Pre-Effective Amendment No.
Post-Effective Amendment No. 26
and
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
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Amendment No. 29
WILLIAMSBURG INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
312 WALNUT STREET, 21ST FLOOR, CINCINNATI, OHIO 45202
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (513)629-2000
W. Lee H. Dunham, Esq.
Sullivan & Worcester
One Post Office Square
BOSTON, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
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/X / immediately upon filing pursuant to Rule 485(b)
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/ / on ( ) pursuant to Rule 485(b)
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/ / 60 days after filing pursuant to Rule 485(a)
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/ / on ( ) pursuant to Rule 485(a)
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The Registrant has registered an indefinite number of shares under
the Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. The Rule 24f-2 Notice for the
fiscal year ended March 31, 1996 was filed on May 29, 1996.
<PAGE>
WILLIAMSBURG INVESTMENT TRUST
CROSS-REFERENCE SHEET PURSUANT TO RULE 495(A)
PART A PROSPECTUS
FORM ITEM CROSS-REFERENCE
Item 1. Cover Page Cover Page
Item 2. Synopsis Prospectus Summary;
Synopsis of Costs and
Expenses
Item 3. Condensed Financial Financial Highlights;
Information Dividends, Distributions,
Taxes and Other
Information
Item 4. General Description Investment Objective(s),
of Registrant Investment Policies and
Risk Considerations;
Management of the
Fund(s); Appendix A:
Description of Municipal
Obligations; Appendix B
Item 5. Management of the Fund Management of the Fund(s)
Item 5A. Management's Discussion Not Applicable
of Fund Performance (Annual Report)
Item 6. Capital Stock and Tax Status; Dividends,
Distributions, Taxes and Other
Other Securities Information
Item 7. Purchase of Securities How to Purchase Shares;
Being Offered How Net Asset Value is
Determined; Application
Item 8. Redemption or Repurchase How to Redeem Shares
Item 9. Pending Legal Proceedings Not Applicable
STATEMENT OF
PART B ADDITIONAL INFORMATION
FORM ITEM CROSS-REFERENCE
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
<PAGE>
Item 12. General Information Capital Shares and Voting
and History
Item 13. Investment Objectives Investment Objectives and
and Policies Policies; Description of
Bond Ratings; Investment
Limitations
Item 14. Management of the Fund Trustees and Officers
Item 15. Control Persons and Trustees and Officers
Principal Holders of
Securities
Item 16. Investment Advisory and Investment Advisor;
Other Services Administrator;
Other Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock and Capital Shares and Voting
Other Securities
Item 19. Purchase, Redemption and Special Shareholder
Pricing of Securities Services; Purchase of
Being Offered Shares; Redemption of Shares;
Net Asset Value Determination
Item 20. Tax Status Additional Tax
Information
Item 21. Underwriters Not Applicable
Item 22. Calculation of Calculation of
Performance Data Performance Data
Item 23. Financial Statements Financial Statements and
Reports
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
INVESTMENT ADVISOR
Flippin, Bruce & Porter, Inc.
800 Main Street, Suite 202
P.O. Box 6138
Lynchburg, Virginia 24505
800-FBP-9375
ADMINISTRATOR
MGF Service Corp.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
OFFICERS
John M. Flippin, President
John T. Bruce, Vice President and
Portfolio Manager
R. Gregory Porter, III Vice President
TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
<PAGE>
THE
FBP
FLIPPIN, BRUCE & POTTER
FUNDS
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
Prospectus
NO-LOAD FUNDS
<PAGE>
PROSPECTUS NO-LOAD FUNDS
August 1, 1996
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
==============================================================================
The FBP CONTRARIAN EQUITY FUND seeks long term growth of capital through
investment in a diversified portfolio comprised primarily of equity
securities, with current income as a secondary objective.
==============================================================================
The FBP CONTRARIAN BALANCED FUND seeks long term capital appreciation and
current income through investment in a balanced portfolio of equity and fixed
income securities assuming a moderate level of investment risk.
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the
"Funds") are NO-LOAD, diversified, open-end series of the Williamsburg
Investment Trust, a registered management investment company. This Prospectus
provides you with the basic information you should know before investing in
the Funds. You should read it and keep it for future reference. While there is
no assurance that the Funds will achieve their investment objectives, they
endeavor to do so by following the investment policies described in this
Prospectus.
A Statement of Additional Information dated August 1, 1996, containing
additional information about the Funds, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Funds' address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and their telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Funds.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary.................................................... 2
Synopsis of Costs and Expenses........................................ 3
Financial Highlights.................................................. 4
Investment Objectives, Investment Policies and Risk Considerations.... 6
How to Purchase Shares................................................ 12
How to Redeem Shares.................................................. 14
How Net Asset Value is Determined..................................... 15
Management of the Funds............................................... 16
Dividends, Distributions, Taxes and Other Information................. 17
Application........................................................... 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
THE FUNDS. The FBP Contrarian Equity Fund (the "Equity Fund") and the FBP
Contrarian Balanced Fund (the "Balanced Fund") are NO-LOAD, diversified,
open-end series of the Williamsburg Investment Trust, a registered management
investment company commonly known as a "mutual fund". Each represents a
separate mutual fund with its own investment objectives and policies. An
investor may elect one or both of the Funds to meet individual investment
objectives, and may switch from one Fund to the other without charge when a
shareholder's investment objectives or plans change. While there is no
assurance that the Funds will achieve their investment objectives, they each
endeavor to do so by following the investment policies described in this
Prospectus.
INVESTMENT OBJECTIVES. The Equity Fund's investment objective is long term
growth of capital through investment in a diversified portfolio comprised
primarily of equity securities, with current income as a secondary objective.
The Balanced Fund's investment objectives are long term capital appreciation
and current income through investment in a balanced portfolio of equity and
fixed income securities assuming a moderate level of investment risk.
INVESTMENT APPROACH. In seeking to achieve the investment objectives of both
the Equity Fund and the Balanced Fund, a "contrarian" investment strategy is
utilized. Contrarian investing entails the acquisition of securities of
companies which, in the Adviser's judgment, are undervalued in the securities
markets, usually because they are out of favor with most of the investment
community. A company's securities may be out of favor because, for example, of
earnings declines, business or economic cycle slumps, competitive problems,
litigation, product obsolescence and other reasons. Such securities are
selected based upon the Adviser's assessment of historical valuations, future
recovery prospects and other factors. (See "Investment Objectives, Investment
Policies and Risk Considerations.")
INVESTMENT ADVISER. Flippin, Bruce & Porter, Inc. (the "Adviser") serves
as investment adviser to each of the Funds. For its services, the Adviser
receives compensation of 0.75% of the average daily net assets of each of the
Funds. The fees are reduced for either Fund when the assets of the particular
Fund exceed $250 million. (See "Management of the Funds.")
PURCHASE OF SHARES. Shares are offered "No-Load", which means they may be
purchased directly from the Funds without the imposition of any sales or 12b-1
charges. The minimum initial purchase for either Fund is $25,000 ($1,000 for
IRAs or Keogh accounts). Subsequent investments in both Funds must be $1,000
or more ($300 for IRA or Keogh accounts). Shares may be purchased by
individuals or organizations and may be appropriate for use in Tax Sheltered
Retirement Plans and Systematic Withdrawal Plans. (See "How to Purchase
Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions from
either Fund. Shares may be redeemed at any time in which the Funds are open
for business at the net asset value next determined after receipt of a
redemption request by the Funds. (See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income of the Funds is
distributed quarterly. Net capital gains, if any, are distributed annually.
Shareholders may elect to receive dividends and capital gain distributions in
cash or the dividends and capital gain distributions may be reinvested in
additional Fund shares. (See "Dividends, Distributions, Taxes and Other
Information.")
MANAGEMENT. The Funds are series of the Williamsburg Investment Trust
(the "Trust"), the Board of Trustees of which is responsible for overall
management of the Trust and the Funds. The Trust has employed MGF Service
Corp. (the "Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Funds.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
==============================================================================
FBP CONTRARIAN EQUITY FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average daily net assets)
Investment Advisory Fees (after expense reimbursements)......... 0.33%
Administrator's Fees............................................ 0.36%
Other Expenses (after expense reimbursements)................... 0.56%
--------
Total Fund Operating Expense.................................... 1.25%
========
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether
or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$13 $40 $69 $151
FBP CONTRARIAN BALANCED FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average daily net assets)
Investment Advisory Fees......................................... 0.75%
Administrator's Fees............................................. 0.20%
Other Expenses................................................... 0.22%
--------
Total Fund Operating Expense..................................... 1.17%
========
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether
or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$12 $37 $64 $142
The purpose of the foregoing tables is to assist investors in the Funds
in understanding the various costs and expenses that they will bear directly
or indirectly. See "Management of the Funds" for more information about the
fees and costs of operating the Funds. The Annual Fund Operating Expenses
shown above are based upon actual operating history for the fiscal year ended
March 31, 1996. Absent the expense reimbursements by the Adviser, the Equity
Fund's investment advisory fees would have been 0.75% of average daily net
assets and total fund operating expenses would have been 1.67% of average
daily net assets. THE EXAMPLES SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR
LESS THAN THOSE SHOWN.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Funds' latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Funds.
FBP CONTRARIAN EQUITY FUND
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD
<CAPTION>
YEAR YEAR JULY 30,
ENDED ENDED 1993(A) TO
MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994
<S> <C> <C> <C>
Net asset value at beginning of period ....................... $ 11.21 $ 10.15 10.00
--------- --------- ---------
Income from investment operations:
Net investment income ..................................... 0.24 0.21 0.12
Net realized and unrealized gains on investments .......... 3.05 1.14 0.19
--------- --------- ---------
Total from investment operations ............................. 3.29 1.35 0.31
--------- --------- ---------
Less distributions:
Dividends from net investment income ...................... (0.24) (0.23) (0.10)
Distributions from net realized gains ..................... (0.05) (0.06) (0.06)
--------- --------- ---------
Total distributions .......................................... (0.29) (0.29) (0.16)
--------- --------- ---------
Net asset value at end of period ............................. $ 14.21 $ 11.21 $ 10.15
========= ========= =========
Total return ................................................. 29.54% 13.52% 4.59%(c)
========= ========= =========
Net assets at end of period (000's) .......................... $ 9,090 $ 5,323 $ 3,135
========= ========= =========
Ratio of expenses to average net assets(b) ................... 1.25% 1.25% 1.25%(c)
Ratio of net investment income to average net assets ......... 1.89% 2.15% 1.98%(c)
Portfolio turnover rate ...................................... 12% 9% 7%
<FN>
(a)Commencement of operations.
(b)Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.67%, 2.27% and 3.10% (c)
for the periods ended March 31, 1996, 1995 and 1994, respectively.
(c)Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
FBP CONTRARIAN BALANCED FUND
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD
<CAPTION>
JULY 3,
YEARS ENDED MARCH 31, 1989(A) TO
MARCH 31,
1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ... $ 12.80 $ 12.19 $ 12.10 $ 11.10 $ 9.90 $ 9.75 $10.16
------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income .................. 0.43 0.38 0.33 0.34 0.36 0.45 0.28
Net realized and unrealized gains
(losses) on investments ............... 2.44 0.87 0.15 1.06 1.17 0.18 (0.42)
------- ------- ------- ------- ------ ------ ------
Total from investment operations ......... 2.87 1.25 0.48 1.40 1.53 0.63 (0.14)
------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income ... (0.43) (0.39) (0.32) (0.35) (0.33) (0.48) (0.27)
Distributions from net realized gains .. (0.38) (0.25) (0.07) (0.05) -- -- --
------- ------- ------- ------- ------ ------ ------
Total distributions ...................... (0.81) (0.64) (0.39) (0.40) (0.33) (0.48) (0.27)
------- ------- ------- ------- ------ ------ ------
Net asset value at end of period ......... $ 14.86 $ 12.80 $ 12.19 $ 12.10 $11.10 $ 9.90 $ 9.75
======= ======= ======= ======= ====== ====== ======
Total return ............................. 22.86% 10.54% 3.88% 12.76% 15.71% 6.98% (1.78%)(d)
======= ======= ======= ======= ====== ====== ======
Net assets at end of period (000's) ...... $35,641 $25,976 $21,969 $16,435 $9,572 $5,285 $3,270
======= ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets .. 1.17% 1.17%(b) 1.25%(c) 1.31%(c) 1.35%(c) 1.40%(c) 1.84%(c)(d)
Ratio of net investment income
to average net assets .................. 3.04% 3.10% 2.64% 3.09% 3.61% 5.07% 4.90%(d)
Portfolio turnover rate .................. 17% 14% 28% 27% 14% 13% 16%
<FN>
(a) Effective date of the Fund's initial registration under the Securities Act
of 1933, as amended.
(b) In an effort to reduce the total operating expenses of the Fund, a
portion of the Fund's custodian fees for the year ended March 31, 1995 was
paid through an arrangement with a third-party broker-dealer who was
compensated through commission trades. Payment of the fees was based on a
percentage of commissions earned. Absent expenses reimbursed through the
directed brokerage arrangement, the ratio of expenses to average net
assets would have been 1.20% for the year ended March 31, 1995.
(c) Absent fee waivers and/or expense reimbursements by the Adviser, the
ratios of expenses to average net assets would have been 1.36%,
1.43%, 1.66%, 1.95% and 2.59% (d) for the periods ended March 31, 1994,
1993, 1992, 1991 and 1990, respectively.
(d)Annualized.
</FN>
Further information about the performance of the Funds is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Funds.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
==============================================================================
A description of the investment objectives and policies of each Fund appears
below. The investment objectives of each Fund may not be altered without the
prior approval of a majority (as defined by the Investment Company Act of
1940) of the Fund's shares.
THE EQUITY FUND
The investment objective of the Equity Fund is long term growth of capital
through investment in a diversified portfolio comprised primarily of equity
securities. As income is a secondary objective, any income produced will be a
by-product of the effort to achieve the Equity Fund's primary objective.
In seeking to achieve the Fund's investment objective, the Adviser follows a
contrarian investment approach in the selection and sale of equity securities.
The contrarian philosophy is a disciplined form of value management, setting
the stage for investors to take advantage of quality securities which in the
opinion of the Adviser are undervalued. These securities, while out of favor
with much of the investment community when purchased, still retain the
fundamental characteristics that may return their performance to historical
levels. (See "Investment Selection.")
It is the intention of the Adviser for the Equity Fund to remain fully
invested at all times. Equity securities will normally comprise 70-100% of the
Fund's assets, while money market instruments will comprise 0-30%. The use of
money market instruments enables the Fund to earn interest while satisfying
its working capital needs, such as the accumulation of liquid reserves for
anticipated acquisition of portfolio securities.
THE BALANCED FUND
The investment objective of the Balanced Fund is long term capital
appreciation and current income by investing in a balanced portfolio of equity
and fixed income securities assuming a moderate level of investment risk.
The Balanced Fund invests in both equity and fixed income securities. Equity
securities are acquired for capital appreciation or a combination of capital
appreciation and income. Fixed income securities, including money market
instruments, are acquired for income and secondarily for capital appreciation.
(See "Investment Selection.")
In addition to investing in various types of securities, the Adviser also
invests in various companies, industries and economic sectors. The percentage
of assets invested in equities, fixed income securities and money market
instruments will vary from time to time depending upon the Adviser's judgment
of general market and economic conditions, trends in yields and interest rates
and changes in fiscal or monetary policies. Depending upon the Adviser's
determination of market and economic conditions, investment emphasis may be
placed on equities or fixed income securities as reflected in the table below.
This allocation between stocks and bonds creates an opportunity for investors
to receive competitive returns of capital growth and income while maintaining
diversification. Under normal market conditions the Balanced Fund's portfolio
allocation ranges will be as follows:
% OF TOTAL ASSETS
Equity Securities 40-70%
Fixed Income Securities 25-50%
Money Market Instruments 0-35%
<PAGE>
INVESTMENT SELECTION -- EQUITY FUND AND BALANCED FUND
The concept of "contrarian" investing used in both the Equity Fund and the
Balanced Fund entails the acquisition of securities of companies which, in the
Adviser's judgment, are undervalued in the securities markets. Candidates for
such contrarian investment will usually include the equity securities of
domestic, established companies. Under normal conditions, at least 65% of each
Fund's assets will be invested utilizing the contrarian investment approach
described herein.
It is the Adviser's belief that the securities of well managed companies which
may be temporarily out of favor due to earnings declines or other adverse
developments, such as competitive problems, litigation or product
obsolescence, are likely to provide a greater total investment return than
securities of companies which are favored by most investors because of actual
or anticipated favorable developments. The reason, the Adviser believes, is
that the prices of securities of "out of favor" companies often tend to be
driven lower than fundamentally derived values because of overly pessimistic
investor expectations, while the prices of securities of "in favor" companies
tend to be driven higher than fundamentally derived values because of overly
optimistic investor perceptions.
No assurance can be given, of course, that the Adviser will be correct in its
expectations of recovery for the securities selected for the Funds'
portfolios. While portfolio securities are generally acquired for the long
term, they will be sold when the Adviser believes that: (a) the anticipated
price appreciation has been achieved or is no longer probable; (b) alternate
investments offer superior total return prospects; or (c) the risk of decline
in market value is increased. In an attempt to reduce overall portfolio risk,
provide stability, and to meet operations and cash needs of both of the Funds,
and generate income for the Balanced Fund, the Adviser allocates a portion of
the Equity Fund's assets to money market instruments, and a portion of the
Balanced Fund's assets to fixed income securities as well as money market
instruments.
As a temporary defensive measure, when the Adviser determines that market
conditions warrant, the Equity Fund and the Balanced Fund may depart from
their normal investment objective and money market instruments may be
emphasized, even to the point that 100% of either Fund's assets may be so
invested.
EQUITY SELECTION. The Adviser will invest the Funds' assets among various
companies, industries and economic sectors in an attempt to take advantage of
what the Adviser believes are the best opportunities for capital appreciation
and growth with limited risk.
The Equity Fund and the equity portion of the Balanced Fund will be primarily
invested in common stocks, convertible preferred stocks, and investment rights
and warrants traded on domestic securities exchanges or on the
over-the-counter market. Foreign securities, if held, will be held in the form
of American Depository Receipts ("ADRs"). ADRs are foreign securities
denominated in U.S. Dollars and traded on U.S. securities markets. The Funds
will invest only in sponsored ADRs on foreign equities.
The majority of the equities in the Equity Fund and the equity portion of the
Balanced Fund will be in the securities of established companies, having
operating histories of 10 years or longer and having a market capitalization
of $500 million or more, which are undervalued in the Adviser's opinion. In
determining whether a common stock is undervalued, the Adviser considers,
among other things, such factors as: research material generated by the
brokerage community; investment and business publications and general investor
attitudes as perceived by the Adviser; valuation with respect to price-to-book
value, price-to-sales, price-to-cash flow, price-to-earnings ratios, and
dividend yield, all compared to historical valuations and future prospects for
the company as judged by the Adviser.
<PAGE>
In order to implement the Funds' contrarian strategy, the Adviser allocates
the total portfolio of the Equity Fund, and the equity portion of the
Balanced Fund's portfolio as follows:
FRESHLY IDENTIFIED CONTRARIAN SECURITIES will normally comprise
approximately 25% of the equities held by the Funds. Such securities will
be of companies which the Adviser believes have reached the low point of
their business cycle and have, as a result, fallen out of favor with most
of the investment community. Such companies must, in the Adviser's
assessment, possess the capability to achieve full recovery of business
and economic viability, as well as investment community favor, within a
typical time frame of from three to four years.
SECURITIES OF RECOVERING COMPANIES will normally comprise approximately
50% of the equities held by the Funds. Such companies will be evidencing
varying degrees of recovery from their business cycle low points and the
investment community will, in varying degrees, be recognizing this
recovery. Recognition may take many forms, some of which may be in the
form of favorable research reports and purchase recommendations by
brokerage firms and other investment professionals, renewed institutional
interest in the form of reported large block purchase transactions and/or
favorable market price movements relative to the stock market as a whole.
Such securities, considered by many to be so called "value" purchases,
are considered by the Adviser to have attractive potential for long term
capital appreciation and growth.
SECURITIES OF RECOVERED COMPANIES will comprise approximately 25% of the
equities held by the Funds. These once contrarian issues are now at or
near the top of the Adviser's growth and price expectations, have
generally achieved renewed favor of the investment community and are,
generally, candidates for the option writing activities described herein
or for other disposition in order to realize their capital gains
potential.
FIXED INCOME SELECTION. The Balanced Fund's fixed income investments may
include corporate debt obligations and "U.S. Government Securities." The
Balanced Fund will generally invest in obligations which mature in one to ten
years from the date of purchase except when, in the Adviser's opinion, long
term interest rates are expected by the Adviser to be in a declining trend, in
which case maturities may extend to thirty years.
Corporate debt obligations will consist primarily of "investment grade"
securities rated at least Baa by Moody's Investors Service, Inc. ("Moody's")
or BBB by Standard & Poor's Ratings Group ("S&P") or, if not rated, of
equivalent quality in the Adviser's opinion. Corporate debt obligations are
acquired primarily for their income return and secondarily for capital
appreciation. Those acquired for their capital appreciation potential may be
"contrarian" issues as described herein. For example, fixed income securities
of companies and/or industries at the low point of their business cycle often
experience a downgrading of their quality ratings by Moody's, S&P or other
rating services, generally resulting in reduced prices for such securities.
The Adviser believes such downgraded debt obligations often represent
opportunities for capital appreciation as well as current income and will
acquire such securities after a downgrading where it believes that the
company's financial condition (and therefore its quality ratings) will be
improving. Such downgraded securities will usually be rated less than A by
Moody's and S&P. The Balanced Fund will invest no more than 5% of its net
assets in fixed income securities rated less than Baa by Moody's or BBB by S&P
and will not invest in fixed income securities rated lower than B (or the
equivalent, in the Adviser's opinion, if not rated). Lower rated issues (those
rated lower than A) are considered speculative in certain respects.
Descriptions of the quality ratings of Moody's and S&P are contained in the
Statement of Additional Information. Although the Adviser utilizes the ratings
of various credit rating services as one factor in establishing
creditworthiness, it relies primarily upon its own analysis of factors
establishing creditworthiness. For as long as the Balanced Fund holds a fixed
income issue, the Adviser monitors the issuer's credit standing.
The Adviser expects that U.S. Government Securities will normally comprise at
least 10% of the Balanced Fund's total assets. "U.S. Government Securities"
include direct obligations of the U.S. Treasury, securities issued or
guaranteed as to interest and principal by agencies or instrumentalities of
the U.S. Government, or any of the foregoing subject to repurchase agreements.
(See "Repurchase Agreements.") While obligations of some U.S. Government
sponsored entities are supported by the full faith and credit of the U.S.
Government, several are supported by the right of the issuer to borrow from
the U.S. Government, and still others are supported only by the credit of the
issuer itself. The guarantee of the U.S. Government does not extend to the
yield or value of the U.S. Government Securities held by the Funds or to
either Fund's shares. See the Statement of Additional Information for a more
detailed description.
<PAGE>
MONEY MARKET INSTRUMENTS. Money market instruments mature in thirteen
months or less from the date of purchase and include U.S. Government
Securities (defined above) and corporate debt securities (including those
subject to repurchase agreements), bankers' acceptances and certificates of
deposit of domestic branches of U.S. banks and commercial paper (including
variable amount demand master notes). At the time of purchase, money market
instruments will have a short-term rating in the highest category by Moody's
or S&P or, if not rated, issued by a corporation having an outstanding
unsecured debt issue rated A or better by Moody's or S&P or, if not so rated,
of equivalent quality in the Adviser's opinion. See the Statement of
Additional Information for a further description of money market instruments.
OPTIONS. When the Adviser believes that individual portfolio securities within
the Equity Fund and Balanced Fund are approaching the top of the Adviser's
growth and price expectations, covered call options ("Calls") may be written
(sold) against such securities in a disciplined approach to selling portfolio
securities.
When the Funds write a call, they receive a premium and agree to sell the
underlying security to a purchaser of a corresponding call at a specified
price ("strike price") by a future date ("exercise date"). To terminate its
obligation on a call the Fund has written, it may purchase a corresponding
call in a "closing purchase transaction". A profit or loss will be realized,
depending upon whether the price of the closing purchase transaction is more
or less than the premium (net of transaction costs) previously received on the
call written.
The Funds may also realize a profit if the call it has written lapses
unexercised, in which case the Funds keep the premium and retain the
underlying security as well. If a call written by one of the Funds is
exercised, the Fund forgoes any possible profit from an increase in the market
price of the underlying security over the exercise price plus the premium
received. The Funds write options only for hedging purposes and not for
speculation where the aggregate value of the underlying obligations will not
exceed 25% of a Fund's net assets. If the Adviser is incorrect in its
expectations and the market price of a stock subject to a call option rises
above the exercise price of the option, the Funds will lose the opportunity
for further appreciation of that security.
Profits on closing purchase transactions and premiums on lapsed calls written
are considered capital gains for financial reporting purposes and are short
term gains for federal income tax purposes. When short term gains are
distributed to shareholders, they are taxed as ordinary income. If the Funds
desire to enter into a closing purchase transaction, but there is no market
when they desire to do so, they would have to hold the securities underlying
the call until the call lapses or until the call is exercised.
The Funds will only write options which are issued by the Options Clearing
Corporation and listed on a national securities exchange. Call writing affects
the Funds' portfolio turnover rate and the brokerage commissions paid.
Commissions for options, which are normally higher than for general securities
transactions, are payable when writing calls and when purchasing closing
purchase transactions. The Statement of Additional Information contains
additional information about covered call options.
FACTORS TO CONSIDER. Neither Fund is intended to be a complete investment
program and there can be no assurance that the Funds will achieve their
investment objectives. To the extent that the Equity Fund's portfolio is fully
invested in equity securities, and the major portion of the Balanced Fund's
portfolio is invested in equity securities, it may be expected that the net
asset value of each Fund will be subject to greater fluctuation than a
portfolio containing mostly fixed income securities. The fixed income
securities in which the Balanced Fund will invest are also subject to
fluctuation in value. Such fluctuations may be based on movements in interest
rates or from changes in creditworthiness of the issuers, which may result
from adverse business and economic developments or proposed corporate
transactions, such as a leveraged buy-out or recapitalization of the issuer.
The Funds may borrow using their assets as collateral, but only under certain
limited conditions. Borrowing, if done, would tend to exaggerate the effects
of market fluctuations on a Fund's net asset value until repaid. (See
"Borrowing.")
<PAGE>
The value of the Balanced Fund's fixed income securities will generally
vary inversely with the direction of prevailing interest rate movements.
Consequently, should interest rates increase or the creditworthiness of an
issuer deteriorate, the value of the Balanced Fund's fixed income securities
would decrease in value, which would have a depressing influence on the
Balanced Fund's net asset value. At times when fixed income investments are
emphasized, the Balanced Fund's net asset value would not be subject to as
much stock market volatility but may be expected to fluctuate inversely with
the direction of interest rates. The Adviser believes that, by utilizing the
investment policies described herein, the Balanced Fund's net asset value may
not rise as rapidly or as much as the stock market (as represented by the S&P
500 Index) during rising market cycles, but that during declining market
cycles, the Balanced Fund would not suffer as great a decline in its net asset
value as the S&P 500 Index. This should result, in the Adviser's opinion, in
the Balanced Fund and its shareholders experiencing less volatile year-to-year
total returns than would be experienced by the S&P 500 Index.
UNSEASONED ISSUERS. The Funds may invest in the securities of unseasoned
issuers, that is, companies having an operating history of less than three
years (including predecessors and, in the case of fixed income securities,
guarantors). The management of such companies frequently does not have
substantial business experience. Furthermore, they may be competing with other
companies which are well established, more experienced and better financed.
Because of these and other risks, described in the Statement of Additional
Information, investment in unseasoned issuers is restricted by the Funds to no
more than 5% of each Fund's net assets.
FOREIGN SECURITIES. The Funds may invest in foreign securities in order to
take advantage of opportunities for growth where, as with domestic securities,
they are depressed in price because they are out of favor with most of the
investment community. The same factors would be considered in selecting
foreign securities as with domestic securities. Foreign securities investment
presents special considerations not typically associated with investments in
domestic securities. Foreign taxes may reduce income. Currency exchange rates
and regulations may cause fluctuations in the value of foreign securities.
Foreign securities are subject to different regulatory environments than in
the United States and, compared to the United States, there may be a lack of
uniform accounting, auditing and financial reporting standards, less volume
and liquidity and more volatility, less public information, and less
regulation of foreign issuers. Countries have been known to expropriate or
nationalize assets, and foreign investments may be subject to political,
financial or social instability or adverse diplomatic developments. There may
be difficulties in obtaining service of process on foreign issuers and
difficulties in enforcing judgments with respect to claims under the U.S.
securities laws against such issuers. Favorable or unfavorable differences
between U.S. and foreign economies could affect foreign securities values. The
U.S. Government has, in the past, discouraged certain foreign investments by
U.S. investors through taxation or other restrictions and it is possible that
such restrictions could be imposed again. Because of the inherent risk of
foreign securities over domestic issues, the Funds have adopted a policy
limiting foreign investments to those traded domestically as American
Depository Receipts (ADRs).
LOWER RATED FIXED INCOME SECURITIES. The Balanced Fund will invest to a
limited extent in fixed income securities which are rated lower than A by
Moody's and S&P. Issues rated lower than A are speculative in certain
respects. The Balanced Fund limits its investment in issues rated less than
Baa by Moody's and BBB by S&P to 5% of the Balanced Fund's net assets and the
Balanced Fund will not invest in issues rated lower than B by either rating
service. The Adviser carefully evaluates such lower rated issues prior to
purchase to ascertain that the issuer's financial condition is, in the
Adviser's judgment, improving. See the Statement of Additional Information for
descriptions of the rating categories.
<PAGE>
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total
assets for extraordinary purposes and may increase this limit to 33.3% of its
total assets to meet redemption requests which might otherwise require
untimely disposition of portfolio holdings. To the extent the Funds borrow for
these purposes, the effects of market price fluctuations on portfolio net
asset value will be exaggerated. If while such borrowing is in effect, the
value of the particular Fund's assets declines, the Fund would be forced to
liquidate portfolio securities when it is disadvantageous to do so. The Funds
would incur interest and other transaction costs in connection with such
borrowing. A Fund will not make any additional investments while its
outstanding borrowings exceed 5% of the current value of its total assets.
PORTFOLIO TURNOVER. By utilizing the contrarian approach to investing
described herein, annual portfolio turnover will generally not exceed 100%
with respect to either Fund. Market conditions may dictate, however, a higher
rate of portfolio turnover in a particular year. The degree of portfolio
activity affects the brokerage costs of the Funds and may have an impact on
the amount of taxable distributions to shareholders. The portfolio turnover of
the Equity Fund and of the Balanced Fund for the fiscal year ended March 31,
1996 was 12% and 17%, respectively.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government securities or
other high-grade debt securities subject to repurchase agreements. A
repurchase agreement transaction occurs when the Funds acquire a security and
simultaneously resell it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate earned by the Funds
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to
five days of the purchase. For purposes of the Investment Company Act of 1940
(the "1940 Act"), a repurchase agreement is considered to be a loan
collateralized by the securities subject to the repurchase agreement. Neither
Fund will enter into a repurchase agreement which will cause more than 10% of
its assets to be invested in repurchase agreements which extend beyond seven
days and other illiquid securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Funds' exposure to
risk, each Fund has adopted certain limitations which, together with its
investment objectives, are considered fundamental policies which may not be
changed without shareholder approval. Each Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of either Fund's total assets, or (b) in order to
meet redemption requests which might otherwise require untimely disposition of
portfolio securities if, immediately after such borrowing, the value of a
Fund's assets, including all borrowings then outstanding, less its liabilities
(excluding all borrowings), is equal to at least 300% of the aggregate amount
of borrowings then outstanding, and may pledge its assets to secure all such
borrowings; (2) invest in restricted securities, or invest more than 10% of a
Fund's net assets in other illiquid securities, including repurchase
agreements maturing in over seven days, and other securities for which there
is no established market or for which market quotations are not readily
available; (3) acquire foreign securities, except that the Funds may acquire
foreign securities sold as American Depository Receipts without limit; (4)
write, acquire or sell puts, calls or combinations thereof, or purchase or
sell commodities, commodities contracts, futures contracts or related options,
except that the Funds may (a) write covered call options provided that the
aggregate value of the obligations underlying the call options will not exceed
25% of a Fund's net assets and (b) purchase exchange listed put and call
options provided the aggregate premiums paid on all such options which are
held at any time do not exceed 20% of a Fund's net assets; and (5) purchase
securities of other investment companies, except through purchases in the open
market involving only customary brokerage commissions and as a result of which
not more than 5% of a Fund's total assets would be invested in such
securities, or except as part of a merger, consolidation or other acquisition.
With respect to the purchase of put and call options, limitation numbered 4(b)
above, the Funds reserve the right to, but do not intend to, engage in such
transactions during the coming year. Should the Trustees determine that it is
desirable for the Funds to do so in the future, shareholders would be provided
60 days' notice in writing (including a description of the implications of
such transactions) and the Prospectus would be amended. Other fundamental
investment limitations are listed in the Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Funds at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Funds. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at a Fund's net asset value next determined
after your order is received by the Funds in proper order as indicated herein.
The minimum initial investment in the Funds, unless stated otherwise herein,
is $25,000. The minimum for an Individual Retirement Account ("IRA") or self
employed retirement plan ("Keogh Plan") is $1,000. The Funds may, in the
Adviser's sole discretion, accept certain accounts with less than the stated
minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value next determined
on that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Funds are required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Funds within 60 days.
Investors should be aware that the Funds' account application contains
provisions in favor of the Funds, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Funds or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
THE FLIPPIN, BRUCE & PORTER FUNDS
C/O SHAREHOLDER SERVICES
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354
<PAGE>
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Funds, at
1-800-443-4249, before wiring funds, to advise the Funds of the investment,
the dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
Star Bank, N.A.
Cinti/Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For either FBP Contrarian Equity Fund or
FBP Contrarian Balanced Fund
(Shareholder name and account number or tax identification number)
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Funds as described under "Regular Mail Orders,"
above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $1,000, or $300 for IRAs and Keoghs) at any time by
purchasing shares at the then current net asset value as aforementioned.
Before making additional investments by bank wire, please call the Funds at
1-800-443-4249 to alert the Funds that your wire is to be sent. Follow the
wire instructions above to send your wire. When calling for any reason, please
have your account number ready, if known. Mail orders should include, when
possible, the "Invest by Mail" stub which is attached to your Fund
confirmation statement. Otherwise, be sure to identify your account in your
letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables
shareholders to make regular monthly investment in shares through automatic
charges to their checking accoun9. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the net asset value on or about the 15th day and/or the last
business day of the month. The shareholder may change the amount of the
investment or discontinue the plan at any time by writing to the
Administrator.
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of
either Fund to purchase shares of the other Fund. Shares of either Fund may
also be exchanged for the following money market funds:
Institutional Government Income Fund (a series of Midwest
Trust)--invests in short-term U.S. Government obligations and seeks
high current income, consistent with protection of capital.
Tax-Free Money Fund (a series of Midwest Group Tax Free
Trust)--invests in high quality, short-term municipal obligations and
seeks the highest level of interest income that is exempt from
federal income tax, consistent with protection of capital.
Shares of the Institutional Government Income Fund and the Tax-Free Money Fund
acquired via exchange may be reexchanged for shares of either Fund at net
asset value.
There is no charge for this exchange privilege. Exchanges may only be made for
shares of funds then offered for sale in your state of residence. Before
making an exchange, you should read the Prospectus relating to the fund into
which the shares are to be exchanged. The shares of the fund to be acquired
will be purchased at the net asset value next determined after acceptance of
the exchange request in writing by the Administrator. The exchange of shares
of one fund for shares of another fund is treated, for federal income tax
purposes, as a sale on which you may realize taxable gain or loss. To prevent
the abuse of the exchange privilege to the disadvantage of other shareholders,
each Fund reserves the right to terminate or modify the exchange offer upon 60
days' notice to shareholders.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Funds or
certain parties related thereto. The minimum initial investment for such
accounts is $1,000. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
<PAGE>
HOW TO REDEEM SHARES
==============================================================================
Shares of the Funds may be redeemed on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Funds' portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time, will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions, exchanges or
transfers, and not due to market action) upon 60 days' written notice. If the
shareholder brings his account value up to $1,000 or more during the notice
period, the account will not be redeemed. Redemptions from retirement plans
may be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-800-443-4249, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The
Flippin, Bruce & Porter Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354.
Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying the Equity
Fund or the Balanced Fund, the account number, and the number of shares or
dollar amount to be redeemed. This request must be signed by all registered
shareholders in the exact names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension or
profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, a Fund may delay forwarding
a redemption check for recently purchased shares while it determines whether
the purchase payment will be honored. Such delay (which may take up to 15
days) may be reduced or avoided if the purchase is made by certified check,
government check or wire transfer. In such cases, the net asset value next
determined after receipt of the request for redemption will be used in
processing the redemption and your redemption proceeds will be mailed to you
upon clearance of your check to purchase shares. The Funds may suspend
redemption privileges or postpone the date of payment (i) during any period
that the Exchange is closed, or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission (the "Commission"), (ii)
during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Funds
to dispose of securities owned by them, or to fairly determine the value of
their assets, and (iii) for such other periods as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Funds. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Funds. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of either Fund
valued at $25,000 or more at the current offering price may establish a
Systematic Withdrawal Plan to receive a monthly or quarterly check in a stated
amount not less than $100. Each month or quarter as specified, the Funds will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Funds. See the Statement of Additional
Information for further details.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of each Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Securities
traded on a national stock exchange will be valued based upon the closing
price on the valuation date on the principal exchange where the security is
traded. Fixed income securities will ordinarily be traded in the
over-the-counter market and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. The prices provided by the pricing service are determined
with consideration given to institutional bid and last sale prices and take
into account securities prices, yields, maturities, call features, ratings,
institutional trading in similar groups of securities and developments related
to specific securities. The Trustees will satisfy themselves that such pricing
services consider all appropriate factors relevant to the value of such
securities in determining their fair value. Calls written by the Funds are
valued at the then current market quotation, using the ask price, as of the
close of each day on the principal exchanges on which they are traded.
Securities and other assets for which no quotations are readily available will
be valued in good faith at fair value using methods determined by the Board of
Trustees.
<PAGE>
MANAGEMENT OF THE FUNDS
==============================================================================
The Funds are diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Funds and provides information
about them.
INVESTMENT ADVISER. Subject to the authority of the Board of Trustees,
Flippin, Bruce & Porter, Inc. (the "Adviser") provides the Funds with a
continuous program of supervision of each Fund's assets, including the
composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to Investment Advisory Agreements with the Trust. The
Adviser is also responsible for the selection of broker-dealers through which
the Funds execute portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Funds.
The Adviser, organized as a Virginia corporation in March 1985, is controlled
by John M. Flippin, John T. Bruce and R. Gregory Porter, III. In addition to
acting as Adviser to the Funds, the Adviser also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals.
John T. Bruce is primarily responsible for managing the portfolio of each
Fund and has acted in this capacity since the Funds' inception. Mr. Bruce has
been a principal of the Adviser since the founding of the firm in 1985.
Compensation of the Adviser, based upon each Fund's average daily net assets,
is at the following annual rates: On the first $250 million, 0.75%; on the
next $250 million, 0.65%; on assets over $500 million, 0.50%. For the fiscal
year ended March 31, 1996, the Adviser received $21,816 in investment advisory
fees from the Equity Fund (net of fee waivers), which represented 0.33% of the
Fund's average daily net assets. For the fiscal year ended March 31, 1996, the
Adviser received $237,270 in investment advisory fees from the Balanced Fund,
which represented 0.75% of the Fund's average daily net assets.
The Adviser currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of the Equity Fund to
1.25% per annum of its average daily net assets. However, there is no
assurance that any voluntary fee waivers will continue in the current or
future fiscal years, and expenses of the Equity Fund may therefore exceed
1.25% of its average daily net assets.
The Adviser's address is 800 Main Street, Suite 202, P.O. Box 6138, Lynchburg,
Virginia 24505.
ADMINISTRATOR. The Funds have retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial Inc., of which Robert H.
Leshner is the controlling shareholder.
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
Each Fund pays the Administrator a fee for these services at the annual rate
of 0.20% of the average value of its daily net assets up to $25 million,
0.175% on the next $25 million of such assets and 0.15% of such assets in
excess of $50 million; provided, however, that the minimum fee is $2,000 per
month with respect to each Fund. The Administrator also charges the Funds for
certain costs involved with the daily valuation of investment securities and
is reimbursed for out-of-pocket expenses.
CUSTODIAN. The Custodian of the Funds' assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Adviser, Administrator or interested persons
thereof may have banking relationships with the Custodian.
OTHER FUND COSTS. The Funds pay all expenses not assumed by the Adviser,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and Officers who are not "affiliated
persons" of the Adviser, fees of the Funds' Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Funds'
shareholder servicing operations, fees and expenses of qualifying and
registering the Funds' shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Funds are also liable for any nonrecurring expenses as may
arise such as litigation to which the Funds may be a party. The Funds may be
obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of a Fund are accrued daily on the books of such Fund
at a rate which, to the best of its belief, is equal to the actual expenses
expected to be incurred by the Fund in accordance with generally accepted
accounting practices. For the fiscal year ended March 31, 1995, the expense
ratio of the Balanced Fund was 1.17% of its average daily net assets and the
expense ratio of the Equity Fund was 1.25% of its average daily net assets
after expense reimbursements.
BROKERAGE. The Funds have adopted brokerage policies which allow the Adviser
to prefer brokers which provide research or other valuable services to the
Adviser and/or the Funds. In all cases, the primary consideration for
selection of broker-dealers through which to execute brokerage transactions
will be to obtain the most favorable price and execution for the Funds.
Research services obtained through the Funds' brokerage transactions may be
used by the Adviser for its other clients; conversely, the Funds may benefit
from research services obtained through the brokerage transactions of the
Adviser's other clients. The Statement of Additional Information contains more
information about the management and brokerage practices of the Funds.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Funds in general
and, particularly, with respect to dividends and distributions, tax aspects of
the Funds' activities in options, and other matters. Shareholders should be
aware that dividends from the Funds which are derived in whole or in part from
interest on U.S. Government Securities may not be taxable for state income tax
purposes. Other state income tax implications are not covered, nor is this
discussion exhaustive on the subject of federal income taxation. Consequently,
investors should seek qualified tax advice.
Each Fund intends to remain qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed
to them. The Funds intend to declare dividends quarterly, payable in March,
June, September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities and premiums from
expired options realized through October 31 of that year. Each Fund may make a
supplemental distribution of capital gains at the end of its fiscal year. The
nature and amount of all dividends and distributions will be identified
separately when tax information is distributed by the Funds at the end of each
year. The Funds intend to withhold 30% on taxable dividends and any other
payments that are subject to such withholding and are made to persons who are
neither citizens or residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains for either Fund.
Current practice of the Funds, subject to the discretion of the Board of
Trustees, is for declaration and payment of income dividends during the last
week of each calendar quarter. All dividends and capital gains distributions
are reinvested in additional shares of the Funds unless the shareholder
requests in writing to receive dividends and/or capital gains distributions in
cash. That request must be received by the Funds prior to the record date to
be effective as to the next dividend. Tax consequences to shareholders of
dividends and distributions are the same if received in cash or if received in
additional shares of the Funds.
TAX STATUS OF THE FUNDS. If a Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Funds, see
"Additional Tax Information" in the Statement of Additional Information.
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued in addition to the Equity Fund and the Balanced Fund described in
this Prospectus: shares of The Jamestown Balanced Fund, The Jamestown Equity
Fund, The Jamestown International Equity Fund, The Jamestown Bond Fund, The
Jamestown Short Term Bond Fund and The Jamestown Tax Exempt Virginia Fund,
which are managed by Lowe, Brockenbrough & Tattersall, Inc. of Richmond,
Virginia; and The Government Street Equity Fund, The Government Street Bond
Fund and The Alabama Tax Free Bond Fund, which are managed by T. Leavell &
Associates, Inc. of Mobile, Alabama. The Trustees are permitted to create
additional series, or funds, at any time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory
agreement for a particular Fund. The shares of the Funds will have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect all of the Trustees
if they so choose.
<PAGE>
The Declaration of Trust provides the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Funds at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time each Fund may advertise its
total return. Each Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate
future performance.
The "total return" of a Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If a Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.
In addition, the Funds may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of a Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Funds all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated.
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
Send completed application to:
THE FLIPPIN, BRUCE & PORTER FUNDS
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL _______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT* _______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the
right of survivorship unless otherwise indicated.
Q UGMA/UTMA _________________________________________ under the ___________
(First Name) (Middle Initial) (Last Name) (State)
Uniform Gifts/Transfers to Minors Act
___________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
---------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
Q For Corporations,
Partnerships, Trusts,
Retirement Plans and
Third Party IRAs
---------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and
the date of the Trust instrument.
---------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City__________________________________________State____________Zip____________
Telephone________U.S. Citizen___Resident Alien__
Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City__________________________________________State____________Zip____________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $25,000; $1,000 minimum
for tax qualified account)
q Enclosed is a check payable to THE FLIPPIN, BRUCE & PORTER FUNDS for $_____
(Please indicate Fund below)
q FBP Contrarian Equity Fund (71) q FBP Contrarian Balanced Fund (70)
q Funds were wired to Star Bank on________in the amount of $_________________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUNDS AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR FBP CONTRARIAN EQUITY FUND OR FBP CONTRARIAN BALANCED FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
<PAGE>
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS
AND OTHER INSTITUTIONS
==============================================================================
Please retain a copy of this document for your files. Any modification of the
information contained in this section will require an Amendment to this
Application Form.
==============================================================================
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
FLIPPIN, BRUCE & PORTER FUNDS for the Registered Owner and to execute and
deliver any instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
- ----------------------- -------------------------- -----------------------
- ----------------------- -------------------------- -----------------------
- ----------------------- -------------------------- -----------------------
THE FLIPPIN, BRUCE & PORTER FUNDS, or any agent of the Funds may, without
inquiry, rely upon the instruction of any person(s) purporting to be an
authorized person named above, or in any Amendment received by the Funds or
their agent. The Funds and their Agent shall not be liable for any claims,
expenses or losses resulting from having acted upon any instruction reasonably
believed to be genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $____________
beginning the last business day of________________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of q FBP Contrarian Equity Fund q FBP Contrarian
Balanced Fund by withdrawing from the commercial bank account below, per the
instructions below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
____________________________________________is hereby authorized to
(Name of Bank)
charge to my account the bank draft amount here indicated. I understand
the payment of this draft is subject to all provisions of the contract as
stated on my bank account signature card.
-------------------------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_______--____________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Funds and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, Flippin, Bruce & Porter, Inc., and their
respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- -------------------------------------- -------------------------------------
APPLICANT DATE JOINT APPLICANT DATE
- -------------------------------------- -------------------------------------
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
Investment Advisor
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
Administrator
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Independent Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
Legal Counsel
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
Board of Trustees
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
Portfolio Manager
Thomas W. Leavell
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell
shares in any State to any person to whom it is unlawful for the Fund to make
such offer in such State.
<PAGE>
THE GOVERNMENT
STREET EQUITY FUND
A No-Load Fund
Investment Advisor
T. Leavell & Associates,
Inc.
Founded 1979
<PAGE>
PROSPECTUS
August 1, 1996
THE GOVERNMENT STREET EQUITY FUND A No-Load Fund
==============================================================================
The investment objective of THE GOVERNMENT STREET EQUITY FUND is to seek
capital appreciation through investments in common stocks. To achieve the
Fund's objective, the Fund will be governed by an investment philosophy which
focuses on the management of portfolio risk. To the extent practicable, the
Fund generally will remain fully invested in equities. Current income will be
of secondary importance.
==============================================================================
INVESTMENT ADVISOR
T. Leavell & Associates, Inc.
Mobile, Alabama
The Government Street Equity Fund (the "Fund") is a NO-LOAD, diversified,
open-end series of the Williamsburg Investment Trust, a registered management
investment company. This Prospectus provides you with the basic information
you should know before investing in the Fund. You should read it and keep it
for future reference. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and its telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Fund.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary......................................................... 2
Synopsis of Costs and Expenses............................................. 3
Financial Highlights....................................................... 4
Investment Objectives, Investment Policies and Risk Considerations......... 5
How to Purchase Shares..................................................... 8
How to Redeem Shares....................................................... 10
How Net Asset Value is Determined.......................................... 12
Management of the Fund..................................................... 12
Dividends, Distributions, Taxes and Other Information...................... 14
Application................................................................ 17
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
The Fund. The Government Street Equity Fund (the "Fund") is a No-Load,
diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company commonly known as a "mutual fund."
The Fund's investment objective is to seek capital appreciation through the
compounding of dividends and of capital gains, both realized and unrealized.
Current income will be of secondary importance. While there is no assurance
that the Fund will achieve its investment objective, it endeavors to do so by
following the investment policies described in this Prospectus.
Investment Approach. In seeking to achieve the Fund's investment
objective, the Fund will be governed by an investment philosophy which focuses
on the management of portfolio risk. The Advisor does not engage in "market
timing" as related to the wholesale movement of Fund assets into and out of
the stock market. To the extent practicable, the Fund generally will remain
fully invested in common stocks. (See "Investment Objective, Investment
Policies and Risk Considerations.")
Investment Advisor. T. Leavell & Associates, Inc. (the "Advisor") serves as
investment advisor to the Fund. For its services, the Advisor receives
compensation of 0.60% of the average daily net assets of the Fund. The fees
are reduced when the assets of the Fund exceed $100 million. (See "Management
of the Fund.") The Advisor currently serves as investment advisor to
approximately $310 million in assets, of which approximately $130 million are
equities and $180 million are fixed income securities. The Advisor currently
serves as investment advisor to two additional mutual funds, the subjects of
separate prospectuses.
Purchase of Shares. Shares are offered "No Load," which means they may be
purchased directly from the Fund without the imposition of any sales or 12b-1
charges. The minimum initial purchase for the Fund is $5,000 ($1,000 for IRA
or Keogh accounts). Subsequent investments must be $500 or more. Shares may be
purchased by individuals or organizations and may be appropriate for use in
Tax Sheltered Retirement Plans and Systematic Withdrawal Plans. (See "How to
Purchase Shares.")
Redemption of Shares. There is currently no charge for redemptions.
Shares may be redeemed at any time in which the Fund is open for business at
the net asset value next determined after receipt of a redemption request by
the Fund. (See "How to Redeem Shares.")
Dividends and Distributions. Net investment income of the Fund is
distributed quarterly. Net capital gains, if any, are distributed annually.
Shareholders may elect to receive dividends and capital gain distributions in
cash or the dividends and capital gain distributions may be reivested in
additional Fund shares. (See "Dividends, Distributions, Taxes and Other
Information.")
Management. The Fund is a series of the Williamsburg Investment Trust
(the "Trust"), the Board of Trustees of which is responsible for overall
management of the Trust and the Fund. The Trust has employed MGF Service Corp.
(the "Administrator") to provide administration, accounting and transfer agent
services. (See "Management of the Fund.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
==============================================================================
SHAREHOLDER TRANSACTION EXPENSES: None
==============================================================================
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average daily net assets)
Investment Advisory Fees........................................... 0.60%
Administrator's Fees............................................... 0.19%
Other Expenses..................................................... 0.15%
---------
Total Fund Operating Expense.......................................... 0.94%
==========
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------
$ 10 $30 $52 $115
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees
and costs of operating the Fund. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. The Example shown should not be considered a representation of past
or future expenses. Actual expenses in the future may be greater or less than
those shown.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Fund's latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Fund.
==============================================================================
<CAPTION>
Selected Per Share Data and Ratios for a Share Outstanding Throughout
Each Period
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period .......... $ 23.87 $ 22.69 $ 23.06 $ 21.37 $ 20.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ........................ 0.40 0.38 0.30 0.34 0.28
Net realized and unrealized
gains (losses) on investments .............. 5.75 1.19 (0.37) 1.71 1.35
---------- ---------- ---------- ---------- ----------
Total from investment operations ................ 6.15 1.57 (0.07) 2.05 1.63
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ......... (0.40) (0.39) (0.30) (0.36) (0.26)
Distributions from net realized gains ........ (0.21) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ............................. (0.61) (0.39) (0.30) (0.36) (0.26)
---------- ---------- ---------- ---------- ----------
Net asset value at end of period ................ $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
========== ========== ========== ========== ==========
Total return .................................... 25.96% 7.02% (0.31%) 9.66% 9.99%(c)
========== ========== ========== ========== ==========
Net assets at end of period (000's) ............. $ 41,421 $ 31,473 $ 27,101 $ 21,735 $ 14,971
========== ========== ========== ========== ==========
Ratio of expenses to average net
assets (b) ................................... 0.94% 0.91% 1.00% 1.00% 1.00%(c)
Ratio of net investment income
to average net assets ........................ 1.50% 1.71% 1.33% 1.55% 1.88%(c)
Portfolio turnover rate ......................... 31% 55% 63% 59% 20%
<FN>
(a)Commencement of operations.
(b)In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's administrative and custodian fees for periods ended prior to
March 31, 1996 were paid through an arrangement with a third-party
broker-dealer who was compensated through commission trades. Payment of the
fees was based on a percentage of commissions earned. Absent expenses
reimbursed through the directed brokerage arrangement, the ratios of
expenses to average net assets would have been 1.00%, 1.16%, 1.20% and
1.18%(c) for the periods ended March 31, 1995, 1994, 1993 and 1992,
respectively.
(c)Annualized.
</FN>
Further information about the performance of the Fund is contained in the
Annual Report, a copy of which can be obtained at no charge by calling the
Fund.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE, INVESTMENT POLICIES AND RISK CONSIDERATIONS
==============================================================================
The investment objective of the Fund is capital appreciation through the
compounding of dividends and of capital gains, both realized and unrealized.
The Fund will seek to attain its objective by investing in common stocks.
Current income will be of secondary importance. Any investment involves risk,
and there can be no assurance that the Fund will achieve its investment
objective. The investment objective of the Fund may not be altered without the
prior approval of a majority (as defined by the Investment Company Act of
1940) of the Fund's shares.
==============================================================================
The Fund is governed by an investment philosophy that focuses on the
management of risk in the portfolio. The Advisor's approach is quantitative,
highly consistent, and systematic. It is further supported by the fundamental
statistical relationships between individual stocks. This approach seeks to
reduce risk (the variability of returns) in the portfolio while increasing
compounded returns.
The portfolio consists primarily of the common stocks of medium to large
capitalization companies which are broadly diversified among economic sectors
and industries.
The Advisor does not engage in "market timing" as related to the significant
movement of Fund assets into and out of the stock market. To the extent
practicable, the Fund generally will remain fully invested in common stocks.
The Fund's portfolio will be comprised of common stocks traded on the New York
Stock Exchange, American Stock Exchange or on the over-the-counter market.
Foreign securities, if held, will be held in the form of American Depository
Receipts ("ADRs"). ADRs are foreign securities denominated in U.S. Dollars and
traded on U.S. securities markets. The Fund will invest only in sponsored ADRs
on foreign equities.
The process of selecting common stocks for the Fund combines quantitative
analysis of securities with more basic fundamental analysis to construct an
efficiently diversified portfolio.
The selection process begins with a stock list of approximately 550 common
stocks. This list is the S&P 500 plus "special consideration" stocks. The
stocks on this list are screened monthly for fundamental strength based on
balance sheet quality and financial ratios (including but not limited to
debt/equity, return on equity, return on assets and net worth). The net result
is a stock universe of approximately 350 stocks.
Stocks in the universe are then characterized by their diversification
characteristics. Stocks are grouped into either "growth" or "value" stocks
(depending upon their respective price/book values). Each group ("growth" and
"value") is then sorted into capitalization sectors (small, medium or large)
using the capitalization sector weightings of the S&P 500 as benchmarks. These
six sectors are the basis for the diversification that is inherent in the
portfolio.
To ensure broad diversification, a target representation for each sector is
established. There is equal representation of "growth" and "value" stocks. The
capitalization distribution is based on the sector weightings of the S&P 500.
<PAGE>
An optimization program is then employed to suggest the most efficient
combination of stocks in terms of risk and return. The optimization program is
based upon the expected return of each stock, the historical variability of
each stock and the statistical relationships between all stock pairs in the
universe. The optimization process is subject to constraints that limit the
amount of exposure of any one stock (to no more than approximately 4% of the
portfolio). The result of the optimization is a portfolio that is broadly
diversified and represents the most efficient combination of stocks from the
universe.
The performance of the Fund and of its individual securities is monitored on
an ongoing basis. To maintain the quality and diversification that is desired,
the portfolio is continuously evaluated, and it is re-balanced periodically.
Factors to Consider. The Fund is not intended to be a complete investment
program and there can be no assurance that the Fund will achieve its
investment objective. To the extent that the major portion of the Fund's
portfolio is invested in equity securities, it may be expected that its net
asset value will be subject to greater fluctuation than a portfolio containing
mostly fixed income securities. The Fund may borrow using its assets as
collateral, but only under certain limited conditions. Borrowing, if done,
would tend to exaggerate the effects of market fluctuations on the Fund's net
asset value until repaid. (See "Borrowing.")
Money Market Instruments. Money market instruments may be purchased for
temporary defensive purposes when the Advisor believes the prospect for
capital appreciation in the equity securities markets is not attractive. Money
market instruments will typically represent a portion of the Fund's portfolio,
as funds awaiting investment, to accumulate cash for anticipated purchases of
portfolio securities and to provide for shareholder redemptions and
operational expenses of the Fund. Money market instruments mature in thirteen
months or less from the date of purchase and may include U.S. Government
Securities and corporate debt securities (including those subject to
repurchase agreements), bankers' acceptances and certificates of deposit of
domestic branches of U.S. banks, and commercial paper (including variable
amount demand master notes). At the time of purchase, money market instruments
will have a short-term rating in the highest category from any nationally
recognized statistical rating organization ("NRSRO") or, if not rated, issued
by a corporation having an outstanding unsecured debt issue rated in the three
highest categories of any NRSRO or, if not so rated, of equivalent quality in
the Advisor's opinion. See the Statement of Additional Information for a
further description of money market instruments.
Unseasoned Issuers. The Fund may invest in the securities of unseasoned
issuers, that is, companies having an operating history of less than three
years (including predecessors and, in the case of fixed income securities,
guarantors). The management of such companies frequently does not have
substantial business experience. Furthermore, they may be competing with other
companies who are well established, more experienced and better financed.
Because of these and other risks, described in the Statement of Additional
Information, investment in unseasoned issuers is restricted by the Fund to no
more than 5% of its net assets.
Foreign Securities. Foreign securities investment presents special
considerations not typically associated with investments in domestic
securities. Foreign taxes may reduce income. Currency exchange rates and
regulations may cause fluctuations in the value of foreign securities. Foreign
securities are subject to different regulatory environments than in the United
States and, compared to the United States, there may be a lack of uniform
accounting, auditing and financial reporting standards, less volume and
liquidity and more volatility, less public information, and less regulation of
foreign issuers. Countries have been known to expropriate or nationalize
assets, and foreign investments may be subject to political, financial or
social instability or adverse diplomatic developments. There may be
difficulties in obtaining service of process on foreign issuers and
difficulties in enforcing judgments with respect to claims under the U.S.
securities laws against such issuers. Favorable or unfavorable differences
between U.S. and foreign economies could affect foreign securities values. The
U.S. Government has, in the past, discouraged certain foreign investments by
U.S. investors through taxation or other restrictions and it is possible that
such restrictions could be imposed again. Because of the inherent risk of
foreign securities over domestic issues, the Fund has adopted a policy
limiting foreign investments to those traded domestically as American
Depository Receipts (ADRs).
<PAGE>
Borrowing. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase the limit to 33.3% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If, while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities
when it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make
any additional investments while its outstanding borrowings exceed 5% of the
current value of its total assets.
Portfolio Turnover. By utilizing the approach to investing described herein,
annual portfolio turnover is expected to average approximately 50% and will
generally not exceed 100%. Market conditions may dictate, however, a higher
rate of turnover in a particular year. The degree of portfolio activity
affects the brokerage costs of the Fund and may have an impact on the amount
of taxable distributions to shareholders. The portfolio turnover of the Fund
for the fiscal year ended March 31, 1996 was 31%.
Repurchase Agreements. The Fund may acquire U.S. Government Securities or
other high-grade debt securities subject to repurchase agreements. A
repurchase agreement transaction occurs when the Fund acquires a security and
simultaneously resells it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate earned by the Fund
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to
five days of the purchase. For purposes of the Investment Company Act of 1940
(the "1940 Act"), a repurchase agreement is considered to be a loan
collateralized by the securities subject to the repurchase agreement. The Fund
will not enter into a repurchase agreement which will cause more than 10% of
its assets to be invested in repurchase agreements which extend beyond seven
days and other illiquid securities.
Investment Limitations. For the purpose of limiting the Fund's exposure to
risk, the Fund has adopted certain limitations which, together with its
investment objective, are considered fundamental policies which may not be
changed without shareholder approval. The Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of the Fund's total assets or, (b) in order to meet
redemption requests which might otherwise require untimely disposition of
portfolio securities if, immediately after such borrowing, the value of the
Fund's assets, including all borrowings then outstanding, less its liabilities
(excluding all borrowings), is equal to at least 300% of the aggregate amount
of borrowings then outstanding, and may pledge its assets to secure all such
borrowings; (2) make loans of money or securities, except that the Fund may
invest in repurchase agreements (but repurchase agreements having a maturity
of longer than seven days, together with other securities which are not
readily marketable, are limited to 10% of the Fund's net assets); (3) acquire
foreign securities, except that the Fund may acquire foreign securities sold
as American Depository Receipts without limit; (4) write, acquire or sell
puts, calls or combinations thereof, or purchase or sell commodities,
commodities contracts, futures contracts or related options; (5) invest more
than 5% of its total assets in the securities of any one issuer nor hold more
than 10% of the voting stock of any one issuer; and (6) invest in restricted
securities. Other fundamental investment limitations are listed in the
Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are no sales commissions charged to investors. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Fund at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Fund. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at the Fund's net asset value next determined
after your order is received by the Fund in proper order as indicated herein.
The minimum initial investment in the Fund, unless stated otherwise herein, is
$5,000. The minimum for an Individual Retirement Account ("IRA") or
self-employed retirement plan ("Keogh Plan") is $1,000. The Fund may, in the
Advisor's sole discretion, accept certain accounts with less than the stated
minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value determined on
that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Fund is required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Fund within 60 days.
Investors should be aware that the Fund's account application contains
provisions in favor of the Fund, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Fund or the Administrator in the transaction.
<PAGE>
Regular Mail Orders. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to The
Government Street Equity Fund, and mail it to:
The Government Street Equity Fund
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
Bank Wire Orders. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Fund, at
1-800-443-4249, before wiring funds, to advise the Fund of the investment, the
dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
Star Bank, N. A.
Cinti/Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For The Government Street Equity Fund
(Shareholder name and account number or tax identification number)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Fund as described under "Regular Mail Orders,"
above.
Additional Investments. You may add to your account by mail or wire (minimum
additional investment of $500) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Fund at 1-800-443-4249 to alert the
Fund that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
Automatic Investment Plan. The automatic investment plan enables shareholders
to make regular monthly investment in shares through automatic charges to
their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the 15th day and/or the last business day of the
month. The shareholder may change the amount of the investment or discontinue
the plan at any time by writing to the Administrator.
<PAGE>
Employees and Affiliates of the Fund. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Fund or
certain parties related thereto. The minimum initial investment for such
accounts is $1,000. See the Statement of Additional Information for further
details.
Stock Certificates. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
HOW TO REDEEM SHARES
==============================================================================
Shares of the Fund may be redeemed on each day that the Fund is open for
business by sending a written request to the Fund. The Fund is open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Fund's portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
==============================================================================
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
but not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed. Redemptions from retirement plans may be subject
to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-443-4249, or write to the address shown below.
Regular Mail Redemptions. Your request should be addressed to The
Government Street Equity Fund, P.O. Box 5354, Cincinnati, Ohio 45201-5354.
Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying the
account number, and the number of shares or dollar amount to be redeemed.
This request must be signed by all registered shareholders in the exact
names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, the Fund may delay
forwarding a redemption check for recently purchased shares while it
determines whether the purchase payment will be honored. Such delay (which may
take up to 15 days) may be reduced or avoided if the purchase is made by
certified check, government check or wire transfer. In such cases, the net
asset value next determined after receipt of the request for redemption will
be used in processing the redemption and your redemption proceeds will be
mailed to you upon clearance of your check to purchase shares. The Fund may
suspend redemption privileges or postpone the date of payment (i) during any
period that the Exchange is closed, or trading on the Exchange is restricted
as determined by the Securities and Exchange Commission (the "Commission"),
(ii) during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Fund
to dispose of securities owned by it, or to fairly determine the value of its
assets, and (iii) for such other periods as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized persons, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Fund
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Fund. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Fund. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
Signature Guarantees. To protect your account and the Fund from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
Systematic Withdrawal Plan. A shareholder who owns shares of the Fund valued
at $10,000 or more at the current offering price may establish a Systematic
Withdrawal Plan to receive a monthly or quarterly check in a stated amount not
less than $100. Each month or quarter as specified, the Fund will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Fund. See the Statement of Additional
Information for further details.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of the Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Securities
traded on a national stock exchange will be valued based upon the closing
price on the valuation date on the principal exchange where the security is
traded. Common stocks will ordinarily be traded on a national securities
exchange, but may also be traded in the over-the-counter market. Securities
and other assets for which no quotations are readily available will be valued
in good faith at fair value using methods determined by the Board of Trustees.
MANAGEMENT OF THE FUND
==============================================================================
The Fund is a diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Fund under
the laws of Massachusetts governing the responsibilities of Trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Fund and provides information about
them.
Investment Advisor. Subject to the authority of the Board of Trustees, T.
Leavell & Associates, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities,
pursuant to an Investment Advisory Agreement with the Trust. The Advisor is
also responsible for the selection of broker-dealers through which the Fund
executes portfolio transactions, subject to brokerage policies established by
the Trustees, and provides certain executive personnel to the Fund.
The Advisor, organized as an Alabama corporation in 1979, is controlled by
Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill, Timothy S. Healey and
John R. Miller, Jr. In addition to acting as Advisor to the Fund, the Advisor
also provides investment advice to corporations, trusts, pension and profit
sharing plans, other business and institutional accounts and individuals. The
Advisor also serves as investment advisor to The Government Street Bond Fund
and The Alabama Tax Free Bond Fund (two series of the Trust), the subjects of
separate prospectuses.
Thomas W. Leavell is primarily responsible for managing the portfolio of the
Fund and has acted in this capacity since the Fund's inception. Mr. Leavell
has been a principal of the Advisor since the founding of the firm in 1979.
Mr. Leavell holds a B.S. degree from Auburn University and an M.B.A. from the
University of Kentucky.
Compensation of the Advisor with respect to the Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $100 million, 0.60%; on assets over $100 million, 0.50%. For the fiscal
year ended March 31, 1996, the Advisor received $221,551 in investment
advisory fees from the Fund, which represented 0.60% of the Fund's average
daily net assets.
The Advisor's address is 150 Government Street, Post Office Box 1307, Mobile,
Alabama 36633.
Administrator. The Fund has retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial, Inc., of which Robert H.
Leshner is the controlling shareholder.
<PAGE>
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
The Fund pays the Administrator a fee for these services at the annual rate of
0.20% of the average value of its daily net assets up to $25 million, 0.175%
on the next $25 million of such assets and 0.15% of such assets in excess of
$50 million; provided, however, that the minimum fee is $2,000 per month. The
Administrator also charges the Fund for certain costs involved with the daily
valuation of investment securities and is reimbursed for out-of-pocket
expenses.
Custodian. The Custodian of the Fund's assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
Other Fund Costs. The Fund pays all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Fund's Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Fund's
shareholder servicing operations, fees and expenses of qualifying and
registering the Fund's shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Fund is also liable for any nonrecurring expenses as may
arise such as litigation to which the Fund may be a party. The Fund may be
obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of the Fund are accrued daily on the books of the
Fund at a rate which, to the best of its belief, is equal to the actual
expenses expected to be incurred by the Fund in accordance with generally
accepted accounting practices. For the fiscal year ended March 31, 1996, the
expense ratio of the Fund was 0.94% of its average daily net assets.
Brokerage. The Fund has adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the
Advisor and/or the Fund. In all cases, the primary consideration for selection
of broker-dealers through which to execute brokerage transactions will be to
obtain the most favorable price and execution for the Fund. Research services
obtained through the Fund's brokerage transactions may be used by the Advisor
for its other clients; conversely, the Fund may benefit from research services
obtained through the brokerage transactions of the Advisor's other clients.
The Statement of Additional Information contains more information about the
management and brokerage practices of the Fund.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general
and, particularly, with respect to dividends and distributions and other
matters. The discussion herein of the federal income tax consequences of an
investment in the Fund is not exhaustive on the subject. Consequently,
investors should seek qualified tax advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Fund but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed
to them. The Fund intends to declare dividends quarterly, payable in March,
June, September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. The Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Fund at the end of each year. The Fund intends to
withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are made to persons who are neither citizens nor
residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains. Current practice of
the Fund, subject to the discretion of the Board of Trustees, is for
declaration and payment of income dividends during the last week of each
calendar quarter. All dividends and capital gains distributions are reinvested
in additional shares of the Fund unless the shareholder requests in writing to
receive dividends and/or capital gains distributions in cash. That request
must be received by the Fund prior to the record date to be effective as to
the next dividend. Tax consequences to shareholders of dividends and
distributions are the same if received in cash or if received in additional
shares of the Fund.
Tax Status of the Fund. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Fund, see
"Additional Tax Information" in the Statement of Additional Information.
<PAGE>
Description of Fund Shares and Other Matters. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Fund: shares of the FBP Contrarian Equity Fund
and the FBP Contrarian Balanced Fund, which are managed by Flippin, Bruce &
Porter, Inc. of Lynchburg, Virginia; shares of The Jamestown Balanced Fund,
The Jamestown Equity Fund, The Jamestown International Equity Fund, The
Jamestown Bond Fund, The Jamestown Short Term Bond Fund and The Jamestown Tax
Exempt Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall,
Inc. of Richmond, Virginia; and shares of The Government Street Bond Fund and
The Alabama Tax Free Bond Fund, which are managed by T. Leavell & Associates,
Inc. The Trustees are permitted to create additional series, or funds, at any
time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the Investment Company Act of 1940 (the
"1940 Act"), shares shall be voted by individual Fund; and (ii) when the
matter does not affect any interest of a particular Fund, then only
shareholders of the affected Fund or Funds shall be entitled to vote thereon.
Examples of matters which affect only a particular Fund could be a proposed
change in the fundamental investment objectives or policies of that Fund or a
proposed change in the investment advisory agreement for a particular Fund.
The shares of the Fund will have noncumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of Trustees
can elect all of the Trustees if they so choose.
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Fund at the address shown on the cover.
<PAGE>
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
Calculation of Performance Data. From time to time the Fund may advertise its
total return. The Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate
future performance.
The "total return" of the Fund refers to the average annual compounded rates
of return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If the Fund has been operating less than 1, 5 or 10 years, the
time period during which the Fund has been operating is substituted.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandarized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative rate of return, actual
year-by-year rates or any combination thereof.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Fund all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated.
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
Send completed application to:
THE GOVERNMENT STREET EQUITY FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL _______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT* _______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the
right of survivorship unless otherwise indicated.
Q UGMA/UTMA __________________________________________ under the_______
(First Name) (Middle Initial) (Last Name) (State)
Uniform Gifts/Transfers to Minors Act
___________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
---------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
Q For Corporations,
Partnerships, Trusts,
Retirement Plans and
Third Party IRAs
---------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and
the date of the Trust instrument.
---------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City________________________________________State____________Zip______________
Telephone______________________U.S. Citizen___Resident Alien__
Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City______________________________________State____________Zip________________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $5,000; $1,000 minimum
for tax qualified account)
q Enclosed is a check payable to THE GOVERNMENT STREET EQUITY FUND
for $_____________________________________
q Funds were wired to Star Bank on___________in the amount of $______________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUND AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Fund. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE GOVERNMENT STREET EQUITY FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
<PAGE>
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS
==============================================================================
Please retain a copy of this document for your files. Any modification of the
information contained in this section will require an Amendment to this
Application Form.
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
GOVERNMENT STREET EQUITY FUND for the Registered Owner and to execute and
deliver any instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
THE GOVERNMENT STREET EQUITY FUND, or any agent of the Fund may, without
inquiry, rely upon the instruction of any person(s) purporting to be an
authorized person named above, or in any Amendment received by the Fund or
their agent. The Fund and its Agent shall not be liable for any claims,
expenses or losses resulting from having acted upon any instruction reasonably
believed to be genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $_________ beginning the last business
day of_______________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of THE GOVERNMENT STREET EQUITY FUND by withdrawing
from the commercial bank account below, per the instructions below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
__________________________________________is hereby authorized to
(Name of Bank)
charge to my account the bank draft amount here indicated. I understand
the payment of this draft is subject to all provisions of the contract as
stated on my bank account signature card.
-------------------------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Fund and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, T. Leavell & Associates, Inc., and their
respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- ------------------------------------- ---------------------------------------
APPLICANT DATE JOINT APPLICANT DATE
- ------------------------------------- ---------------------------------------
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
<PAGE>
THE GOVERNMENT STREET BOND FUND
Investment Advisor
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
Administrator
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Independent Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
Legal Counsel
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
Board of Trustees
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
Portfolio Manager
Thomas W. Leavell
<PAGE>
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell
shares in any State to any person to whom it is unlawful for the Fund to make
such offer in such State.
THE GOVERNMENT
STREET BOND FUND
PROSPECTUS
August 1, 1996
THE GOVERNMENT
STREET BOND FUND
A NO-LOAD FUND
==============================================================================
The investment objectives of The Government Street Bond Fund are to preserve
capital, to provide current income and to protect the value of the portfolio
against the effects of inflation. To achieve the Fund's objectives, the Fund
will emphasize preservation of capital by limiting investments in the
portfolio to securities in the four highest quality ratings. Capital
appreciation will be of secondary importance.
INVESTMENT ADVISOR
T. Leavell & Associates, Inc.
Mobile, Alabama
The Government Street Bond Fund (the "Fund") is a NO-LOAD, diversified,
open-end series of the Williamsburg Investment Trust, a registered management
investment company. This Prospectus provides you with the basic information
you should know before investing in the Fund. You should read it and keep it
for future reference. While there is no assurance that the Fund will achieve
its investment objectives, it endeavors to do so by following the investment
policies described in this Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and its telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Fund.
<PAGE>
TABLE OF CONTENTS
==============================================================================
Prospectus Summary...................................................... 2
Synopsis of Costs and Expenses.......................................... 3
Financial Highlights.................................................... 4
Investment Objectives, Investment Policies and Risk Considerations...... 5
How to Purchase Shares.................................................. 8
How to Redeem Shares.................................................... 10
How Net Asset Value is Determined....................................... 12
Management of the Fund.................................................. 12
Dividends, Distributions, Taxes and Other Information................... 14
Application............................................................. 17
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
The Fund. The Government Street Bond Fund (the "Fund") is a No-Load,
diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company commonly known as a "mutual fund."
The Fund's investment objectives are to preserve capital, to provide current
income and to protect the value of the portfolio against the effects of
inflation. Capital appreciation will be of secondary importance. While there
is no assurance that the Fund will achieve its investment objectives, it
endeavors to do so by following the investment policies described in this
Prospectus.
==============================================================================
Investment Approach. In seeking to achieve the Fund's investment
objectives, the Fund will emphasize preservation of capital by limiting
investments in the portfolio to securities in the four highest quality
ratings. A minimum of 40% of the Fund's total assets will be invested in U.S.
Treasury securities or securities issued or guaranteed as to interest and
principal by agencies or instrumentalities of the U.S. Government. (See
"Investment Objectives, Investment Policies and Risk Considerations.")
Investment Advisor. T. Leavell & Associates, Inc. (the "Advisor") serves as
investment advisor to the Fund. For its services, the Advisor receives
compensation of 0.50% of the average daily net assets of the Fund. The fees
are reduced when the assets of the Fund exceed $100 million. (See "Management
of the Fund.") The Advisor currently serves as investment advisor to
approximately $310 million in assets, of which approximately $130 million are
equities and $180 million are fixed income securities. The Advisor currently
serves as investment advisor to two additional mutual funds, the subjects of
separate prospectuses.
Purchase of Shares. Shares are offered "No Load," which means they may be
purchased directly from the Fund without the imposition of any sales or 12b-1
charges. The minimum initial purchase for the Fund is $5,000 ($1,000 for IRA
or Keogh accounts). Subsequent investments must be $500 or more. Shares may be
purchased by individuals or organizations and may be appropriate for use in
Tax-Sheltered Retirement Plans and Systematic Withdrawal Plans. (See "How to
Purchase Shares.")
Redemption of Shares. There is currently no charge for redemptions.
Shares may be redeemed at any time in which the Fund is open for business at
the net asset value next determined after receipt of a redemption request by
the Fund. (See "How to Redeem Shares.")
<PAGE>
Dividends and Distributions. Net investment income of the Fund is distributed
monthly. Net capital gains, if any, are distributed annually. Shareholders may
elect to receive dividends and capital gain distributions in cash or the
dividends and capital gain distributions may be reinvested in additional Fund
shares. (See "Dividends, Distributions, Taxes and Other Information.")
Management. The Fund is a series of the Williamsburg Investment Trust (the
"Trust"),the Board of Trustees of which is responsible for overall management
of the Trust and the Fund. The Trust has employed MGF Service Corp. (the
"Administrator") to provide administration, accounting and transfer agent
services. (See "Management of the Fund.")
<TABLE>
<CAPTION>
SYNOPSIS OF COSTS AND EXPENSES
<S> <C>
===================================================================================================================
Shareholder Transaction Expenses: None
===================================================================================================================
Annual Fund Operating Expenses:
(As a percentage of average daily net assets)
Investment Advisory Fees...................................................................... 0.50%
Administrator's Fees.......................................................................... 0.08%
Other Expenses................................................................................ 0.18%
--------
Total Fund Operating Expense .................................................................... 0.76%
========
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether
or not you redeem at the end of the period, assuming 5% annual return:
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------
<S> <C> <C> <C> <C>
$8 $24 $42 $94
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees
and costs of operating the Fund. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. The Example shown should not be considered a representation of past
or future expenses. Actual expenses in the future may be greater or less than
those shown.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Fund's latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Fund.
<CAPTION>
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period...... $ 20.33 $ 20.87 $ 21.77 $ 20.67 $ 20.00
----------- ----------- ---------- ----------- ----------
Income from investment operations:
Net investment income.................... 1.35 1.35 1.32 1.34 0.95
Net realized and unrealized
gains (losses) on investments.......... 0.54 (0.53) (0.90) 1.10 0.67
----------- --- ------- ---------- ----------- ----------
Total from investment operations............ 1.89 0.82 0.42 2.44 1.62
----------- ----------- ---------- ----------- ----------
Less distributions:
Dividends from net investment income..... (1.35) (1.36) (1.32) (1.33) (0.95)
Distributions from net realized gains.... -- -- -- (0.01) --
----------- ----------- ---------- ----------- ----------
Total distributions......................... (1.35) (1.36) (1.32) (1.34) (0.95)
----------- ----------- ---------- ----------- ----------
Net asset value at end of period............ $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
=========== =========== ========== =========== ==========
Total return................................ 9.43% 4.12% 1.85% 12.14% 9.95%(c)
=========== =========== ========== =========== ==========
Net assets at end of period (000's)......... $ 28,718 $ 27,780 $ 22,633 $ 15,955 $ 6,506
=========== =========== ========== =========== ==========
Ratio of expenses to average net assets(b) . 0.76% 0.85% 0.86% 0.88% 0.93%(c)
Ratio of net investment income
to average net assets.................... 6.38% 6.68% 6.15% 6.44% 7.02%(c)
Portfolio turnover rate..................... 10% 11% 10% 17% 15%
- -------------------------------------------------------------------------------------------------------------------
<FN>
(a)Commencement of operations.
(b)Absent investment advisory fees waived by the Advisor, the ratios of
expenses to average net assets would have been 1.03%, 1.09% and 1.30%(c) for
the periods ended March 31, 1994, 1993 and 1992, respectively.
(c)Annualized.
</FN>
</TABLE>
Further information about the performance of the Fund is contained in the
Annual Report, a copy of which can be obtained at no charge by calling the
Fund.
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS
==============================================================================
The investment objectives of the Fund are to preserve capital, to provide
current income and to protect the value of the portfolio against the effects
of inflation. Capital appreciation will be of secondary importance. Any
investment involves risk, and there can be no assurance that the Fund will
achieve its investment objectives.
The investment objectives of the Fund may not be altered without the prior
approval of a majority (as defined by the Investment Company Act of 1940) of
the Fund's shares.
==============================================================================
In order to achieve its objectives, the Fund invests in fixed income
securities in the four highest classifications (often called "investment
grade") by any of the nationally recognized statistical rating organizations
("NRSROs") - Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Group ("S&P"), Fitch Investors Service, Inc. ("Fitch") or Duff &
Phelps ("D&P"). For S&P, Fitch and D&P those ratings are AAA, AA, A and BBB.
For Moody's those ratings are Aaa, Aa, A and Baa. For a description of these
ratings, see the Statement of Additional Information. A minimum of 40% of the
Fund's total assets will be invested in U.S. Treasury securities or securities
issued or guaranteed as to interest and principal by agencies or
instrumentalities of the U.S. Government. (See "U.S. Government Securities"
below.)
Lower rated issues (those rated lower than A) are considered speculative in
certain respects. Although the Advisor utilizes the ratings of various credit
rating services as one factor in establishing creditworthiness, it relies
primarily upon its own analysis of factors establishing creditworthiness. For
as long as the Fund holds a fixed income issue, the Advisor monitors the
issuer's credit standing.
Maturities in the portfolio will range from less than one year to fifteen
years from the date of purchase. The Fund will be adjusted from time to time
to maintain an average maturity of between three and seven years, depending
upon the Advisor's market interest rate forecasts.
The selection of corporate bonds and/or notes will be based upon the overall
credit quality of the issuer, the bonds' relative interest rate spread over
U.S. Treasury securities of comparable maturity, and call features. The
corporate fixed income securities selected for the portfolio may include
floating rate securities which adjust their effective interest rate at
predetermined periodic intervals.
<PAGE>
In the event that a corporate fixed income security held by the Fund is
downgraded such that its rating is no longer among the four highest ratings by
at least two of the NRSROs, the Advisor has the discretion to determine
whether the security will be sold or retained by the Fund.
U.S. Government Securities. The Fund will invest at least 40% of its portfolio
in U.S. Government Securities. "U.S. Government Securities" include U.S.
Treasury bonds, and U.S. Treasury bills, obligations guaranteed by the U.S.
Government such as Government National Mortgage Association ("GNMA") as well
as obligations of U.S. Government authorities, agencies and instrumentalities
such as Federal National Mortgage Association ("FNMA"), Federal Home Loan
Mortgage Corporation ("FHLMC"), Federal Farm Credit Bank, Federal Home Loan
Bank, Resolution Funding Corporation, Financing Corporation, Tennessee Valley
Authority and Student Loan Marketing Association. While obligations of some
U.S. Government sponsored entities are supported by the full faith and credit
of the U.S. Government, several are supported by the right of the issuer to
borrow from the U.S. Government, and still others are supported only by the
credit of the issuer itself. The guarantee of the U.S. Government does not
extend to the yield or value of the U.S. Government Securities held by the
Fund or to the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"certificates" representing undivided ownership interests in pools of
mortgages. Such certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the issuer. In the case of
securities issued by GNMA, the payment of principal and interest would be
backed by the full faith and credit of the U.S. Government. Mortgage
pass-through certificates issued by FNMA or FHLMC would be guaranteed as to
payment of principal and interest by the credit of the issuing U.S. Government
agency. Securities issued by other non-governmental entities (such as
commercial banks or mortgage bankers) may offer credit enhancement such as
guarantees, insurance, or letters of credit. Mortgage pass-through
certificates are subject to more rapid prepayment than their stated maturity
date would indicate; their rate of prepayment tends to accelerate during
periods of declining interest rates or increased property transfers and, as a
result, the proceeds from such prepayments may be reinvested in instruments
which have lower yields. To the extent such securities were purchased at a
premium, such prepayments could result in capital losses. The issuer of a
pass-through mortgage certificate does not guarantee premiums or market value
of its issue.
<PAGE>
Factors to Consider. The Fund is not intended to be a complete investment
program and there can be no assurance that the Fund will achieve its
investment objectives. The fixed income securities in which the Fund will
invest are subject to fluctuation in value. Such fluctuations may be based on
movements in interest rates or from changes in creditworthiness of the
issuers, which may result from adverse business and economic developments or
proposed corporate transactions, such as a leveraged buy-out or
recapitalization of the issuer.
The value of the Fund's fixed income securities will generally vary inversely
with the direction of prevailing interest rate movements. Consequently, should
interest rates increase or the creditworthiness of an issuer deteriorate, the
value of the Fund's fixed income securities would decrease in value, which
would have a depressing influence on the Fund's net asset value.
Money Market Instruments. Money market instruments may be purchased when the
Advisor believes interest rates are rising, the prospect for capital
appreciation in the longer term fixed income securities markets is not
attractive, or when the "yield curve" favors short-term fixed income
securities versus longer term fixed income securities. Money market
instruments will typically represent a portion of the Fund's portfolio, as
funds awaiting investment, to accumulate cash for anticipated purchases of
portfolio securities and to provide for shareholder redemptions and
operational expenses of the Fund. Money market instruments mature in thirteen
months or less from the date of purchase and include U.S. Government
Securities (defined above) and corporate debt securities (including those
subject to repurchase agreements), bankers' acceptances and certificates of
deposit of domestic branches of U.S. banks, and commercial paper (including
variable amount demand master notes). At the time of purchase, money market
instruments will have a short-term rating in the highest category by any NRSRO
or, if not rated, issued by a corporation having an outstanding unsecured debt
issue rated in the three highest categories of any NRSRO or, if not so rated,
of equivalent quality in the Advisor's opinion. See the Statement of
Additional Information for a further description of money market instruments.
Unseasoned Issuers. The Fund may invest in the securities of unseasoned
issuers, that is, companies having an operating history of less than three
years (including predecessors and, in the case of fixed income securities,
guarantors). The management of such companies frequently does not have
substantial business experience. Furthermore, they may be competing with other
companies who are well established, more experienced and better financed.
Because of these and other risks, described in the Statement of Additional
Information, investment in unseasoned issuers is restricted by the Fund to no
more than 5% of its net assets.
<PAGE>
Borrowing. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase the limit to 33.3% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If, while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities
when it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make
any additional investments while its outstanding borrowings exceed 5% of the
current value of its total assets.
Portfolio Turnover. By utilizing the approach to investing described herein,
annual portfolio turnover is expected to average approximately 30% and will
generally not exceed 50%. Market conditions may dictate, however, a higher
rate of turnover in a particular year. The degree of portfolio activity
affects the brokerage costs of the Fund and may have an impact on the amount
of taxable distributions to shareholders. The portfolio turnover of the Fund
for the fiscal year ended March 31, 1996 was 10%.
Repurchase Agreements. The Fund may acquire U.S. Government Securities or
other high-grade debt securities subject to repurchase agreements. A
repurchase agreement transaction occurs when the Fund acquires a security and
simultaneously resells it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate earned by the Fund
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to
five days of the purchase. For purposes of the Investment Company Act of 1940
(the "1940 Act"), a repurchase agreement is considered to be a loan
collateralized by the securities subject to the repurchase agreement. The Fund
will not enter into a repurchase agreement which will cause more than 10% of
its assets to be invested in repurchase agreements which extend beyond seven
days and other illiquid securities.
Investment Limitations. For the purpose of limiting the Fund's exposure to
risk, the Fund has adopted certain limitations which, together with its
investment objectives, are considered fundamental policies which may not be
changed without shareholder approval. The Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of the Fund's total assets, or (b) in order to meet
redemption requests which might otherwise require untimely disposition of
portfolio securities if, immediately after such borrowing, the value of the
Fund's assets, including all borrowings then outstanding, less its liabilities
(excluding all borrowings), is equal to at least 300% of the aggregate amount
of borrowings then outstanding, and may pledge its assets to secure all such
borrowings; (2) make loans of money or securities, except that the Fund may
invest in repurchase agreements (but repurchase agreements having a maturity
of longer than seven days, together with other securities which are not
readily marketable, are limited to 10% of the Fund's net assets); (3) acquire
foreign securities, except that the Fund may acquire foreign securities sold
as American Depository Receipts without limit; (4) write, acquire or sell
puts, calls or combinations thereof, or purchase or sell commodities,
commodities contracts, futures contracts or related options; (5) invest more
than 5% of its total assets in the securities of any one issuer nor hold more
than 10% of the voting stock of any one issuer; and (6) invest in restricted
securities. Other fundamental investment limitations are listed in the
Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are no sales commissions charged to investors. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Fund at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Fund. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at the Fund's net asset value next determined
after your order is received by the Fund in proper order as indicated herein.
The minimum initial investment in the Fund, unless stated otherwise herein, is
$5,000. The minimum for an Individual Retirement Account ("IRA") or
self-employed retirement plan ("Keogh Plan") is $1,000.
The Fund may, in the Advisor's sole discretion, accept certain accounts with
less than the stated minimum initial investment.
==============================================================================
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value determined on
that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Fund is required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Fund within 60 days. Investors should be aware that the Fund's account
application contains provisions in favor of the Fund, the Administrator and
certain of their affiliates, excluding such entities from certain liabilities
(including, among others, losses resulting from unauthorized shareholder
transactions) relating to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Fund or the Administrator in the transaction.
Regular Mail Orders. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to The
Government Street Bond Fund, and mail it to:
The Government Street Bond Fund
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
<PAGE>
Bank Wire Orders. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Fund, at
1-800-443-4249, before wiring funds, to advise the Fund of the investment, the
dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
Star Bank, N.A.
Cinti/Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For The Government Street Bond Fund
(Shareholder name and account number or tax identification number)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Fund as described under "Regular Mail Orders,"
above.
Additional Investments. You may add to your account by mail or wire (minimum
additional investment of $500) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Fund at 1-800-443-4249 to alert the
Fund that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
Automatic Investment Plan. The automatic investment plan enables shareholders
to make regular monthly investment in shares through automatic charges to
their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the 15th day and/or the last business day of the
month. The shareholder may change the amount of the investment or discontinue
the plan at any time by writing to the Administrator.
Employees and Affiliates of the Fund. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Fund or
certain parties related thereto. The minimum initial investment for such
accounts is $1,000. See the Statement of Additional Information for further
details.
Stock Certificates. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
<PAGE>
HOW TO REDEEM SHARES
==============================================================================
Shares of the Fund may be redeemed on each day that the Fund is open for
business by sending a written request to the Fund. The Fund is open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Fund's portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
==============================================================================
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
but not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed. Redemptions from retirement plans may be subject
to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-443-4249, or write to the address shown below.
Regular Mail Redemptions. Your request should be addressed to The Government
Street Bond Fund, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request for
redemption must include:
1) your letter of instruction or a stock assignment specifying the account
number, and the number of shares or dollar amount to be redeemed. This
request must be signed by all registered shareholders in the exact names
in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships,
pension or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, the Fund may delay
forwarding a redemption check for recently purchased shares while it
determines whether the purchase payment will be honored. Such delay (which may
take up to 15 days) may be reduced or avoided if the purchase is made by
certified check, government check or wire transfer. In such cases, the net
asset value next determined after receipt of the request for redemption will
be used in processing the redemption and your redemption proceeds will be
mailed to you upon clearance of your check to purchase shares. The Fund may
suspend redemption privileges or postpone the date of payment (i) during any
period that the Exchange is closed, or trading on the Exchange is restricted
as determined by the Securities and Exchange Commission (the "Commission"),
(ii) during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Fund
to dispose of securities owned by it, or to fairly determine the value of its
assets, and (iii) for such other periods as the Commission may permit.
<PAGE>
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized persons, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Fund
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Fund. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Fund. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
Signature Guarantees. To protect your account and the Fund from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
Systematic Withdrawal Plan. A shareholder who owns shares of the Fund valued
at $10,000 or more at the current offering price may establish a Systematic
Withdrawal Plan to receive a monthly or quarterly check in a stated amount not
less than $100. Each month or quarter as specified, the Fund will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Fund. See the Statement of Additional
Information for further details.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of the Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
==============================================================================
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Securities
traded on a national stock exchange will be valued based upon the closing
price on the valuation date on the principal exchange where the security is
traded. Fixed income securities will ordinarily be traded in the
over-the-counter market. When market quotations are not readily available,
fixed income securities may be valued on the basis of prices provided by an
independent pricing service. The prices provided by the pricing service are
determined with consideration given to institutional bid and last sale prices
and take into account securities prices, yields, maturities, call features,
ratings, institutional trading in similar groups of securities and
developments related to specific securities. The Trustees will satisfy
themselves that such pricing services consider all appropriate factors
relevant to the value of such securities in determining their fair value.
Securities and other assets for which no quotations are readily available will
be valued in good faith at fair value using methods determined by the Board of
Trustees.
MANAGEMENT OF THE FUND
==============================================================================
The Fund is a diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Fund under
the laws of Massachusetts governing the responsibilities of Trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Fund and provides information about
them.
==============================================================================
<PAGE>
Investment Advisor. Subject to the authority of the Board of Trustees, T.
Leavell & Associates, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities,
pursuant to an Investment Advisory Agreement with the Trust. The Advisor is
also responsible for the selection of broker-dealers through which the Fund
executes portfolio transactions, subject to brokerage policies established by
the Trustees, and provides certain executive personnel to the Fund.
The Advisor, organized as an Alabama corporation in 1979, is controlled by
Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill, Timothy S. Healey and
John R. Miller, Jr. In addition to acting as Advisor to the Fund, the Advisor
also provides investment advice to corporations, trusts, pension and profit
sharing plans, other business and institutional accounts and individuals. The
Advisor also serves as investment advisor to The Government Street Equity Fund
and The Alabama Tax Free Bond Fund (two series of the Trust), the subjects of
separate prospectuses.
Thomas W. Leavell is primarily responsible for managing the portfolio of the
Fund and has acted in this capacity since the Fund's inception. Mr. Leavell
has been a principal of the Advisor since the founding of the firm in 1979.
Mr. Leavell holds a B.S. degree from Auburn University and an M.B.A. from the
University of Kentucky.
Compensation of the Advisor with respect to the Fund, based upon the Fund's
average daily net assets, is at the following annual rates: On the first $100
million, 0.50%; on assets over $100 million, 0.40%. For the fiscal year ended
March 31, 1996, the Advisor received $143,643 in investment advisory fees from
the Fund, which represented 0.50% of the Fund's average daily net assets.
The Advisor's address is 150 Government Street, Post Office Box 1307, Mobile,
Alabama 36633.
Administrator. The Fund has retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial, Inc., of which Robert H.
Leshner is the controlling shareholder.
<PAGE>
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
The Fund pays the Administrator a fee for these services at the annual rate of
0.075% of the average value of its daily net assets up to $200 million and
0.05% of such assets in excess of $200 million; provided, however, that the
minimum fee is $2,000 per month. The Administrator also charges the Fund for
certain costs involved with the daily valuation of investment securities and
is reimbursed for out-of-pocket expenses.
Custodian. The Custodian of the Fund's assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
Other Fund Costs. The Fund pays all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Fund's Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Fund's
shareholder servicing operations, fees and expenses of qualifying and
registering the Fund's shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Fund is also liable for any nonrecurring expenses as may
arise such as litigation to which the Fund may be a party. The Fund may be
obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of the Fund are accrued daily on the books of the
Fund at a rate which, to the best of its belief, is equal to the actual
expenses expected to be incurred by the Fund in accordance with generally
accepted accounting practices. For the fiscal year ended March 31, 1996, the
expense ratio of the Fund was 0.76% of its average daily net assets.
<PAGE>
Brokerage. The Fund has adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the
Advisor and/or the Fund. In all cases, the primary consideration for selection
of broker-dealers through which to execute brokerage transactions will be to
obtain the most favorable price and execution for the Fund. Research services
obtained through the Fund's brokerage transactions may be used by the Advisor
for its other clients; conversely, the Fund may benefit from research services
obtained through the brokerage transactions of the Advisor's other clients.
The Statement of Additional Information contains more information about the
management and brokerage practices of the Fund. It is anticipated that most
securities transactions of the Fund will be handled on a principal, rather
than agency, basis. Fixed income securities are normally traded on a net basis
(without commission) through broker-dealers and banks acting for their own
account. Such firms attempt to profit from buying at the bid price and selling
at the higher asked price of the market, the difference being referred to as
the spread.
DIVIDENDS, DISTRIBUTIONS, TAXES
AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general
and, particularly, with respect to dividends and distributions and other
matters. Shareholders should be aware that dividends from the Fund which are
derived in whole or in part from interest on U.S. Government Securities may
not be taxable for state income tax purposes. Other state income tax
implications are not covered, nor is this discussion exhaustive on the subject
of federal income taxation. Consequently, investors should seek qualified tax
advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Fund but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed
to them. The Fund intends to declare and pay dividends on the last business
day of each month. In addition, distributions may be made annually in December
out of any net short-term or long-term capital gains derived from the sale of
securities realized through October 31 of that year. The Fund may make a
supplemental distribution of capital gains at the end of its fiscal year. The
nature and amount of all dividends and distributions will be identified
separately when tax information is distributed by the Fund at the end of each
year. The Fund intends to withhold 30% on taxable dividends and any other
payments that are subject to such withholding and are made to persons who are
neither citizens nor residents of the U.S.
<PAGE>
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains. All dividends and
capital gains distributions are reinvested in additional shares of the Fund
unless the shareholder requests in writing to receive dividends and/or capital
gains distributions in cash. That request must be received by the Fund prior
to the record date to be effective as to the next dividend. Tax consequences
to shareholders of dividends and distributions are the same if received in
cash or if received in additional shares of the Fund.
Tax Status of the Fund. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Fund, see
"Additional Tax Information" in the Statement of Additional Information.
Description of Fund Shares and Other Matters. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Fund: shares of the FBP Contrarian Equity Fund
and the FBP Contrarian Balanced Fund, which are managed by Flippin, Bruce &
Porter, Inc. of Lynchburg, Virginia; shares of The Jamestown Balanced Fund,
The Jamestown Equity Fund, The Jamestown International Equity Fund, The
Jamestown Bond Fund, The Jamestown Short Term Bond Fund and The Jamestown Tax
Exempt Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall,
Inc. of Richmond, Virginia; and shares of The Government Street Equity Fund
and The Alabama Tax Free Bond Fund, which are managed by T. Leavell &
Associates, Inc. The Trustees are permitted to create additional series, or
funds, at any time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the Investment Company Act of 1940 (the
"1940 Act"), shares shall be voted by individual Fund; and (ii) when the
matter does not affect any interest of a particular Fund, then only
shareholders of the affected Fund or Funds shall be entitled to vote thereon.
Examples of matters which affect only a particular Fund could be a proposed
change in the fundamental investment objectives or policies of that Fund or a
proposed change in the investment advisory agreement for a particular Fund.
The shares of the Fund will have noncumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of Trustees
can elect all of the Trustees if they so choose.
<PAGE>
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Fund at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
Calculation of Performance Data. From time to time the Fund may advertise its
total return. The Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate
future performance.
The "total return" of the Fund refers to the average annual compounded rates
of return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If the Fund has been operating less than 1, 5 or 10 years, the
time period during which the Fund has been operating is substituted.
<PAGE>
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandarized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative rate of return, actual
year-by-year rates or any combination thereof.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Fund all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated.
<PAGE>
THE GOVERNMENT STREET BOND FUND
Send completed application to:
THE GOVERNMENT STREET BOND FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL
______________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT*
______________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of
survivorship unless otherwise indicated.
Q UGMA/UTMA
__________________________________ under the_______
Uniform Gifts/Transfers to Minors Act
- ------------------------------------------------------------------------------
(First Name)(Middle Initial) (Last Name) (State)
__________________________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
- ------------------------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
- ------------------------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the name(s) of
Trustees in which account will be registered, and the date of the Trust
instrument.
- ------------------------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
<PAGE>
ADDRESS
Street or P.O. Box____________________________________________________________
City___________________________________________State____________Zip___________
Telephone____________________________
U.S. Citizen___Resident Alien__Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City___________________________________________State____________Zip___________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $5,000; $1,000 minimum for tax
qualified account)
q Enclosed is a check payable to THE GOVERNMENT STREET BOND FUND
for $_______________________________________
q Funds were wired to Star Bank on____________________________________in the
amount of $_____________________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUND AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Fund. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE GOVERNMENT STREET BOND FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
<PAGE>
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS
==============================================================================
Please retain a copy of this document for your files. Any modification of the
information contained in this section will require an Amendment to this
Application Form.
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
GOVERNMENT STREET BOND FUND for the Registered Owner and to execute and
deliver any instrument necessary to effectuate the authority hereby conferred:
Name
========================================
- ----------------------------------------
Title Signature
==================================================================
------------------------------------------------------------------
THE GOVERNMENT STREET BOND FUND, or any agent of the Fund may, without
inquiry, rely upon the instruction of any person(s) purporting to be an
authorized person named above, or in any Amendment received by the Fund or
their agent. The Fund and its Agent shall not be liable for any claims,
expenses or losses resulting from having acted upon any instruction reasonably
believed to be genuine.
==============================================================================
<PAGE>
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $___________________ beginning the last
business day of______________________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of THE GOVERNMENT STREET BOND FUND by withdrawing from
the commercial bank account below, per the instructions below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
____________________________________________________________is hereby
(Name of Bank)
authorized to charge to my account the bank draft amount here indicated. I
understand the payment of this draft is subject to all provisions of the
contract as stated on my bank account signature card.
-------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
<PAGE>
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Fund and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, T. Leavell & Associates, Inc., and their
respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- -----------------------------------------------------
APPLICANT DATE
- -----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
- ----------------------------------------------------
JOINT APPLICANT DATE
- ----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
A No-Load Fund
Investment Advisor
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
THE ALABAMA TAX FREE BOND FUND
Investment Advisor
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
Administrator
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Independent Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
Legal Counsel
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
Board of Trustees
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
Portfolio Manager
Timothy S. Healey
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell
shares in any State to any person to whom it is unlawful for the Fund to make
such offer in such State.
<PAGE>
THE ALABAMA
TAX FREE
BOND FUND
A No-Load Fund
Investment Advisor
T. Leavell & Associates,
Inc.
Founded 1979
<PAGE>
PROSPECTUS
August 1, 1996
THE ALABAMA
TAX FREE BOND FUND
A No-Load Fund
==============================================================================
The investment objectives of The Alabama Tax Free Bond Fund are to provide
current income exempt from federal income taxes and from the personal income
taxes of Alabama and to preserve capital. Capital appreciation will be of
secondary importance.
INVESTMENT ADVISOR
T. Leavell & Associates, Inc.
Mobile, Alabama
The Alabama Tax Free Bond Fund (the "Fund") is a NO-LOAD, non-diversified,
open-end series of the Williamsburg Investment Trust, a registered management
investment company. This Prospectus provides you with the basic information
you should know before investing in the Fund. You should read it and keep it
for future reference. While there is no assurance that the Fund will achieve
its investment objectives, it endeavors to do so by following the investment
policies described in this Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and its telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Fund.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary..................................................... 2
Synopsis of Costs and Expenses......................................... 3
Financial Highlights................................................... 4
Investment Objectives, Investment Policies and Risk Considerations..... 5
How to Purchase Shares................................................. 11
How to Redeem Shares................................................... 13
How Net Asset Value is Determined...................................... 14
Management of the Fund................................................. 15
Tax Status............................................................. 17
Dividends, Distributions, Taxes and Other Information.................. 18
Appendix A: Description of Municipal Obligations....................... 21
Appendix B: Factors Affecting Alabama Issuers.......................... 23
Application............................................................ 25
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
The Alabama Tax Free Bond Fund (the "Fund") is a No-Load, non-diversified,
open-end series of the Williamsburg Investment Trust, a registered management
investment company commonly known as a "mutual fund." The Fund's investment
objectives are to provide current income exempt from federal income taxes and
from the personal income taxes of Alabama and to preserve capital. Capital
appreciation will be of secondary importance. While there is no assurance that
the Fund will achieve its investment objectives, it endeavors to do so by
following the investment policies described in this Prospectus.
History of the Fund. Pursuant to an Agreement and Plan of Reorganization dated
March 1, 1994, the Fund, on April 1, 1994, succeeded to the assets and
liabilities of another mutual fund of the same name (the "Predecessor Fund"),
which was an investment series of Albermarle Investment Trust. The investment
objectives, policies and restrictions of the Fund and the Predecessor Fund are
practically identical and the financial data and information in this
Prospectus for periods prior to April 1, 1994 relates to the Predecessor Fund.
Investment Considerations. The primary investment objectives of the Fund are
to provide current income exempt from federal income taxes and from the
personal income taxes of Alabama and to preserve capital. Prospective
investors should be aware that the net asset value of the shares of the Fund
(as with any open-end investment company) will change as the general levels of
interest rates fluctuate. When interest rates decline, the value of a
portfolio invested at higher yields can be expected to rise. Conversely, when
interest rates rise, the value of a portfolio invested at lower yields can be
expected to decline. (See "Investment Objectives, Investment Policies and Risk
Considerations.")
Investment Advisor. T. Leavell & Associates, Inc. (the "Advisor") serves as
investment advisor to the Fund and was investment advisor to the Predecessor
Fund. For its services, the Advisor receives compensation of 0.35% of the
average daily net assets of the Fund. The fees are reduced when the assets of
the Fund exceed $100 million. (See "Management of the Fund.") The Advisor
currently serves as investment advisor to approximately $310 million in
assets, of which approximately $130 million are equities and $180 million are
fixed income securities. The Advisor currently serves as investment advisor to
two additional mutual funds, the subjects of separate prospectuses.
Purchase of Shares. Shares are offered "No-Load," which means they may be
purchased directly from the Fund without the imposition of any sales or 12b-1
charges. The minimum initial purchase for the Fund is $5,000. Subsequent
investments must be $500 or more. Shares may be purchased by individuals or
organizations. (See "How to Purchase Shares.")
Redemption of Shares. There is currently no charge for redemptions.
Shares may be redeemed at any time in which the Fund is open for business at
the net asset value next determined after receipt of a redemption request by
the Fund. (See "How to Redeem Shares.")
<PAGE>
Dividends and Distributions. Net investment income of the Fund is
distributed monthly. Net capital gains, if any, are distributed annually.
Shareholders may elect to receive dividends and capital gain distributions in
cash or the dividends and capital gain distributions may be reinvested in
additional Fund shares. (See "Dividends, Distributions, Taxes and Other
Information.")
The Fund. The Fund has registered as a non-diversified management investment
company so that it will be able to invest more than 5% of its assets in
obligations of each of one or more issuers. The proceeds of sales of shares of
the Fund are used to buy securities (primarily municipal bonds and notes and
other debt instruments, the interest on which is exempt from federal income
taxes and from the personal income taxes of Alabama) for the portfolio of the
Fund.
Management. The Fund is a series of the Williamsburg Investment Trust
(the "Trust"), the Board of Trustees of which is responsible for overall
management of the Trust and the Fund. The Trust has employed MGF Service Corp.
(the "Administrator") to provide administration, accounting and transfer agent
services. (See "Management of the Fund.")
SYNOPSIS OF COSTS AND EXPENSES
==============================================================================
Shareholder Transaction Expenses: None
Annual Fund Operating Expenses:
(As a percentage of average daily net assets)
Investment Advisory Fees (After expense reimbursements) ...... 0.24%
Administrator's Fees........................................... 0.17%
Other Expenses................................................. 0.34%
------
Total Fund Operating Expense................................... 0.75%
======
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------
$8 $24 $42 $93
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees
and costs of operating the Fund. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. Absent the expense reimbursements by the Advisor, the Fund's
investment advisory fees would have been 0.35% of average daily net assets and
total fund operating expenses would have been 0.86% of average daily net
assets. The Example shown should not be considered a representation of past or
future expenses. Actual expenses in the future may be greater or less than
those shown.
<PAGE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Fund's latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Fund.
<TABLE>
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD
<CAPTION>
SEVEN MONTHS JANUARY 15,
YEARS ENDED MARCH 31, ENDED 1993(B) TO
MARCH 31, AUGUST 31,
1996 1995 1994(a) 1993
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............. $ 9.96 $ 9.96 $ 10.30 $ 10.00
---------- ---------- --------- ---------
Income from investment operations:
Net investment income ........................... 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments ................. 0.27 -- (0.34) 0.30
---------- ---------- --------- ---------
Total from investment operations ................... 0.69 0.45 (0.08) 0.53
---------- ---------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.42) (0.45) (0.26) (0.23)
---------- ---------- --------- ---------
Net asset value at end of period ................... $ 10.23 $ 9.96 $ 9.96 $ 10.30
========== ========== ========= =========
Total return ....................................... 7.02% 4.66% (1.50%)(d) 8.79%(d)
========== ========== ========= =========
Net assets at end of period (000's) ................ $ 15,480 $ 12,816 $ 9,716 $ 3,429
========== ========== ========= =========
Ratio of expenses to average net assets(c) ......... 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets ........................... 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate ............................ 4% 36% 3% 2%
<FN>
(a) Effective April 1, 1994, the Fund was reorganized and changed its fiscal
year end from August 31 to March 31.
(b) Commencement of operations.
(c) Absent investment advisory fees waived and/or expenses reimbursed by the
Advisor, the ratios of expenses to average net assets would have been
0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1996,
March 31, 1995, March 31, 1994 and August 31, 1993, respectively.
(d)Annualized.
</FN>
Further information about the performance of the Fund is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Fund.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS
==============================================================================
The investment objectives of the Fund are to provide current income exempt
from federal income taxes and from the personal income taxes of Alabama and to
preserve capital. Capital appreciation will be of secondary importance. Any
investment involves risk, and there can be no assurance that the Fund will
achieve its investment objectives. The investment objectives of the Fund may
not be altered without the prior approval of a majority (as defined by the
Investment Company Act of 1940) of the Fund's shares.
As a fundamental policy, the Trust seeks to achieve the investment objectives
of the Fund by investing the assets of the Fund primarily (i.e., at least 80%
of its assets under normal conditions) in municipal bonds and notes and other
debt instruments, the interest on which is exempt from federal income taxes
and from the personal income taxes of Alabama and not subject to the
alternative minimum tax. These obligations are issued primarily by Alabama,
its political subdivisions, municipalities, agencies, instrumentalities or
public authorities and other qualifying issuers (including Puerto Rico, the
U.S. Virgin Islands and Guam). The securities will be rated in the three
highest grades used by the recognized rating agencies or comparable
securities. Under normal circumstances, the Fund's average maturity is
expected to be of an intermediate term (three to ten years).
Although the Fund seeks to invest all the assets of the Fund in the
obligations exempt from federal and Alabama state income taxes, market
conditions may from time to time limit the availability of such obligations.
During periods when the Fund is unable to purchase such obligations for the
portfolio of the Fund, the Fund will seek to invest the assets of the Fund in
Municipal Obligations (as defined below) the interest on which would be exempt
from federal income taxes, but which would be subject to the personal income
taxes of Alabama. Also, as a temporary defensive measure during times of
adverse market conditions, up to 50% of the assets of the Fund may be held in
cash or invested in the short-term obligations described in paragraphs 3 and 4
below. All of the investments of the Fund will be made in:
(1) Tax-exempt securities which are rated AAA, AA, or A by Standard & Poor's
Ratings Group ("S&P") or are rated Aaa, Aa, or A by Moody's Investors
Service, Inc. ("Moody's") (or of equivalent rating by any of the
nationally recognized statistical rating organizations) or which are
considered by the Advisor to have essentially the same characteristics
and quality as securities having such ratings;
(2) Notes of issuers having an issue of outstanding Municipal Obligations
rated AAA, AA or A by S&P or Aaa, Aa or A by Moody's or which are
guaranteed by the U.S. Government or which are rated MIG-1 or MIG-2 by
Moody's;
(3) Obligations issued or guaranteed as to interest and principal by the
U.S. Government or its agencies or instrumentalities, which may be
subject to repurchase agreements; and
(4) Commercial paper which is rated A-1 or A-2 by S&P or P-1 or P-2 by
Moody's (or which is unrated but which is considered to have essentially
the same characteristics and qualities as commercial paper having such
ratings), obligations of banks with $1 billion of assets (including
certificates of deposit, bankers' acceptances and repurchase agreements),
securities of other investment companies, and cash.
<PAGE>
Interest income from the short-term obligations described in paragraphs 3 and
4 above may be taxable to shareholders as ordinary income for federal and
state income tax purposes. The Fund may purchase Municipal Obligations, the
interest on which may be subject to the alternative minimum tax (for purposes
of this Prospectus, the interest thereon is nonetheless considered to be
tax-exempt). For a general discussion of Municipal Obligations, the risks
associated with an investment therein, and descriptions of the ratings of
Municipal Obligations and short-term obligations permitted as investments, see
Appendix A. As used in this Prospectus, the terms "Municipal Obligations" and
"tax-exempt securities" are used interchangeably to refer to debt instruments
issued by or on behalf of states, territories and possessions of the United
States and the District of Columbia and their political subdivisions, agencies
or instrumentalities, the interest on which is exempt from federal income tax
(without regard to whether the interest thereon is also exempt from the
personal income taxes of any State).
With respect to those Municipal Obligations which are not rated by a major
rating agency, the Fund will be more reliant on the Advisor's judgment,
analysis and experience than would be the case if such Municipal Obligations
were rated. In evaluating the creditworthiness of an issue, whether rated or
unrated, the Advisor may take into consideration, among other things, the
issuer's financial resources, its sensitivity to economic conditions and
trends, the operating history of and the community support for the facility
financed by the issue, the ability of the issuer's management and regulatory
matters.
To protect the capital of shareholders of the Fund under adverse market
conditions, the Fund may from time to time deem it prudent to hold cash or to
purchase taxable short-term obligations for the Fund with a resultant decrease
in yield or increase in the proportion of taxable income.
The Fund will not invest more than 10% of its total assets in securities of
other investment companies nor (with affiliates) hold more than 3% of
securities of one investment company. Any such investment would involve
duplication of expenses, particularly investment advisory fees.
The Fund may invest its assets in a relatively high percentage of Municipal
Obligations issued by entities having similar characteristics. The issuers may
pay their interest obligations from revenue of similar projects such as
multi-family housing, nursing homes, electric utility systems, hospitals or
life care facilities. This too may make the Fund more sensitive to economic,
political, or regulatory occurrences, particularly because such issuers would
likely be located in the same State. As the similarity in issuers increases,
the potential for fluctuation of the net asset value of the Fund's shares also
increases. The Fund will only invest in securities of issuers which it
believes will make timely payments of interest and principal.
The Fund may invest from time to time a portion of the Fund's assets in
industrial revenue bonds (referred to under current tax law as private
activity bonds), and also may invest a portion of the Fund's assets in revenue
bonds issued for housing, including multi-family housing, health care
facilities or electric utilities, at times when the relative value of issues
of such a type is considered, in the judgment of the Advisor, to be more
favorable than that of other available types of issues, taking into
consideration the particular restrictions on investment flexibility arising
from the investment objective of the Fund of providing current income exempt
from personal income taxes of Alabama (as well as federal income taxes).
Therefore, investors should also be aware of the risks which these investments
may entail. Industrial revenue bonds are issued by various state and local
agencies to finance various projects.
<PAGE>
Housing revenue bonds typically are issued by a state, county or local housing
authority and are secured only by the revenues of mortgages originated by the
authority using the proceeds of the bond issue. Because of the impossibility
of precisely predicting demand for mortgages from the proceeds of such an
issue, there is a risk that the proceeds of the issue will be in excess of
demand, which would result in early retirement of the bonds by the issuer.
Moreover, such housing revenue bonds depend for their repayment upon the cash
flow from the underlying mortgages, which cannot be precisely predicted when
the bonds are issued. Any difference in the actual cash flow from such
mortgages from the assumed cash flow could have an adverse impact upon the
ability of the issuer to make scheduled payments of principal and interest on
the bonds, or could result in early retirement of the bonds. Additionally,
such bonds depend in part for scheduled payments of principal and interest
upon reserve funds established from the proceeds of the bonds, assuming
certain rates of return on investment of such reserve funds. If the assumed
rates of return are not realized because of changes in interest rate levels or
for other reasons, the actual cash flow for scheduled payments of principal
and interest on the bonds may be inadequate. The financing of multi-family
housing projects is affected by a variety of factors, including satisfactory
completion of construction within cost constraints, the achievement and
maintenance of a sufficient level of occupancy, sound management of the
developments, timely and adequate increases in rents to cover increases in
operating expenses, including taxes, utility rates and maintenance costs,
changes in applicable laws and governmental regulations and social and
economic trends.
Electric utilities face problems in financing large construction programs in
an inflationary period, cost increases and delay occasioned by environmental
considerations (particularly with respect to nuclear facilities), difficulty
in obtaining fuel at reasonable prices, the cost of competing fuel sources,
difficulty in obtaining sufficient rate increases and other regulatory
problems, the effect of energy conservation and difficulty of the capital
market to absorb utility debt.
Health care facilities include life care facilities, nursing homes and
hospitals. Life care facilities are alternative forms of long-term housing for
the elderly which offer residents the independence of condominium life style
and, if needed, the comprehensive care of nursing home services. Bonds to
finance these facilities have been issued by various state industrial
development authorities. Because the bonds are secured only by the revenues of
each facility, and not by state or local government tax payments, they are
subject to a wide variety of risks. Primarily, the projects must maintain
adequate occupancy levels to be able to provide revenues adequate to maintain
debt service payments. Moreover, in the case of life care facilities, because
a portion of housing, medical care and other services may be financed by an
initial deposit, there may be risk if the facility does not maintain adequate
financial reserves to secure estimated actuarial liabilities. The ability of
management to accurately forecast inflationary cost pressures weighs
importantly in this process. The facilities may also be affected by regulatory
cost restrictions applied to health care delivery in general, particularly
state regulations or changes in Medicare and Medicaid payments or
qualifications, or restrictions imposed by medical insurance companies. They
may also face competition from alternative health care or conventional housing
facilities in the private or public sector. Hospital bond ratings are often
based on feasibility studies which contain projections of expenses, revenues
and occupancy levels. A hospital's gross receipts and net income available to
service its debt are influenced by demand for hospital services, the ability
of the hospital to provide the services required, management capabilities,
economic developments in the service area, efforts by insurers and government
agencies to limit rates and expenses, confidence in the hospital, service area
economic developments, competition, availability and expense of malpractice
insurance, Medicaid and Medicare funding, and possible federal legislation
limiting the rates of increase of hospital charges.
<PAGE>
The Fund may also invest in bonds for industrial and other projects, such as
sewage or solid waste disposal or hazardous waste treatment facilities.
Financing for such projects will be subject to inflation and other general
economic factors as well as construction risks including labor problems,
difficulties with construction sites and the ability of contractors to meet
specifications in a timely manner. Because some of the materials, processes
and wastes involved in these projects may include hazardous components, there
are risks associated with their production, handling and disposal.
Variable Rate Securities. The Fund may invest in tax-exempt securities that
bear interest at rates which are adjusted periodically to market rates. The
market value of fixed coupon securities fluctuates with changes in prevailing
interest rates, increasing in value when interest rates decline and decreasing
in value when interest rates rise. The value of variable rate securities,
however, is less affected by changes in prevailing interest rates because of
the periodic adjustment of their coupons to a market rate. The shorter the
period between adjustments, the smaller the impact of interest rate
fluctuations on the value of these securities. The market value of tax exempt
variable rate securities usually tends toward par (100% of face value) at
interest rate adjustment time.
Put Bonds. The Fund may invest in tax-exempt securities (including securities
with variable interest rates) which may be redeemed or sold back (put) to the
issuer of the security or a third party at face value prior to stated
maturity. This type of security will normally trade as if maturity is the
earlier put date, even though stated maturity is longer.
Zero Coupon Bonds. Municipal Obligations in which the Fund may invest also
include zero coupon bonds and deferred interest bonds. Zero coupon bonds and
deferred interest bonds are debt obligations which are issued at a significant
discount from face value. While zero coupon bonds do not require the periodic
payment of interest, deferred interest bonds provide for a period of delay
before the regular payment of interest begins. The discount approximates the
total amount of interest the bonds will accrue and compound over the period
until maturity or the first interest payment date at a rate of interest
reflecting the market rate of the security at the time of issuance. Zero
coupon bonds and deferred interest bonds benefit the issuer by mitigating its
need for cash to meet debt service, but they also require a higher rate of
return to attract investors who are willing to defer receipt of such cash.
Such investments may experience greater volatility in market value than debt
obligations which make regular payments of interest. The Fund will accrue
income on such investments for tax and accounting purposes, which is
distributable to shareholders.
<PAGE>
Municipal Lease Obligations. The Fund may also invest in municipal lease
obligations, installment purchase contract obligations, and certificates of
participation in such obligations (collectively, "lease obligations"). A lease
obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, although the lease
obligation is ordinarily backed by the municipality's covenant to budget for
the payments due under the lease obligation. Certain lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease obligation payments in future years unless money is
appropriated for such purpose on a yearly basis. A risk peculiar to these
municipal lease obligations is the possibility that a municipality will not
appropriate funds for lease payments. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. The Advisor will seek to
minimize these risks by not investing more than 10% of the total assets of the
Fund in lease obligations that contain "non-appropriation" clauses. In
evaluating a potential investment in such a lease obligation, the Advisor will
consider: (1) the credit quality of the obligor, (2) whether the underlying
property is essential to a government function, and (3) whether the lease
obligation contains covenants prohibiting the obligor from substituting
similar property if the obligor fails to make appropriations for the lease
obligation. Municipal lease obligations may be determined to be liquid in
accordance with the guidelines established by the Board of Trustees and other
factors the Advisor may determine to be relevant to such determination. In
determining the liquidity of municipal lease obligations, the Advisor will
consider a variety of factors including: (1) the willingness of dealers to bid
for the security; (2) the number of dealers willing to purchase or sell the
obligation and the number of other potential buyers; (3) the frequency of
trades and quotes for the obligation; and (4) the nature of the marketplace
trades. In addition, the Advisor will consider factors unique to particular
lease obligations affecting their marketability. These include the general
creditworthiness of the municipality, the importance of the property covered
by the lease to the municipality, and the likelihood that the marketability of
the obligation will be maintained throughout the time the obligation is held
by the Fund.
The Board of Trustees is responsible for determining the credit quality of
unrated municipal lease obligations on an ongoing basis, including an
assessment of the likelihood that the lease will not be cancelled.
Factors to Consider. Because of the concentration in Alabama municipal
securities, the Fund is more susceptible to factors affecting Alabama issuers
than is a comparable municipal bond fund not concentrated in the obligations
of issuers located in a single state. For a general discussion on certain
economic, financial and legal matters pertaining to Alabama, see Appendix B.
Yields on Alabama municipal securities depend on a variety of factors,
including: the general conditions of the municipal bond market; the size of
the particular offering; the maturity of the obligations; and the rating of
the issue. Further, any adverse economic conditions or developments affecting
the State of Alabama or its municipalities could impact the Fund's portfolio.
The ability of the Fund to achieve its investment objectives also depends on
the continuing ability of the issuers of Alabama municipal securities and
participation interests, or the guarantors of either, to meet their
obligations for the payment of interest and principal when due. Certain
Alabama constitutional amendments, legislative measures, executive orders,
administrative regulations and voter initiatives could result in adverse
consequences affecting Alabama municipal securities.
<PAGE>
The net asset value of the shares of the Fund changes as the general levels of
interest rates fluctuate. When interest rates decline, the value of a
portfolio invested at higher yields can be expected to rise. Conversely, when
interest rates rise, the value of a portfolio invested at lower yields can be
expected to decline.
The Fund has registered as a non-diversified management investment company so
that more than 5% of the assets of the Fund may be invested in the obligations
of each of one or more issuers. Because a relatively high percentage of the
assets of the Fund may be invested in the obligations of a limited number of
issuers, the value of shares of the Fund may be more sensitive to any single
economic, political or regulatory occurrence than the shares of a diversified
investment company would be.
Borrowing. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities
when it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make
any additional investments while its outstanding borrowings exceed 5% of the
current value of its total assets.
Portfolio Turnover. Portfolio turnover will not be a limiting factor when the
Advisor deems changes appropriate. While portfolio turnover is difficult to
predict in an active fixed income portfolio, it is expected that annual
portfolio turnover will vary between 25% and 100% annually. Market conditions
may dictate, however, a higher rate of turnover in a particular year. The
degree of portfolio turnover affects the brokerage costs of the Fund and may
have an impact on the amount of taxable distributions to shareholders. The
portfolio turnover of the Fund for the fiscal year ended March 31, 1996 was
4%.
Dividends and Capital Gain Distributions. Each month the Fund distributes to
the shareholders of the Fund dividends substantially equal to all the net
investment income of the Fund. The Fund's net investment income consists of
non-capital gain income, less expenses. The Fund will declare one or more
long-term capital gain distributions to the shareholders of the Fund during
the calendar year if the Fund's profits from the sale of securities held for
longer than the applicable period exceed losses from these transactions
together with any net capital losses carried forward from prior years (to the
extent not used to offset short-term capital gains). If the Fund realizes net
short-term capital gains, they will also be distributed at that time.
Shareholders may elect to receive dividends and capital gain distributions in
either cash or additional shares. (See "Tax Status" and "Dividends,
Distributions, Taxes and Other Information.")
Investment Limitations. For the purpose of limiting the Fund's exposure to
risk, the Fund has adopted certain limitations which, together with its
investment objectives, are considered fundamental policies which may not be
changed without shareholder approval. The Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of the Fund's total assets, or (b) in order to meet
redemption requests which might otherwise require untimely disposition of
portfolio securities, in amounts not exceeding 15% of its total assets, and
may pledge its assets to secure all such borrowings; (2) make loans of money
or securities, except that the Fund may invest in repurchase agreements; (3)
invest more than 15% of its net assets in securities subject to legal or
contractual restrictions on resale or for which there are no readily available
market quotations or in other illiquid securities; and (4) write, acquire or
sell commodities, commodities contracts, futures contracts or related options.
Other fundamental investment limitations are listed in the Statement of
Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are no sales commissions charged to investors. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Fund at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Fund. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at the Fund's net asset value next determined
after your order is received by the Fund in proper order as indicated herein.
The minimum initial investment in the Fund, unless stated otherwise herein, is
$5,000. The Fund may, in the Advisor's sole discretion, accept certain
accounts with less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value next determined
on that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Fund is required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Fund within 60 days.
Investors should be aware that the Fund's account application contains
provisions in favor of the Fund, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Fund or the Administrator in the transaction.
<PAGE>
Regular Mail Orders. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to The
Alabama Tax Free Bond Fund, and mail it to:
The Alabama Tax Free Bond Fund
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
Bank Wire Orders. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Fund, at
1-800-443-4249, before wiring funds, to advise the Fund of the investment, the
dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
Star Bank, N.A.
Cinti/Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For The Alabama Tax Free Bond Fund
(Shareholder name and account number or tax identification number)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Fund as described under "Regular Mail Orders,"
above.
Additional Investments. You may add to your account by mail or wire (minimum
additional investment of $500) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Fund at 1-800-443-4249 to alert the
Fund that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
Automatic Investment Plan. The automatic investment plan enables shareholders
to make regular monthly investment in shares through automatic charges to
their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the 15th day and/or the last business day of the
month. The shareholder may change the amount of the investment or discontinue
the plan at any time by writing to the Administrator.
Employees and Affiliates of the Fund. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Fund or
certain parties related thereto. The minimum initial investment for such
accounts is $1,000. See the Statement of Additional Information for further
details.
Stock Certificates. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
<PAGE>
HOW TO REDEEM SHARES
==============================================================================
Shares of the Fund may be redeemed on each day that the Fund is open for
business by sending a written request to the Fund. The Fund is open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Fund's portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
and not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-443-4249, or write to the address shown below.
Regular Mail Redemptions. Your request should be addressed to The Alabama
Tax Free Bond Fund, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request
for redemption must include:
1) your letter of instruction or a stock assignment specifying the
account number, and the number of shares or dollar amount to be redeemed.
This request must be signed by all registered shareholders in the exact
names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, and
other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, the Fund may delay
forwarding a redemption check for recently purchased shares while it
determines whether the purchase payment will be honored. Such delay (which may
take up to 15 days) may be reduced or avoided if the purchase is made by
certified check, government check or wire transfer. In such cases, the net
asset value next determined after receipt of the request for redemption will
be used in processing the redemption and your redemption proceeds will be
mailed to you upon clearance of your check to purchase shares. The Fund may
suspend redemption privileges or postpone the date of payment (i) during any
period that the Exchange is closed, or trading on the Exchange is restricted
as determined by the Securities and Exchange Commission (the "Commission"),
(ii) during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Fund
to dispose of securities owned by it, or to fairly determine the value of its
assets, and (iii) for such other periods as the Commission may permit.
<PAGE>
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Fund
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Fund. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Fund. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
Signature Guarantees. To protect your account and the Fund from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
Systematic Withdrawal Plan. A shareholder who owns shares of the Fund valued
at $10,000 or more at the current offering price may establish a Systematic
Withdrawal Plan to receive a monthly or quarterly check in a stated amount not
less than $100. Each month or quarter as specified, the Fund will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Fund. See the Statement of Additional
Information for further details.
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of the Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Municipal
Obligations will ordinarily be traded in the over-the-counter market. When
market quotations are not readily available, Municipal Obligations may be
valued on the basis of prices provided by an independent pricing service. The
prices provided by the pricing service are determined with consideration given
to institutional bid and last sale prices and take into account securities
prices, yields, maturities, call features, ratings, institutional trading in
similar groups of securities and developments related to specific securities.
The Trustees will satisfy themselves that such pricing services consider all
appropriate factors relevant to the value of such securities in determining
their fair value. Securities and other assets for which no quotations are
readily available will be valued in good faith at fair value using methods
determined by the Board of Trustees.
MANAGEMENT OF THE FUND
==============================================================================
The Fund is a non-diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Fund under
the laws of Massachusetts governing the responsibilities of trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Fund and provides information about
them.
Investment Advisor. Subject to the authority of the Board of Trustees, T.
Leavell & Associates, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities,
pursuant to an Investment Advisory Agreement with the Trust. The Advisor is
also responsible for the selection of broker-dealers through which the Fund
executes portfolio transactions, subject to brokerage policies established by
the Trustees, and provides certain executive personnel to the Fund.
The Advisor, organized as an Alabama corporation in 1979, is controlled by
Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill, Timothy S. Healey and
John R. Miller, Jr. In addition to acting as Advisor to the Fund, the Advisor
also provides investment advice to corporations, trusts, pension and profit
sharing plans, other business and institutional accounts and individuals. The
Advisor also serves as investment advisor to The Government Street Bond Fund
and The Government Street Equity Fund (two series of the Trust), the subjects
of separate prospectuses.
Timothy S. Healey is primarily responsible for managing the portfolio of
the Fund and also acted in this capacity for the Predecessor Fund. Mr. Healey
is a Vice President of the Advisor and has been a portfolio manager with the
firm since 1986. Prior to joining the Advisor, Mr. Healey served as second
Vice President at Torchmark Advisory Co., Inc. in Birmingham, Alabama. He
holds a B.S., Finance from the University of Alabama and has been continuously
engaged in the investment management business since 1975.
Compensation of the Advisor with respect to the Fund, based upon the Fund's
average daily net assets, is at the following annual rates: On the first $100
million, 0.35%; on assets over $100 million, 0.25%. For the fiscal year ended
March 31, 1996, the Advisor received $34,436 in investment advisory fees from
the Fund (net of fee waivers), which represented 0.24% of the Fund's average
daily net assets.
<PAGE>
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of the Fund to 0.75%
per annum of its average daily net assets. However, there is no assurance that
any voluntary fee waivers will continue in the current or future fiscal years,
and expenses of the Fund may therefore exceed 0.75% of its average daily net
assets.
The Advisor's address is 150 Government Street, Post Office Box 1307, Mobile,
Alabama 36633.
Administrator. The Fund has retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial, Inc., of which Robert H.
Leshner is the controlling shareholder.
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
The Fund pays the Administrator a fee for these services at the annual rate of
0.15% of the average value of its daily net assets up to $200 million and
0.10% of such assets in excess of $200 million; provided, however, that the
minimum fee is $2,000 per month. The Administrator also charges the Fund for
certain costs involved with the daily valuation of investment securities and
is reimbursed for out-of-pocket expenses.
Custodian. The Custodian of the Fund's assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
Other Fund Costs. The Fund pays all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Fund's Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Fund's
shareholder servicing operations, fees and expenses of qualifying and
registering the Fund's shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Fund is also liable for any nonrecurring expenses as may
arise such as litigation to which the Fund may be a party. The Fund may be
obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of the Fund are accrued daily on the books of the
Fund at a rate which, to the best of its belief, is equal to the actual
expenses expected to be incurred by the Fund in accordance with generally
accepted accounting practices. For the fiscal year ended March 31, 1996, the
expense ratio of the Fund was 0.75% of its average daily net assets after
expense reimbursements.
Brokerage. The Fund has adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the
Advisor and/or the Fund. In all cases, the primary consideration for selection
of broker-dealers through which to execute brokerage transactions will be to
obtain the most favorable price and execution for the Fund. Research services
obtained through the Fund's brokerage transactions may be used by the Advisor
for its other clients; conversely, the Fund may benefit from research services
obtained through the brokerage transactions of the Advisor's other clients.
The Statement of Additional Information contains more information about the
management and brokerage practices of the Fund. It is anticipated that most
securities transactions of the Fund will be handled on a principal, rather
than agency, basis. Municipal Obligations, including Alabama obligations, are
normally traded on a net basis (without commission) through broker-dealers and
banks acting for their own account. Such firms attempt to profit from buying
at the bid price and selling at the higher asked price of the market, the
difference being referred to as the spread.
<PAGE>
TAX STATUS
==============================================================================
Federal Income Taxes. Each series of the Trust is a separate entity for tax
purposes, and the Trust intends to qualify the Fund each year as a separate
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986 (the "Code"). Because the Fund intends to distribute to shareholders
substantially all of its net investment income and net realized capital gains
in accordance with the timing requirements imposed by the Code, it is expected
that the Fund will not be required to pay any federal income or excise taxes.
The Fund also expects the dividends it pays to shareholders of the Fund from
interest on Municipal Obligations generally to be exempt from federal income
tax because the Trust intends the Fund to satisfy certain requirements of the
Code. One such requirement is that at the close of each quarter of the taxable
year of the Fund, at least 50% of the value of its total assets consists of
obligations whose interest is exempt from federal income tax. Distributions of
income from investments in taxable securities and from certain other
investments of the Fund (including capital gains from the sale of securities)
will be taxable to the shareholder, whether distributed in cash or in
additional shares. However, it is expected that such amounts would not be
substantial in relation to the tax-exempt interest received by the Fund.
A statement will be sent to each shareholder of the Fund promptly after the
end of each calendar year setting forth the federal income tax status of all
distributions for each calendar year, including the portion exempt from
federal income taxes as "exempt-interest dividends;" the portion, if any, that
is a tax preference item under the federal alternative minimum tax; the
portion taxable as ordinary income; the portion taxable as capital gains; and
the portion representing a return of capital (which is free of current taxes
but results in a basis reduction). The Fund intends to withhold 30% on taxable
dividends and any other payments that are subject to such withholding and are
made to persons who are neither citizens nor residents of the U.S.
Current federal tax law limits the types and volume of bonds qualifying for
the federal income tax exemption of interest and makes interest on certain
tax-exempt bonds and distributions by the Fund of such interest a tax
preference item for purposes of the individual and corporate alternative
minimum tax. In addition, all exempt-interest dividends may affect a corporate
shareholder's alternative minimum tax liability. Applicable tax law and
changes therein may also affect the availability of Municipal Obligations for
investment by the Fund and the value of the Fund's portfolio. The tax
discussion in this Prospectus is for general information only. Prospective
investors should consult their own tax advisors as to the tax consequences of
an investment in the Fund.
<PAGE>
State Income Taxes. The Trust is organized as a Massachusetts business trust
and, under current law, the Fund is not liable for any income or franchise tax
in the Commonwealth of Massachusetts as long as it qualifies as a regulated
investment company under the Code. Set forth below is a brief description of
the personal income tax status of an investment in the Fund under Alabama tax
laws currently in effect. A statement setting forth the state income tax
status of all distributions made during each calendar year will be sent to
shareholders annually.
Under existing Alabama tax laws, as long as the Fund qualifies as a "regulated
investment company" under the Code, and provided the Fund is invested in
obligations the interest on which would be exempt from Alabama personal income
taxes if held directly by an individual shareholder (such as obligations of
Alabama or its political subdivisions, of the United States or of certain
territories or possessions of the United States), dividends received from the
Fund that represent interest received by the Fund on such obligations will be
exempt from Alabama personal income taxes. To the extent that distributions by
the Fund are derived from long-term or short-term capital gains on such
obligations, or from dividends or capital gains on other types of obligations,
such distributions will not be exempt from Alabama personal income tax.
Capital gains or losses realized from a redemption of shares of the Fund by an
Alabama resident will be taxable for Alabama personal income tax purposes.
Interest on indebtedness incurred (directly or indirectly) by a shareholder of
the Fund to purchase or carry shares of the Fund will not be deductible for
Alabama income tax purposes.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code, Treasury regulations, and Alabama tax laws presently
in effect. For the complete provisions, reference should be made to the
pertinent Code sections, the Treasury regulations promulgated thereunder, and
the applicable Alabama tax laws. The Code, Treasury regulations, and Alabama
tax laws are subject to change by legislative, judicial or administrative
action either prospectively or retroactively. Shareholders are urged to
consult their own tax advisors regarding specific questions as to federal,
state, local or foreign taxes.
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general
and, particularly, with respect to dividends and distributions and other
matters. The discussion herein of the federal and state income tax
consequences of an investment in the Fund is not exhaustive on the subject.
Consequently, investors should seek qualified tax advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Code and will distribute all of its net income and
realized capital gains to shareholders. The Fund intends to declare dividends
on each business day and to pay such dividends monthly. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. The Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Fund at the end of each year.
<PAGE>
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains. All dividends and
capital gains distributions are reinvested in additional shares of the Fund
unless the shareholder requests in writing to receive dividends and/or capital
gains distributions in cash. That request must be received by the Fund prior
to the record date to be effective as to the next dividend. Tax consequences
to shareholders of dividends and distributions are the same if received in
cash or if received in additional shares of the Fund.
Tax Status of the Fund. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Fund, see
"Additional Tax Information" in the Statement of Additional Information.
Description of Fund Shares and Other Matters. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Fund: shares of the FBP Contrarian Equity Fund
and the FBP Contrarian Balanced Fund, which are managed by Flippin, Bruce &
Porter, Inc. of Lynchburg, Virginia; shares of The Jamestown Balanced Fund,
The Jamestown Equity Fund, The Jamestown International Equity Fund, The
Jamestown Bond Fund, The Jamestown Short Term Bond Fund and The Jamestown Tax
Exempt Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall,
Inc. of Richmond, Virginia; and shares of The Government Street Equity Fund
and The Government Street Bond Fund, which are managed by T. Leavell &
Associates, Inc. The Trustees are permitted to create additional series, or
funds, at any time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the Investment Company Act of 1940 (the
"1940 Act"), shares shall be voted by individual Fund; and (ii) when the
matter does not affect any interest of a particular Fund, then only
shareholders of the affected Fund or Funds shall be entitled to vote thereon.
Examples of matters which affect only a particular Fund could be a proposed
change in the fundamental investment objectives or policies of that Fund or a
proposed change in the investment advisory agreement for a particular Fund.
The shares of the Fund will have noncumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of Trustees
can elect all of the Trustees if they so choose.
<PAGE>
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Fund at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
Calculation of Performance Data. From time to time the Fund may advertise its
total return. The Fund may also advertise yield and tax-equivalent yield. The
Fund's yield, tax-equivalent yield and total return figures are based on
historical earnings and are not intended to indicate future performance.
The "total return" of the Fund refers to the average annual compounded rates
of return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If the Fund has been operating less than 1, 5 or 10 years, the
time period during which the Fund has been operating is substituted.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Fund all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated. The "tax-equivalent yield"
of the Fund is computed by using the tax-exempt yield figure and dividing by
one minus the tax rate.
<PAGE>
APPENDIX A
==============================================================================
Description of Municipal Obligations
Municipal Obligations include bonds, notes and commercial paper issued by or
on behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies or
instrumentalities, the interest on which is exempt from federal income taxes
(without regard to whether the interest thereon is also exempt from the
personal income taxes of any state). Municipal Obligation bonds are issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities such as bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligation bonds may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses, and
obtaining funds to loan to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide privately-operated
housing facilities, airport, mass transit or port facilities, sewage disposal,
solid waste disposal or hazardous waste treatment or disposal facilities and
certain local facilities for water supply, gas or electricity. Such
obligations are included within the term Municipal Obligations if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated
industrial or commercial facilities, may constitute Municipal Obligations,
although the current federal tax laws place substantial limitations on the
size of such issues.
The two principal classifications of Municipal Obligation bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its good faith, credit and taxing power for the payment of
principal and interest. The payment of the principal of and interest on such
bonds may be dependent upon an appropriation by the issuer's legislative body.
The characteristics and enforcement of general obligation bonds vary according
to the law applicable to the particular issuer. Revenue bonds are payable only
from the revenues derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise or other specific
revenue source. Industrial development bonds which are Municipal Obligations
are in most cases revenue bonds and do not generally constitute the pledge of
the credit of the issuer of such bonds.
Municipal Obligations also include participations in municipal leases. These
are undivided interests in a portion of an obligation in the form of a lease
or installment purchase which is issued by state and local governments to
acquire equipment and facilities. Municipal leases frequently have special
risks not normally associated with general obligation or revenue bonds. Leases
and installment purchase or conditional sale contracts (which normally provide
for title to the leased asset to pass eventually to the governmental issuer)
have evolved as a means for governmental issuers to acquire property and
equipment without meeting the constitutional and statutory requirements for
the issuance of debt. The debt-issuance limitations are deemed to be
inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly
or other periodic basis. Accordingly, a risk peculiar to these municipal lease
obligations is the possibility that a governmental issuer will not appropriate
funds for lease payments. Although the obligations will be secured by the
leased equipment or facilities, the disposition of the property in the event
of non-appropriation or foreclosure might, in some cases, prove difficult.
There are, of course, variations in the security of Municipal Obligations,
both within a particular classification and between classifications, depending
on numerous factors.
<PAGE>
Municipal Obligation notes generally are used to provide for short-term
capital needs and generally have maturities of one year or less. Municipal
Obligation notes include:
1. Tax Anticipation Notes. Tax Anticipation Notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.
2. Revenue Anticipation Notes. Revenue Anticipation Notes are issued in
expectation of receipt of other kinds of revenue, such as federal revenues
available under Federal Revenue Sharing Programs.
3. Bond Anticipation Notes. Bond Anticipation Notes are issued to provide
interim financing until long-term bond financing can be arranged. In most
cases, the long-term bonds then provide the money for the repayment of the
Notes.
Issues of commercial paper typically represent short-term, unsecured,
negotiable promissory notes. These obligations are issued by agencies of state
and local governments to finance seasonal working capital needs of
municipalities or to provide interim construction financing and are paid from
general revenues of municipalities or are refinanced with long-term debt. In
most cases, Municipal Obligation commercial paper is backed by letters of
credit, lending agreements, note repurchase agreements or other credit
facility agreements offered by banks or other institutions. The yields on
Municipal Obligations are dependent on a variety of factors, including general
market conditions, supply and demand and general conditions of the Municipal
Obligation market, size of a particular offering, the maturity of the
obligation and rating (if any) of the issue.
Description of Municipal Bond Ratings. The ratings of the nationally
recognized statistical rating organizations (Moody's Investors Service, Inc.,
Standard & Poor's Ratings Group, Fitch Investors Service and Duff & Phelps)
represent each firm's opinion as to the quality of various Municipal
Obligations. It should be emphasized, however, that ratings are not absolute
standards of quality. Consequently, Municipal Obligations with the same
maturity, coupon and rating may have different yields while Municipal
Obligations of the same maturity and coupon with different ratings may have
the same yield. The descriptions offered by each individual rating firm may
differ slightly, but the following offers a description by Moody's Investors
Service, Inc. of each rating category:
Aaa or AAA: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
<PAGE>
Aa or AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
APPENDIX B
==============================================================================
Factors Affecting Alabama Municipal Obligations
The following information regarding certain economic, financial and legal
matters pertaining to Alabama is drawn primarily from official statements
relating to securities offerings of Alabama and other publicly available
documents, dated as of various dates prior to the date of this Prospectus, and
do not purport to be complete descriptions. Data regarding the financial
condition of Alabama state government may not be relevant to Municipal
Obligations issued by political subdivisions of Alabama. Moreover, the general
economic conditions discussed may or may not affect issuers of the
obligations.
In 1995, manufacturing accounted for 22.8% of Alabama's Real Gross State
Product (the total value of goods and services produced in Alabama). During
the 1960s and 1970s the State's Industrial base became more diversified and
balanced, moving away from primary textiles (including apparel), chemicals,
rubber and plastics. Since the early 1980s, modernization of existing
facilities and an increase in direct foreign investments in the State has made
the manufacturing sector more competitive in domestic and international
markets.
Among the leading manufacturing industries have been pulp and paper and
chemicals, the development and growth of which have been made possible by
abundant rainfall (the mean annual average of which varies between 52 and 68
inches) and a high pulpwood growth rate (averaging approximately one-half cord
per acre per year). In recent years Alabama has ranked as the fifth largest
producer of timber in the nation. Alabama has fresh water availability of
twenty times present usage. The State's growing chemical industry has been the
natural complement of production of wood pulp and paper.
Mining, oil and gas production, textiles and apparel, rubber and plastics,
printing and publishing, steel, machinery and service industries are also
important to Alabama's economy. Coal mining is by far the most important
mining activity.
In recent years, the importance of service industries to the State's economy
has increased significantly. The major service industries in the State are the
general health care industries, most notably represented by the University of
Alabama medical complex in Birmingham, and the high technology research and
development industries concentrated in the Huntsville area. The financial,
insurance and real estate sectors have also shown strong growth over the last
several years.
<PAGE>
The economy in the State of Alabama recovered quickly from the recession of
the early 1980s. Since 1983, the State has recovered and moved forward faster
than the national average. The Alabama Development Office ("ADO") reported as
of December 31, 1995, that for the ninth consecutive year more than two
billion dollars was expended in Alabama for new and expanded industries. In
fact, during 1995 the State had new and expanding capital investments of $3.8
billion. These expenditures accounted for the creation of 21,290 new jobs.
Some of the largest investments during the period 1990-1995 include Champion
International ($550 million); Mercedes Benz ($520 million); Amoco Chemicals
($350 million); EXXON Company, USA ($300 million); and United States Steel
Corp. ($200 million).
Real Gross State Product ("RGSP") is a comprehensive measure of economic
performance for the State of Alabama. Alabama's RGSP is defined as the total
value of all final goods and services produced in the State in constant dollar
terms. In 1995, Alabama's RGSP was $72.8 billion - a 2.4% change from 1994.
From 1991-1995, RGSP originating in manufacturing increased by 2.1% per year.
Those non-manufacturing sectors exhibiting large percentage increases in RGSP
originating between 1991 and 1995 were Services and Trade. From 1991 to 1995,
RGSP originating in Services grew by 4.6% per year and Trade grew by 4.6% per
year. The continued movement toward diversification of Alabama's manufacturing
base and a similar current trend toward enlargement and diversification of the
transportation, communication and public utilities and service industries in
the State are expected to lead to increased economic stability.
<PAGE>
THE ALABAMA TAX FREE BOND FUND
Send completed application to:
THE ALABAMA TAX FREE BOND FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT* ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the
right of survivorship unless otherwise indicated.
Q UGMA/UTMA __________________________________________ under the_______
(First Name) (Middle Initial) (Last Name) (State)
Uniform Gifts/Transfers to Minors Act
___________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
---------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
Q For Corporations,
Partnerships Trusts
---------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and
the date of the Trust instrument.
---------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City__________________________________________State____________Zip____________
Telephone_________________U.S. Citizen___Resident Alien
__Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City_____________________________________State___________Zip__________________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $5,000)
q Enclosed is a check payable to THE ALABAMA TAX FREE BOND FUND for $________
q Funds were wired to Star Bank on___________in the amount of $______________
By Mail: You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire: You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUND AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Fund. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE ALABAMA TAX FREE BOND FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
<PAGE>
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS
==============================================================================
Please retain a copy of this document for your files. Any modification of the
information contained in this section will require an Amendment to this
Application Form.
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
ALABAMA TAX FREE BOND FUND for the Registered Owner and to execute and deliver
any instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
THE ALABAMA TAX FREE BOND FUND, or any agent of the Fund may, without inquiry,
rely upon the instruction of any person(s) purporting to be an authorized
person named above, or in any Amendment received by the Fund or their agent.
The Fund and its Agent shall not be liable for any claims, expenses or losses
resulting from having acted upon any instruction reasonably believed to be
genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $______ beginning the last business day
of______________________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of THE ALABAMA TAX FREE BOND FUND by withdrawing from
the commercial bank account below, per the instructions below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
__________________________________is hereby authorized to
(Name of Bank)
charge to my account the bank draft amount here indicated. I understand
the payment of this draft is subject to all provisions of the contract as
stated on my bank account signature card.
------------------------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Fund and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, T. Leavell & Associates, Inc., and their
respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- -------------------------------------- ---------------------------------------
APPLICANT DATE JOINT APPLICANT DATE
- -------------------------------------- ---------------------------------------
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
OFFICERS
Henry C. Spalding, Jr., President
Ernest H. Stephenson, Jr., Vice President
Connie R. Taylor, Vice President
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Funds. This Prospectus does not constitute an offer by the Funds to sell
shares in any State to any person to whom it is unlawful for the Funds to make
such offer in such State.
<PAGE>
THE JAMESTOWN
BALANCED FUND
THE JAMESTOWN
EQUITY FUND
No-Load Funds
PROSPECTUS
AUGUST 1, 1996
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<PAGE>
PROSPECTUS
August 1, 1996
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
NO-LOAD FUNDS
==============================================================================
The investment objectives of THE JAMESTOWN BALANCED FUND are long term growth
of capital and income through investment in a balanced portfolio of equity and
fixed income securities. Capital protection and low volatility are important
investment goals.
The investment objective of THE JAMESTOWN EQUITY FUND is long term growth of
capital through investment in a diversified portfolio composed primarily of
common stocks. Current income is incidental to this objective and may not be
significant.
INVESTMENT ADVISOR
LOWE, BROCKENBROUGH & TATTERSALL, INC.
RICHMOND, VIRGINIA
The Jamestown Balanced Fund and The Jamestown Equity Fund (the "Funds") are
NO-LOAD, diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company. This Prospectus provides you with
the basic information you should know before investing in the Funds. You
should read it and keep it for future reference. While there is no assurance
that the Funds will achieve their investment objectives, they endeavor to do
so by following the investment policies described in this Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Funds, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Funds' address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and their telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Funds.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary....................................................... 2
Synopsis of Costs and Expenses........................................... 3
Financial Highlights..................................................... 4
Investment Objectives, Investment Policies and Risk Considerations....... 6
How to Purchase Shares................................................... 9
How to Redeem Shares..................................................... 11
How Net Asset Value is Determined........................................ 12
Management of the Funds.................................................. 13
Dividends, Distributions, Taxes and Other Information.................... 14
Application.............................................................. 17
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
THE FUNDS. The Jamestown Balanced Fund (the "Balanced Fund") and The Jamestown
Equity Fund (the "Equity Fund") are NO-LOAD, diversified, open-end series of
the Williamsburg Investment Trust, a registered management investment company
commonly known as a "mutual fund." Each represents a separate mutual fund with
its own investment objectives and policies. An investor may elect one or both
of the Funds to meet individual investment objectives, and may switch from one
Fund to the other without charge when a shareholder's investment objectives or
plans change. While there is no assurance that the Funds will achieve their
investment objectives, they each endeavor to do so by following the investment
policies described in this Prospectus.
INVESTMENT OBJECTIVES. The Balanced Fund's investment objectives are long term
growth of capital and income through investment in a balanced portfolio of
equity and fixed income securities. Capital protection and low volatility are
important investment goals.
The Equity Fund's investment objective is long term growth of capital through
investment in a diversified portfolio composed primarily of common stocks.
Current income is incidental to this objective and may not be significant.
INVESTMENT APPROACH. The percentage of assets of the Balanced Fund invested in
equities and fixed income securities is varied according to the Advisor's
judgment of market and economic conditions. The Advisor attempts to take
advantage of the long term capital growth and income opportunities available
in the securities markets considering the investment goals of capital
protection and low volatility.
The Advisor seeks to achieve the Equity Fund's objective through investment in
a diversified portfolio composed primarily of common stocks. Equity
investments are made primarily for growth, using strong fundamental factors,
rankings of growth/value models and attractive technical and other factors as
selection criteria. (See "Investment Objectives, Investment Policies and Risk
Considerations.")
INVESTMENT ADVISOR. Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor")
serves as investment advisor to each of the Funds. For its services, the
Advisor receives compensation of 0.65% of the average daily net assets of
each Fund. The fees are reduced for either Fund when the assets of the
particular Fund exceed $250 million. (See "Management of the Funds.")
PURCHASE OF SHARES. Shares are offered "No-Load," which means they may be
purchased directly from the Funds without the imposition of any sales or 12b-1
charges. The minimum initial purchase for either Fund is $100,000. Subsequent
investments in both Funds must be $1,000 or more. Shares may be purchased by
individuals or organizations and may be appropriate for use in Tax Sheltered
Retirement Plans and Systematic Withdrawal Plans. (See "How to Purchase
Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions from
either Fund. Shares may be redeemed at any time in which the Funds are open
for business at the net asset value next determined after receipt of a
redemption request by the Funds. (See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income of the Funds is
distributed quarterly. Net capital gains, if any, are distributed annually.
Shareholders may elect to receive dividends and capital gain distributions in
cash or the dividends and capital gain distributions may be reinvested in
additional Fund shares. (See "Dividends, Distributions, Taxes and Other
Information.")
MANAGEMENT. The Funds are series of the Williamsburg Investment Trust
(the "Trust"), the Board of Trustees of which is responsible for overall
management of the Trust and the Funds. The Trust has employed MGF Service
Corp. (the "Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Funds.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
==============================================================================
THE JAMESTOWN BALANCED FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average net assets)
Investment Advisory Fees ............................................. 0.65%
Administrator's Fees ................................................. 0.18%
Other Expenses ....................................................... 0.10%
-------
Total Fund Operating Expense ......................................... 0.93%
=======
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$9 $30 $51 $114
THE JAMESTOWN EQUITY FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average net assets)
Investment Advisory Fees............................................... 0.65%
Administrator's Fees .................................................. 0.21%
Other Expenses......................................................... 0.28%
------
Total Fund Operating Expense .......................................... 1.14%
======
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$12 $36 $63 $139
The purpose of the foregoing tables is to assist investors in the Funds in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Funds" for more information about the fees
and costs of operating the Funds. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. THE EXAMPLES SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN
THOSE SHOWN.
The footnotes to the Financial Highlights table contain information concerning
a decrease in each Fund's expense ratio as a result of a directed brokerage
arrangement.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Funds' latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Funds.
THE JAMESTOWN BALANCED FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout
Each Period
<CAPTION>
JULY 3,
YEARS ENDED MARCH 31, 1989(A) TO
MARCH 31,
1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ..... $ 12.76 $ 12.15 $ 12.49 $ 11.52 $ 10.88 $ 10.27 $ 10.16
-------- -------- -------- -------- -------- -------- -------
Income from investment operations:
Net investment income .................... 0.36 0.33 0.30 0.31 0.32 0.38 0.25
Net realized and unrealized gains (losses)
on investments .......................... 2.50 0.90 (0.18) 1.11 0.67 0.63 0.10
-------- -------- -------- -------- -------- -------- -------
Total from investment operations ........... 2.86 1.23 0.12 1.42 0.99 1.01 0.35
-------- -------- -------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income ..... (0.36) (0.33) (0.30) (0.31) (0.31) (0.39) (0.24)
Distributions from net realized gains ...... (0.49) (0.29) (0.16) (0.14) (0.04) (0.01) -
-------- -------- -------- -------- -------- -------- -------
Total distributions ........................ (0.85) (0.62) (0.46) (0.45) (0.35) (0.40) (0.24)
-------- -------- -------- -------- -------- -------- -------
Net asset value at end of period ........... $ 14.77 $ 12.76 $ 12.15 $ 12.49 $ 11.52 $ 10.88 $ 10.27
======== ======== ======== ======== ======== ======== =======
Total return ............................... 22.79% 10.54% 0.94% 12.50% 9.16% 9.99% 4.65% (c)
======== ======== ======== ======== ======== ======== =======
Net assets at end of period (000's) ........ $ 61,576 $ 52,062 $ 46,928 $ 40,512 $ 23,786 $ 13,180 $ 4,399
======== ======== ======== ======== ======== ======== =======
Ratio of expenses to average net assets(b) . 0.93% 0.96% 0.98% 0.99% 1.19% 1.47% 1.61%(c)
Ratio of net investment income
to average net assets .................... 2.52% 2.72% 2.47% 2.59% 3.00% 5.52% 5.24%(c)
Portfolio turnover rate .................... 72% 95% 123% 134% 153% 110% 7%
<FN>
(a)Effective date of the Fund's initial registration under the Securities Act
of 1933, as amended.
(b)For the year ended March 31, 1996, the ratio of expenses to average net
assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement. For years prior to
March 31, 1996, the ratio was determined based on net expenses after
expense reimbursements through the directed brokerage arrangement. Absent
such expenses reimbursements, the ratios of expenses to average net assets
would have been 0.99%, 1.01% and 1.07% for the years ended March 31, 1995,
1994 and 1993, respectively.
(c)Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout
Each Period
<CAPTION>
PERIOD
YEARS ENDED MARCH 31, ENDED
MARCH 31,
1996 1995 1994 1993(A)
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 11.29 $ 10.19 $ 10.18 $ 10.00
------------ ------------- ------------- ------------
Income from investment operations:
Net investment income....................... 0.15 0.10 0.08 0.04
Net realized and unrealized gains (losses)
on investments ........................... 2.98 1.15 ( 0.01) 0.18
------------ ------------- ------------- ------------
Total from investment operations............... 3.13 1.25 0.07 0.22
------------ ------------- ------------- ------------
Less distributions:
Dividends from net investment income........ ( 0.15) ( 0.12) ( 0.06) ( 0.04)
Distributions from net realized gains....... ( 0.31) ( 0.03) -- --
------------ ------------- ------------- ------------
Total distributions............................ ( 0.46) ( 0.15) ( 0.06) ( 0.04)
------------ ------------- ------------- ------------
Net asset value at end of period............... $ 13.96 $ 11.29 $ 10.19 $ 10.18
============ ============= ============= ============
Total return................................... 28.00% 12.33% 0.67% 6.81%(c)
============ ============= ============= ============
Net assets at end of period (000's)............ $ 17,857 $ 8,111 $ 2,811 $ 1,953
============ ============= ============= ============
Ratio of expenses to average net assets(b) .... 1.14% 1.44% 1.50% 1.50%(c)
Ratio of net investment income
to average net assets....................... 1.27% 1.18% 0.82% 1.13%(c)
Portfolio turnover rate........................ 54% 48% 92% 54%
<FN>
(a) Represents the period from the commencement of operations (December 1,
1992) through March 31, 1993.
(b) For the year ended March 31, 1996, the ratio of expenses to average net
assets was determined based on gross expenses prior to expense
reimbursments through a directed broderage arrangement. For periods prior
to March 31, 1996, no expenses were reimbursed through a directed
brokerage arrangement, but investment advisory fees were waived and/or
expenses reimbursed by the Advisor. Absent fee waivers and/or expense
reimbursements by the Advisor, the ratio of expenses to average net assets
would have been 1.99%, 3.16% and 3.19%(c) for the periods ended March 31,
1995, 1994 and 1993, respectively.
(c) Annualized.
</FN>
</TABLE>
Further information about the performance of the Funds is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Funds.
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
==============================================================================
The investment objectives of the Balanced Fund are long term growth of capital
and income through investment in a balanced portfolio of equity and fixed
income securities. Capital protection and low volatility are important
investment goals.
The investment objective of the Equity Fund is long term growth of capital
through investment in a diversified portfolio composed primarily of common
stocks. Current income is incidental to this objective and may not be
significant.
Any investment involves risk, and there can be no assurance that the Funds
will achieve their investment objectives. The investment objectives of each
Fund may not be altered without the prior approval of a majority (as defined
by the Investment Company Act of 1940) of the Fund's shares.
EQUITY SELECTION. The Equity Fund and the equity portion of the Balanced Fund
will be primarily invested in common stocks, straight preferred stocks,
convertible preferred stocks, and convertible bonds. Such investments are made
primarily for long term growth of capital, with income as a secondary
consideration. Selection of equity securities is made on the basis of several
criteria, including, among other things:
1. Fundamental factors such as financial strength, management record, size
of the company, strategy and position of its major products and services.
2. Stock rankings, through the use of a proprietary computerized value model
("value model") which ranks stocks by using value measures such as
price-earnings ratios, near term earnings momentum (the percentage change
in projected earnings for the next four quarters compared to actual
earnings for the last four quarters) and projected earnings growth. The
value model uses consensus earnings estimates obtained from published
investment research sources.
3. Relative price strength analysis (the percent change of the price of an
individual stock versus the average price change of a universe of one
thousand stocks).
Attractive equity securities for investment would include companies which
measure favorably in fundamental factors which achieve a high stock ranking on
the basis of the value model, and which demonstrate attractive technical
(price movement) characteristics in relation to other stocks. These selection
criteria are used by the Advisor to help identify equity candidates which
possess an attractive combination of capital appreciation potential and
dividend income in light of the Funds' investment objectives. Securities
convertible into common stocks are evaluated based on both their equity
attributes and fixed income attributes.
FIXED INCOME SELECTION. The Balanced Fund's fixed income investments may
include corporate debt obligations and "U.S. Government Securities." U.S.
Government Securities include direct obligations of the U.S. Treasury,
securities issued or guaranteed as to interest and principal by agencies or
instrumentalities of the U.S. Government, or any of the foregoing subject to
repurchase agreements. (See "Repurchase Agreements.") While obligations of
some U.S. Government sponsored entities are supported by the full faith and
credit of the U.S. Government, several are supported by the right of the
issuer to borrow from the U.S. Government, and still others are supported only
by the credit of the issuer itself. The guarantee of the U.S. Government does
not extend to the yield or value of the U.S. Government Securities held by the
Funds or to either Fund's shares. See the Statement of Additional Information
for a more detailed description.
Corporate debt obligations will consist of "investment grade" securities rated
at least Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard
& Poor's Ratings Group ("S&P") or, if not rated, of equivalent quality in the
Advisor's opinion. Corporate debt obligations are acquired primarily for their
income return and secondarily for capital appreciation. No bond having a
Moody's or S&P rating less than A will be acquired if, as a result, more than
10% of the total value of the fixed income portion of the Balanced Fund's
assets would be invested in such bonds. This applies at the time of
acquisition; a decline in the value of the Balanced Fund's assets subsequent
to acquisition will not require a sale of previously acquired securities, nor
will a change in rating subsequent to acquisition require a sale. Lower rated
issues (those rated lower than A) are considered speculative in certain
respects. Descriptions of the quality ratings of Moody's and S&P are contained
in the Statement of Additional Information. Although the Advisor utilizes the
ratings of various credit rating services as one factor in establishing
creditworthiness, it relies primarily upon its own analysis of factors
establishing creditworthiness. For as long as the Balanced Fund holds a fixed
income issue, the Advisor monitors the issuer's credit standing.
<PAGE>
Fixed income investment decisions are made on the basis of the yield relative
to yields available on the same maturity of U.S. Treasury Notes or Bonds
("Treasuries"). When the yield "spread" between Treasuries and other debt
instruments is great, then U.S. Government agency securities (which will have
higher yields than U.S. Treasuries of the same maturity) or corporate bonds
are potentially attractive. When yield spreads are low, Treasuries would be
the preferred investment. The average maturity of the fixed income portion of
the Balanced Fund's portfolio will vary from three to twelve years. The
average maturity of the portfolio will be shifted to reflect the Advisor's
assessment of changes in credit conditions, international currency markets,
economic environment, fiscal policy, monetary policy and political climate.
PORTFOLIO ALLOCATION FOR THE BALANCED FUND. The Balanced Fund invests in a
balanced portfolio of equity and fixed income securities. Equity securities
are acquired for capital appreciation or a combination of capital appreciation
and income. Fixed income securities are acquired for income and secondarily
for capital appreciation.
In addition to investing in the types of securities described above, the
Advisor invests the Balanced Fund's assets among various companies, industries
and economic sectors and adjusts the Balanced Fund's portfolio allocation
between common stocks and fixed income securities in an attempt to take
advantage of what the Advisor believes are the best opportunities for long
term growth of capital and income, considering the investment goals of capital
protection and low volatility. In making determinations of how to allocate the
portfolio between equities and fixed income securities, the Advisor analyzes
the projected total return relationships between four year stock market total
returns (using the Standard & Poor's 500 Composite Index ("S&P 500") as a
proxy for the market) and U.S. Treasury Notes with a four-year maturity. A
four-year time frame is used in the Advisor's total return projections
because, in its belief, four years is a sufficiently long time period to
assess the potential total return of competing investments without being
unduly influenced by short term economic and market factors. A dividend
discount model, based upon historical S&P 500 price to dividend relationships,
is used by the Advisor in projecting four-year stock market total returns.
This model compares the Advisor's projected S&P 500 four-year dividend streams
and resulting computer generated fourth year S&P 500 index values to the
current S&P 500 index value to derive estimates of the total return potential
from stocks. While the Advisor uses the foregoing analysis in portfolio
allocation considerations, it relies upon the judgment of its professional
staff to make conclusive portfolio allocation determinations, especially
during times of volatile stock market and interest rate fluctuation, in an
attempt to achieve the Balanced Fund's goal of low volatility. While the S&P
500 is used as a proxy for the stock market in formulating portfolio
allocation determinations, equity investments are not limited to stocks
included in the S&P 500 index. There is no assurance that the projected S&P
500 total rate of return will be realized by the Balanced Fund, and the rate
of return of the Balanced Fund's portfolio may be significantly different than
the projected S&P 500 rate of return.
The Advisor does not attempt to predict the proportion of income or growth of
capital to be realized by the Balanced Fund. However, the common stock and
fixed income allocations will each normally range from a minimum of 25% to a
maximum of 75% of the Balanced Fund's assets.
<PAGE>
MONEY MARKET INSTRUMENTS. Money market instruments will typically represent a
portion of each Fund's portfolio, as funds awaiting investment, to accumulate
cash for anticipated purchases of portfolio securities and to provide for
shareholder redemptions and operational expenses of the Funds. For temporary
defensive purposes, when the Advisor determines that market conditions
warrant, the Balanced Fund and the Equity Fund may depart from their normal
investment objectives and money market instruments may be emphasized, even to
the point that 100% of either Fund's assets may be so invested. Money market
instruments mature in thirteen months or less from the date of purchase and
include U.S. Government Securities (defined above) and corporate debt
securities (including those subject to repurchase agreements), bankers'
acceptances and certificates of deposit of domestic branches of U.S. banks,
and commercial paper (including variable amount demand master notes). At the
time of purchase, money market instruments will have a short-term rating in
the highest category by Moody's or S&P or, if not rated, issued by a
corporation having an outstanding unsecured debt issue rated A or better by
Moody's or S&P or, if not so rated, of equivalent quality in the Advisor's
opinion. See the Statement of Additional Information for a further description
of money market investments.
FACTORS TO CONSIDER. Neither Fund is intended to be a complete investment
program and there can be no assurance that the Funds will achieve their
investment objectives. To the extent that the Equity Fund's portfolio is fully
invested in equity securities, and the major portion of the Balanced Fund's
portfolio is invested in equity securities, it may be expected that the net
asset value of each Fund will be subject to greater fluctuation than a
portfolio containing mostly fixed income securities. The fixed income
securities in which the Balanced Fund will invest are also subject to
fluctuation in value. Such fluctuations may be based on movements in interest
rates or on changes in the creditworthiness of the issuers, which may result
from adverse business and economic developments or proposed corporate
transactions, such as a leveraged buy-out or recapitalization of the issuer.
The Funds may borrow using their assets as collateral, but only under certain
limited conditions. Borrowing, if done, would tend to exaggerate the effects
of market fluctuations on a Fund's net asset value until repaid. (See
"Borrowing.")
The value of the Balanced Fund's fixed income securities will generally vary
inversely with the direction of prevailing interest rate movements.
Consequently, should interest rates increase or the creditworthiness of an
issuer deteriorate, the value of the Balanced Fund's fixed income securities
would decrease in value, which would have a depressing influence on the
Balanced Fund's net asset value. At times when fixed income investments are
emphasized, the Balanced Fund's net asset value would not be subject to as
much stock market volatility but may be expected to fluctuate inversely with
the direction of interest rates. The Advisor believes that, by utilizing the
investment policies described herein, the Balanced Fund's net asset value may
not rise as rapidly or as much as the stock market (as represented by the S&P
500 Index) during rising market cycles, but that during declining market
cycles, the Balanced Fund would not suffer as great a decline in its net asset
value as the S&P 500 Index. This should result, in the Advisor's opinion, in
the Balanced Fund and its shareholders experiencing less volatile year-to-year
total returns than would be experienced by the S&P 500 Index.
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 33.3% of its total
assets to meet redemption requests which might otherwise require untimely
disposition of portfolio holdings. To the extent the Funds borrow for these
purposes, the effects of market price fluctuations on portfolio net asset
value will be exaggerated. If while such borrowing is in effect, the value of
the particular Fund's assets declines, the Fund would be forced to liquidate
portfolio securities when it is disadvantageous to do so. The Funds would
incur interest and other transaction costs in connection with such borrowing.
A Fund will not make any additional investments while its outstanding
borrowings exceed 5% of the current value of its total assets.
PORTFOLIO TURNOVER. By utilizing the approach to investing described herein,
annual portfolio turnover will generally not exceed 100% with respect to the
Equity Fund and 200% with respect to the Balanced Fund. Market conditions may
dictate, however, a higher rate of portfolio turnover in a particular year.
The degree of portfolio activity affects the brokerage costs of the Funds and
may have an impact on the amount of taxable distributions to shareholders. The
portfolio turnover of the Balanced Fund and of the Equity Fund for the fiscal
year ended March 31, 1996 was 72% and 54%, respectively.
<PAGE>
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities or
other high-grade debt securities subject to repurchase agreements. A
repurchase agreement transaction occurs when the Funds acquire a security and
simultaneously resell it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon interest rate earned by the Funds
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to
five days of the purchase. For purposes of the Investment Company Act of 1940
(the "1940 Act"), a repurchase agreement is considered to be a loan
collateralized by the securities subject to the repurchase agreement. Neither
Fund will enter into a repurchase agreement which will cause more than 10% of
its assets to be invested in repurchase agreements which extend beyond seven
days and other illiquid securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Funds' exposure to
risk, each Fund has adopted certain limitations which, together with its
investment objectives, are considered fundamental policies which may not be
changed without shareholder approval. Each Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of either Fund's total assets, or (b) in order to
meet redemption requests which might otherwise require untimely disposition of
portfolio securities if, immediately after such borrowing, the value of a
Fund's assets, including all borrowings then outstanding, less its liabilities
(excluding all borrowings), is equal to at least 300% of the aggregate amount
of borrowings then outstanding, and may pledge its assets to secure all such
borrowings; (2) invest in restricted securities, or invest more than 10% of a
Fund's assets in other illiquid securities, including repurchase agreements
maturing in over seven days, and other securities for which there is no
established market or for which market quotations are not readily available;
(3) acquire foreign securities, except that the Funds may acquire foreign
securities sold as American Depository Receipts in amounts not in excess of 5%
of each Fund's assets; (4) write, acquire or sell puts, calls or combinations
thereof, or purchase or sell commodities, commodities contracts, futures
contracts or related options; and (5) purchase securities of other investment
companies, except through purchases in the open market involving only
customary brokerage commissions and as a result of which not more than 5% of a
Fund's total assets would be invested in such securities, or except as part of
a merger, consolidation or other acquisition. Other fundamental investment
limitations are listed in the Statement of Additional Information.
HOW TO PURCHASE SHARES
==============================================================================
THERE ARE NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Funds at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Funds. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at a Fund's net asset value next determined
after your order is received by the Funds in proper order as indicated herein.
The minimum initial investment in the Funds, unless stated otherwise herein,
is $100,000. The Funds may, in the Advisor's sole discretion, accept certain
accounts with less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value next determined
on that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Funds are required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Funds within 60 days.
<PAGE>
Investors should be aware that the Funds' account application contains
provisions in favor of the Funds, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Funds or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
THE JAMESTOWN BALANCED FUND OR
THE JAMESTOWN EQUITY FUND
C/O SHAREHOLDER SERVICES
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Funds, at
1-800-443-4249, before wiring funds, to advise the Funds of the investment,
the dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
STAR BANK, N.A.
CINTI/TRUST
ABA# 042000013
FOR WILLIAMSBURG INVESTMENT TRUST #485777056
FOR EITHER THE JAMESTOWN BALANCED FUND OR
THE JAMESTOWN EQUITY FUND
(SHAREHOLDER NAME AND ACCOUNT NUMBER OR TAX IDENTIFICATION NUMBER)
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Funds as described under "Regular Mail Orders,"
above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $1,000) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Funds at 1-800-443-4249 to alert the
Funds that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly investment in shares through automatic charges to
their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the 15th day and/or the last business day of the
month. The shareholder may change the amount of the investment or discontinue
the plan at any time by writing to the Administrator.
<PAGE>
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of
either Fund to purchase shares of the other Fund offering shares for sale in
your state of residence. There is no charge for this exchange privilege.
Before making an exchange, you should read the portion of the Prospectus
relating to the Fund into which the shares are to be exchanged. The shares of
the Fund to be acquired will be purchased at the net asset value next
determined after acceptance of the exchange request in writing by the
Administrator. The exchange of shares of one Fund for shares of the other Fund
is treated, for federal income tax purposes, as a sale on which you may
realize taxable gain or loss. To prevent the abuse of the exchange privilege
to the disadvantage of other shareholders, each Fund reserves the right to
terminate or modify the exchange offer upon 60 days' notice to shareholders.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Funds or
certain parties related thereto. The minimum initial investment for such
accounts is $5,000. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
HOW TO REDEEM SHARES
==============================================================================
Shares of the Funds may be redeemed on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Funds' portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $10,000 (due to redemptions, exchanges or
transfers, and not due to market action) upon 60 days' written notice. If the
shareholder brings his account value up to $10,000 or more during the notice
period, the account will not be redeemed. Redemptions from retirement plans
may be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-800-443-4249, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to either The
Jamestown Balanced Fund or The Jamestown Equity Fund, P.O. Box 5354,
Cincinnati, Ohio 45201-5354. Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying the Equity
Fund or the Balanced Fund, the account number, and the number of shares or
dollar amount to be redeemed. This request must be signed by all registered
shareholders in the exact names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, a Fund may delay forwarding
a redemption check for recently purchased shares while it determines whether
the purchase payment will be honored. Such delay (which may take up to 15
days) may be reduced or avoided if the purchase is made by certified check,
government check or wire transfer. In such cases, the net asset value next
determined after receipt of the request for redemption will be used in
processing the redemption and your redemption proceeds will be mailed to you
upon clearance of your check to purchase shares. The Funds may suspend
redemption privileges or postpone the date of payment (i) during any period
that the Exchange is closed, or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission (the "Commission"), (ii)
during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Funds
to dispose of securities owned by them, or to fairly determine the value of
their assets, and (iii) for such other periods as the Commission may permit.
<PAGE>
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Funds. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Funds. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of either Fund
valued at $25,000 or more at the current offering price may establish a
Systematic Withdrawal Plan to receive a monthly or quarterly check in a stated
amount not less than $100. Each month or quarter as specified, the Funds will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Funds. See the Statement of Additional
Information for further details.
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of each Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Securities
traded on a national stock exchange will be valued based upon the closing
price on the valuation date on the principal exchange where the security is
traded. Fixed income securities will ordinarily be traded in the
over-the-counter market and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. The prices provided by the pricing service are determined
with consideration given to institutional bid and last sale prices and take
into account securities prices, yields, maturities, call features, ratings,
institutional trading in similar groups of securities and developments related
to specific securities. The Trustees will satisfy themselves that such pricing
services consider all appropriate factors relevant to the value of such
securities in determining their fair value. Securities and other assets for
which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Trustees.
<PAGE>
MANAGEMENT OF THE FUNDS
==============================================================================
The Funds are diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Funds and provides information
about them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Tattersall, Inc. (the "Advisor") provides the Funds with a
continuous program of supervision of each Fund's assets, including the
composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to Investment Advisory Agreements with the Trust. The
Advisor is also responsible for the selection of broker-dealers through which
the Funds execute portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Funds.
The Advisor, organized as a Virginia corporation in 1970, is controlled by
Austin Brockenbrough, III and Fred T. Tattersall. In addition to acting as
Advisor to the Funds, the Advisor also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals. The Advisor also serves as investment
advisor to The Jamestown International Equity Fund, The Jamestown Bond Fund,
The Jamestown Short Term Bond Fund and The Jamestown Tax Exempt Virginia Fund
(four series of the Trust), the subjects of separate prospectuses.
Henry C. Spalding, Jr. is primarily responsible for managing the
portfolio of each Fund and has acted in this capacity since the Funds'
inception. Mr. Spalding has been Executive Vice President of the Advisor since
1988.
Compensation of the Advisor with respect to the Balanced Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $250 million, 0.65%; on the next $250 million, 0.60%; on assets over
$500 million, 0.55%. For the fiscal year ended March 31, 1996, the Advisor
received $373,945 in investment advisory fees from the Balanced Fund, which
represented 0.65% of the Fund's average daily net assets.
Compensation of the Advisor with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $500 million, 0.65%; on assets over $500 million, 0.50%. For the fiscal
year ended March 31, 1996, the Advisor received $79,891 in investment advisory
fees from the Equity Fund, which represented 0.65% of the Fund's average daily
net assets.
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Funds have retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial Inc., of which Robert H.
Leshner is the controlling shareholder.
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
<PAGE>
Each Fund pays the Administrator a fee for these services at the annual rate
of 0.20% of the average value of its daily net assets up to $25 million,
0.175% on the next $25 million of such assets and 0.15% of such assets in
excess of $50 million; provided, however, that the minimum fee is $2,000 per
month with respect to each Fund. The Administrator also charges the Funds for
certain costs involved with the daily valuation of investment securities and
is reimbursed for out-of-pocket expenses.
CUSTODIAN. The Custodian of the Funds' assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
OTHER FUND COSTS. The Funds pay all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Funds' Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Funds'
shareholder servicing operations, fees and expenses of qualifying and
registering the Funds' shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Funds are also liable for any nonrecurring expenses that
may arise such as litigation to which the Funds may be a party. The Funds may
be obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of a Fund are accrued daily on the books of such Fund
at a rate which, to the best of its belief, is equal to the actual expenses
expected to be incurred by the Fund in accordance with generally accepted
accounting practices. For the fiscal year ended March 31, 1996, the expense
ratio of the Balanced Fund was 0.93% of its average daily net assets and the
expense ratio of the Equity Fund was 1.14% of its average daily net assets.
In order to register its shares for sale in certain states, the Funds may be
required to place limitations on their expenses. The Advisor has agreed with
the Funds that, if expenses exceed the lesser of (i) any such state
limitations or (ii) 2% of a Fund's average daily net assets, the Advisor will
either waive its fees and/or reimburse such Fund to the extent required to
conform to such limitations. Such reimbursements, if required, would be
accounted for as a reduction of expenses. The Advisor would not be required to
make reimbursements in excess of the fees received from the Funds.
BROKERAGE. The Funds have adopted brokerage policies which allow the Advisor
to prefer brokers which provide research or other valuable services to the
Advisor and/or the Funds. In all cases, the primary consideration for
selection of broker-dealers through which to execute brokerage transactions
will be to obtain the most favorable price and execution for the Funds.
Research services obtained through the Funds' brokerage transactions may be
used by the Advisor for its other clients; conversely, the Funds may benefit
from research services obtained through the brokerage transactions of the
Advisor's other clients. The Statement of Additional Information contains more
information about the management and brokerage practices of the Funds.
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Funds in general
and, particularly, with respect to dividends and distributions and other
matters. Shareholders should be aware that dividends from the Funds which are
derived in whole or in part from interest on U.S. Government Securities may
not be taxable for state income tax purposes. Other state income tax
implications are not covered, nor is this discussion exhaustive on the subject
of federal income taxation. Consequently, investors should seek qualified tax
advice.
Each Fund intends to remain qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed
to them. The Funds intend to declare dividends quarterly, payable in March,
June, September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. Each Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Funds at the end of each year. The Funds intend to
withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are made to persons who are neither citizens nor
residents of the U.S.
<PAGE>
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains for either Fund.
Current practice of the Funds, subject to the discretion of the Board of
Trustees, is for declaration and payment of income dividends during the last
week of each calendar quarter. All dividends and capital gains distributions
are reinvested in additional shares of the Funds unless the shareholder
requests in writing to receive dividends and/or capital gains distributions in
cash. That request must be received by the Funds prior to the record date to
be effective as to the next dividend. Tax consequences to shareholders of
dividends and distributions are the same if received in cash or if received in
additional shares of the Funds.
TAX STATUS OF THE FUNDS. If a Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Funds, see
"Additional Tax Information" in the Statement of Additional Information.
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Balanced Fund and the Equity Fund described in
this Prospectus: shares of the FBP Contrarian Balanced Fund and the FBP
Contrarian Equity Fund, which are managed by Flippin, Bruce & Porter, Inc. of
Lynchburg, Virginia; shares of The Government Street Equity Fund, The
Government Street Bond Fund and The Alabama Tax Free Bond Fund, which are
managed by T. Leavell & Associates, Inc. of Mobile, Alabama; and shares of The
Jamestown International Equity Fund, The Jamestown Bond Fund, The Jamestown
Short Term Bond Fund and The Jamestown Tax Exempt Virginia Fund, which are
managed by Lowe, Brockenbrough & Tattersall, Inc. The Trustees are permitted
to create additional series, or funds, at any time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory
agreement for a particular Fund. The shares of the Funds have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of Trustees can elect all of the Trustees if they so
choose.
The Declaration of Trust provides the Trustees may hold office indefinitely,
except that: (1) any Trustee may resign or retire; (2) any Trustee may be
removed with or without cause at any time: (a) by a written instrument, signed
by at least two-thirds of the number of Trustees prior to such removal; (b) by
vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c) by a written declaration signed by shareholders holding not
less than two-thirds of the outstanding shares of the Trust and filed with the
Trust's custodian. In case a vacancy or an anticipated vacancy shall for any
reason exist, the vacancy shall be filled by the affirmative vote of a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act.
<PAGE>
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Funds at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time each Fund may advertise its
total return. Each Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate
future performance.
The "total return" of a Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If a Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.
In addition, the Funds may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of a Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Funds all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated.
<PAGE>
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
Send completed application to:
THE JAMESTOWN BALANCED OR THE JAMESTOWN EQUITY FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT* ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the
right of survivorship unless otherwise indicated.
Q UGMA/UTMA __________________________________________ under the_______
(First Name) (Middle Initial) (Last Name) (State)
Uniform Gifts/Transfers to Minors Act
__________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
---------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
Q For Corporations,
Partnerships, Trusts,
Retirement Plans and
Third Party IRAs
---------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and
the date of the Trust instrument.
---------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City____________________________________________State__________Zip____________
Telephone_________________U.S. Citizen___Resident Alien
__Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City______________________________________State____________Zip________________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $100,000)
q Enclosed is a check payable to the applicable Fund for $________
(Please indicate Fund below)
q Jamestown Balanced Fund (80) q Jamestown Equity Fund (81)
q Funds were wired to Star Bank on___________in the amount of $______________
By Mail: You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire: You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUNDS AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE JAMESTOWN BALANCED FUND OR THE JAMESTOWN EQUITY FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
<PAGE>
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS Please retain a copy of this document for your files. Any
modification of the information contained in this section will require an
Amendment to this Application Form.
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
JAMESTOWN BALANCED FUND OR THE JAMESTOWN EQUITY FUND for the Registered Owner
and to execute and deliver any instrument necessary to effectuate the
authority hereby conferred:
Name Title Signature
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
- ------------------------ ------------------------- -----------------------
THE JAMESTOWN FUNDS, or any agent of the Funds may, without inquiry, rely upon
the instruction of any person(s) purporting to be an authorized person named
above, or in any Amendment received by the Funds or their agent. The Funds and
their Agent shall not be liable for any claims, expenses or losses resulting
from having acted upon any instruction reasonably believed to be genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $_______ beginning the last business
day of______________________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of q Jamestown Balanced Fund q Jamestown Equity Fund by
withdrawing from the commercial bank account below, per the instructions
below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
____________________________________________is hereby authorized to
(Name of Bank)
charge to my account the bank draft amount here indicated. I understand
the payment of this draft is subject to all provisions of the contract as
stated on my bank account signature card.
------------------------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Funds and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, Lowe, Brockenbrough & Tattersall, Inc., and
their respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- -----------------------------------------------------
APPLICANT DATE
- -----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
- ----------------------------------------------------
JOINT APPLICANT DATE
- ----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN BOND FUNDS
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
OFFICERS
Fred T. Tattersall, President
Craig D. Truitt, Vice President
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Funds. This Prospectus does not constitute an offer by the Funds to sell
shares in any State to any person to whom it is unlawful for the Funds to make
such offer in such State.
<PAGE>
THE JAMESTOWN
BOND FUNDS
No-Load Funds
PROSPECTUS
AUGUST 1, 1996
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
THE JAMESTOWN
BOND FUNDS
No-Load Funds
PROSPECTUS
AUGUST 1, 1996
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<PAGE>
PROSPECTUS
August 1, 1996
THE JAMESTOWN
BOND FUNDS
NO-LOAD FUNDS
==============================================================================
The investment objective of THE JAMESTOWN BOND FUND (the "Bond Fund") is to
maximize total return, consisting of current income and capital appreciation
(both realized and unrealized), consistent with the preservation of capital
through active management of investment grade fixed income securities.
The investment objective of THE JAMESTOWN SHORT TERM BOND FUND (the "Short
Term Fund") is identical to that of the Bond Fund, with the distinction that
the Short Term Fund intends to achieve this objective by investing in a
portfolio of investment grade fixed income securities having a shorter average
duration.
The Jamestown Bond Fund and The Jamestown Short Term Bond Fund are designed
primarily for institutional investors who wish to take advantage of the
professional investment management expertise of Lowe, Brockenbrough &
Tattersall, Inc., which serves as investment advisor to the Funds.
INVESTMENT ADVISOR
LOWE, BROCKENBROUGH & TATTERSALL, INC.
RICHMOND, VIRGINIA
The Jamestown Bond Fund and the Jamestown Short Term Bond Fund (the "Funds")
are NO-LOAD, diversified, open-end series of the Williamsburg Investment
Trust, a registered management investment company. This Prospectus provides
you with the basic information you should know before investing in the Funds.
You should read it and keep it for future reference. While there is no
assurance that the Funds will achieve their investment objectives, they
endeavor to do so by following the investment policies described in this
Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Funds, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Funds' address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and their telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Funds.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary........................................................ 2
Synopsis of Costs and Expenses............................................ 3
Financial Highlights...................................................... 4
Investment Objectives, Investment Policies and Risk Considerations........ 6
How to Purchase Shares.................................................... 11
How to Redeem Shares...................................................... 12
How Net Asset Value is Determined......................................... 14
Management of the Funds................................................... 14
Dividends, Distributions, Taxes and Other Information..................... 16
Application............................................................... 19
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
- ------------------------------------------------------------------------------
PROSPECTUS SUMMARY
==============================================================================
THE FUNDS. The Jamestown Bond Fund (the "Bond Fund") and the Jamestown Short
Term Bond Fund (the "Short Term Fund") are No-Load, diversified, open-end
series of the Williamsburg Investment Trust, a registered management
investment company commonly known as a "mutual fund." Each represents a
separate mutual fund with its own objectives and policies. An investor may
elect one or both of the Funds to meet individual investment objectives, and
may switch from one Fund to the other without charge when a shareholder's
investment objectives or plans change. While there is no assurance that the
Funds will achieve their investment objectives, they each endeavor to do so by
following the investment policies described in this Prospectus. The Funds are
primarily designed for tax exempt institutional investors such as pension and
profit-sharing plans, endowments, foundations, and employee benefit trusts.
Corporations and individual investors may invest in either Fund, although it
should be noted that investment decisions of the Funds will not be influenced
by any federal tax considerations, other than those considerations which apply
to the Funds themselves.
INVESTMENT OBJECTIVES. The Bond Fund and the Short Term Fund are governed by
virtually identical investment objectives and policies, with the exception of
the average duration range of the individual Funds. Each Fund seeks to
maximize total return, consisting of current income and capital appreciation
(both realized and unrealized), consistent with the preservation of capital
through active management of investment grade fixed income securities. For a
more detailed explanation of the definition of "investment grade" securities,
see "Investment Objectives, Investment Policies and Risk Considerations."
INVESTMENT APPROACH. The Advisor's philosophy in managing fixed income
portfolios is to emphasize a disciplined balance between sector selection and
moderate portfolio duration shifts to maximize total return. Duration is an
important concept in the Advisor's fixed income management philosophy and, in
the Advisor's opinion, provides a better measure of interest rate sensitivity
than maturity for many fixed income securities. Each Fund intends to invest
only in investment grade securities. Due to their controlled duration and
quality standards, the Funds expect to exhibit less volatility than would
mutual funds with longer average maturities and lower quality portfolios.
INVESTMENT ADVISOR. Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor")
serves as investment advisor to each of the Funds. For its services, the
Advisor receives compensation of 0.375% of the average daily net assets of
each Fund. (See "Management of the Funds.")
PURCHASE OF SHARES. Shares are offered "No-Load," which means they may be
purchased directly from the Funds without the imposition of any sales or 12b-1
charges.
The minimum initial purchase for the Bond Fund is $500,000.
The minimum initial purchase for the Short Term Fund is $100,000.
Subsequent investments in both Funds must be $1,000 or more. Shares may be
purchased by individuals or organizations and may be appropriate for use in
Tax Sheltered Retirement Plans. (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions from
either Fund. Shares may be redeemed at any time in which the Funds are open
for business at the net asset value next determined after receipt of a
redemption request by the Funds. (See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income of the Funds is
distributed quarterly. Net capital gains, if any, are distributed annually.
Shareholders may elect to receive dividends and capital gain distributions in
cash or the dividends and capital gain distributions may be reinvested in
additional Fund shares. (See "Dividends, Distributions, Taxes and Other
Information.")
MANAGEMENT. The Funds are series of the Williamsburg Investment Trust
(the "Trust"), the Board of Trustees of which is responsible for overall
management of the Trust and the Funds. The Trust has employed MGF Service
Corp. (the "Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Funds.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
==============================================================================
THE JAMESTOWN BOND FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of net assets)
Investment Advisory Fees............................................... 0.375%
Administrator's Fees................................................... 0.075%
Other Expenses......................................................... 0.110%
---------
Total Fund Operating Expense .......................................... 0.56%
=========
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$ 6 $18 $31 $70
THE JAMESTOWN SHORT TERM BOND FUND
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of net assets)
Investment Advisory Fees (after expense reimbursements)................ 0.03%
Administrator's Fees................................................... 0.19%
Other Expenses......................................................... 0.28%
---------
Total Fund Operating Expense .......................................... 0.50%
=========
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$ 5 $16 $28 $63
The purpose of the foregoing tables is to assist investors in the Funds in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Funds" for more information about the fees
and costs of operating the Funds. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. Absent the expense reimbursements by the Advisor, the Short Term
Fund's investment advisory fees would have been 0.375% of average daily net
assets and total fund operating expenses would have been 0.85% of average
daily net assets. THE EXAMPLES SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The footnotes to the Financial Highlights table contain information concerning
a decrease in the Bond Fund's expense ratio as a result of a directed
brokerage arrangement.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
==============================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Funds' latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Funds.
THE JAMESTOWN BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout
Each Period
<CAPTION>
PERIOD
YEARS ENDED MARCH 31, ENDED
MARCH 31,
1996 1995 1994 1993 1992 1991(A)
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ...... $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97 $ 10.00
--------- -------- -------- -------- -------- -------
Income from investment operations:
Net investment income .................... 0.70 0.62 0.55 0.64 0.54 0.20
Net realized and unrealized gains (losses)
on investments ......................... 0.41 (0.18) (0.30) 0.55 0.48 (0.03)
--------- -------- -------- -------- -------- -------
Total from investment operations ............ 1.11 0.44 0.25 1.19 1.02 0.17
--------- -------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income ..... (0.69) (0.62) (0.55) (0.64) (0.54) (0.20)
Distributions from net realized gains .... -- -- (0.19) (0.15) (0.03) --
Distributions in excess of net realized
gains ................................... -- -- (0.18) -- -- --
--------- -------- -------- -------- -------- -------
Total distributions ......................... (0.69) (0.62) (0.92) (0.79) (0.57) (0.20)
--------- -------- -------- -------- -------- -------
Net asset value at end of period ............ $ 10.39 $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97
========= ======== ======== ======== ======== =======
Total return ................................ 11.23% 4.56% 2.12% 11.69% 10.33% 5.70%(c)
========= ======== ======== ======== ======== =======
Net assets at end of period (000's) ......... $ 74,774 $ 72,029 $ 64,029 $ 55,718 $ 29,727 $ 794
--------- -------- -------- -------- -------- -------
Ratio of expenses to average net assets (b) . 0.56% 0.53% 0.60% 0.59% 0.60% 0.90%(c)
Ratio of net investment income to average
net assets ................................ 6.54% 6.28% 5.03% 6.09% 6.67% 7.07%(c)
Portfolio turnover rate ..................... 268% 381% 381% 454% 484% 54%
<FN>
(a) Represents the period from the commencement of operations (December 13,
1990) through March 31, 1991.
(b) For the year ended March 31, 1996, the ratio of expenses to average net
assests was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement. For the year
ended March 31, 1995, the ratio was determined based on net expenses
after expense reimbursements through the directed brokerage arrangement.
Absent such expense reimbursements, the ratio of expenses to average net
assets would have been 0.57% for the year ended March 31, 1995. Absent
investment advisory fees waived by the Advisor, the ratio of expenses to
average net assets would have been 0.80% and 3.08%(c) for the periods
ended March 31, 1992 and 1991.
(c) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN SHORT TERM BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout
Each Period
<CAPTION>
PERIOD
YEARS ENDED MARCH 31, ENDED
MARCH 31,
1996 1995 1994 1993 1992(A)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................. $ 9.64 $ 9.82 $ 10.07 $ 9.93 $ 10.00
--------- --------- ---------- --------- ---------
Income from investment operations:
Net investment income ............................... 0.62 0.60 0.51 0.50 0.09
Net realized and unrealized gains (losses)
on investments .................................... 0.08 (0.17) (0.23) 0.13 (0.07)
--------- --------- ---------- --------- ---------
Total from investment operations ....................... 0.70 0.43 0.28 0.63 0.02
--------- --------- ---------- --------- ---------
Less distributions:
Dividends from net investment income ................ (0.62) (0.61) (0.51) (0.49) (0.09)
Distributions from net realized gains ............... -- -- (0.02) -- --
--------- --------- ---------- --------- ---------
Total distributions .................................... (0.62) (0.61) (0.53) (0.49) (0.09)
--------- --------- ---------- --------- ---------
Net asset value at end of period ....................... $ 9.72 $ 9.64 $ 9.82 $ 10.07 $ 9.93
========= ========= ========== ========= =========
Total return ........................................... 7.38% 4.53% 2.76% 6.40% 0.99%(c)
========= ========= ========== ========= =========
Net assets at end of period (000's) .................... $ 9,426 $ 14,122 $ 18,715 $ 15,580 $ 5,320
========= ========= ========== ========= =========
Ratio of expenses to average net
assets (b) ........................................... 0.50% 0.50% 0.50% 0.50% 0.50%(c)
Ratio of net investment income
to average net assets ............................... 6.27% 6.04% 5.22% 5.24% 4.86%(c)
Portfolio turnover rate ................................ 157% 144% 324% 289% 97%
<FN>
(a)Represents the period from the commencement of operations (January 21,
1992) through March 31, 1992.
(b)Absent investment advisory fees waived by the Advisor, the ratios of
expenses to average net assets would have been 0.85%, 0.85%, 0.81%, 0.82%
and 0.81%(c) for the periods ended March 31, 1996, 1995, 1994, 1993 and
1992, respectively.
(c)Annualized.
</FN>
</TABLE>
<PAGE>
Further information about the performance of the Funds is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Funds.
INVESTMENT OBJECTIVES, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
==============================================================================
The investment objective of each Fund is to maximize total return, consisting
of current income and capital appreciation, both realized and unrealized,
through active management of a portfolio of investment grade fixed income
securities. Any investment involves risk, and there can be no assurance that
the Funds will achieve their investment objectives. The investment objective
of each Fund may not be altered without the prior approval of a majority (as
defined by the Investment Company Act of 1940) of the Fund's shares.
The Advisor's philosophy in the management of fixed income securities utilizes
a disciplined balance between sector selection and moderate portfolio duration
shifts to maximize total return. The Advisor's determination of optimal
duration for each Fund is based on economic indicators, inflation trends,
credit demands, monetary policy and global influences as well as psychological
and technical factors. The Funds endeavor to invest in securities and market
sectors which the Advisor believes are undervalued by the marketplace. The
selection of undervalued bonds by the Advisor is based on, among other things,
historical yield relationships, credit risk, market volatility and absolute
levels of interest rates, as well as supply and demand factors.
The Funds are designed primarily to allow institutional investors to take
advantage of the professional investment management expertise of Lowe,
Brockenbrough & Tattersall, Inc. Each Fund will be managed in a manner that
closely resembles that of other bond portfolios of similar maturity and
duration managed by the Advisor. The Advisor uses a wide variety of securities
and techniques in managing fixed income portfolios. As the fixed income
markets evolve, the Advisor may invest in other types of securities than those
specifically identified in this Prospectus if the Advisor views these
investments to be consistent with the overall investment objectives and
policies of the Funds. The securities and techniques the Advisor currently
expects to utilize are described below.
DURATION. Duration is an important concept in the Advisor's fixed income
management philosophy. "Duration" and "maturity" are different concepts and
should not be substituted for one another for purposes of understanding the
investment philosophy of either Fund. The Advisor believes that for most fixed
income securities "duration" provides a better measure of interest rate
sensitivity than maturity. Whereas maturity takes into account only the final
principal payments to determine the risk of a particular bond, duration
weights all potential cash flows (principal, interest and reinvestment income)
on an expected present value basis, to determine the "effective life" of the
security.
The Advisor intends to limit the portfolio duration of the Bond Fund to a 2
year minimum and a 6 year maximum. The Advisor intends to maintain a portfolio
duration for the Short Term Fund of less than 3 years. In addition, the
Advisor intends to limit the duration of any one single security of the Short
Term Fund to a maximum duration of 5 years. The precise point of each Fund's
duration within these ranges will depend on the Advisor's view of the market.
For the purposes of the Funds, the duration calculation used is Macaulay
duration adjusted for option features (such as call features or prepayment
options). Adjusting for option features requires assumptions with respect to
the probability of that option being exercised. These assumptions will be
determined by the Advisor based on then current market conditions.
The Funds expect the average maturity of their portfolios to be longer than
the average duration. How much longer will depend upon, among other factors,
the composition of coupons (higher coupons imply shorter duration), as well as
overall interest rate levels (higher interest rates generally will result in
shorter duration relative to maturity). It should be noted that for some
securities the standard duration calculation does not accurately reflect
interest rate sensitivity. For example, mortgage pass-through securities,
Collateralized Mortgage Obligations and Asset Backed Securities require
estimates of principal prepayments which are critical in determining interest
rate sensitivity. Floating rate securities, because of the interest rate
adjustment feature, are not appropriate for the standard duration calculation.
In these and other similar situations, the Advisor will use more sophisticated
techniques to determine interest rate sensitivity of securities of the Funds.
<PAGE>
INVESTMENT GRADE SECURITIES. Each Fund intends to limit its investment
purchases to investment grade securities. The Funds define investment grade
securities as those securities which, in the Advisor's opinion, have the
characteristics described by any of the nationally recognized statistical
rating organizations ("NRSROs"), Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group ("S&P"), Fitch Investors Service, Inc.
("Fitch") or Duff & Phelps ("D&P"), in their four highest rating grades. For
S&P, Fitch and D&P those ratings are AAA, AA, A and BBB. For Moody's those
ratings are Aaa, Aa, A and Baa. For a description of each rating grade, see
the Statement of Additional Information.
Each Fund invests exclusively in those securities rated investment grade by
one or more of the NRSROs or, if not rated, are considered by the Advisor to
have essentially the same characteristics and quality as securities having
such ratings. There may also be instances where the Advisor purchases
securities which are rated investment grade by one NRSRO and which are not
rated or rated below investment grade by other NRSROs, and such securities
would be eligible for purchase by the Funds. Issues rated within the fourth
highest grade (those rated lower than A) are considered speculative in certain
respects and changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity to pay principal and interest than is
the case with higher grade securities. The final determination of quality and
value will remain with the Advisor. Although the Advisor utilizes the ratings
of various credit rating services a sone factor in establishing
creditworthiness, it relies primarily upon it own analysis of factors
establishing creditworthiness. For as long as the Funds hold a fixed income
issue, the Advisor monitors the issuer's credit standing. In the event a
security's rating is reduced below a Fund's minimum requirements, the Fund
will sell the security, subject to market conditions and the Advisor's
assessment of the most opportune time for sale. Although lower rated
securities will generally provide higher yields than higher rated securities
of similar maturities, they are subject to a greater degree of market
fluctuation.
U.S. GOVERNMENT SECURITIES. U.S. Government Securities include direct
obligations of the U.S. Treasury, securities issued or guaranteed as to
interest and principal by agencies or instrumentalities of the U.S.
Government, or any of the foregoing subject to repurchase agreements (See
"Repurchase Agreements.") While obligations of some U.S. Government sponsored
entities are supported by the full faith and credit of the U.S. Government,
several are supported by the right of the issuer to borrow from the U.S.
Government, and still others are supported only by the credit of the issuer
itself. The guarantee of the U.S. Government does not extend to the yield or
value of the U.S. Government Securities held by the Funds or to either Fund's
shares. See the Statement of Additional Information for a more detailed
description.
MORTGAGE PASS-THROUGH CERTIFICATES. Obligations of the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC") include
direct pass-through certificates representing undivided ownership interests in
pools of mortgages. Such certificates are guaranteed as to payment of
principal and interest (but not as to price and yield) by the issuer. In the
case of securities issued by GNMA, the payment of principal and interest would
be backed by the full faith and credit of the U.S. Government. Mortgage
pass-through certificates issued by FNMA or FHLMC would be guaranteed as to
payment of principal and interest by the credit of the issuing U.S. Government
agency. Securities issued by other non-governmental entities (such as
commercial banks or mortgage bankers) may offer credit enhancement such as
guarantees, insurance, or letters of credit. Mortgage pass-through
certificates are subject to more rapid prepayment than their stated maturity
date would indicate; their rate of prepayment tends to accelerate during
periods of declining interest rates or increased property transfers and, as a
result, the proceeds from such prepayments may be reinvested in instruments
which have lower yields. To the extent such securities were purchased at a
premium, such prepayments could result in capital losses. The issuer of a
pass-through mortgage certificate does not guarantee premiums or market value
of its issue.
COLLATERALIZED MORTGAGE OBLIGATIONS. The Funds intend to invest in
collateralized mortgage obligations ("CMOs") which are generally backed by
mortgage pass-through securities or whole mortgage loans. CMOs are usually
structured into classes of varying maturities and principal payment
priorities. The prepayment sensitivity of each class may or may not resemble
that of the CMOs' collateral depending on the maturity and structure of that
class. CMOs pay interest and principal (including prepayments) monthly,
quarterly or semiannually. Most CMOs are AAA rated, reflecting the credit
quality of the underlying collateral; however, some classes carry greater
price risk than that of their underlying collateral. The Advisor will invest
in CMO classes only if their characteristics and interest rate sensitivity fit
the investment objectives and policies of the individual Fund.
<PAGE>
OTHER MORTGAGE RELATED SECURITIES. In addition to the mortgage pass-through
securities and the CMOs mentioned above, the Funds may also invest in other
mortgage derivative products if the Advisor views them to be consistent with
the overall policies and objectives of the Funds. Current offerings include
"principal only" (PO) and "interest only" (IO) Stripped Mortgage Backed
Securities ("SMBS"). POs and IOs are created when a mortgage pass-through
certificate is separated into two securities - one security representing a
claim to principal distributions and the other representing a claim to the
corresponding interest payments. As prepayments on the underlying mortgage
loans rise (typically when interest rates fall), the PO security holders
receive their principal sooner than expected, which serves to increase the
POs' yield. The IO security holders receive interest payments only on the
outstanding principal amount of the underlying mortgage loans. Therefore, if
prepayments on the notional principal of the IO rise, the IOs' price will
fall. As POs generally benefit from declining interest rates and IOs generally
benefit from rising interest rates, these securities can provide an effective
way to stabilize portfolio value.
SMBS are much more sensitive to prepayment fluctuations than are regular
mortgage-backed securities and therefore involve more risk. Due to the deep
discounted prices of SMBS, any mismatch in actual versus anticipated
prepayments of principal will significantly increase or decrease the yield to
maturity. In general, changes in interest rate levels will have the greatest
effect on prepayments. Sufficiently high prepayment rates could result in
purchasers of IOs not recovering the full amount of their initial investment.
The Funds will not invest more than 10% of their total assets in SMBS.
The Advisor expects that governmental, government related and private entities
may create other mortgage related securities offering mortgage pass-through
and mortgage collateralized instruments in addition to those described herein.
As new types of mortgage related securities are developed and offered to the
investment community, the Advisor will, consistent with the particular Fund's
investment objectives, policies and quality standards, consider making
investments in such new types of mortgage related securities.
ASSET BACKED SECURITIES. Other Asset Backed Securities have been offered to
investors backed by loans such as automobile loans, home equity loans, credit
card receivables, marine loans, recreational vehicle loans and manufactured
housing loans. Typically, Asset Backed Securities represent undivided
fractional interests in a fund whose assets consist of a pool of loans and
security interests in the collateral securing the loans. Payments of principal
and interest on Asset Backed Securities are passed through monthly to
certificate holders. In some cases Asset Backed Securities are divided into
senior and subordinated classes so as to enhance the quality of the senior
class. Underlying loans are subject to prepayment, which may reduce the
overall return to certificate holders. If the subordinated classes are
exhausted and the full amounts due on underlying loans are not received
because of unanticipated costs, depreciation, damage or loss of the collateral
securing the contracts, or other factors, certificate holders may experience
delays in payment or losses on Asset Backed Securities. The Funds may invest
in other Asset Backed Securities that may be developed in the future.
ZERO COUPON AND ORIGINAL ISSUE DISCOUNT ("OID") BONDS. Some securities may be
offered without coupons or with very low coupons. These bonds will typically
be more interest rate sensitive than a comparable maturity current coupon
bond. The majority of zero coupon bonds have been created when a qualified
U.S. Government Security is exchanged for a series of "Strips" through the
Federal Reserve Bank. Strips have been created from, among others, U.S.
Treasury, Resolution Trust Corporation and Financing Corporation securities. A
number of U.S. Government Securities have also been repackaged by
broker-dealers or commercial banks into trusts which issue zero coupon
receipts such as U.S. Treasury Receipts ("TRs") or Treasury Investment Growth
Receipts ("TIGRs"). Zero coupon and original issue discount bonds generate
income under generally accepted accounting principles, but do not generate
cash flow, resulting in the possibility that the Funds may be required to sell
portfolio securities to make distributions as required under Subchapter M of
the Internal Revenue Code.
<PAGE>
CORPORATE BONDS. The Funds' investments in corporate debt securities will be
based on credit analysis and value determination by the Advisor. The Advisor's
selection of bonds or industries within the corporate bond sector is
determined by, among other factors, historical yield relationships between
bonds or industries, the current and anticipated credit of the borrower, and
call features, as well as supply and demand factors.
VARIABLE AND FLOATING RATE SECURITIES. The Funds may invest in variable or
floating rate securities which adjust the interest rate paid at periodic
intervals based on an interest rate index. Typically floating rate securities
use as their benchmark an index such as the 1, 3 or 6 month LIBOR, 3, 6 or 12
month Treasury bills, or the Federal Funds rate. Resets of the rates can occur
at predetermined intervals or whenever changes in the benchmark index occur.
MONEY MARKET INSTRUMENTS. Money market instruments will typically represent a
portion of each Fund's portfolio, as funds awaiting investment, to accumulate
cash for anticipated purchases of portfolio securities and to provide for
shareholder redemptions and operational expenses of the Funds. Money market
instruments mature in thirteen months or less from the date of purchase and
include U.S. Government Securities (defined above) and corporate debt
securities (including those subject to repurchase agreements), bankers'
acceptances and certificates of deposit of domestic branches of U.S. banks,
and commercial paper (including variable amount demand master notes). At the
time of purchase, money market instruments will have a short-term rating in
the highest category from any NRSRO or, if not so rated, issued by a
corporation having an outstanding unsecured debt issue rated in the three
highest categories of any NRSRO or, if not so rated, of equivalent quality in
the Advisor's opinion. See the Statement of Additional Information for a
further description of money market instruments.
INVESTMENT COMPANIES. The Bond Fund may invest in the securities of open-end
and closed-end investment companies which are generally authorized to invest
in securities eligible for purchase by the Fund. To the extent the Fund does
so, Fund shareholders would indirectly pay a portion of the operating costs of
the underlying investment companies. These costs include management,
brokerage, shareholder servicing and other operational expenses. Indirectly,
then, shareholders may pay higher operational costs than if they owned the
underlying investment companies directly.
In addition, shares of closed-end investment companies frequently trade at a
discount from their net asset values. This characteristic of shares of a
closed-end investment company is a risk separate and distinct from the risk
that its net asset value will decrease.
The Bond Fund does not presently intend to invest more than 10% of its total
assets in securities of other investment companies. In addition, the Fund will
not invest more than 5% of its total assets in securities of any single
investment company, nor will it purchase more than 3% of the outstanding
voting securities of any investment company.
FACTORS TO CONSIDER. Neither Fund is intended to be a complete investment
program and there can be no assurance that the Funds will achieve their
investment objectives. The fixed income securities in which the Funds will
invest are subject to fluctuation in value. Such fluctuations may be based on
movements in interest rates or on changes in the creditworthiness of the
issuers, which may result from adverse business and economic developments or
proposed corporate transactions, such as a leveraged buy-out or
recapitalization of the issuer. The value of the Funds' fixed income
securities will generally vary inversely with the direction of prevailing
interest rate movements. Consequently, should interest rates increase or the
creditworthiness of an issuer deteriorate, the value of the Funds' fixed
income securities would decrease in value, which would have a depressing
influence on the Funds' net asset values. The Funds may borrow using their
assets as collateral, but only under certain limited conditions. Borrowing, if
done, would tend to exaggerate the effects of market fluctuations on a Fund's
net asset value until repaid. (See "Borrowing.")
<PAGE>
SECURITIES LENDING. Each Fund may lend up to 33% of its portfolio securities
to broker-dealers or other institutional investors. Since there could be a
delay in the recovery of loaned securities or even a loss of rights in
collateral supplied should the borrower fail financially, loans will not be
made unless, in the judgment of the Advisor, the consideration to be earned
from such loans would justify the risk. Collateral will be maintained in
excess of 100% of the value of the underlying securities, determined by
marking to market daily those securities involved in the lending program. It
is expected that the Funds will use the cash portions of loan collateral to
invest in short-term income-producing securities. These practices may be
amended from time to time as regulatory provisions permit. Securities lending
for purposes of discussion in this Prospectus should not be confused with
"Borrowing" below.
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Funds borrow for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the particular
Fund's assets declines, the Fund would be forced to liquidate portfolio
securities when it is disadvantageous to do so. The Funds would incur interest
and other transaction costs in connection with such borrowing. A Fund will not
make any additional investments while its outstanding borrowings exceed 5% of
the current value of its total assets.
PORTFOLIO TURNOVER. Portfolio turnover will not be a limiting factor when the
Advisor deems changes appropriate. While portfolio turnover is difficult to
predict in an active fixed income portfolio, it is expected that annual
portfolio turnover will vary between 100% and 500% with respect to each Fund.
Market conditions may dictate, however, a higher rate of turnover in a
particular year. The degree of portfolio turnover affects the brokerage costs
of the Funds and may have an impact on the amount of taxable distributions to
shareholders. The portfolio turnover of the Bond Fund and of the Short Term
Fund for the fiscal year ended March 31, 1996 was 268% and 157%, respectively.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities or
other high-grade debt securities subject to repurchase agreements. A
repurchase agreement transaction occurs when the Funds acquire a security and
simultaneously resell it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate earned by the Funds
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to
five days of the purchase. For purposes of the Investment Company Act of 1940
(the "1940 Act"), a repurchase agreement is considered to be a loan
collateralized by the securities subject to the repurchase agreement. Neither
Fund will enter into a repurchase agreement which will cause more than 10% of
its assets to be invested in repurchase agreements which extend beyond seven
days and other illiquid securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Funds' exposure to
risk, each Fund has adopted certain limitations which, together with its
investment objective, are considered fundamental policies which may not be
changed without shareholder approval. Each Fund will not: (1) issue senior
securities, borrow money or pledge its assets, except that it may borrow from
banks as a temporary measure (a) for extraordinary or emergency purposes, in
amounts not exceeding 5% of either Fund's total assets, or (b) in order to
meet redemption requests which might otherwise require untimely disposition of
portfolio securities, in amounts not exceeding 15% of either Fund's total
assets, and may pledge its assets to secure all such borrowings; (2) invest
more than 10% of a Fund's assets in other illiquid securities, including
repurchase agreements maturing in over seven days, and other securities for
which there is no established market or for which market quotations are not
readily available; (3) write, acquire or sell puts, calls or combinations
thereof, or purchase or sell commodities, commodities contracts, futures
contracts or related options; and (4) invest more than 5% of its total assets
in the securities of any one issuer. Other fundamental investment limitations
are listed in the Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Funds at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Funds. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at a Fund's net asset value next determined
after your order is received by the Funds in proper order as indicated herein.
The minimum initial investment in the Bond Fund is $500,000.
The minimum initial investment in the Short Term Fund is $100,000.
The Funds may, in the Advisor's sole discretion, accept certain accounts with
less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value next determined
on that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Funds are required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Funds within 60 days.
Investors should be aware that the Funds' account application contains
provisions in favor of the Funds, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Funds or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
THE JAMESTOWN BOND FUNDS
C/O SHAREHOLDER SERVICES
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Funds, at
1-800-443-4249, before wiring funds, to advise the Funds of the investment,
the dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
<PAGE>
STAR BANK, N.A.
CINTI/TRUST
ABA# 042000013
FOR WILLIAMSBURG INVESTMENT TRUST #485777056
FOR EITHER: THE JAMESTOWN BOND FUND OR
THE JAMESTOWN SHORT TERM BOND FUND
(SHAREHOLDER NAME AND ACCOUNT NUMBER OR TAX IDENTIFICATION NUMBER)
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Funds as described under "Regular Mail Orders,"
above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $1,000) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Funds at 1-800-443-4249 to alert the
Funds that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of
either Fund to purchase shares of the other Fund offering shares for sale in
your state of residence. There is no charge for this exchange privilege.
Before making an exchange, you should read the portion of the Prospectus
relating to the Fund into which the shares are to be exchanged. The shares of
the Fund to be acquired will be purchased at the net asset value next
determined after acceptance of the exchange request in writing by the
Administrator. The exchange of shares of one Fund for shares of the other Fund
is treated, for federal income tax purposes, as a sale on which you may
realize taxable gain or loss. To prevent the abuse of the exchange privilege
to the disadvantage of other shareholders, each Fund reserves the right to
terminate or modify the exchange offer upon 60 days' notice to shareholders.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Funds or
certain parties related thereto. The minimum initial investment for such
accounts is $5,000. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
HOW TO REDEEM SHARES
==============================================================================
Shares of the Funds may be redeemed on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Funds' portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $100,000 (due to redemptions, exchanges
or transfers, and not due to market action) upon 60 days' written notice. If
the shareholder brings his account value up to $100,000 or more during the
notice period, the account will not be redeemed. Redemptions from retirement
plans may be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-800-443-4249, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The
Jamestown Bond Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request
for redemption must include:
1) your letter of instruction or a stock assignment specifying the Bond
Fund or the Short Term Fund, the account number, and the number of shares
or dollar amount to be redeemed. This request must be signed by all
registered shareholders in the exact names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, a Fund may delay forwarding
a redemption check for recently purchased shares while it determines whether
the purchase payment will be honored. Such delay (which may take up to 15
days) may be reduced or avoided if the purchase is made by certified check,
government check or wire transfer. In such cases, the net asset value next
determined after receipt of the request for redemption will be used in
processing the redemption and your redemption proceeds will be mailed to you
upon clearance of your check to purchase shares. The Funds may suspend
redemption privileges or postpone the date of payment (i) during any period
that the Exchange is closed, or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission (the "Commission"), (ii)
during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Funds
to dispose of securities owned by them, or to fairly determine the value of
their assets, and (iii) for such other periods as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Funds. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Funds. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of each Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Securities
traded on a national exchange will be valued based upon the closing price on
the valuation date on the principal exchange where the security is traded. It
is expected that fixed income securities will ordinarily be traded in the
over-the-counter market. When market quotations are not readily available,
fixed income securities may be valued on the basis of prices provided by an
independent pricing service. The prices provided by the pricing service are
determined with consideration given to institutional bid and last sale prices
and take into account securities prices, yields, maturities, call features,
ratings, institutional trading in similar groups of securities and
developments related to specific securities. The Trustees will satisfy
themselves that such pricing services consider all appropriate factors
relevant to the value of such securities in determining their fair value.
Securities and other assets for which no quotations are readily available will
be valued in good faith at fair value using methods determined by the Board of
Trustees.
MANAGEMENT OF THE FUNDS
==============================================================================
The Funds are diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Funds and provides information
about them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Tattersall, Inc. (the "Advisor") provides the Funds with a
continuous program of supervision of each Fund's assets, including the
composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to Investment Advisory Agreements with the Trust. The
Advisor is also responsible for the selection of broker-dealers through which
the Funds execute portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Funds.
The Advisor, organized as a Virginia corporation in 1970, is controlled by
Austin Brockenbrough, III and Fred T. Tattersall. In addition to acting as
Advisor to the Funds, the Advisor also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals. The Advisor also serves as investment
advisor to The Jamestown Balanced Fund, The Jamestown Equity Fund, The
Jamestown International Equity Fund and The Jamestown Tax Exempt Virginia Fund
(four series of the Trust), the subjects of separate prospectuses.
Since each Fund's inception, both the Bond Fund and the Short Term Fund have
been managed on a day to day basis by a committee comprised of the Advisor's
fixed income portfolio management professionals, each portfolio professional
responsible for designated specific sectors of the fixed income market.
Compensation of the Advisor is at the annual rate of 0.375% of each Fund's
average daily net assets. For the fiscal year ended March 31, 1996, the
Advisor received $305,247 in investment advisory fees from the Bond Fund,
which represented 0.375% of the Bond Fund's average daily net assets. For the
fiscal year ended March 31, 1996, the Advisor received $3,786 in investment
advisory fees from the Short Term Fund (net of fee waivers), which represented
0.03% of the Short Term Fund's average daily net assets.
<PAGE>
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of the Short Term Fund
to 0.50% per annum of its average daily net assets. However, there is no
assurance that any voluntary fee waivers will continue in the current or
future fiscal years, and expenses of the Short Term Fund may therefore exceed
0.50% of its average daily net assets.
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Funds have retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial Inc., of which Robert H.
Leshner is the controlling shareholder.
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
Each Fund pays the Administrator a fee for these services at the annual rate
of 0.075% of the average value of its daily net assets up to $200 million and
0.05% of such assets in excess of $200 million; provided, however, that the
minimum fee is $2,000 per month with respect to each Fund. The Administrator
also charges the Funds for certain costs involved with the daily valuation of
investment securities and is reimbursed for out-of-pocket expenses.
CUSTODIAN. The Custodian of the Funds' assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
OTHER FUND COSTS. The Funds pay all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Funds' Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Funds'
shareholder servicing operations, fees and expenses of qualifying and
registering the Funds' shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Funds are also liable for any nonrecurring expenses that
may arise such as litigation to which the Funds may be a party. The Funds may
be obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of a Fund are accrued daily on the books of such Fund
at a rate which, to the best of its belief, is equal to the actual expenses
expected to be incurred by the Fund in accordance with generally accepted
accounting practices. For the fiscal year ended March 31, 1996, the expense
ratio of the Bond Fund was 0.56% of its average daily net assets and the
expense ratio of the Short Term Fund was 0.50% of its average daily net assets
after expense reimbursements.
BROKERAGE. The Funds have adopted brokerage policies which allow the Advisor
to prefer brokers which provide research or other valuable services to the
Advisor and/or the Funds. In all cases, the primary consideration for
selection of broker-dealers through which to execute brokerage transactions
will be to obtain the most favorable price and execution for the Funds.
Research services obtained through the Funds' brokerage transactions may be
used by the Advisor for its other clients; conversely, the Funds may benefit
from research services obtained through the brokerage transactions of the
Advisor's other clients. The Statement of Additional Information contains more
information about the management and brokerage practices of the Funds. It is
anticipated that most securities transactions of the Funds will be handled on
a principal, rather than agency, basis. Fixed income securities are normally
traded on a net basis (without commission) through broker-dealers and banks
acting for their own account. Such firms attempt to profit from buying at the
bid price and selling at the higher asked price of the market, the difference
being referred to as the spread.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Funds in general
and, particularly, with respect to dividends and distributions and other
matters. Shareholders should be aware that dividends from the Funds which are
derived in whole or in part from interest on U.S. Government Securities may
not be taxable for state income tax purposes. Other state income tax
implications are not covered, nor is this discussion exhaustive on the subject
of federal income taxation. Consequently, investors should seek qualified
tax advice.
Each Fund intends to remain qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed
to them. The Funds intend to declare dividends quarterly, payable in March,
June, September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. Each Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Funds at the end of each year. The Funds intend to
withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are neither citizens nor residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains for either Fund.
Current practice of the Funds, subject to the discretion of the Board of
Trustees, is for declaration and payment of income dividends during the last
week of each calendar quarter. All dividends and capital gains distributions
are reinvested in additional shares of the Funds unless the shareholder
requests in writing to receive dividends and/or capital gains distributions in
cash. That request must be received by the Funds prior to the record date to
be effective as to the next dividend. Tax consequences to shareholders of
dividends and distributions are the same if received in cash or if received in
additional shares of the Funds.
TAX STATUS OF THE FUNDS. If a Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Funds, see
"Additional Tax Information" in the Statement of Additional Information.
PRINCIPAL SHAREHOLDERS. Rockingham Health Care, Inc., 235 Cantrell Avenue,
Harrisonburg, Virginia, owned of record 56.2% of the Short Term Fund's
outstanding shares as of July 5, 1996 and may be deemed to control the Fund.
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Bond Fund and the Short Term Fund described in
this Prospectus: shares of the FBP Contrarian Balanced Fund and the FBP
Contrarian Equity Fund, which are managed by Flippin, Bruce & Porter, Inc. of
Lynchburg, Virginia; shares of The Government Street Equity Fund, The
Government Street Bond Fund and The Alabama Tax Free Bond Fund, which are
managed by T. Leavell & Associates, Inc. of Mobile, Alabama; and shares of The
Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown
International Equity Fund and The Jamestown Tax Exempt Virginia Fund, which
are managed by Lowe, Brockenbrough & Tattersall, Inc. The Trustees are
permitted to create additional series, or funds, at any time.
<PAGE>
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory
agreement for a particular Fund. The shares of the Funds have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of Trustees can elect all of the Trustees if they so
choose.
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Funds at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time each Fund may advertise its
total return. Each Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate
future performance.
The "total return" of a Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If a Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.
In addition, the Funds may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
<PAGE>
The "yield" of a Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses
of the Funds all recurring fees that are charged to all shareholder accounts
and any nonrecurring charges for the period stated.
<PAGE>
THE JAMESTOWN BOND FUNDS
Send completed application to:
THE JAMESTOWN BOND FUNDS
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT* ______________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the
right of survivorship unless otherwise indicated.
Q UGMA/UTMA _________________________________________ under the ___________
(First Name) (Middle Initial) (Last Name) (State)
Uniform Gifts/Transfers to Minors Act
___________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
---------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
Q For Corporations,
Partnerships, Trusts,
Retirement Plans and
Third Party IRAs
---------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and
the date of the Trust instrument.
---------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City__________________________________________State____________Zip____________
Telephone______________________U.S. Citizen___Resident Alien
__Non Resident (Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City_________________________________________State____________Zip_____________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $500,000 for Bond Fund;
$100,000 for Short Term Bond Fund)
q Enclosed is a check payable to the applicable Fund for $_____________
(Please indicate Fund below)
q Jamestown Bond Fund (82) q Jamestown Short Term Bond Fund (83)
q Funds were wired to Star Bank on_______in the amount of $__________________
By Mail: You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire: You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUNDS AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE JAMESTOWN BOND FUND OR THE JAMESTOWN SHORT TERM BOND FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
<PAGE>
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
==============================================================================
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS Please retain a copy of this document for your files. Any
modification of the information contained in this section will require an
Amendment to this Application Form.
q New Application q Amendment to previous Application dated________
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
JAMESTOWN BOND FUNDS for the Registered Owner and to execute and deliver any
instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
- ----------------------- -------------------------- -----------------------
- ----------------------- -------------------------- -----------------------
- ----------------------- -------------------------- -----------------------
THE JAMESTOWN BOND FUNDS, or any agent of the Funds may, without inquiry, rely
upon the instruction of any person(s) purporting to be an authorized person
named above, or in any Amendment received by the Funds or their agent. The
Funds and their Agent shall not be liable for any claims, expenses or losses
resulting from having acted upon any instruction reasonably believed to be
genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of $5,000)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Funds and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, Lowe, Brockenbrough & Tattersall, Inc., and
their respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
- -------------------------------------- -------------------------------------
APPLICANT DATE JOINT APPLICANT DATE
- -------------------------------------- -------------------------------------
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN TAX EXEMPT
VIRGINIA FUND
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
OFFICERS
Austin Brockenbrough, III, President
Beth Ann Walk, Vice President
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell
shares in any State to any person to whom it is unlawful for the Fund to make
such offer in such State.
<PAGE>
THE JAMESTOWN
TAX EXEMPT
VIRGINIA FUND
A No-Load Fund
PROSPECTUS
AUGUST 1, 1996
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<PAGE>
PROSPECTUS
August 1, 1996
THE JAMESTOWN
TAX EXEMPT VIRGINIA FUND
A NO-LOAD FUND
==============================================================================
The investment objectives of THE JAMESTOWN TAX EXEMPT VIRGINIA FUND are to
provide current income exempt from federal income taxes and from the personal
income taxes of Virginia, to preserve capital, to limit credit risk and to
take advantage of opportunities to increase income and enhance the value of
your investment.
==============================================================================
INVESTMENT ADVISOR
LOWE, BROCKENBROUGH & TATTERSALL, INC.
RICHMOND, VIRGINIA
The Jamestown Tax Exempt Virginia Fund (the "Fund") is a NO-LOAD,
non-diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company. This Prospectus provides you with
the basic information you should know before investing in the Fund. You should
read it and keep it for future reference. While there is no assurance that the
Fund will achieve its investment objectives, it endeavors to do so by
following the investment policies described in this Prospectus.
A Statement of Additional Information, dated August 1, 1996, containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354,
and its telephone number is 1-800-443-4249. A copy of the Statement of
Additional Information may be obtained at no charge by calling or writing the
Fund.
TABLE OF CONTENTS
==============================================================================
Prospectus Summary........................................................ 3
Synopsis of Costs and Expenses............................................ 4
Financial Highlights...................................................... 5
Investment Objectives, Investment Policies and Risk
Considerations............................................................ 6
How to Purchase Shares.................................................... 10
How to Redeem Shares...................................................... 12
How Net Asset Value is Determined......................................... 13
Management of the Fund.................................................... 13
Tax Status................................................................ 15
Dividends, Distributions, Taxes and Other Information..................... 17
Appendix A: Description of Municipal Obligations.......................... 20
Appendix B: Factors Affecting Virginia Issuers............................ 22
Application............................................................... 25
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUMMARY
==============================================================================
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND (the "Fund") is a NO-LOAD,
non-diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company commonly known as a "mutual fund."
The Fund's investment objectives are to provide current income exempt from
federal income taxes and from the personal income taxes of Virginia, to
preserve capital, to limit credit risk and to take advantage of opportunities
to increase income and enhance the value of your investment. While there is no
assurance that the Fund will achieve its investment objectives, it endeavors
to do so by following the investment policies described in this Prospectus.
INVESTMENT APPROACH. The Advisor's philosophy in managing fixed income
portfolios is to emphasize a disciplined balance between sector selection and
moderate portfolio duration shifts to enhance income and total return.
Duration is an important concept in the Advisor's fixed income management
philosophy and, in the Advisor's opinion, provides a better measure of
interest rate sensitivity than maturity for many fixed income securities. The
Fund intends to concentrate its investments in "high quality" bonds by
maintaining at least 75% of the Fund's assets in bonds rated A or better. Due
to the Fund's controlled duration and high quality standards, it expects to
exhibit less volatility than would mutual funds with longer average maturities
and lower quality portfolios.
Prospective investors should be aware that the net asset value of the shares
of the Fund (as with any open-end investment company) will change as the
general levels of interest rates fluctuate. When interest rates decline, the
value of a portfolio invested at higher yields can be expected to rise.
Conversely, when interest rates rise, the value of a portfolio invested at
lower yields can be expected to decline. (See "Investment Objectives,
Investment Policies and Risk Considerations.")
INVESTMENT ADVISOR. Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor")
serves as investment advisor to the Fund. For its services, the Advisor
receives compensation of 0.40% of the daily average net assets of the Fund.
The fees are reduced when the assets of the Fund exceed $250 million. (See
"Management of the Fund.")
<PAGE>
PURCHASE OF SHARES. Shares are offered "No-Load," which means they may be
purchased directly from the Fund without the imposition of any sales or 12b-1
charges. The minimum initial purchase for the Fund is $25,000. Subsequent
investments must be $500 or more. Shares may be purchased by individuals or
organizations. (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions. Shares may
be redeemed at any time in which the Fund is open for business at the net
asset value next determined after receipt of a redemption request by the Fund.
(See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income of the Fund is distributed
monthly. Net capital gains, if any, are distributed annually. Shareholders may
elect to receive dividends and capital gain distributions in cash or the
dividends and capital gain distributions may be reinvested in additional Fund
shares. (See "Dividends, Distributions, Taxes and Other Information.")
THE FUND. The Fund is registered as a non-diversified management investment
company so that it will be able to invest more than 5% of its assets in
obligations of each of one or more issuers. The proceeds of sales of shares of
the Fund are used to buy securities (primarily municipal bonds and notes and
other debt instruments, the interest on which is exempt from federal income
taxes and from the personal income taxes of Virginia) for the portfolio of the
Fund.
MANAGEMENT. The Fund is a series of the Williamsburg Investment Trust (the
"Trust"), the Board of Trustees of which is responsible for overall management
of the Trust and the Fund. The Trust has employed MGF Service Corp. (the
"Administrator") to provide administration, accounting and transfer agent
services. (See "Management of the Fund.")
<PAGE>
<TABLE>
SYNOPSIS OF COSTS AND EXPENSES
================================================================================
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average daily net assets)
Investment Advisory Fees (After expense reimbursements)................................ 0.11%
Administrator's Fees................................................................... 0.29%
Other Expenses ........................................................................ 0.35%
--------
Total Fund Operating Expense........................................................... 0.75%
========
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$8 $24 $42 $93
</TABLE>
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees
and costs of operating the Fund. The Annual Fund Operating Expenses shown
above are based upon actual operating history for the fiscal year ended March
31, 1996. Absent the expense reimbursements by the Advisor, the Fund's
investment advisory fees would have been 0.40% of average daily net assets and
total fund operating expenses would have been 1.04% of average daily net
assets. THE EXAMPLE SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN
THOSE SHOWN.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
================================================================================
The following audited financial information has been audited by Tait, Weller &
Baker, independent accountants, whose report covering the fiscal year ended
March 31, 1996 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Fund's latest audited
annual financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Fund.
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
YEAR YEAR PERIOD
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994(A)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period............................. $ 9.68 $ 9.61 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income........................................... 0.45 0.44 0.23
Net realized and unrealized gains (losses) on investments....... 0.17 0.07 ( 0.39 )
---------- ---------- ----------
Total from investment operations................................... 0.62 0.51 ( 0.16 )
---------- ---------- ----------
Less distributions:
Dividends from net investment income............................ ( 0.45) ( 0.44) ( 0.23 )
---------- ---------- ----------
Net asset value at end of period................................... $ 9.85 $ 9.68 $ 9.61
========== ========== ==========
Total return....................................................... 6.51% 5.47% (2.96)% (c)
========== ========== ==========
Net assets at end of period (000's)................................ $ 8,779 $ 7,712 $ 2,056
========== ========== ==========
Ratio of expenses to average net assets(b) ........................ 0.75% 0.75% 0.75% (c)
Ratio of net investment income to average net assets............... 4.57% 4.64% 4.07% (c)
Portfolio turnover rate............................................ 14% 97% 33%
<FN>
(a)Represents the period from the commencement of operations (September 1,
1993) through March 31, 1994.
(b)Absent investment advisory fees waived and/or expenses reimbursed by the
Advisor, the ratios of expenses to average net assets would have been 1.04%,
1.62% and 4.83%(c) for the periods ended March 31, 1996, 1995 and 1994,
respectively.
(c)Annualized.
Further information about the performance of the Fund is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Fund.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS
==============================================================================
The investment objectives of the Fund are to provide current income exempt
from federal income taxes and from the personal income taxes of Virginia, to
preserve capital, to limit credit risk and to take advantage of opportunities
to increase income and enhance the value of your investment. Any investment
involves risk, and there can be no assurance that the Fund will achieve its
investment objectives. The investment objectives of the Fund may not be
altered without the prior approval of a majority (as defined by the Investment
Company Act of 1940) of the Fund's shares.
The Fund is designed primarily to allow individual and institutional investors
seeking tax exempt current income to take advantage of the professional
investment management expertise of Lowe, Brockenbrough & Tattersall, Inc. The
Fund maintains a policy of generating at least 80% of the Fund's annual income
exempt from income tax and excluded from the calculation of the federal
alternative minimum tax for individual taxpayers. The policy of the Fund will
be to maintain an investment of at least 65% of the Fund's net assets in
Virginia tax exempt securities during normal market conditions. The Advisor's
philosophy in the management of fixed income securities utilizes a disciplined
balance between sector selection and moderate portfolio duration shifts. The
Advisor's determination of optimal duration for the Fund is based on economic
indicators, inflation trends, credit demands, monetary policy and global
influences as well as psychological and technical factors. The Fund endeavors
to invest in securities and market sectors which the Advisor believes are
undervalued by the marketplace. The selection of undervalued bonds by the
Advisor is based on, among other things, historical yield relationships,
credit risk, market volatility and absolute levels of interest rates, as well
as supply and demand factors.
Although the Fund seeks to invest all the assets of the Fund in obligations
exempt from federal and Virginia state income taxes, market conditions may
from time to time limit the availability of such obligations. During periods
when the Fund is unable to purchase such obligations for the portfolio of the
Fund, the Fund will seek to invest the assets of the Fund in Municipal
Obligations (as defined below) the interest on which would be exempt from
federal income taxes, but which would be subject to the personal income taxes
of Virginia. Also, as a temporary defensive measure during times of adverse
market conditions, up to 50% of the assets of the Fund may be held in cash or
invested in the short-term obligations described below.
DURATION. Duration is an important concept in the Advisor's fixed income
management philosophy. "Duration" and "maturity" are different concepts and
should not be substituted for one another for purposes of understanding the
investment philosophy of the Fund. The Advisor believes that for most fixed
income securities "duration" provides a better measure of interest rate
sensitivity than maturity. Whereas maturity takes into account only the final
principal payments to determine the risk of a particular bond, duration
weights all potential cash flows (principal, interest and reinvestment income)
on an expected present value basis, to determine the "effective life" of the
security.
<PAGE>
The Advisor intends to limit the portfolio duration of the Fund to a 2 year
minimum and a 15 year maximum. The precise point of the Fund's duration within
this range will depend on the Advisor's view of the market. For purposes of
the Fund, the duration calculation used is Macaulay duration adjusted for
option features (such as call features or prepayment options). Adjusting for
option features requires assumptions with respect to the probability of that
option being exercised. These assumptions will be determined by the Advisor
based on then current market conditions.
The Fund expects the average maturity of its portfolio to be longer than the
average duration. How much longer will depend upon, among other factors, the
composition of coupons (higher coupons imply shorter duration), as well as
overall interest rate levels (higher interest rates generally will result in
shorter duration relative to maturity).
INVESTMENT GRADE SECURITIES. The Fund intends to limit its investment
purchases to investment grade securities. The Fund defines investment grade
securities as those securities which, in the Advisor's opinion, have the
characteristics described by any of the nationally recognized statistical
rating organizations ("NRSROs"), Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group ("S&P"), Fitch Investors Service, Inc.
("Fitch") or Duff & Phelps ("D&P"), in their four highest rating grades. For
S&P, Fitch and D&P those ratings are AAA,AA, A and BBB. For Moody's those
ratings are Aaa, Aa, A and Baa. For a description of each rating grade, see
Appendix A.
The Fund requires that 75% of its assets must be rated at least A by Moody's,
S&P, Fitch or D&P or, if not rated, are considered by the Advisor to have
essentially the same characteristics and quality as securities having such
ratings. There may also be instances where the Advisor purchases bonds which
are rated A by one rating agency and which are not rated or rated lower than A
by other rating agencies, and such purchase would be within the bounds of the
75% limitation previously stated. The final determination of quality and value
will remain with the Advisor. The Fund intends to purchase bonds rated BBB by
S&P, Fitch or D&P or Baa by Moody's only if in the Advisor's opinion these
bonds have some potential to improve in value or credit rating. Lower rated
issues (those rated lower than A) are considered speculative in certain
respects. Although the Advisor utilizes the ratings of various credit rating
services as one factor in establishing creditworthiness, it relies primarily
upon its own analysis of factors establishing creditworthiness. For as long as
the Fund holds a fixed income issue, the Advisor monitors the issuer's credit
standing.
<PAGE>
MUNICIPAL BONDS. The Fund intends to invest in a broad range of investment
grade Municipal Obligations, including general obligation bonds, which are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest; revenue bonds, which are payable from
the revenue derived from a particular facility or class of facilities or, in
some cases, from annual appropriations made by the state legislature for the
repayment of interest and principal or other specific revenue source, but not
from the general taxing power; lease obligations backed by the municipality's
covenant to budget for the payments due under the lease obligation; and
certain types of industrial development bonds issued by or on behalf of public
authorities to obtain funds for privately-operated facilities, provided that
the interest paid on such securities qualifies as exempt from federal income
tax. The value of the securities in which the Fund will invest usually
fluctuates inversely with changes in prevailing interest rates.
For a general discussion of Municipal Obligations, the risks associated with
an investment therein, and descriptions of the ratings of Municipal
Obligations permitted as investments, see Appendix A. As used in this
Prospectus, the terms "Municipal Obligations" and "tax exempt securities" are
used interchangeably to refer to debt instruments issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies or instrumentalities, the
interest on which is exempt from federal income tax (without regard to whether
the interest thereon is also exempt from the personal income taxes of any
State).
With respect to those Municipal Obligations which are not rated by a major
rating agency, the Fund will be more reliant on the Advisor's judgment,
analysis and experience than would be the case if such Municipal Obligations
were rated. In evaluating the creditworthiness of an issue, whether rated or
unrated, the Advisor may take into consideration, among other things, the
issuer's financial resources, its sensitivity to economic conditions and
trends, the operating history of and the community support for the facility
financed by the issue, the ability of the issuer's management and regulatory
matters.
SHORT TERM OBLIGATIONS. To protect the capital of shareholders of the Fund
under adverse market conditions, the Fund may from time to time deem it
prudent to hold cash or to purchase taxable short-term obligations for the
Fund with a resultant decrease in yield or increase in the proportion of
taxable income. These securities may consist of obligations of the United
States Government, its agencies or instrumentalities and repurchase agreements
secured by such instruments; certificates of deposit of domestic banks having
capital, surplus and undivided profits in excess of $100 million; bankers'
acceptances of such banks; and commercial paper and other corporate debt
obligations which are rated A-1 or A-2 by S&P or P-1 or P-2 by Moody's (or
which are unrated but which are considered to have essentially the same
characteristics and qualities as commercial paper having such ratings).
VARIABLE RATE SECURITIES. The Fund may invest in tax exempt securities that
bear interest at rates which are adjusted periodically to market rates. The
market value of fixed coupon securities fluctuates with changes in prevailing
interest rates, increasing in value when interest rates decline and decreasing
in value when interest rates rise. The value of variable rate securities,
however, is less affected by changes in prevailing interest rates because of
the periodic adjustment of their coupons to a market rate. The shorter the
period between adjustments, the smaller the impact of interest rate
fluctuations on the value of these securities. The market value of tax exempt
variable rate securities usually tends toward par (100% of face value) at
interest rate adjustment time.
<PAGE>
PUT BONDS. The Fund may invest in tax exempt securities (including securities
with variable interest rates) which may be redeemed or sold back (put) to the
issuer of the security or a third party at face value prior to stated
maturity. This type of security will normally trade as if maturity is the
earlier put date, even though stated maturity is longer.
MUNICIPAL LEASE OBLIGATIONS. The Fund may also invest in municipal lease
obligations, installment purchase contract obligations, and certificates of
participation in such obligations (collectively, "lease obligations"). A lease
obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, although the lease
obligation is ordinarily backed by the municipality's covenant to budget for
the payments due under the lease obligation. Certain lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease obligation payments in future years unless money is
appropriated for such purpose on a yearly basis. A risk peculiar to these
municipal lease obligations is the possibility that a municipality will not
appropriate funds for lease payments. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. The Advisor will seek to
minimize these risks by not investing more than 10% of the total assets of the
Fund in lease obligations that contain "non-appropriation" clauses. In
evaluating a potential investment in such a lease obligation, the Advisor will
consider: (1) the credit quality of the obligor, (2) whether the underlying
property is essential to a government function, and (3) whether the lease
obligation contains covenants prohibiting the obligor from substituting
similar property if the obligor fails to make appropriations for the lease
obligation. Municipal lease obligations may be determined to be liquid in
accordance with the guidelines established by the Board of Trustees and other
factors the Advisor may determine to be relevant to such determination. In
determining the liquidity of municipal lease obligations, the Advisor will
consider a variety of factors including: (1) the willingness of dealers to bid
for the security; (2) the number of dealers willing to purchase or sell the
obligation and the number of other potential buyers; (3) the frequency of
trades and quotes for the obligation; and (4) the nature of the marketplace
trades. In addition, the Advisor will consider factors unique to particular
lease obligations affecting their marketability. These include the general
creditworthiness of the municipality, the importance of the property covered
by the lease to the municipality, and the likelihood that the marketability of
the obligation will be maintained throughout the time the obligation is held
by the Fund.
<PAGE>
The Board of Trustees is responsible for determining the credit quality of
unrated municipal lease obligations on an ongoing basis, including an
assessment of the likelihood that the lease will not be cancelled.
INVESTMENT COMPANIES. The Fund may invest in the securities of open-end and
closed-end investment companies which are generally authorized to invest in
securities eligible for purchase by the Fund. To the extent the Fund does so,
Fund shareholders would indirectly pay a portion of the operating costs of the
underlying investment companies. These costs include management, brokerage,
shareholder servicing and other operational expenses. Indirectly, then,
shareholders may pay higher operational costs than if they owned the
underlying investment companies directly.
In addition, shares of closed-end investment companies frequently trade at a
discount from their net asset values. This characteristic of shares of a
closed-end investment company is a risk separate and distinct from the risk
that its net asset value will decrease. The Fund does not intend to invest
more than 10% of its total assets in securities of closed-end investment
companies, nor does it intend to invest more than 5% of its total assets in
securities of any single closed-end investment company.
FACTORS TO CONSIDER. Because of the concentration in Virginia municipal
securities, the Fund is more susceptible to factors affecting Virginia issuers
than is a comparable
municipal bond fund not concentrated in the obligations of issuers located in
a single state. For a general discussion on certain economic, financial and
legal matters pertaining to Virginia, see Appendix B. Yields on Virginia
municipal securities depend on a variety of factors, including: the general
conditions of the municipal bond market; the size of the particular offering;
the maturity of the obligations; and the rating of the issue. Further, any
adverse economic conditions or developments affecting the Commonwealth of
Virginia or its municipalities could impact the Fund's portfolio. The ability
of the Fund to achieve its investment objectives also depends on the
continuing ability of the issuers of Virginia municipal securities and
participation interests, or the guarantors of either, to meet their
obligations for the payment of interest and principal when due. Certain
Virginia constitutional amendments, legislative measures, executive orders,
administrative regulations and voter initiatives could result in adverse
consequences affecting Virginia municipal securities.
The net asset value of the shares of the Fund changes as the general levels of
interest rates fluctuate. When interest rates decline, the value of a
portfolio invested at higher yields can be expected to rise. Conversely, when
interest rates rise, the value of a portfolio invested at lower yields can be
expected to decline.
<PAGE>
The Fund has registered as a non-diversified management investment company so
that more than 5% of the assets of the Fund may be invested in the obligations
of each of one or more issuers. Because a relatively high percentage of the
assets of the Fund may be invested in the obligations of a limited number of
issuers, the value of shares of the Fund may be more sensitive to any single
economic, political or regulatory occurrence than the shares of a diversified
investment company would be.
The Fund may invest its assets in a relatively high percentage of Municipal
Obligations issued by entities having similar characteristics. The issuers may
pay their interest obligations from revenue of similar projects such as
multi-family housing, nursing homes, electric utility systems, hospitals or
life care facilities. This too may make the Fund more sensitive to economic,
political, or regulatory occurrences, particularly because such issuers would
likely be located in the same State. As the similarity in issuers increases,
the potential for fluctuation of the net asset value of the Fund's shares also
increases. The Fund will only invest in securities of issuers which it
believes will make timely payments of interest and principal.
SECURITIES LENDING. The Fund may lend up to 33% of its portfolio securities to
broker-dealers or other institutional investors. Since there could be a delay
in the recovery of loaned securities or even a loss of rights in collateral
supplied should the borrower fail financially, loans will not be made unless,
in the judgment of the Advisor, the consideration to be earned from such loans
would justify the risk. Collateral will be maintained in excess of 100% of the
value of the underlying securities, determined by marking to market daily
those securities involved in the lending program. It is expected that the Fund
will use the cash portions of loan collateral to invest in short-term
income-producing securities. These practices may be amended from time to time
as regulatory provisions permit. Securities lending for purposes of discussion
in this Prospectus should not be confused with "Borrowing" below.
BORROWING. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities
when it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make
any additional investments while its outstanding borrowings exceed 5% of the
current value of its total assets.
<PAGE>
PORTFOLIO TURNOVER. Portfolio turnover will not be a limiting factor when the
Advisor deems changes appropriate. While portfolio turnover is difficult to
predict in an active fixed income portfolio, it is expected that portfolio
turnover will vary between 25% and 100% annually. Market conditions may
dictate, however, a higher rate of turnover in a particular year. The degree
of portfolio turnover affects the brokerage costs of the Fund and may have an
impact on the amount of taxable distributions to shareholders. The portfolio
turnover of the Fund for the fiscal year ended March 31, 1996 was 14%.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. Each month the Fund distributes to
the shareholders of the Fund dividends substantially equal to all the net
investment income of the Fund. The Fund's net investment income consists of
non-capital gain income, less expenses. The Fund will declare one or more
long-term capital gain distributions to the shareholders of the Fund during
the calendar year if the Fund's profits from the sale of securities held for
longer than the applicable period exceed losses from these transactions
together with any net capital losses carried forward from prior years (to the
extent not used to offset short-term capital gains). If the Fund realizes net
short-term capital gains, they will also be distributed at that time.
Shareholders may elect to receive dividends and capital gain distributions in
either cash or additional shares. (See "Tax Status" and "Dividends,
Distributions, Taxes and Other Information.")
<PAGE>
HOW TO PURCHASE SHARES
==============================================================================
There are NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or
by writing to the Fund at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell
shares of the Fund. Such broker-dealer may charge you a fee for its services.
Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your
investment will purchase shares at the Fund's net asset value next determined
after your order is received by the Fund in proper order as indicated herein.
The minimum initial investment in the Fund, unless stated otherwise herein, is
$25,000. The Fund may, in the Advisor's sole discretion, accept certain
accounts with less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable
in U.S. dollars. All orders received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to 4:00
p.m. Eastern time will purchase shares at the net asset value next determined
on that business day. If your order is not received by 4:00 p.m. Eastern time,
your order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without
social security or tax identification numbers will not be accepted. If,
however, you have already applied for a social security or tax identification
number at the time of completing your account application, the application
should so indicate. The Fund is required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the
Fund within 60 days.
Investors should be aware that the Fund's account application contains
provisions in favor of the Fund, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating
to the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by
the Fund or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to The
Jamestown Tax Exempt Virginia Fund, and mail it to:
The Jamestown Tax Exempt Virginia Fund
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
<PAGE>
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish
a new account or add to an existing account by wire, please call the Fund, at
1-800-443-4249, before wiring funds, to advise the Fund of the investment, the
dollar amount and the account registration. This will ensure prompt and
accurate handling of your investment. Please have your bank use the following
wiring instructions to purchase by wire:
Star Bank, N.A.
Cinti/Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For The Jamestown Tax Exempt Virginia Fund
(Shareholder name and account number or tax identification number)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire
is sent you should, as soon as possible thereafter, complete and mail your
Account Application to the Fund as described under "Regular Mail Orders,"
above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $500) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional
investments by bank wire, please call the Fund at 1-800-443-4249 to alert the
Fund that your wire is to be sent. Follow the wire instructions above to send
your wire. When calling for any reason, please have your account number ready,
if known. Mail orders should include, when possible, the "Invest by Mail" stub
which is attached to your Fund confirmation statement. Otherwise, be sure to
identify your account in your letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly investment in shares through automatic charges to
their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the 15th day and/or the last business day of the
month. The shareholder may change the amount of the investment or discontinue
the plan at any time by writing to the Administrator.
EMPLOYEES AND AFFILIATES OF THE FUND. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Fund or
certain parties related thereto. The minimum initial investment for such
accounts is $1,000. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
<PAGE>
HOW TO REDEEM SHARES
==============================================================================
Shares of the Fund may be redeemed on each day that the Fund is open for
business by sending a written request to the Fund. The Fund is open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of
your shares depending on the market value of the Fund's portfolio securities.
All redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem
your shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
and not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-443-4249, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The Jamestown
Tax Exempt Virginia Fund, P.O. Box
5354, Cincinnati, Ohio 45201-5354. Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying the
account number, and the number of shares or dollar amount to be redeemed. This
request must be signed by all registered shareholders in the exact names in
which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, and other
organizations.
<PAGE>
Your redemption proceeds will be mailed to you within three business days
after receipt of your redemption request. However, the Fund may delay
forwarding a redemption check for recently purchased shares while it
determines whether the purchase payment will be honored. Such delay (which may
take up to 15 days) may be reduced or avoided if the purchase is made by
certified check, government check or wire transfer. In such cases, the net
asset value next determined after receipt of the request for redemption will
be used in processing the redemption and your redemption proceeds will be
mailed to you upon clearance of your check to purchase shares. The Fund may
suspend redemption privileges or postpone the date of payment (i) during any
period that the Exchange is closed, or trading on the Exchange is restricted
as determined by the Securities and Exchange Commission (the "Commission"),
(ii) during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Fund
to dispose of securities owned by it, or to fairly determine the value of its
assets, and (iii) for such other periods as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Fund
may not be redeemed by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Fund. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Fund. (See "Signature
Guarantees.")
There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written
notice, to make reasonable charges for wire redemptions. All charges will be
deducted from your account by redemption of shares in your account. Your bank
or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Fund from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your
account. Signature guarantees are required for (1) change of registration
requests, and (2) requests to establish or change redemption services other
than through your initial account application. Signature guarantees are
acceptable from a member bank of the Federal Reserve System, a savings and
loan institution, credit union, registered broker-dealer or a member firm of a
U.S. Stock Exchange, and must appear on the written request for redemption, or
change of registration.
SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of the Fund valued
at $25,000 or more at the current offering price may establish a Systematic
Withdrawal Plan to receive a monthly or quarterly check in a stated amount not
less than $100. Each month or quarter as specified, the Fund will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by writing the Fund. See the Statement of Additional
Information for further details.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
==============================================================================
The net asset value of the Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
See the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale
price, if available, otherwise, at the last quoted bid price. Municipal
Obligations will ordinarily be traded in the over-the-counter market. When
market quotations are not readily available, Municipal Obligations may be
valued on the basis of prices provided by an independent pricing service. The
prices provided by the pricing service are determined with consideration given
to institutional bid and last sale prices and take into account securities
prices, yields, maturities, call features, ratings, institutional trading in
similar groups of securities and developments related to specific securities.
The Trustees will satisfy themselves that such pricing services consider all
appropriate factors relevant to the value of such securities in determining
their fair value. Securities and other assets for which no quotations are
readily available will be valued in good faith at fair value using methods
determined by the Board of Trustees.
<PAGE>
MANAGEMENT OF THE FUND
===============================================================================
The Fund is a non-diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Fund under
the laws of Massachusetts governing the responsibilities of trustees of
business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and the Fund and provides information about
them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Tattersall, Inc. (the "Advisor") provides the Fund with a
continuous program of supervision of the Fund's assets, including the
composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to an Investment Advisory Agreement with the Trust. The
Advisor is also responsible for the selection of broker-dealers through which
the Fund executes portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Fund.
The Advisor, organized as a Virginia corporation in 1970, is controlled by
Austin Brockenbrough, III and Fred T. Tattersall. In addition to acting as
Advisor to the Fund, the Advisor also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals. The Advisor also serves as investment
advisor to The Jamestown Balanced Fund, The Jamestown Equity Fund, The
Jamestown International Equity Fund, The Jamestown Bond Fund and The Jamestown
Short Term Bond Fund (five series of the Trust), the subjects of separate
prospectuses.
Beth Ann Walk, CFA is primarily responsible for managing the portfolio of the
Fund and has acted in this capacity since the Fund's inception. Ms. Walk is a
Portfolio Manager of the Advisor and has been with the firm since 1983.
Compensation of the Advisor with respect to the Fund, based upon the Fund's
average daily net assets, is at the following annual rates: On the first $250
million, 0.40%; on the next $250 million, 0.35%; on assets over $500 million,
0.30%. For the fiscal year ended March 31, 1996, the Advisor received $9,576
in investment advisory fees from the Fund (net of fee waivers), which
represented 0.11% of the Fund's average daily net assets.
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of the Fund to 0.75%
per annum of its average daily net assets. However, there is no assurance that
any voluntary fee waivers will continue in the current or future fiscal years,
and expenses of the Fund may therefore exceed 0.75% of its average daily net
assets.
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Fund has retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a subsidiary of Leshner Financial, Inc., of which Robert H.
Leshner is the controlling shareholder.
The Administrator supplies executive, administrative and regulatory services,
supervises the preparation of tax returns, and coordinates the preparation of
reports to shareholders and reports to and filings with the Securities and
Exchange Commission and state securities authorities. In addition, the
Administrator calculates daily net asset value per share and maintains such
books and records as are necessary to enable it to perform its duties.
The Fund pays the Administrator a fee for these services at the annual rate of
0.15% of the average value of its daily net assets up to $200 million and
0.10% of such assets in excess of $200 million; provided, however, that the
minimum fee is $2,000 per month. The Administrator also charges the Fund for
certain costs involved with the daily valuation of investment securities and
is reimbursed for out-of-pocket expenses.
<PAGE>
CUSTODIAN. The Custodian of the Fund's assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street,
Cincinnati, Ohio 45202. The Advisor, Administrator or interested persons
thereof may have banking relationships with the Custodian.
OTHER FUND COSTS. The Fund pays all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and
expenses, if any, of the Trustees and officers who are not "affiliated
persons" of the Advisor, fees of the Fund's Custodian, interest expense,
taxes, brokerage fees and commissions, fees and expenses of the Fund's
shareholder servicing operations, fees and expenses of qualifying and
registering the Fund's shares under federal and state securities laws,
expenses of preparing, printing and distributing prospectuses and reports to
existing shareholders, auditing and legal expenses, insurance expenses,
association dues, and the expense of shareholders' meetings and proxy
solicitations. The Fund is also liable for any nonrecurring expenses that may
arise such as litigation to which the Fund may be a party. The Fund may be
obligated to indemnify the Trustees and officers with respect to such
litigation. All expenses of the Fund are accrued daily on the books of the
Fund at a rate which, to the best of its belief, is equal to the actual
expenses expected to be incurred by the Fund in accordance with generally
accepted accounting practices. For the fiscal year ended March 31, 1995, the
expense ratio of the Fund was 0.75% of its average daily net assets after
expense reimbursements.
BROKERAGE. The Fund has adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the
Advisor and/or the Fund. In all cases, the primary consideration for selection
of broker-dealers through which to execute brokerage transactions will be to
obtain the most favorable price and execution for the Fund. Research services
obtained through the Fund's brokerage transactions may be used by the Advisor
for its other clients; conversely, the Fund may benefit from research services
obtained through the brokerage transactions of the Advisor's other clients.
The Statement of Additional Information contains more information about the
management and brokerage practices of the Fund. It is anticipated that most
securities transactions of the Fund will be handled on a principal, rather
than agency, basis. Municipal Obligations, including Virginia obligations, are
normally traded on a net basis (without commission) through broker-dealers and
banks acting for their own account. Such firms attempt to profit from buying
at the bid price and selling at the higher asked price of the market, the
difference being referred to as the spread.
<PAGE>
TAX STATUS
==============================================================================
FEDERAL INCOME TAXES. Each series of the Trust is a separate entity for tax
purposes, and the Trust intends to qualify the Fund each year as a separate
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986 (the "Code"). Because the Fund intends to distribute to shareholders
substantially all of its net investment income and net realized capital gains
in accordance with the timing requirements imposed by the Code, it is expected
that the Fund will not be required to pay any federal income or excise taxes.
The Fund also expects the dividends it pays to shareholders of the Fund from
interest on Municipal Obligations generally to be exempt from federal income
tax because the Trust intends the Fund to satisfy certain requirements of the
Code. One such requirement is that at the close of each quarter of the taxable
year of the Fund, at least 50% of the value of its total assets consists of
obligations whose interest is exempt from federal income tax. Distributions of
income from investments in taxable securities and from certain other
investments of the Fund (including capital gains from the sale of securities)
will be taxable to the shareholder, whether distributed in cash or in
additional shares. However, it is expected that such amounts would not be
substantial in relation to the tax-exempt interest received by the Fund.
A statement will be sent to each shareholder of the Fund promptly after the
end of each calendar year setting forth the federal income tax status of all
distributions for each calendar year, including the portion exempt from
federal income tax as "exempt-interest dividends;" the portion, if any, that
is a tax preference item under the federal alternative minimum tax; the
portion taxable as ordinary income; the portion taxable as capital gains; and
the portion representing a return of capital (which is free of current taxes
but results in a basis reduction). The Fund intends to withhold 30% on taxable
dividends and any other payments that are subject to such withholding and are
made to persons who are neither citizens nor residents of the U.S.
Current federal tax law limits the types and volume of bonds qualifying for
the federal income tax exemption of interest and makes interest on certain
tax-exempt bonds and distributions by the Fund of such interest a tax
preference item for purposes of the individual and corporate alternative
minimum tax. In addition, all exempt-interest dividends may affect a corporate
shareholder's alternative minimum tax liability. Applicable tax law and
changes therein may also affect the availability of Municipal Obligations for
investment by the Fund and the value of the Fund's portfolio. The tax
discussion in this Prospectus is for general information only. Prospective
investors should consult their own tax advisors as to the tax consequences of
an investment in the Fund.
<PAGE>
STATE INCOME TAXES. The Trust is organized as a Massachusetts business trust
and, under current law, the Fund is not liable for any income or franchise tax
in the Commonwealth of Massachusetts as long as it qualifies as a regulated
investment company under the Code. The Fund will have a business location in
Virginia and will be subject to the income tax laws of that state. A regulated
investment company generally will not be required to pay any Virginia income
tax so long as it (i) does not have to pay any federal income tax and (ii)
receives no interest income that is exempt from federal income tax but is not
exempt from Virginia income tax, such as federally tax-exempt interest on
obligations of a state other than Virginia.
Set forth below is a brief description of the personal income tax status of an
investment in the Fund under Virginia tax laws currently in effect. A
statement setting forth the state income tax status of all distributions made
during each calendar year will be sent to shareholders annually.
The Virginia Department of Taxation has ruled that, under existing Virginia
law, as long as the Fund qualifies as a "regulated investment company" under
the Internal Revenue Code and 50% or more of the value of the total assets of
the Fund consists of obligations whose interest is exempt from federal income
tax, dividends received from the Fund will not be subject to Virginia personal
income taxes to the extent that such dividends are either (i) excludable from
gross income for federal income tax purposes and attributable to interest on
obligations issued by the Commonwealth of Virginia or any of its political
subdivisions or instrumentalities or obligations issued by Guam, Puerto Rico
or the United States Virgin Islands or (ii) attributable to interest on
obligations issued by the United States or any authority, commission, or
instrumentality of the United States in the exercise of borrowing power, and
backed by the full faith and credit of the United States. For shareholders who
are subject to Virginia income tax, dividends received from the Fund (whether
paid in cash or reinvested in additional shares) generally will be includable
in Virginia taxable income to the extent not described in the preceding
sentence. Thus, for example, the portion of dividends excludable from gross
income for federal income tax purposes and attributable to interest on
obligations of a state other than Virginia will not be exempt from Virginia
income tax.
Capital gains distributed by the Fund and gain recognized on the sale or other
disposition of shares of the Fund generally will not be exempt from Virginia
income taxation.
<PAGE>
Interest on indebtedness incurred (directly or indirectly) by a shareholder of
the Fund to purchase or carry shares of the Fund (i) will not be deductible
for Virginia income tax purposes to the extent that such interest expense
relates to the portions of dividends received from the Fund exempt from
Virginia income tax and (ii) will be deductible for Virginia income tax
purposes as an offset against the portions of the dividends received from the
Fund attributable to interest income not exempt from Virginia income taxation
to the extent that such interest expense is not deducted in determining
federal taxable income and is related to such non-exempt portions.
The maximum marginal Virginia personal income tax rate is 5.75%. The same rate
applies to capital gains as to other taxable income.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code, Treasury regulations, and Virginia tax laws presently
in effect. For the complete provisions, reference should be made to the
pertinent Code sections, the Treasury regulations promulgated thereunder, and
the applicable Virginia tax laws. The Code, Treasury regulations, and Virginia
tax laws are subject to change by legislative, judicial or administrative
action either prospectively or retroactively. Shareholders are urged to
consult their own tax advisors regarding specific questions as to federal,
state, local or foreign taxes.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
==============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general
and, particularly, with respect to dividends and distributions and other
matters. The discussion herein of the federal and state income tax
consequences of an investment in the Fund is not exhaustive on the subject.
Consequently, investors should seek qualified tax advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Code and will distribute all of its net income and
realized capital gains to shareholders. The Fund intends to declare dividends
on each business day and to pay such dividends monthly. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. The Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Fund at the end of each year.
There is no fixed dividend rate, and there can be no assurance as to the
payment of any dividends or the realization of any gains. All dividends and
capital gains distributions are reinvested in additional shares of the Fund
unless the shareholder requests in writing to receive dividends and/or capital
gains distributions in cash. That request must be received by the Fund prior
to the record date to be effective as to the next dividend. Tax consequences
to shareholders of dividends and distributions are the same if received in
cash or if received in additional shares of the Fund.
TAX STATUS OF THE FUND. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to
qualify. For a more detailed discussion of the tax status of the Fund, see
"Additional Tax Information" in the Statement of Additional Information.
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven
funds, or series, to be issued. Shares of all eleven series have currently
been issued, in addition to the Fund: shares of the FBP Contrarian Equity Fund
and the FBP Contrarian Balanced Fund, which are managed by Flippin, Bruce &
Porter, Inc. of Lynchburg, Virginia; shares of The Government Street Equity
Fund, The Government Street Bond Fund and The Alabama Tax Free Bond Fund,
which are managed by T. Leavell & Associates, Inc. of Mobile, Alabama; and
shares of The Jamestown Balanced Fund, The Jamestown Equity Fund, The
Jamestown International Equity Fund, The Jamestown Bond Fund and The Jamestown
Short Term Bond Fund, which are managed by Lowe, Brockenbrough & Tattersall,
Inc. The Trustees are permitted to create additional series, or funds, at any
time.
<PAGE>
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust
or a particular Fund of the Trust, holders of the outstanding shares of the
Fund being liquidated shall be entitled to receive, in proportion to the
number of shares of the Fund held by them, the excess of that Fund's assets
over its liabilities. Each outstanding share is entitled to one vote for each
full share and a fractional vote for each fractional share, on all matters
which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the Investment Company Act of 1940 (the
"1940 Act"), shares shall be voted by individual Fund; and (ii) when the
matter does not affect any interest of a particular Fund, then only
shareholders of the affected Fund or Funds shall be entitled to vote thereon.
Examples of matters which affect only a particular Fund could be a proposed
change in the fundamental investment objectives or policies of that Fund or a
proposed change in the investment advisory agreement for a particular Fund.
The shares of the Fund have noncumulative voting rights, which means that the
holders of more than 50% of the shares voting for the election of Trustees can
elect all of the Trustees if they so choose.
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more
information. Shareholder inquiries may be made in writing, addressed to the
Fund at the address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of
the Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional
Information for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time the Fund may advertise its
total return. The Fund may also advertise yield and tax-equivalent yield. The
Fund's yield, tax-equivalent yield and total return figures are based on
historical earnings and are not intended to indicate future performance.
The "total return" of the Fund refers to the average annual compounded rates
of return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged
to all shareholder accounts and deducts all nonrecurring charges at the end of
each period. If the Fund has been operating less than 1, 5 or 10 years, the
time period during which the Fund has been operating is substituted.
<PAGE>
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same
or different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. The
"tax-equivalent yield" of the Fund is computed by using the tax-exempt yield
figure and dividing by one minus the tax rate. For the purpose of determining
net investment income, the calculation includes among expenses of the Fund all
recurring fees that are charged to all shareholder accounts and any
nonrecurring charges for the period stated.
<PAGE>
APPENDIX A
==============================================================================
DESCRIPTION OF MUNICIPAL OBLIGATIONS
Municipal Obligations include bonds, notes and commercial paper issued by or
on behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies or
instrumentalities, the interest on which is exempt from federal income taxes
(without regard to whether the interest thereon is also exempt from the
personal income taxes of any state). Municipal Obligation bonds are issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities such as bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligation bonds may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses, and
obtaining funds to loan to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide privately-operated
housing facilities, airport, mass transit or port facilities, sewage disposal,
solid waste disposal or hazardous waste treatment or disposal facilities and
certain local facilities for water supply, gas or electricity. Such
obligations are included within the term Municipal Obligations if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated
industrial or commercial facilities, may constitute Municipal Obligations,
although the current federal tax laws place substantial limitations on the
size of such issues.
The two principal classifications of Municipal Obligation bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its good faith, credit and taxing power for the payment of
principal and interest. The payment of the principal of and interest on such
bonds may be dependent upon an appropriation by the issuer's legislative body.
The characteristics and enforcement of general obligation bonds vary according
to the law applicable to the particular issuer. Revenue bonds are payable only
from the revenues derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise or other specific
revenue source. Industrial development bonds which are Municipal Obligations
are in most cases revenue bonds and do not generally constitute the pledge of
the credit of the issuer of such bonds.
Municipal Obligations also include participations in municipal leases. These
are undivided interests in a portion of an obligation in the form of a lease
or installment purchase which is issued by state and local governments to
acquire equipment and facilities. Municipal leases frequently have special
risks not normally associated with general obligation or revenue bonds. Leases
and installment purchase or conditional sale contracts (which normally provide
for title to the leased asset to pass eventually to the governmental issuer)
have evolved as a means for governmental issuers to acquire property and
equipment without meeting the constitutional and statutory requirements for
the issuance of debt. The debt-issuance limitations are deemed to be
inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly
or other periodic basis. Accordingly, a risk peculiar to these municipal lease
obligations is the possibility that a governmental issuer will not appropriate
funds for lease payments. Although the obligations will be secured by the
leased equipment or facilities, the disposition of the property in the event
of non-appropriation or foreclosure might, in some cases, prove difficult.
There are, of course, variations in the security of Municipal Obligations,
both within a particular classification and between classifications, depending
on numerous factors.
<PAGE>
Municipal Obligation notes generally are used to provide for short-term
capital needs and generally have maturities of one year or less. Municipal
Obligation notes include:
1. TAX ANTICIPATION NOTES. Tax Anticipation Notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.
2. REVENUE ANTICIPATION NOTES. Revenue Anticipation Notes are issued in
expectation of receipt of other kinds of revenue, such as federal revenues
available under Federal Revenue Sharing Programs.
3. BOND ANTICIPATION NOTES. Bond Anticipation Notes are issued to provide
interim financing until long-term bond financing can be arranged. In most
cases, the long-term bonds then provide the money for the repayment of the
Notes.
Issues of commercial paper typically represent short-term, unsecured,
negotiable promissory notes. These obligations are issued by agencies of state
and local governments to finance seasonal working capital needs of
municipalities or to provide interim construction financing and are paid from
general revenues of municipalities or are refinanced with long-term debt. In
most cases, Municipal Obligation commercial paper is backed by letters of
credit, lending agreements, note repurchase agreements or other credit
facility agreements offered by banks or other institutions.
The yields on Municipal Obligations are dependent on a variety of factors,
including general market conditions, supply and demand and general conditions
of the Municipal Obligation market, size of a particular offering, the
maturity of the obligation and rating (if any) of the issue.
DESCRIPTION OF MUNICIPAL BOND RATINGS. The ratings of the nationally
recognized statistical rating organizations (Moody's Investors Service, Inc.,
Standard & Poor's Ratings Group, Fitch Investors Service and Duff & Phelps)
represent each firm's opinion as to the quality of various Municipal
Obligations. It should be emphasized, however, that ratings are not absolute
standards of quality. Consequently, Municipal Obligations with the same
maturity, coupon and rating may have different yields while Municipal
Obligations of the same maturity and coupon with different ratings may have
the same yield. The descriptions offered by each individual rating firm may
differ slightly, but the following offers a description by Moody's Investors
Service, Inc. of each rating category:
<PAGE>
AAA OR AAA: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
AA OR AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
BAA OR BBB: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
<PAGE>
APPENDIX B
==============================================================================
FACTORS AFFECTING VIRGINIA MUNICIPAL OBLIGATIONS
The Commonwealth, its officials and employees are named as defendants in legal
proceedings which occur in the normal course of governmental operations, some
involving substantial amounts. It is not possible at the present time to
estimate the ultimate outcome or liability, if any, of the Commonwealth with
respect to these lawsuits. However, the ultimate liability resulting from
these suits is not expected to have a material, adverse effect on the
financial condition of the Commonwealth.
In Davis v. Michigan (decided March 28, 1989), the United States Supreme Court
ruled unconstitutional states' exempting from state income tax the retirement
benefits paid by the state or local governments without exempting retirement
benefits paid by the federal government. At that time, Virginia exempted state
and local retirement benefits but not federal retirement benefits. At a
Special Session held in April 1989, the General Assembly repealed the
exemption of state and local retirement benefits.
Following Davis, at least five suits, some with multiple plaintiffs, for
refunds of Virginia income taxes, were filed by federal retirees. These suits
were consolidated under the name of Harper v. Virginia Department of Taxation.
On February 12, 1990, the Circuit Court of the City of Alexandria denied the
federal retirees' claims for refunds. On March 1, 1991, the Virginia Supreme
Court affirmed the Circuit Court ruling. Petitions for review were filed in
the United States Supreme Court, which remanded the cases to the Virginia
Supreme Court for further consideration in light of James B. Beam Distilling
Co. v. Georgia (decided June 20, 1991). On November 8, 1991, the Virginia
Supreme Court affirmed its March 1, 1991 ruling denying refunds, and petitions
for review were again filed in the United States Supreme Court. On May 18,
1992, the United States Supreme Court agreed to hear the case of Harper v.
Virginia Department of Taxation (No. 91-794). On June 18, 1993, the United
States Supreme Court reversed the November 8, 1991 ruling of the Virginia
Supreme Court and remanded the case for further proceedings consistent with
its opinion. The syllabus for that opinion states that "Virginia is free to
choose the form of relief it will provide, so long as that relief is
consistent with `federal due process principles.' A state retains flexibility
in responding to the determination that it has imposed an impermissibly
discriminatory tax. The availability of a predeprivation hearing constitutes a
procedural safeguard sufficient to satisfy due process, but if no such relief
exists, the State must provide meaningful backward-looking relief either by
awarding full refunds or by issuing some other order that creates in hindsight
a nondiscriminatory scheme."
<PAGE>
On July 30, 1993, the Virginia Supreme Court remanded the Harper case to the
Circuit Court of Alexandria for consideration of these issues. On January 7,
1994, the Alexandria Circuit Court again ruled in favor of the Commonwealth
and denied refunds to federal retirees. On May 27, 1994, the Virginia Supreme
Court agreed to hear Harper on appeal from the Alexandria Circuit Court, and
on July 26, 1994, the Court granted a stay in the proceedings in Harper for
six months or until further order of the Court, whichever occurs first. On
January 26, 1995, the Court lifted the stay.
In a Special Session on July 9, 1994, the Virginia General Assembly passed
emergency legislation to provide payments to federal retirees in settlement of
the retirees' claims as a result of Davis. The settlement payments are to be
made over a five-year period, commencing on March 31, 1995. The total amount
of the proposed settlement is $340 million (payable to participating retirees
in installments of $60 million on March 31, 1995, and $70 million on each
succeeding March 31 through March 31, 1999, subject to appropriation by the
General Assembly) plus earnings on the investment of appropriations. The
settlement amount will be reduced by a percentage of the dollar amount of
claims of taxpayers opting out of the settlement or waiving payments.
To preserve the right to the legislative settlement or other legislative
remedies, retirees had to respond to a notice of the proposed settlement by
November 1, 1994. Retirees who chose to accept the settlement offer, which was
communicated to them on December 15, 1994, were required to sign and return to
the Tax Commissioner by February 1, 1995, a settlement agreement releasing the
Commonwealth from any further liability for claims arising out of taxes paid
on federal retirement income during the 1985-1988 taxable years and dismissing
any litigation as to such claims to which the taxpayer is a party.
Approximately 91% of the retirees accepted the settlement.
In addition, the legislation provided that in the event that the total
principal amount of the claims of the taxpayers opting out of the settlement
exceeds $20 million, the entire settlement would be null and void unless
reauthorized by the General Assembly on or before March 1, 1995. Although
claims of retirees opting out exceeded $20 million, the General Assembly in
its regular 1995 session reauthorized the settlement prior to March 1, 1995
and the Governor signed the reauthorization legislation on February 28, 1995.
The General Assembly also enacted legislation to provide relief to retirees
who failed to meet deadlines in the original settlement legislation, or filed
incomplete claims. The total principal amount of the claims of the retirees
opting out of the settlement is in excess of $47 million. Those retirees
opting out have elected to be bound by the final resolution of pending
litigation.
<PAGE>
If the courts ultimately rule that the Commonwealth must refund taxes imposed
prior to Davis v. Michigan, the potential cost of refunding all Virginia
income taxes paid on federal government pensions for taxable years 1985, 1986,
1987 and 1988 to federal government pensioners who opted out of the settlement
is approximately $75 million, including interest earnings as of March 1, 1995.
The Office of the Attorney General cannot predict the outcome of this
litigation.
The most recent judicial development with respect to claims by federal
retirees for refunds of state income taxes was the December 6, 1994 decision
of the United States Supreme Court reversing the Georgia Supreme Court's
decision in Reich v. Collins. This case was remanded to the Georgia Supreme
Court for the provision of "meaningful backward-looking relief" to the
retirees. The facts and statutes involved in Reich v. Collins differ from
those at issue in Harper, and the decision is therefore not binding on the
Virginia Supreme Court. In addition, the Supreme Court recently declined to
hear arguments in two other retroactive tax refund cases, James B. Beam
Distilling Co. v. Georgia and Swanson v. North Carolina, both of which had
been decided by the state courts in favor of the states, holding that no
refunds were due to the taxpayers.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Send completed application to:
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Shareholder Services
P.O. Box 5354
Cincinnati, OH 45201-5354
FUND SHARES APPLICATION
(Please type or print clearly)
==============================================================================
ACCOUNT REGISTRATION
Q INDIVIDUAL
______________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
Q JOINT*
______________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of
survivorship unless otherwise indicated.
Q UGMA/UTMA __________________________________ under the_______ Uniform
Gifts/Transfers to Minors Act
- ------------------------------------------------------------------------------
(First Name)(Middle Initial) (Last Name) (State)
________________________________________________________________ as Custodian
(First Name) (Middle Name) (Last Name)
- ------------------------------------------------------------------------------
(Birthdate of Minor) (SS # of Minor)
- ------------------------------------------------------------------------------
Name of Corporation or Partnership. If a Trust, include the name(s) of
Trustees in which account will be registered, and the date of the Trust
instrument.
- ------------------------------------------------------------------------------
(Taxpayer Identification Number)
==============================================================================
ADDRESS
Street or P.O. Box____________________________________________________________
City_________________________________________State____________Zip_____________
Telephone_________________________U.S. Citizen___Resident Alien__Non Resident
(Country of Residence)______
==============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name__________________________________________________________________________
Street or P.O. Box____________________________________________________________
City___________________________________________State____________Zip___________
==============================================================================
INITIAL INVESTMENT (Minimum initial investment: $25,000)
q Enclosed is a check payable to THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
for $___________________
q Funds were wired to Star Bank on____________________________________
in the amount of $_____________________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE,
PLEASE CONTACT THE FUND AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER
IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire
should be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
==============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
q Reinvest all dividends and capital gains distributions
q Reinvest all capital gain distributions; dividends to be paid in cash
q Pay all dividends and capital gain distributions in cash
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS Please retain a copy of this document for your files. Any
modification of the information contained in this section will require an
Amendment to this Application Form.
q New Application q Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
JAMESTOWN TAX EXEMPT VIRGINIA FUND for the Registered Owner and to execute and
deliver any instrument necessary to effectuate the authority hereby conferred:
Name
========================================
- ----------------------------------------
Title Signature
==================================================================
- ------------------------------------------------------------------
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND, or any agent of the Fund may, without
inquiry, rely upon the instruction of any person(s) purporting to be an
authorized person named above, or in any Amendment received by the Fund or its
agent. The Fund and its Agent shall not be liable for any claims, expenses or
losses resulting from having acted upon any instruction reasonably believed to
be genuine.
==============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
q Please mail redemption proceeds to the name and address of record
q Please wire redemptions to the commercial bank account indicated below
(subject to a minimum wire transfer of
$5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value,
in accordance with the instructions below: (subject to a minimum $100 per
distribution)
Dollar amount of each withdrawal $___________________ beginning the last
business day of______________________
Withdrawals to be made: q Monthly q Quarterly
q Please DEPOSIT DIRECTLY the proceeds to the bank account below
q Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of The Jamestown Tax Exempt Virginia Fund by
withdrawing from the commercial bank account below, per the instructions
below:
Amount $___________________(minimum $100)
Please make my automatic investment on:
q the last business day of each month
q the 15th day of each month
q both the 15th and last business day
____________________________________________________________is hereby
(Name of Bank)
authorized to charge to my account the bank draft amount here indicated. I
understand the payment of this draft is subject to all provisions
of the contract as stated on my bank account signature card.
--------------------------------------------------------------------------
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account_____________________________________________
Commercial bank account #_____________________________________________________
ABA Routing #_________________________________________________________________
City, State and Zip in which bank is located__________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check
from the above account.
==============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Fund and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release MGF Service Corp.,
Williamsburg Investment Trust, Lowe, Brockenbrough & Tattersall, Inc., and
their respective officers, employees, agents and affiliates from any and all
liability in the performance of the acts instructed herein provided that such
entities have exercised due care to determine that the instructions are
genuine. I certify under the penalties of perjury that (1) the Social Security
Number or Tax Identification Number shown is correct and (2) I am not subject
to backup withholding. The certifications in this paragraph are required from
all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law.
The Internal Revenue Service does not require your consent to any provision of
this document, other that the certifications required to avoid backup with
holding. (Check here if you are subject to backup withholding) q.
- -----------------------------------------------------
APPLICANT DATE
- -----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
----------------------------------------------------
JOINT APPLICANT DATE
----------------------------------------------------
OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE
FLIPPIN, BRUCE & PORTER
FUNDS
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
August 1, 1996
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES.......................... 2
DESCRIPTION OF BOND RATINGS................................. 6
INVESTMENT LIMITATIONS...................................... 8
TRUSTEES AND OFFICERS....................................... 10
INVESTMENT ADVISER.......................................... 14
ADMINISTRATOR............................................... 15
OTHER SERVICES.............................................. 16
BROKERAGE................................................... 16
SPECIAL SHAREHOLDER SERVICES................................ 17
PURCHASE OF SHARES.......................................... 19
REDEMPTION OF SHARES........................................ 20
NET ASSET VALUE DETERMINATION............................... 20
ALLOCATION OF TRUST EXPENSES................................ 20
ADDITIONAL TAX INFORMATION.................................. 21
CAPITAL SHARES AND VOTING................................... 22
CALCULATION OF PERFORMANCE DATA............................. 23
FINANCIAL STATEMENTS AND REPORTS............................ 25
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of both the FBP Contrarian Equity
Fund and the FBP Contrarian Balanced Fund (the "Funds") dated August 1, 1996.
The Prospectus may be obtained from the Funds, at the address and phone number
shown above, at no charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both the FBP Contrarian Balanced
Fund (the "Balanced Fund"), formerly the FBP Contrarian Fund, and the FBP
Contrarian Equity Fund (the "Equity Fund") unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WRITING COVERED CALL OPTIONS. The writing of call options by the Funds is
subject to limitations established by each of the exchanges governing the
maximum number of options which may be written or held by a single investor or
group of investors acting in concert, regardless of whether the options were
written or purchased on the same or different exchanges or are held in one or
more accounts or through one or more different exchanges or through one or
more brokers. Therefore the number of calls the Funds may write (or purchase
in closing transactions) may be affected by options written or held by other
entities, including other clients of the Adviser. An exchange may order the
liquidation of positions found to be in violation of these limits and may
impose certain other sanctions.
Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986. One of the requirements for
such qualification is that gains realized from the sale of securities held by
each Fund less than three months must comprise less than 30% of the Fund's
gross income. Due to this requirement, the Funds will limit the extent to
which they write call options on investments held less than 3 months.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a
short duration and are distributed directly by the issuer to its shareholders.
Rights and warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts (ADRs). The Funds may
invest in foreign securities in order to take advantage of opportunities for
growth where, as with domestic securities, they are depressed in price because
they are out of favor with most of the investment
- 5 -
<PAGE>
community. The same factors would be considered in selecting foreign
securities as with domestic securities, as discussed in the Prospectus.
Foreign securities investment presents special considerations not typically
associated with investments in domestic securities. Foreign taxes may reduce
income. Currency exchange rates and regulations may cause fluctuation in the
value of foreign securities. Foreign securities are subject to different
regulatory environments than in the United States and, compared to the United
States, there may be a lack of uniform accounting, auditing and financial
reporting standards, less volume and liquidity and more volatility, less
public information, and less regulation of foreign issuers. Countries have
been known to expropriate or nationalize assets, and foreign investments may
be subject to political, financial or social instability or adverse diplomatic
developments. There may be difficulties in obtaining service of process on
foreign issuers and difficulties in enforcing judgments with respect to claims
under the U.S. securities laws against such issuers. Favorable or unfavorable
differences between U.S. and foreign economies could affect foreign securities
values. The U.S. Government has, in the past, discouraged certain foreign
investments by U.S. investors through taxation or other restrictions and it is
possible that such restrictions could be imposed again.
SECURITIES OF UNSEASONED COMPANIES. The securities of unseasoned companies
(those in business less than three years, including predecessors and, in the
case of bonds, guarantors) may have a limited trading market, which may
adversely affect disposition. If other investors attempt to dispose of such
holdings when the Funds desire to do so, the Funds could receive lower prices
than might otherwise be obtained. Because of the increased risk over larger,
better known companies, each Fund limits its investments in the securities of
unseasoned issuers to no more than 5% of its total assets.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government securities
subject to repurchase agreements. A repurchase transaction occurs when, at the
time a Fund purchases a security (normally a U.S. Treasury obligation), it
also resells it to the vendor (normally a member bank of the Federal Reserve
System or a registered Government Securities dealer) and must deliver the
security (and/or securities substituted for them under the repurchase
agreement) to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred to as the
"Repurchase Securities." The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate effective for the
period of time during which the repurchase agreement is in effect.
- 6 -
<PAGE>
The majority of these transactions run day to day, and the delivery pursuant
to the resale typically will occur within one to five days of the purchase.
The Funds' risk is limited to the ability of the vendor to pay the agreed upon
sum upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Funds hold a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Adviser will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times at least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Funds'
custodian either directly or through a securities depository.
U.S. GOVERNMENT SECURITIES. The Balanced Fund may invest in debt obligations
which are issued or guaranteed by the U.S. Government, its agencies and
instrumentalities ("U.S. Government Securities") as described herein. U.S.
Government Securities include the following securities: (1) U.S. Treasury
obligations of various interest rates, maturities and issue dates, such as
U.S. Treasury bills (mature in one year or less), U.S. Treasury notes (mature
in one to seven years), and U.S. Treasury bonds (mature in more than seven
years), the payments of principal and interest of which are all backed by the
full faith and credit of the U.S. Government; (2) obligations issued or
guaranteed by U.S. Government agencies or instrumentalities, some of which are
backed by the full faith and credit of the U.S. Government, e.g., obligations
of the Government National Mortgage Association ("GNMA"), the Farmers Home
Administration and the Export Import Bank; some of which do not carry the full
faith and credit of the U.S. Government but which are supported by the right
of the issuer to borrow from the U.S. Government, e.g., obligations of the
Tennessee Valley Authority, the U.S. Postal Service, the Federal National
Mortgage Association ("FNMA"), and the Federal Home Loan mortgage Corporation
("FHLMC"); and some of which are backed only by the credit of the issuer
itself, e.g., obligations of the Student Loan Marketing Association, the
Federal Home Loan Banks and the Federal Farm Credit Bank; and (3) any of the
foregoing purchased subject to repurchase agreements as described herein. The
Balanced Fund does not intend to invest in "zero coupon" Treasury securities.
The guarantee of the U.S. Government does not extend to the yield or value of
the Fund's shares.
- 7 -
<PAGE>
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have
lower yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they
mature in thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Funds. Money market instruments also
may include Bankers' Acceptances and Certificates of Deposit of domestic
branches of U.S. banks, Commercial Paper and Variable Amount Demand Master
Notes ("Master Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and
"accepted" by a bank, are the customary means of effecting payment for
merchandise sold in import-export transactions and are a source of financing
used extensively in international trade. When a bank "accepts" such a time
draft, it assumes liability for its payment. When the Funds acquire a Bankers'
Acceptance, the bank which "accepted" the time draft is liable for payment of
interest and principal when due. The Bankers' Acceptance, therefore, carries
the full faith and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an
unsecured interest-bearing debt obligation of a bank. CDs acquired by the
Funds would generally be in amounts of $100,000 or more. COMMERCIAL PAPER is
an unsecured, short term debt obligation of a bank, corporation or other
borrower. Commercial Paper maturity generally ranges from two to 270 days and
is usually sold on a discounted basis rather than as an interest-bearing
instrument. The Funds will invest in Commercial Paper only if it is rated in
the highest rating category by any nationally recognized statistical rating
organization ("NRSRO") or, if not rated, the issuer must have an outstanding
unsecured debt issue rated in the three highest categories by any NRSRO or, if
not so rated, be of equivalent quality in the Adviser's assessment. Commercial
Paper may include Master Notes of the same quality. MASTER NOTES are unsecured
obligations which are redeemable upon demand of the holder and which permit
the investment of fluctuating amounts at varying rates of interest. Master
Notes are acquired by the Funds only through the Master Note program of the
Funds'
- 8 -
<PAGE>
custodian, acting as administrator thereof. The Adviser will monitor, on a
continuous basis, the earnings power, cash flow and other liquidity ratios of
the issuer of a Master Note held by the Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Balanced Fund may purchase
securities on a when-issued basis or for settlement at a future date if the
Fund holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date,
the Balanced Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Balanced Fund would generally purchase securities on a forward commitment
or when-issued basis with the intention of taking delivery, the Fund may sell
such a security prior to the settlement date if the Adviser felt such action
was appropriate. In such a case the Fund could incur a short-term gain or
loss.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an
NRSRO represents the organization's opinion as to the credit quality of the
security being traded. However, the ratings are general and are not absolute
standards of quality or guarantees as to the creditworthiness of an issuer.
Consequently, the Adviser believes that the quality of fixed-income securities
in which the Balanced Fund may invest should be continuously reviewed and that
individual analysts give different weightings to the various factors involved
in credit analysis. A rating is not a recommendation to purchase, sell or hold
a security because it does not take into account market value or suitability
for a particular investor. When a security has received a rating from more
than one NRSRO, each rating is evaluated independently. Ratings are based on
current information furnished by the issuer or obtained by the NRSROs from
other sources that they consider reliable. Ratings may be changed, suspended
or withdrawn as a result of changes in or unavailability of such information,
or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
AAA: Bonds rated Aaa are judged to be of the best quality. These
bonds carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are
protected by a large or by an exceptionally stable margin and
- 9 -
<PAGE>
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large in Aa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements that make the long term risks
appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
that suggest a susceptibility to impairment sometime in the future.
BAA: Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA: Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds rated B generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms
of the contract over any long period of time may be small.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated
Aa, A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to
a debt obligation and indicates an extremely strong capacity to
pay principal and interest.
- 10 -
<PAGE>
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
exposures or adverse conditions.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within these major rating categories.
Credit quality in the markets for lower rated fixed income securities can
change unexpectedly, and even recently issued credit ratings may not fully
reflect the actual risks posed by a particular security. The Adviser believes
that the yields from the lower rated securities purchased by the Balanced Fund
will more than compensate for any additional risk. During periods of
deteriorating economic conditions or increased interest rates, trading in the
secondary market for lower rated securities may become thin and market
liquidity may be significantly reduced. Under such conditions, valuation of
the securities at fair value becomes more difficult and judgment plays a
greater role. Beside credit and liquidity concerns, prices for lower rated
securities may be affected by legislative and regulatory developments.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this
- 11 -
<PAGE>
purpose, means the lesser of (i) 67% of a Fund's outstanding shares
represented in person or by proxy at a meeting at which more than 50% of its
outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the
securities of any one issuer or purchase more than 10% of the
outstanding voting securities or of any class of securities of any
one issuer;
(2) Invest 25% or more of the value of its total assets in any
one industry or group of industries (except that securities
of the U.S. Government, its agencies and instrumentalities
are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or
trustees of the Trust or its Adviser who own beneficially more than
1/2 of 1% of the outstanding securities of such issuer together own
more than 5% of the outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management
of another issuer;
(5) Invest in interests in real estate, real estate mortgage
loans, oil, gas or other mineral exploration or development
programs, except that the Funds may invest in the securities
of companies (other than those which are not readily
marketable) which own or deal in such things, and the Funds
may invest in certain mortgage backed securities as
described in the Prospectus under "Investment Objectives,
Investment Policies and Risk Considerations";
(6) Underwrite securities issued by others, except to the extent a Fund
may be deemed to be an underwriter under the federal securities laws
in connection with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such
short-term credits as may be necessary for the clearance of
transactions);
(8) Make short sales of securities or maintain a short position, except
short sales "against the box." (A short sale is made by selling a
security the Fund does not own. A short sale is "against the box" to
the extent that the Fund contemporaneously owns or has the right to
obtain at no additional cost securities identical to those sold
short.);
- 12 -
<PAGE>
(9) Participate on a joint or joint and several basis in any
trading account in securities;
(10) Make loans of money or securities, except that the Funds may
invest in repurchase agreements; or
(11) Invest in securities of issuers which have a record of less than
three years' continuous operation (including predecessors and, in the
case of bonds, guarantors), if more than 5% of its total assets would
be invested in such securities.
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation. However, in the
case of the borrowing limitation (the first restriction in the Prospectus)
each Fund will, to the extent necessary, reduce its existing borrowings to
comply with the limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Adviser has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or
Funds, age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- --------------
<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 13 -
<PAGE>
<CAPTION>
<S> <C> <C>
John T. Bruce (age 42) Principal None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
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<PAGE>
<CAPTION>
<S> <C> <C>
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 15 -
<PAGE>
<CAPTION>
<S> <C> <C>
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Stratetic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -----------------------------
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette
and Witt constitute the Trust's Audit Committee. The Audit
Committee reviews annually the nature and cost of the
professional services rendered by the Trust's independent
accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial
matters, including the adequacy of internal controls. On the
- 16 -
</TABLE>
<PAGE>
basis of this review the Audit Committee makes recommendations to the Trustees
as to the appointment of independent accountants for the following year. The
Trustees have not appointed a compensation committee or a nominating
committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 2.9% of the then outstanding shares of the Equity Fund and
3.4% of the then outstanding shares of the Balanced Fund. On the same date,
the Trust Company of Knoxville, P.O. Box 789, Knoxville, Tennessee, owned of
record 16.5% of the then outstanding shares of the Equity Fund.
INVESTMENT ADVISER
Flippin, Bruce & Porter, Inc. (the "Adviser") supervises each Fund's
investments pursuant to an Investment Advisory Agreement (the "Advisory
Agreement") described in the Prospectus. The Advisory Agreement is effective
until April 1, 1997 and will be renewed thereafter for one year periods only
so long as such renewal and continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of the Funds'
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust or the
Adviser by vote cast in person at a meeting called for the purpose of voting
on such approval. The Advisory Agreement is terminable without penalty on
sixty days notice by the Board of Trustees of the Trust or by the Adviser. The
Advisory Agreement provides that it will terminate automatically in the event
of its assignment.
Compensation of the Adviser, with respect to each Fund, based upon each Fund's
average daily net assets, is at the following annual rates: On the first $250
million, 0.75%; on the next $250 million, 0.65%; and on assets over $500
million, 0.50%. For the fiscal year ended March 31, 1996, the Equity Fund paid
the Adviser advisory fees of $21,816 (which was net of voluntary fee waivers
of $27,849). The Adviser voluntarily waived its entire advisory fee and
reimbursed a portion of the Equity Fund's operating expenses for the fiscal
years ended March 31, 1995 and 1994; the total fees waived and reimbursed
amounted to $42,110 and $28,946, respectively. For the fiscal years ended
March 31, 1996, 1995 and 1994, the Balanced Fund paid the Adviser advisory
fees of $237,270, $176,987 and $124,313 (which was net of voluntary fee
waivers of $22,820), respectively.
John M. Flippin, John T. Bruce and R. Gregory Porter, III own all
the capital stock of the Adviser and therefore control the
Adviser. In addition to acting as Adviser to the Funds, the
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<PAGE>
Adviser also provides investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional accounts and
individuals.
The Adviser provides a continuous investment program for the Funds, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Funds. The Adviser determines
what securities and other investments will be purchased, retained or sold by
the Funds, and does so in accordance with the investment objectives and
policies of the Funds as described herein and in the Prospectus. The Adviser
places all securities orders for the Funds, determining with which broker,
dealer or issuer to place the orders.
The Adviser must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Adviser must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Adviser also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.20% of the average value of its
daily net assets up to $25,000,000, 0.175% of such assets from $25,000,000 to
$50,000,000 and 0.15% of such assets in excess of $50,000,000; provided,
however, that the minimum fee is $2,000 per month for each Fund. In addition,
the Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
fees of $24,000 and $23,250, respectively, from the Equity Fund and $61,819
and $46,102, respectively, from the Balanced Fund.
- 18 -
<PAGE>
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
The Custodian of the Funds' assets is Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the
Funds (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all
income and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all
portfolio securities transactions. The Adviser (subject to the general
supervision of the Board of Trustees) directs the execution of the Funds'
portfolio transactions. The Trust has adopted a policy which prohibits the
Adviser from effecting Fund portfolio transactions with broker-dealers which
may be interested persons of either Fund, the Trust, any Trustee, officer or
director of the Trust or its investment advisers or any interested person of
such persons.
The Balanced Fund's fixed income portfolio transactions will normally be
principal transactions executed in over-the-counter markets and will be
executed on a "net" basis, which may include a dealer markup. The Funds'
common stock portfolio transactions will normally be exchange traded and will
be effected through broker-dealers who will charge brokerage commissions.
Options would also normally be exchange traded involving the payment of
commissions. With respect to securities traded only in the over-the-counter
market, orders will be executed on a principal basis with primary market
makers in such securities except where better prices or executions may be
obtained on an agency basis or by dealing with other than a primary market
maker.
For the fiscal years ended March 31, 1996, 1995 and 1994, the total amount of
brokerage commissions paid by the Balanced Fund was $16,891, $11,419 and
$23,281, respectively. During the fiscal years ended March 31, 1996, 1995 and
1994, the total amount of brokerage commissions paid by the Equity Fund was
$8,779, $5,216 and $7,649, respectively.
While there is no formula, agreement or undertaking to do so, the Adviser may
allocate a portion of either Fund's brokerage commission to persons or firms
providing the Adviser with
- 19 -
<PAGE>
research services, which may typically include, but are not limited to,
investment recommendations, financial, economic, political, fundamental and
technical market and interest rate data, and other statistical or research
services. Much of the information so obtained may also be used by the Adviser
for the benefit of the other clients it may have. Conversely, the Funds may
benefit from such transactions effected for the benefit of other clients. In
all cases, the Adviser is obligated to effect transactions for the Funds based
upon obtaining the most favorable price and execution. Factors considered by
the Adviser in determining whether the Funds will receive the most favorable
price and execution include, among other things: the size of the order, the
broker's ability to effect and settle the transaction promptly and efficiently
and the Adviser's perception of the broker's reliability, integrity and
financial condition. During the fiscal year ended March 31, 1996, the amount
of brokerage transactions and related commissions directed to brokers because
of research services provided were $3,999,483 and $9,354, respectively, for
the Balanced Fund and $1,337,656 and $3,547, respectively for the Equity Fund.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder
services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly or quarterly investment in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the public offering price on or about the last business day of the
month or quarter. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing to the Administrator.
- 20 -
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $25,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment,
by authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and
December). Checks will be made payable to the designated recipient and mailed
within three business days of the valuation date. If the designated recipient
is other than the registered shareholder, the signature of each shareholder
must be guaranteed on the application (see "Signature Guarantees"). A
corporation (or partnership) must also submit a "Corporate Resolution" (or
"Certification of Partnership") indicating the names, titles and required
number of signatures authorized to act on its behalf. The application must be
signed by a duly authorized officer(s) and the corporate seal affixed. No
redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Funds.
Shareholders should be aware that such systematic withdrawals may deplete or
use up entirely their initial investment and may result in realized long term
or short term capital gains or losses. The Systematic Withdrawal Plan may be
terminated at any time by the Funds upon sixty days' written notice or by a
shareholder upon written notice to the Funds. Applications and further details
may be obtained by calling the Funds at 1-800-443-4249, or by writing to:
The Flippin, Bruce & Porter Funds
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is
at the sole discretion of the Adviser based upon the suitability of the
securities accepted for inclusion as a long term investment of the Funds, the
marketability of such securities, and other factors which the Adviser may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Funds to pay for all redemptions in
cash. In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Funds. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs
- 21 -
<PAGE>
when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay
redemptions in cash, rather than in kind, to any shareholder of record of the
Funds who redeems during any ninety day period, the lesser of (a) $250,000 or
(b) one percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s)
on the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price computed on the date of receipt;
and an order received after that time will be executed at the price computed
on the next Business Day. An order to purchase shares is not binding on the
Funds until confirmed in writing (or unless other arrangements have been made
with the Funds, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Each Fund reserves the right in its sole discretion (i) to suspend the
offering of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial
investment minimums for the purpose of reducing the cost to the Funds (and
consequently to the shareholders) of communicating with and servicing their
shareholders. However, a reduced minimum initial investment requirement of
$1,000 applies to Trustees, officers and employees of the Funds, the Adviser
and certain parties related thereto, including clients of the Adviser or any
sponsor, officer, committee member thereof, or the immediate family of any of
them. In addition, accounts having the same mailing address may be aggregated
for purposes of the
- 22 -
<PAGE>
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment
(i) during any period that the New York Stock Exchange (the "Exchange") is
closed, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission (the "Commission"), (ii) during any period
when an emergency exists as defined by the rules of the Commission as a result
of which it is not reasonably practicable for the Fund to dispose of
securities owned by it, or to fairly determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities
held by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share of
each Fund is determined by dividing the total value of all Fund securities and
other assets, less liabilities, by the total number of shares then
outstanding. Net asset value includes interest on fixed income securities,
which is accrued daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at
- 23 -
<PAGE>
meetings of certain associations which may be deemed by the trustees to be of
overall benefit to the Fund and its shareholders; legal and auditing expenses;
and the cost of stationery and forms prepared exclusively for the Funds.
General Trust expenses are allocated among the series, or Funds, on a fair and
equitable basis by the Board of Trustees, which may be based on relative net
assets of each Fund (on the date the expense is paid) or the nature of the
services performed and the relative applicability to each Fund.
Under the Advisory Agreement, the Adviser may be required to reimburse a Fund
if that Fund's annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
subject to year end adjustment. The Adviser in its discretion may, but is not
required to, reimburse a Fund an amount of money in excess of its advisory
fee.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In
addition to this distribution requirement, each Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities' loans, gains from the disposition of stock or
securities, and certain other income. Each Fund will also be required to
derive less than 30% of its gross income from the sale or other disposition of
securities held for less than 90 days.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter
M, they will not be subject to federal income tax to the extent they
distribute their taxable net investment income and net realized capital gains.
A nondeductible 4% federal excise tax will be imposed on each Fund to the
extent it does not distribute at least 98% of its ordinary taxable income for
a calendar year, plus 98% of its
- 24 -
<PAGE>
capital gain net taxable income for the one year period ending each October
31, plus certain undistributed amounts from prior years. While each Fund
intends to distribute its taxable income and capital gains in a manner so as
to avoid imposition of the federal excise and income taxes, there can be no
assurance that the Funds indeed will make sufficient distributions to avoid
entirely imposition of federal excise or income taxes.
Should additional series, or funds, be created by the Trustees, each fund
would be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from each Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital
gains, will be taxable to shareholders, whether received in cash or shares and
no matter how long you have held Fund shares, even if they reduce the net
asset value of shares below your cost and thus in effect result in a return of
a part of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have
no preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any Trustee may resign or retire and (2) any Trustee may be
removed with or without cause at any time (a) by a written instrument, signed
by at least two-thirds of the number of Trustees prior to such removal; or (b)
by vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c)
- 25 -
<PAGE>
by a written declaration signed by shareholders holding not less than
two-thirds of the outstanding shares of the Trust and filed with the Trust's
custodian. Shareholders have certain rights, as set forth in the Declaration
of Trust, including the right to call a meeting of the shareholders for the
purpose of voting on the removal of one or more Trustees. Shareholders holding
not less than ten percent (10%) of the shares then outstanding may require the
Trustees to call such a meeting and the Trustees are obligated to provide
certain assistance to shareholders desiring to communicate with other
shareholders in such regard (e.g., providing access to shareholder lists,
etc.). In case a vacancy or an anticipated vacancy shall for any reason exist,
the vacancy shall be filled by the affirmative vote of a majority of the
remaining Trustees, subject to the provisions of Section 16(a) of the 1940
Act. The Trust does not expect to have an annual meeting of shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per
share at the beginning of the period from the net asset value per share at the
end of the period (after adjusting for the reinvestment of any income
dividends and capital gain distributions), and dividing the result by the net
asset value per share at the beginning of the period. In particular, the
average annual total return of a Fund ("T") is computed by using the
redeemable value at the end of a specified period of time ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time ("n")
according to the formula P(1+T)n = ERV. The average annual total return
quotations for the Equity Fund for the one year period ended March 31, 1996
and for the period since inception (July 30, 1993) to March 31, 1996 are
29.54% and 16.84%, respectively. The average annual total return quotations
for the Balanced Fund for the one year period ended March 31, 1996, for the
five year period ended March 31, 1996 and for the period since inception (July
3, 1989) to March 31, 1996 are 22.86%, 12.98% and 10.35%, respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation): it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
- 26 -
<PAGE>
From time to time, each Fund may advertise its yield. A yield quotation is
based on a 30-day (or one month) period and is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
Yield = 2[a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity
of each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day
prior to the start of the 30-day (or one month) period for which yield is
being calculated, or, with respect to obligations purchased during the month,
the purchase price (plus actual accrued interest). The yields of the Balanced
Fund and the Equity Fund for the 30 days ended March 31, 1996 were 2.68% and
1.69%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, each Fund may compare its performance to the S&P
500 Index, which is generally considered to be representative of the
performance of unmanaged common stocks that are publicly traded in the United
States securities markets. Comparative performance may also be expressed by
reference to a ranking prepared by a mutual fund monitoring service, such as
Lipper Analytical Services, Inc. or Morningstar, Inc., or by one or more
newspapers, newsletters or financial periodicals. Performance comparisons may
be useful to investors who wish to compare the Funds' past performance to that
of other mutual funds and investment products. Of course, past performance is
not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
- 27 -
<PAGE>
MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain
a more complete view of the Funds' performance before investing. Of course,
when comparing the Funds' performance to any index, factors such as
composition of the index and prevailing market conditions should be considered
in assessing the significance of such comparisons. When comparing funds using
reporting services, or total return, investors should take into consideration
any relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Funds may quote total
returns that are calculated on non-standardized base periods. The total
returns represent the historic change in the value of an investment in the
Funds based on monthly reinvestment of dividends over a specified period of
time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Funds may also disclose from
time to time information about their portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Funds may also depict the
historical performance of the securities in which the Funds may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Funds may also include in
advertisements and in materials furnished to present and prospective
shareholders statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet specific
financial goals, such as saving for retirement, children's education, or other
future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Funds as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
- 28 -
<PAGE>
Annual Report
March 31, 1996
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
<PAGE>
LETTER TO SHAREHOLDERS MAY 15, 1996
===============================================================================
We are pleased to report on the progress of your Fund and its investments
for the fiscal year ending March 31,1996. The following table displays the
total return (capital change plus income) of the Funds for the past six months
and one year.
Six Twelve
MONTHS MONTHS
FBP Contrarian Equity Fund 9.1% 29.5%
FBP Contrarian Balanced Fund 7.2% 22.9%
REVIEW AND OUTLOOK
The first calendar quarter of 1996 gave investors mixed results from the
financial markets. Stocks continued last year's strong gains with the S&P 500
Index increasing 5.4%. However, bond returns were a negative 2.3%, as
long-term Treasury bond rates increased from 5.95% to 6.67%. This rise in
interest rates has continued throughout April and early May and is approaching
levels which could negatively affect stocks.
Expectations at year end were for a continued weak economy with low
inflation and additional Federal Reserve easing. The weak bond market during
the first quarter was a reflection of the market being wrong on all three
points. Our economy improved from last quarter's slow pace as housing and auto
sales rebounded and unemployment continued to drop. Combined with rising
agricultural and energy prices, inflation concerns resurfaced. And finally,
the Federal Reserve resisted lowering short-term interest rates without
renewed evidence of a weakening economy.
The surge in stock prices was fueled by the record inflow into mutual funds
from December through March, coupled with an economic pickup. The volatility
of stocks has increased, reflecting weakness in the bond market. Leadership
has been centered in previous laggards such as economically sensitive issues
and conglomerates. Financial issues continued their outperformance and retail
stocks, which we added to the Funds during November and December, displayed
surprising strength.
Over the balance of the year, the economy should continue to grow at a
sluggish 2% rate, with low inflation and lower interest rates by year end.
With the increase in interest rates over the past five months, we believe the
majority of the risk of higher rates is behind us. We therefore will begin to
lengthen our maturities in the Balanced Fund to take advantage of the higher
yields available. The Equity Fund's cash position has risen to 25% recently
due to new additions by shareholders. Any weakness which develops in the stock
market will be used as an opportunity to make additional investments.
COMPARATIVE CHARTS
Performance for each Fund is compared on the next page to the most
appropriate broad-based index, the S&P 500, an unmanaged index of 500 large
common stocks. For the six months and one year ended March 31, 1996, the total
return of the S&P 500 Index was 11.71% and 32.10%, respectively. Over time,
this index has outpaced the FBP Contrarian Balanced Fund which maintains at
least 25% bonds. Balanced funds have the growth potential to outpace
inflation, but they will typically be outperformed by a 100% stock index over
the long term because of the bond portion of their portfolios. However, the
advantage of the bond portion is that it can make the return and principal of
a balanced fund more stable than a portfolio completely invested in stocks.
Results are also compared to the Consumer Price Index, a measure of inflation.
Thank you for your continued confidence and investment in The Flippin,
Bruce & Porter Funds.
/s/John M. Flippin
John M. Flippin
President
/s/John T. Bruce, CFA
John T. Bruce, CFA
Vice President
Portfolio Manager
<PAGE>
A representation of the graphic material contained in the Flippin, Bruce
and Porter Funds Annual Report is set forth below.
1. Comparison of the Change in Value of a $10,000 Investment in the FBP
Contrarian Equity Fund and the Standard & Poor's 500 Index and Consumer Price
Index
STANDARD & POOR'S 500 INDEX: FBP CONTRARIAN EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
07/31/93 10,000 07/31/93 10,000
09/30/93 2.99% 10,299 09/30/93 3.05% 10,305
12/31/93 2.32% 10,538 12/31/93 1.99% 10,510
03/31/94 -3.79% 10,139 03/31/94 -1.92% 10,308
06/30/94 0.42% 10,181 06/30/94 0.69% 10,379
09/30/94 4.88% 10,678 09/30/94 7.34% 11,141
12/31/94 -0.02% 10,676 12/31/94 -1.30% 10,996
03/31/95 9.74% 11,716 03/31/95 6.42% 11,702
06/30/95 9.55% 12,834 06/30/95 9.37% 12,798
09/30/95 7.95% 13,854 09/30/95 8.5% 13,890
12/31/95 6.02% 14,688 12/31/95 3.24% 14,340
03/31/96 5.37% 15,477 03/31/96 5.71% 15,158
<PAGE>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
07/31/93 10,000
09/30/93 0.40% 10,040
12/31/93 0.70% 10,110
03/31/94 0.50% 10,161
06/30/94 0.60% 10,222
09/30/94 0.90% 10,314
12/31/94 0.60% 10,376
03/31/95 0.80% 10,460
06/30/95 0.90% 10,554
09/30/95 0.40% 10,596
12/31/95 0.50% 10,649
03/31/96 0.80% 10,735
Past performance is not predictive of future performance.
The FBP Contrarian Equity Fund - Average Annual Total Returns
1 Year ........................29.54%
Since Inception*...............16.84%
*Initial public offering of shares was July 30, 1993.
2. Comparison of the Change in Value of a $10,000 Investment in the FBP
Contrarian Balanced Fund and the Standard & Poor's 500 Index and Consumer
Price Index
STANDARD & POOR'S 500 INDEX: FBP CONTRARIAN BALANCED FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
07/03/89 10,000 07/03/89 10,000
09/30/89 10.71% 11,071 09/30/89 -1.08% 9,892
12/31/89 2.06% 11,299 12/31/89 0.05% 9,897
03/31/90 -3.00% 10,960 03/31/90 -0.30% 9,867
06/30/90 6.28% 11,648 06/30/90 1.95% 10,059
09/30/90 -13.75% 10,047 09/30/90 -13.02% 8,749
12/31/90 8.97% 10,948 12/31/90 4.22% 9,118
03/31/91 14.53% 12,539 03/31/91 15.76% 10,555
06/30/91 -0.23% 12,510 06/30/91 1.21% 10,683
09/30/91 5.35% 13,179 09/30/91 4.18% 11,130
12/31/91 8.38% 14,284 12/31/91 4.29% 11,607
03/31/92 -2.53% 13,922 03/31/92 5.23% 12,214
06/30/92 1.90% 14,187 06/30/92 1.80% 12,434
09/30/92 3.15% 14,634 09/30/92 0.89% 12,545
12/31/92 5.03% 15,370 12/31/92 5.82% 13,275
03/31/93 4.36% 16,040 03/31/93 3.74% 13,772
06/30/93 0.48% 16,117 06/30/93 0.75% 13,875
09/30/93 2.58% 16,533 09/30/93 4.13% 14,448
12/31/93 2.32% 16,916 12/31/93 1.04% 14,598
03/31/94 -3.79% 16,275 03/31/94 -2.00% 14,306
06/30/94 0.42% 16,343 06/30/94 0.13% 14,324
09/30/94 4.88% 17,141 09/30/94 4.82% 15,015
12/31/94 -0.02% 17,138 12/31/94 -0.97% 14,870
03/31/95 9.74% 18,807 03/31/95 6.35% 15,814
06/30/95 9.55% 20,602 06/30/95 7.70% 17,031
09/30/95 7.95% 22,240 09/30/95 6.43% 18,126
12/31/95 6.02% 23,579 12/31/95 3.10% 18,689
03/31/96 5.37% 24,844 03/31/96 3.96% 19,429
<PAGE>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
07/03/89 10,000
09/30/89 0.75% 10,075
12/31/89 1.00% 10,151
03/31/90 2.01% 10,355
06/30/90 0.90% 10,448
09/30/90 1.71% 10,627
12/31/90 1.71% 10,808
03/31/91 0.90% 10,906
06/30/91 0.40% 10,950
09/30/91 0.60% 11,015
12/31/91 0.90% 11,115
03/31/92 0.70% 11,193
06/30/92 0.80% 11,283
09/30/92 0.70% 11,362
12/31/92 0.80% 11,453
03/31/93 0.90% 11,556
06/30/93 0.60% 11,626
09/30/93 0.40% 11,672
12/31/93 0.70% 11,754
03/31/94 0.50% 11,813
06/30/94 0.60% 11,884
09/30/94 0.90% 11,991
12/31/94 0.60% 12,063
03/31/95 0.80% 12,159
06/30/95 0.90% 12,269
09/30/95 0.40% 12,318
12/31/95 0.50% 12,380
03/31/96 0.80% 12,479
Past performance is not predictive of future performance.
The FBP Contrarian Balanced Fund - Average Annual Total Returns
1 Year ........................22.86%
5 Years........................12.98%
Since Inception*...............10.35%
*Initial public offering of shares was July 3, 1989.
<PAGE>
<TABLE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
===================================================================================================================
<CAPTION>
SHARES COMMON STOCKS - 79.9% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES - 2.3%
3,500 Dun & Bradstreet Corporation................................................. $ 212,188
--------------
CHEMICALS - 2.2%
1,400 Dow Chemical Company......................................................... 121,625
8,000 Ethyl Corporation............................................................ 77,000
--------------
......................................................................... 198,625
--------------
COMMERCIAL BANKING - 9.8%
5,344 Banc One Corporation......................................................... 190,380
2,300 Chemical Banking Corporation................................................. 162,150
2,700 Citicorp..................................................................... 216,000
1,629 First Chicago NBD Corporation................................................ 67,603
3,200 NationsBank Corporation...................................................... 256,400
--------------
......................................................................... 892,533
--------------
COMMUNICATIONS - 4.7%
5,900 GTE Corporation.............................................................. 258,862
2,700 Harris Corporation........................................................... 167,063
--------------
......................................................................... 425,925
--------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES - 6.0%
4,000 International Business Machines(c) .......................................... 444,500
11,300 Tandem Computers, Inc.(b) ................................................... 100,287
--------------
......................................................................... 544,787
--------------
CONSUMER GOODS & SERVICES - 3.9%
3,100 Dean Foods Company........................................................... 77,500
3,200 Philip Morris Companies, Inc................................................. 280,800
--------------
......................................................................... 358,300
--------------
DRUGS/MEDICAL EQUIPMENT - 10.1%
4,200 Allergan, Inc................................................................ 154,875
2,700 Bristol-Myers Squibb Company................................................. 231,187
1,700 Johnson & Johnson (c) ....................................................... 156,825
3,000 Merck & Company, Inc......................................................... 186,750
4,640 Pharmacia & Upjohn, Inc...................................................... 185,020
--------------
......................................................................... 914,657
--------------
DURABLE GOODS - 6.9%
5,200 Digital Equipment Corporation(b) (c) ........................................ 286,650
1,200 General Electric Company..................................................... 93,450
1,500 Genuine Parts Company........................................................ 67,500
5,600 WMX Technologies, Inc........................................................ 177,800
--------------
......................................................................... 625,400
--------------
FINANCE - 2.5%
3,000 Student Loan Marketing Association........................................... 229,500
--------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===================================================================================================================
SHARES COMMON STOCKS - 79.9% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE - 4.7%
1,200 Aetna Life & Casualty Company................................................ $ 90,600
8,000 First Colony Corporation..................................................... 191,000
1,600 Marsh & McLennan Companies, Inc.............................................. 148,600
--------------
......................................................................... 430,200
--------------
MANAGEMENT SERVICES - 1.7%
2,800 PHH Corporation.............................................................. 155,750
--------------
OIL & OIL DRILLING - 6.0%
3,000 Equitable Resources, Inc..................................................... 87,750
12,500 Oryx Energy Company(b) ...................................................... 173,438
3,500 Pennzoil Company............................................................. 139,125
1,800 Schlumberger Limited (c) .................................................... 142,425
--------------
......................................................................... 542,738
--------------
PAPER & FOREST PRODUCTS - 1.5%
3,000 Weyerhaeuser Company......................................................... 138,375
--------------
PHOTOGRAPHICAL PRODUCTS - 2.0%
2,500 Eastman Kodak Company........................................................ 177,500
--------------
PRINTING - 1.9%
5,000 R. R. Donnelley & Sons Company............................................... 172,500
--------------
RETAIL STORES - 9.4%
6,100 Circuit City Stores, Inc..................................................... 182,237
5,200 Cracker Barrel Old Country Store, Inc........................................ 120,900
23,000 K-Mart Corporation(b) ....................................................... 215,625
6,000 Toys R Us, Inc.(b) .......................................................... 162,000
7,800 Wal-Mart Stores, Inc......................................................... 180,375
--------------
......................................................................... 861,137
--------------
TRANSPORTATION - 3.2%
4,800 Alexander & Baldwin, Inc..................................................... 115,200
2,500 Federal Express Corporation(b) ............................................. 174,688
--------------
......................................................................... 289,888
--------------
TRAVEL & INVESTMENT SERVICES - 1.1%
2,000 American Express Company..................................................... 98,750
--------------
TOTAL COMMON STOCKS (COST $5,530,374) ...................................... $ 7,268,753
--------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===================================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) - 23.8% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 2,161,251 Lehman Brothers, 5.38%, dated 03/29/96, due 04/01/96,
repurchase proceeds $2,162,220 (Cost $2,161,251)......................... $ 2,161,251
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE - 103.7% ............... $ 9,430,004
LIABILITIES IN EXCESS OF OTHER ASSETS - (3.7)% .............................. ( 340,090 )
--------------
NET ASSETS - 100.0% ......................................................... $ 9,089,914
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/96. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $2,213,548.
(b)Non-income producing security.
(c)Security covers a call option.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
===================================================================================================================
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1996
===================================================================================================================
<CAPTION>
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Digital Equipment Corporation,
500 07/20/96 at $80........................................... $ 313 $ 2,710
400 01/18/97 at $70........................................... 1,750 3,371
International Business Machines,
500 07/20/96 at $130.......................................... 1,188 3,710
Johnson & Johnson,
300 04/20/96 at $90........................................... 1,162 1,573
Schlumberger Limited,
400 08/17/96 at $80........................................... 1,700 1,860
-------------- -------------
.......................................................... $ 6,113 $ 13,224
============== =============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
===================================================================================================================
<CAPTION>
SHARES COMMON STOCKS - 60.4% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES - 1.5%
9,000 Dun & Bradstreet Corporation................................................. $ 545,625
--------------
CHEMICALS - 2.0%
6,000 Dow Chemical Company......................................................... 521,250
20,000 Ethyl Corporation............................................................ 192,500
--------------
......................................................................... 713,750
--------------
COMMERCIAL BANKING - 7.4%
13,590 Banc One Corporation......................................................... 484,144
7,500 Chemical Banking Corporation................................................. 528,750
8,000 Citicorp..................................................................... 640,000
5,430 First Chicago NBD Corporation................................................ 225,345
9,400 NationsBank Corporation...................................................... 753,175
--------------
......................................................................... 2,631,414
--------------
COMMUNICATIONS - 3.3%
15,000 GTE Corporation.............................................................. 658,125
8,500 Harris Corporation........................................................... 525,937
--------------
......................................................................... 1,184,062
--------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES - 4.0%
10,000 International Business Machines(c) .......................................... 1,111,250
37,000 Tandem Computers, Inc.(b) ................................................... 328,375
--------------
......................................................................... 1,439,625
--------------
CONSUMER GOODS & SERVICES - 3.4%
9,000 Dean Foods Company........................................................... 225,000
11,200 Philip Morris Companies, Inc................................................. 982,800
--------------
......................................................................... 1,207,800
--------------
DRUGS/MEDICAL EQUIPMENT - 7.8%
13,000 Allergan, Inc................................................................ 479,375
7,000 Bristol-Myers Squibb Company................................................. 599,375
7,500 Johnson & Johnson(c) ........................................................ 691,875
5,000 Merck & Company, Inc......................................................... 311,250
17,400 Pharmacia & Upjohn, Inc...................................................... 693,825
--------------
......................................................................... 2,775,700
--------------
DURABLE GOODS - 5.2%
13,200 Digital Equipment Corporation(b)(c) ......................................... 727,650
5,600 General Electric Company..................................................... 436,100
4,300 Genuine Parts Company........................................................ 193,500
16,000 WMX Technologies, Inc........................................................ 508,000
--------------
......................................................................... 1,865,250
--------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===================================================================================================================
SHARES COMMON STOCKS - 60.4% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE - 2.1%
10,000 Student Loan Marketing Association........................................... $ 765,000
--------------
INSURANCE - 4.8%
5,300 Aetna Life & Casualty Company................................................ 400,150
4,275 American International Group................................................. 400,247
18,000 First Colony Corporation..................................................... 429,750
5,000 Marsh & McLennan Companies, Inc.............................................. 464,375
--------------
......................................................................... 1,694,522
--------------
MANAGEMENT SERVICES - 1.4%
9,000 PHH Corporation.............................................................. 500,625
--------------
OIL & OIL DRILLING - 3.7%
6,800 Equitable Resources, Inc..................................................... 198,900
25,000 Oryx Energy Company(b) ...................................................... 346,875
9,600 Pennzoil Company............................................................. 381,600
5,000 Schlumberger Limited(c) ..................................................... 395,625
--------------
......................................................................... 1,323,000
--------------
PAPER & FOREST PRODUCTS - 1.3%
10,000 Weyerhaeuser Company......................................................... 461,250
--------------
PHOTOGRAPHICAL PRODUCTS - 1.4%
6,800 Eastman Kodak Company(c) .................................................... 482,800
--------------
PRINTING - 1.3%
13,000 R. R. Donnelley & Sons Company............................................... 448,500
--------------
RETAIL STORES - 6.9%
15,600 Circuit City Stores, Inc..................................................... 466,050
16,000 Cracker Barrel Old Country Store, Inc........................................ 372,000
68,000 K-Mart Corporation(b) ....................................................... 637,500
19,000 Toys R Us, Inc.(b) .......................................................... 513,000
20,000 Wal-Mart Stores, Inc......................................................... 462,500
--------------
......................................................................... 2,451,050
--------------
TRANSPORTATION - 1.8%
8,600 Alexander & Baldwin, Inc..................................................... 206,400
6,500 Federal Express Corporation(b) .............................................. 454,188
--------------
......................................................................... 660,588
--------------
TRAVEL & INVESTMENT SERVICES - 1.1%
8,000 American Express Company..................................................... 395,000
--------------
TOTAL COMMON STOCKS (COST $14,428,951) ................................. $ 21,545,561
--------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===================================================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 20.7% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES - 16.1%
$ 500,000 6.00%, due 06/30/96...................................................... $ 500,781
500,000 6.25%, due 01/31/97...................................................... 503,438
500,000 5.625%, due 06/30/97..................................................... 500,156
200,000 5.50%, due 09/30/97...................................................... 199,437
500,000 5.375%, due 05/31/98..................................................... 495,313
500,000 5.875%, due 08/15/98..................................................... 500,156
500,000 5.50%, due 02/28/99...................................................... 494,218
500,000 6.75%, due 06/30/99...................................................... 511,093
500,000 7.75%, due 01/31/00...................................................... 528,125
500,000 5.625%, due 02/28/01..................................................... 490,000
500,000 6.25%, due 02/15/03...................................................... 498,281
500,000 7.25%, due 05/15/04...................................................... 526,563
--------------
......................................................................... 5,747,561
--------------
FEDERAL FARM CREDIT BANK - .6%
200,000 5.84%, due 12/23/96...................................................... 200,601
--------------
FEDERAL HOME LOAN BANK - .6%
200,000 6.16%, due 01/02/97...................................................... 200,946
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - .4%
150,000 8.125%, due 09/30/96..................................................... 152,028
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.0%
1,000,000 9.05%, due 05/10/21...................................................... 1,060,869
--------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (COST $7,308,126) .............. $ 7,362,005
--------------
<PAGE>
<CAPTION>
===================================================================================================================
PAR VALUE CORPORATE BONDS - 8.4% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE - 1.3%
Signet Banking Corporation,
$ 150,000 9.625%, due 06/01/99..................................................... $ 162,333
United Dominion Realty,
300,000 7.25%, due 04/01/99...................................................... 299,985
--------------
......................................................................... 462,318
--------------
INDUSTRIAL - 4.3%
Baxter International, Inc.,
75,000 9.25%, due 12/15/99...................................................... 81,458
Boise Cascade Corporation,
175,000 10.125%, due 12/15/97.................................................... 185,230
Comdisco, Inc.,
150,000 9.75%, due 01/15/97...................................................... 154,458
Dayton Hudson Corporation,
125,000 9.25%, due 11/15/16...................................................... 131,353
195,000 9.875%, due 06/01/17..................................................... 206,881
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===================================================================================================================
PAR VALUE CORPORATE BONDS - 8.4% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delta Air Equipment Trust,
$ 146,000 9.43%, due 11/17/96...................................................... $ 148,553
Georgia Pacific Corporation,
300,000 9.75%, due 01/15/18...................................................... 314,435
Hilton Hotels,
300,000 7.70%, due 07/15/02...................................................... 302,222
--------------
......................................................................... 1,524,590
--------------
UTILITIES - 2.8%
Commonwealth Edison Company,
300,000 9.50%, due 05/01/16...................................................... 314,473
Niagara Mohawk Power,
500,000 9.50%, due 03/01/21...................................................... 479,782
Texas Eastern Transmission,
185,000 10.00%, due 10/01/11..................................................... 195,779
--------------
......................................................................... 990,034
--------------
TOTAL CORPORATE BONDS (COST $2,918,906) .................................... $ 2,976,942
--------------
TOTAL INVESTMENTS AT VALUE (COST $24,655,983) - 89.5% ...................... $ 31,884,508
--------------
<PAGE>
<CAPTION>
===================================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) - 10.0% VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,576,231 Lehman Brothers, 5.38%, dated 03/29/96, due 04/01/96,
repurchase proceeds $3,577,834 (Cost $3,576,231)......................... $ 3,576,231
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE - 99.5% ................ $ 35,460,739
OTHER ASSETS IN EXCESS OF LIABILITIES - .5% ................................. 179,992
--------------
NET ASSETS - 100.0% ......................................................... $35,640,731
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/96. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $3,662,768.
(b)Non-income producing security.
(c)Security covers a call option.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1996
===================================================================================================================
<CAPTION>
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Digital Equipment Corporation,
2,000 07/20/96 at $80........................................... $ 1,250 $ 10,920
1,000 01/18/97 at $70........................................... 4,375 8,488
Eastman Kodak Company,
1,000 04/20/96 at $70........................................... 3,125 4,085
International Business Machines,
1,500 07/20/96 at $130.......................................... 3,563 11,189
Johnson & Johnson,
1,000 04/20/96 at $90........................................... 3,875 5,335
1,500 07/20/96 at $100.......................................... 3,375 7,815
Schlumberger Limited,
1,000 05/18/96 at $75........................................... 5,750 3,585
1,000 08/17/96 at $80........................................... 4,250 4,710
-------------- -------------
.......................................................... $ 29,563 $ 56,127
============== =============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
===================================================================================================================
<CAPTION>
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities:
At acquisition cost.................................................. $ 5,530,374 $ 24,655,983
=============== ===============
At value (Note 1).................................................... $ 7,268,753 $ 31,884,508
Investments in repurchase agreements (Note 1).......................... 2,161,251 3,576,231
Interest receivable.................................................... 9,634 222,505
Dividends receivable................................................... 13,760 43,504
Receivable for capital shares sold..................................... 16,715 3,242
Other assets........................................................... -- 2,946
--------------- ---------------
TOTAL ASSETS......................................................... 9,470,113 35,732,936
--------------- ---------------
LIABILITIES
Payable for securities purchased....................................... 350,080 --
Payable for capital shares redeemed.................................... 1,500 3,968
Dividends payable...................................................... 7,204 15,437
Accrued advisory fees (Note 3)......................................... 4,210 22,910
Accrued administration fees (Note 3)................................... 2,000 5,800
Other accrued expenses................................................. 9,092 14,527
Covered call options, at value (Note 4)
(premiums received $13,224 and $56,127, respectively) ............... 6,113 29,563
--------------- ---------------
TOTAL LIABILITIES.................................................... 380,199 92,205
--------------- ---------------
NET ASSETS ............................................................... $ 9,089,914 $ 35,640,731
=============== ===============
Net assets consist of:
Capital shares......................................................... $ 7,197,699 $ 27,910,179
Undistributed net investment income.................................... 1,883 7,184
Accumulated net realized gains from security transactions.............. 144,842 468,279
Net unrealized appreciation on investments............................. 1,745,490 7,255,089
--------------- ---------------
Net assets................................................................ $ 9,089,914 $ 35,640,731
=============== ===============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value).............................................. 639,722 2,397,993
=============== ===============
Net asset value, offering price and redemption price per share (Note 1)... $ 14.21 $ 14.86
=============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1996
===================================================================================================================
<CAPTION>
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................... $ 73,785 $ 878,978
Dividends.............................................................. 133,911 450,838
--------------- ---------------
TOTAL INVESTMENT INCOME.............................................. 207,696 1,329,816
--------------- ---------------
EXPENSES
Investment advisory fees (Note 3)...................................... 49,665 237,270
Administrative fees (Note 3)........................................... 24,000 61,819
Custodian fees......................................................... 10,313 29,340
Professional fees...................................................... 7,761 12,801
Trustees' fees and expenses............................................ 5,573 5,573
Registration fees...................................................... 4,477 5,933
Postage and supplies................................................... 3,572 5,793
Printing of shareholder reports........................................ 2,701 4,842
Pricing costs.......................................................... 1,163 4,152
Other expenses......................................................... 1,399 3,142
--------------- ---------------
TOTAL EXPENSES....................................................... 110,624 370,665
Fees waived by the Adviser (Note 3).................................... ( 27,849 ) --
--------------- ---------------
NET EXPENSES......................................................... 82,775 370,665
--------------- ---------------
NET INVESTMENT INCOME .................................................... 124,921 959,151
--------------- ---------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions.......................... 162,612 1,151,459
Net realized gains on option contracts written......................... 5,145 17,162
Net change in unrealized appreciation/depreciation on investments...... 1,328,851 4,142,023
--------------- ---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ......................... 1,496,608 5,310,644
--------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ............................... $ 1,621,529 $ 6,269,795
=============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 1996 AND 1995
===================================================================================================================
<CAPTION>
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income....................... $ 124,921 $ 88,556 $ 959,151 $ 731,725
Net realized gains on:
Security transactions..................... 162,612 4,052 1,151,459 355,025
Option contracts written.................. 5,145 2,015 17,162 25,009
Net change in unrealized appreciation/
depreciation on investments............... 1,328,851 447,385 4,142,023 1,297,628
------------ ------------- ------------- ------------
Net increase in net assets from operations..... 1,621,529 542,008 6,269,795 2,409,387
------------ ------------- ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.................. ( 124,493) ( 94,782) ( 958,803) ( 743,557)
From net realized gains..................... ( 22,509) ( 23,427) ( 863,702) ( 473,702)
------------ ------------- ------------- ------------
Decrease in net assets from
distributions to shareholders............... ( 147,002) ( 118,209) ( 1,822,505) ( 1,217,259)
------------ ------------- ------------- ------------
FROM CAPITAL SHARE TRANSACTIONS(A)
Proceeds from shares sold................... 3,064,694 2,323,648 6,203,415 4,099,675
Net asset value of shares issued in reinvestment
of distributions to shareholders.......... 105,309 65,930 1,739,955 1,156,950
Payments for shares redeemed................ ( 877,596) ( 625,056) ( 2,725,615) ( 2,441,929)
------------ ------------- ------------- ------------
Net increase in net assets from
capital share transactions.................. 2,292,407 1,764,522 5,217,755 2,814,696
------------ ------------- ------------- ------------
TOTAL INCREASE IN NET ASSETS .................. 3,766,934 2,188,321 9,665,045 4,006,824
NET ASSETS
Beginning of year........................... 5,322,980 3,134,659 25,975,686 21,968,862
------------ ------------- ------------- ------------
End of year - (including undistributed net
investment income of $1,883, $1,455,
$7,184 and $6,836, respectively).......... $ 9,089,914 $ 5,322,980 $ 35,640,731 $25,975,686
============ ============= ============= ============
(a) Summary of capital share activity:
Shares sold................................. 227,338 219,734 437,108 330,320
Shares issued in reinvestment of distributions
to shareholders........................... 7,962 6,159 122,643 93,803
Shares redeemed............................. ( 70,241) ( 59,971) ( 191,450) ( 195,945)
------------ ------------- ------------- ------------
Net increase in shares outstanding.......... 165,059 165,922 368,301 228,178
Shares outstanding, beginning of year....... 474,663 308,741 2,029,692 1,801,514
------------ ------------- ------------- ------------
Shares outstanding, end of year............. 639,722 474,663 2,397,993 2,029,692
============ ============= ============= ============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
<CAPTION>
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
===================================================================================================================
YEAR YEAR JULY 30,
ENDED ENDED 1993(A) TO
MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period.................... $ 11.21 $ 10.15 $ 10.00
--------------- --------------- ---------------
Income from investment operations:
Net investment income.................................. 0.24 0.21 0.12
Net realized and unrealized gains on investments....... 3.05 1.14 0.19
--------------- --------------- ---------------
Total from investment operations.......................... 3.29 1.35 0.31
--------------- --------------- ---------------
Less distributions:
Dividends from net investment income................... ( 0.24 ) ( 0.23 ) ( 0.10 )
Distributions from net realized gains.................. ( 0.05 ) ( 0.06 ) ( 0.06 )
--------------- --------------- ---------------
Total distributions....................................... ( 0.29 ) ( 0.29 ) ( 0.16 )
--------------- --------------- ---------------
Net asset value at end of period.......................... $ 14.21 $ 11.21 $ 10.15
=============== =============== ===============
Total return.............................................. 29.54% 13.52% 4.59% (c)
=============== =============== ===============
Net assets at end of period (000's)....................... $ 9,090 $ 5,323 $ 3,135
=============== =============== ===============
Ratio of expenses to average net assets(b) ............... 1.25% 1.25% 1.25% (c)
Ratio of net investment income to average net assets...... 1.89% 2.15% 1.98% (c)
Portfolio turnover rate................................... 12% 9% 7%
<FN>
(a)Commencement of operations.
(b)Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.67%, 2.27% and 3.10%(c)
for the periods ended March 31, 1996, 1995 and 1994, respectively (Note 3).
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
<CAPTION>
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===================================================================================================================
YEARS ENDED MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 12.80 $ 12.19 $ 12.10 $ 11.10 $ 9.90
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.43 0.38 0.33 0.34 0.36
Net realized and unrealized gains
on investments....................... 2.44 0.87 0.15 1.06 1.17
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 2.87 1.25 0.48 1.40 1.53
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... ( 0.43) ( 0.39 ) ( 0.32) ( 0.35) ( 0.33 )
Distributions from net realized gains.. ( 0.38) ( 0.25 ) ( 0.07) ( 0.05) --
----------- ----------- ---------- ---------- -----------
Total distributions....................... ( 0.81) ( 0.64 ) ( 0.39) ( 0.40) ( 0.33 )
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 14.86 $ 12.80 $ 12.19 $ 12.10 $ 11.10
=========== =========== ========== ========== ===========
Total return.............................. 22.86% 10.54% 3.88% 12.76% 15.71%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 35,641 $ 25,976 $ 21,969 $ 16,435 $ 9,572
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets... 1.17% 1.17% (a) 1.25%(b) 1.31%(b) 1.35% (b)
Ratio of net investment income
to average net assets.................. 3.04% 3.10% 2.64% 3.09% 3.61%
Portfolio turnover rate................... 17% 14% 28% 27% 14%
<FN>
(a)In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's custodian fees for the year ended March 31, 1995 was paid
through an arrangement with a third-party broker-dealer who was compensated
through commission trades. Payment of the fees was based on a percentage of
commissions earned. Absent expenses reimbursed through the directed
brokerage arrangement, the ratio of expenses to average net assets would
have been 1.20% for the year ended March 31, 1995.
(b)Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.36%, 1.43% and 1.66% for
the years ended March 31, 1994, 1993 and 1992, respectively (Note 3).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the
Funds) are no-load, diversified, open-end series of the Williamsburg
Investment Trust (the Trust), a registered management investment company under
the Investment Company Act of 1940, as amended. The Trust was organized as a
Massachusetts business trust on July 18, 1988.
The FBP Contrarian Equity Fund seeks long term growth of capital through
investment in a diversified portfolio comprised primarily of equity
securities, with current income as a secondary objective.
The FBP Contrarian Balanced Fund seeks long term capital appreciation and
current income through investment in a balanced portfolio of equity and fixed
income securities assuming a moderate level of investment risk.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national stock exchange
are valued based upon the closing price on the principal exchange where the
security is traded. It is expected that fixed income securities of the FBP
Contrarian Balanced Fund will ordinarily be traded on the over-the-counter
market, and common stocks of each Fund will ordinarily be traded on a national
securities exchange, but may also be traded on the over-the-counter market.
When market quotations are not readily available, fixed income securities may
be valued on the basis of prices provided by an independent pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market value. At the time
the Funds enter into the joint repurchase agreement, the Funds take possession
of the underlying securities and the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal
to or exceed the face amount of the repurchase agreement. In addition, each
Fund actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities
purchased are amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of each Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and
net realized long-term capital gains, if any, are distributed at least once
each year. Income distributions and capital gain distributions are determined
in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Options transactions -- The Funds may write covered call options for which
premiums are received and are recorded as liabilities, and are subsequently
valued daily at the closing prices on their primary exchanges. Premiums
received from writing options which expire are treated as realized gains.
Premiums received from writing options which are exercised increase the
proceeds used to calculate the realized gain or loss on the sale of the
security. If a closing purchase transaction is used to terminate the Funds'
obligation on a call, a gain or loss will be realized, depending upon whether
the price of the closing purchase transaction is more or less than the premium
previously received on the call written.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
<PAGE>
<TABLE>
The following information is based upon the federal income tax cost of
portfolio investments of each Fund as of March 31, 1996:
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized appreciation............................................. $ 1,904,816 $ 7,879,964
Gross unrealized depreciation............................................. ( 159,326 ) ( 624,875 )
--------------- ---------------
Net unrealized appreciation............................................... $ 1,745,490 $ 7,255,089
=============== ===============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax basis of investments for each Fund is equal to the acquisition cost as
shown on the Statements of Assets and Liabilities.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1996, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments,
amounted to $2,533,234 and $646,502, respectively, for the FBP Contrarian
Equity Fund and $8,984,247 and $4,408,828, respectively, for the FBP
Contrarian Balanced Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by Flippin, Bruce & Porter, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .75% on its
average daily net assets up to $250 million; .65% on the next $250 million of
such net assets; and .50% on such net assets in excess of $500 million.
States in which shares of the Funds are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse each
Fund for expenses which exceed the most restrictive applicable expense
limitation of any state. The Adviser currently intends to limit the total
operating expenses of the FBP Contrarian Equity Fund to 1.25% of average daily
net assets. Accordingly, the Adviser voluntarily waived $27,849 of its
investment advisory fees for the FBP Contrarian Equity Fund for the year ended
March 31, 1996.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Funds. For these services, MGF receives a monthly fee from each Fund at an
annual rate of .20% on its average daily net assets up to $25 million; .175%
on the next $25 million of such net assets; and .15% on such net assets in
excess of $50 million, subject to a $2,000 minimum monthly fee. In addition,
each Fund pays out-of-pocket expenses including, but not limited to, pricing
costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
<PAGE>
<TABLE>
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31,
1996 is as follows:
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
NUMBER OF OPTION NUMBER OF OPTION
OPTIONS PREMIUMS OPTIONS PREMIUMS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at beginning of year....... -- $ -- 20 $ 6,170
Options written................................ 48 25,439 182 90,463
Options expired................................ ( 11) ( 5,145) ( 37) ( 17,162)
Options exercised.............................. ( 16) ( 7,070) ( 65) ( 23,344)
---------- ---------- ------------ ----------
Options outstanding at end of year............. 21 $ 13,224 100 $ 56,127
========== ========== ============ ==========
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
===============================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities
of the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund, (each
a series of The Williamsburg Investment Trust), including the portfolios of
investments, as of March 31, 1996, and the related statements of operations
for the year then ended, and the statements of changes in net assets for each
of the two years in the period then ended, and the financial highlights for
the periods indicated thereon. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the FBP Contrarian Equity Fund and the FBP Contrarian Balanced
Fund as of March 31, 1996, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and their financial highlights for the periods referred to above,
in conformity with generally accepted accounting principles.
Tait, Weller & Baker
<PAGE>
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
INVESTMENT ADVISER
Flippin, Bruce & Porter, Inc.
800 Main Street, Suite 202
P.O. Box 6138
Lynchburg, Virginia 24505
800-FBP-9375
TRANSFER AGENT AND
SHAREHOLDER SERVICING AGENT
MGF Service Corp.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
800-443-4249
OFFICERS
John M. Flippin, President
John T. Bruce, Vice President
and Portfolio Manager
R. Gregory Porter, III, Vice President
TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE
GOVERNMENT STREET
FUNDS
The Government Street Equity Fund
The Government Street Bond Fund
August 1, 1996
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES....................................... 2
DESCRIPTION OF BOND RATINGS.............................................. 5
INVESTMENT LIMITATIONS................................................... 7
TRUSTEES AND OFFICERS.................................................... 9
INVESTMENT ADVISOR....................................................... 13
ADMINISTRATOR............................................................ 14
OTHER SERVICES........................................................... 14
BROKERAGE................................................................ 15
SPECIAL SHAREHOLDER SERVICES............................................. 16
PURCHASE OF SHARES....................................................... 18
REDEMPTION OF SHARES..................................................... 19
NET ASSET VALUE DETERMINATION............................................ 19
ALLOCATION OF TRUST EXPENSES............................................. 19
ADDITIONAL TAX INFORMATION............................................... 20
CAPITAL SHARES AND VOTING................................................ 21
CALCULATION OF PERFORMANCE DATA.......................................... 22
FINANCIAL STATEMENTS AND REPORTS......................................... 25
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of both The Government Street
Equity Fund and The Government Street Bond Fund (the "Funds") dated August 1,
1996. The Prospectus may be obtained from the Funds, at the address and phone
number shown above, at no charge.
- 30 -
<PAGE>
- 31 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Government Street Equity
Fund (the "Equity Fund") and The Government Street Bond Fund (the "Bond Fund")
unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts (ADRs). The Funds may
invest in foreign securities if the Advisor believes such investment would be
consistent with the Funds' investment objectives. The same factors would be
considered in selecting foreign securities as with domestic securities, as
discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic
securities. Foreign taxes may reduce income. Currency exchange rates and
regulations may cause fluctuation in the value of foreign securities. Foreign
securities are subject to different regulatory environments than in the United
States and, compared to the United States, there may be a lack of uniform
accounting, auditing and financial reporting standards, less volume and
liquidity and more volatility, less public information, and less regulation of
foreign issuers. Countries have been known to expropriate or nationalize
assets, and foreign investments may be subject to political, financial or
social instability or adverse diplomatic developments. There may be
difficulties in obtaining service of process on foreign issuers and
difficulties in enforcing judgments with respect to claims under the U.S.
securities laws against such issuers. Favorable or unfavorable differences
between U.S. and foreign economies could affect foreign securities values. The
U.S. Government has, in the past, discouraged certain foreign investments by
U.S. investors through taxation or other restrictions and it is possible that
such restrictions could be imposed again.
SECURITIES OF UNSEASONED COMPANIES. The securities of unseasoned companies
(those in business less than three years, including predecessors and, in the
case of bonds, guarantors) may have a limited trading market, which may
adversely affect disposition. If other investors attempt to dispose of such
holdings when the Funds desire to do so, the Funds could receive lower prices
than might otherwise be obtained. Because of the increased risk over larger,
better known companies, each Fund limits its investments in the securities of
unseasoned issuers to no more than 5% of its total assets.
- 32 -
<PAGE>
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities
subject to repurchase agreements. A repurchase transaction occurs when, at the
time a Fund purchases a security (normally a U.S. Treasury obligation), it
also resells it to the vendor (normally a member bank of the Federal Reserve
System or a registered Government Securities dealer) and must deliver the
security (and/or securities substituted for them under the repurchase
agreement) to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred to as the
"Repurchase Securities." The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate effective for the
period of time during which the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Funds hold a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times as least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Funds'
custodian either directly or through a securities depository.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they
mature in thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Funds. Money market instruments also
may include Bankers' Acceptances and Certificates of Deposit of domestic
branches of U.S. banks, Commercial Paper and Variable Amount Demand Master
Notes ("Master Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and
"accepted" by a bank, are the customary means of effecting payment for
merchandise sold in import-export transactions and are a source of financing
used extensively in international
- 33 -
<PAGE>
trade. When a bank "accepts" such a time draft, it assumes liability for its
payment. When the Funds acquire a Bankers' Acceptance, the bank which
"accepted" the time draft is liable for payment of interest and principal when
due. The Bankers' Acceptance, therefore, carries the full faith and credit of
such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured interest-bearing
debt obligation of a bank. CDs acquired by the Funds would generally be in
amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured, short term debt
obligation of a bank, corporation or other borrower. Commercial Paper maturity
generally ranges from two to 270 days and is usually sold on a discounted
basis rather than as an interest-bearing instrument. The Funds will invest in
Commercial Paper only if it is rated in the highest rating category by any
nationally recognized statistical rating organization ("NRSRO") or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Advisor's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are
redeemable upon demand of the holder and which permit the investment of
fluctuating amounts at varying rates of interest. Master Notes are acquired by
the Funds only through the Master Note program of the Funds' custodian, acting
as administrator thereof. The Advisor will monitor, on a continuous basis, the
earnings power, cash flow and other liquidity ratios of the issuer of a Master
Note held by the Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Bond Fund may purchase
securities on a when-issued basis or for settlement at a future date if the
Fund holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date,
the Bond Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Bond Fund would generally purchase securities on a forward commitment or
when-issued basis with the intention of taking delivery, the Fund may sell
such a security prior to the settlement date if the Advisor felt such action
was appropriate. In such a case the Fund could incur a short-term gain or
loss.
- 34 -
<PAGE>
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an
NRSRO represents the organization's opinion as to the credit quality of the
security being traded. However, the ratings are general and are not absolute
standards of quality or guarantees as to the creditworthiness of an issuer.
Consequently, the Advisor believes that the quality of fixed-income securities
in which the Bond Fund may invest should be continuously reviewed and that
individual analysts give different weightings to the various factors involved
in credit analysis. A rating is not a recommendation to purchase, sell or hold
a security because it does not take into account market value or suitability
for a particular investor. When a security has received a rating from more
than one NRSRO, each rating is evaluated independently. Ratings are based on
current information furnished by the issuer or obtained by the NRSROs from
other sources that they consider reliable. Ratings may be changed, suspended
or withdrawn as a result of changes in or unavailability of such information,
or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
AAA: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
AA: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large in Aa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements that make
the long term risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are
to be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
that suggest a susceptibility to impairment sometime in the future.
BAA: Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- 35 -
<PAGE>
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated
Aa, A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity
to pay principal and interest.
AA: Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
A: Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
- 36 -
<PAGE>
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within a rating category.
DESCRIPTION OF DUFF & PHELPS' CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk
factors are negligible, being only slightly more than for risk-
free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit
quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A: Bonds rated A have average protection factors. However
risk factors are more variable and greater in periods of economic
stress.
BBB: Bonds rated BBB have below average protection factors,
but are considered sufficient for prudent investment. There is
considerable variability in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's
outstanding shares represented in person or by proxy at a meeting at which
more than 50% of its outstanding shares are represented, or (ii) more than 50%
of its outstanding shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities
of any one issuer or purchase more than 10% of the outstanding voting
securities or of any class of securities of any one issuer;
(2) Invest 25% or more of the value of its total assets in any
one industry or group of industries (except that securities
of the U.S. Government, its agencies and instrumentalities
are not subject to these limitations);
- 37 -
<PAGE>
(3) Invest in the securities of any issuer if any of the officers or
trustees of the Trust or its Advisor who own beneficially more than 1/2
of 1% of the outstanding securities of such issuer together own more
than 5% of the outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management
of another issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil,
gas or other mineral exploration or development programs, except that
the Funds may invest in the securities of companies (other than those
which are not readily marketable) which own or deal in such things.
(6) Underwrite securities issued by others, except to the extent a Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such
short-term credits as may be necessary for the clearance of
transactions);
(8) Make short sales of securities or maintain a short position, except
short sales "against the box." (A short sale is made by selling a
security the Fund does not own. A short sale is "against the box" to
the extent that the Fund contemporaneously owns or has the right to
obtain at no added cost securities identical to those sold short);
(9) Participate on a joint or joint and several basis in any
trading account in securities;
(10) Make loans of money or securities, except that the Funds may
invest in repurchase agreements;
(11) Invest in securities of issuers which have a record of less than
three years' continuous operation (including predecessors and, in the
case of bonds, guarantors), if more than 5% of its total assets would
be invested in such securities;
(12) Write, purchase or sell puts, calls or combinations thereof, or
purchase or sell commodities, commodities contracts, futures
contracts or related options; or
(13) Invest in restricted securities.
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation. However, in the
case of the
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<PAGE>
borrowing limitation (the first restriction in the Prospectus) each Fund will,
to the extent necessary, reduce its existing borrowings to comply with the
limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or
Funds, age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- --------------
<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John T. Bruce (age 42) Principal None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
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<PAGE>
<CAPTION>
<S> <C> <C>
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 40 -
<PAGE>
<CAPTION>
<S> <C> <C>
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Strategic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 41 -
<PAGE>
<CAPTION>
<S> <C> <C>
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -------------------------------
** Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial matters, including
the adequacy of internal controls. On the basis of this review the Audit
Committee makes recommendations to the Trustees as to the appointment of
independent accountants for the following year. The Trustees have not
appointed a compensation committee or a nominating committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then outstanding shares of both the
Equity Fund and the Bond Fund. On the same date, Charles Schwab & Co., Inc.,
101 Montgomery Street, San Francisco, California 94104, owned of record 22.9%
of the then outstanding shares of the Equity Fund and 11.6% of the then
outstanding shares of the Bond Fund and First Alabama Bank as Trustee of the
Mobile Paint Manufacturing Co. Employee Retirement Plans, P.O. Box 2527,
Mobile, Alabama 36622, owned of record 6.8% of the then outstanding shares of
the Equity Fund and 6.3% of the then outstanding shares of the Bond Fund.
- 42 -
</TABLE>
<PAGE>
INVESTMENT ADVISOR
T. Leavell & Associates, Inc. (the "Advisor") supervises each Fund's
investments pursuant to an Investment Advisory Agreement (the "Advisory
Agreement") described in the Prospectus. The Advisory Agreement is effective
until April 1, 1997 and will be renewed thereafter for one year periods only
so long as such renewal and continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of the Funds'
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust or the
Advisor by vote cast in person at a meeting called for the purpose of voting
on such approval. The Advisory Agreement is terminable without penalty on
sixty days notice by the Board of Trustees of the Trust or by the Advisor. The
Advisory Agreement provides that it will terminate automatically in the event
of its assignment.
Compensation of the Advisor with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $100 million, 0.60%; and on assets over $100 million, 0.50%. For the
fiscal years ended March 31, 1996, 1995 and 1994, the Equity Fund paid to the
Advisor advisory fees of $221,551, $175,295 and $149,703, respectively.
Compensation of the Advisor with respect to the Bond Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $100 million, 0.50%; and on assets over $100 million, 0.40%. For the
fiscal years ended March 31, 1996, 1995 and 1994, the Bond Fund paid the
Advisor advisory fees of $143,643, $129,997 and $64,958 (which was net of
voluntary fee waivers of $33,438), respectively.
The Advisor, organized as an Alabama corporation in 1979, is con-
trolled by its shareholders, Thomas W. Leavell, Richard Mitchell,
Dorothy G. Gambill, Timothy S. Healey and John R. Miller, Jr. In
addition to acting as Advisor to the Funds, the Advisor also
provides investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional accounts
and individuals.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Funds. The Advisor determines
what securities and other investments will be purchased, retained or sold by
the Funds, and does so in accordance with the investment objectives and
policies of the Funds as described herein and in the Prospectus. The Advisor
places all securities orders for the Funds, determining with which broker,
dealer, or issuer to place the orders.
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<PAGE>
The Advisor must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, the Bond Fund pays the
Administrator a fee at the annual rate of 0.075% of the average value of its
daily net assets up to $200,000,000 and 0.05% of such assets in excess of
$200,000,000 and the Equity Fund pays the Administrator a fee at the annual
rate of 0.20% of the average value of its daily net assets up to $25,000,000,
0.175% of such assets from $25,000,000 to $50,000,000 and 0.15% of such assets
in excess of $50,000,000; provided, however, that the minimum fee is $2,000
per month for each Fund. In addition, the Funds pay out-of-pocket expenses,
including but not limited to, postage, envelopes, checks, drafts, forms,
reports, record storage and communication lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
fees of $71,060 and $56,151, respectively, from the Equity Fund and $24,000
and $23,111, respectively, from the Bond Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
- 44 -
<PAGE>
The Custodian of the Funds' assets is Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the
Funds (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all
income and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all
portfolio securities transactions. The Advisor (subject to the general
supervision of the Board of Trustees) directs the execution of the Funds'
portfolio transactions. The Trust has adopted a policy which prohibits the
Advisor from effecting Fund portfolio transactions with broker-dealers which
may be interested persons of either Fund, the Trust, any Trustee, officer or
director of the Trust or its investment advisors or any interested person of
such persons.
The Bond Fund's fixed income portfolio transactions will normally be principal
transactions executed in over-the-counter markets and will be executed on a
"net" basis, which may include a dealer markup. The Equity Fund's common stock
portfolio transactions will normally be exchange traded and will be effected
through broker-dealers who will charge brokerage commissions. With respect to
securities traded only in the over-the-counter market, orders will be executed
on a principal basis with primary market makers in such securities except
where better prices or executions may be obtained on an agency basis or by
dealing with other than a primary market maker.
For the fiscal years ended March 31, 1996, 1995 and 1994, the total amount of
brokerage commissions paid by the Equity Fund was $21,642, $63,251 and
$79,292, respectively. No brokerage commissions were paid by the Bond Fund for
the last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Advisor for the benefit of the other clients it may have.
Conversely, the Funds may benefit from such transactions effected for the
benefit of other clients. In all cases, the Advisor is obligated to effect
transactions for the Funds based upon obtaining the most favorable price and
execution. Factors considered by the Advisor in determining whether the Funds
will receive the most favorable
- 45 -
<PAGE>
price and execution include, among other things: the size of the order, the
broker's ability to effect and settle the transaction promptly and efficiently
and the Advisor's perception of the broker's reliability, integrity and
financial condition.
As of March 31, 1996, the Bond Fund held bonds issued by the following of the
Trust's "regular broker-dealers" (as defined in the 1940 Act) or their
parents: Merrill Lynch & Company, Inc. (the market value of which was
$765,481); Salomon Incorporated (the market value of which was $877,942); and
Bear Stearns Company (the market value of which was $189,357).
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder
services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly or quarterly investment in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the public offering price on or about the last business day of the
month or quarter. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment,
by authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and
December). Checks will be made payable to the designated recipient and mailed
within three business days of the valuation date. If the designated recipient
is other than the registered
- 46 -
<PAGE>
shareholder, the signature of each shareholder must be guaranteed on the
application (see "Signature Guarantees"). A corporation (or partnership) must
also submit a "Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures authorized to
act on its behalf. The application must be signed by a duly authorized
officer(s) and the corporate seal affixed. No redemption fees are charged to
shareholders under this plan. Costs in conjunction with the administration of
the plan are borne by the Funds. Shareholders should be aware that such
systematic withdrawals may deplete or use up entirely their initial investment
and may result in realized long-term or short-term capital gains or losses.
The Systematic Withdrawal Plan may be terminated at any time by the Funds upon
sixty days' written notice or by a shareholder upon written notice to the
Funds. Applications and further details may be obtained by calling the Funds
at 1-800-443-4249, or by writing to:
The Government Street Funds
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is
at the sole discretion of the Advisor based upon the suitability of the
securities accepted for inclusion as a long term investment of the Funds, the
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Funds to pay for all redemptions in
cash. In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Funds. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs when these securities are sold. An irrevocable election
may be filed under Rule 18f-1 of the 1940 Act, wherein each Fund commits
itself to pay redemptions in cash, rather than in kind, to any shareholder of
record of the Funds who redeems during any ninety day period, the lesser of
(a) $250,000 or (b) one percent (1%) of a Fund's net assets at the beginning
of such period.
- 47 -
<PAGE>
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s)
on the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price computed on the date of receipt;
and an order received after that time will be executed at the price computed
on the next Business Day. An order to purchase shares is not binding on the
Funds until confirmed in writing (or unless other arrangements have been made
with the Funds, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Each Fund reserves the right in its sole discretion (i) to suspend the
offering of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial
investment minimums for the purpose of reducing the cost to the Funds (and
consequently to the shareholders) of communicating with and servicing their
shareholders. However, a reduced minimum initial investment requirement of
$1,000 applies to Trustees, officers and employees of the Funds, the Advisor
and certain parties related thereto, including clients of the Advisor or any
sponsor, officer, committee member thereof, or the immediate family of any of
them. In addition, accounts having the same mailing address may be aggregated
for purposes of the minimum investment if they consent in writing to share a
single mailing of shareholder reports, proxy statements (but each such
shareholder would receive his/her own proxy) and other Fund literature.
- 48 -
<PAGE>
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment
(i) during any period that the New York Stock Exchange (the "Exchange") is
closed, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission (the "Commission"), (ii) during any period
when an emergency exists as defined by the rules of the Commission as a result
of which it is not reasonably practicable for the Fund to dispose of
securities owned by it, or to fairly determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities
held by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations
which may be deemed by the Trustees to be of overall benefit to the Fund and
its shareholders; legal and auditing expenses; and the cost of stationery and
forms prepared exclusively for the Funds. General Trust expenses are allocated
among the series, or funds, on a fair and equitable basis by the Board of
Trustees, which may be
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<PAGE>
based on relative net assets of each fund (on the date the expense is paid) or
the nature of the services performed and the relative applicability to each
fund.
Under the Advisory Agreement, the Advisor may be required to reimburse a Fund
if that Fund's annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
subject to year end adjustment. The Advisor in its discretion may, but is not
required to, reimburse a Fund an amount of money in excess of its advisory
fee.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In
addition to this distribution requirement, each Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities' loans, gains from the disposition of stock or
securities, and certain other income. Each Fund will also be required to
derive less than 30% of its gross income from the sale or other disposition of
securities held for less than 90 days.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter
M, they will not be subject to federal income tax to the extent they
distribute their taxable net investment income and net realized capital gains.
A nondeductible 4% federal excise tax will be imposed on each Fund to the
extent it does not distribute at least 98% of its ordinary taxable income for
a calendar year, plus 98% of its capital gain net taxable income for the one
year period ending each October 31, plus certain undistributed amounts from
prior years. While each Fund intends to distribute its taxable income and
capital gains in a manner so as to avoid imposition of the federal excise and
income taxes, there can be no assurance that the Funds indeed will make
sufficient distributions to avoid entirely imposition of federal excise or
income taxes.
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<PAGE>
As of March 31, 1996, the Bond Fund had capital loss carryforwards for federal
income tax purposes of $178,365 which expire through the year 2004. In
addition, the Bond Fund realized net capital losses of $17,816 during the
period from November 1, 1995 through March 31, 1996, which are treated for
federal income tax purposes as arising in the tax year ending March 31, 1997.
These capital loss carryforwards and "post- October" losses may be utilized in
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
Should additional series, or funds, be created by the Trustees, each Fund
would be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from the Equity Fund. Each Fund will send
shareholders information each year on the tax status of dividends and
disbursements. A dividend or capital gains distribution paid shortly after
shares have been purchased, although in effect a return of investment, is
subject to federal income taxation. Dividends from net investment income,
along with capital gains, will be taxable to shareholders, whether received in
cash or shares and no matter how long you have held Fund shares, even if they
reduce the net asset value of shares below your cost and thus in effect result
in a return of a part of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have
no preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any Trustee may resign or retire and (2) any Trustee may be
removed
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<PAGE>
with or without cause at any time (a) by a written instrument, signed by at
lease two-thirds of the number of Trustees prior to such removal; or (b) by
vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c) by a written declaration signed by shareholders holding not
less than two-thirds of the outstanding shares of the Trust and filed with the
Trust's custodian. Shareholders have certain rights, as set forth in the
Declaration of Trust, including the right to call a meeting of the
shareholders for the purpose of voting on the removal of one or more Trustees.
Shareholders holding not less than ten percent (10%) of the shares then
outstanding may require the Trustees to call such a meeting and the Trustees
are obligated to provide certain assistance to shareholders desiring to
communicate with other shareholders in such regard (e.g., providing access to
shareholder lists, etc.). In case a vacancy or an anticipated vacancy shall
for any reason exist, the vacancy shall be filled by the affirmative vote of a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act. The Trust does not expect to have an annual meeting of
shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per
share at the beginning of the period from the net asset value per share at the
end of the period (after adjusting for the reinvestment of any income
dividends and capital gain distributions), and dividing the result by the net
asset value per share at the beginning of the period. In particular, the
average annual total return of a Fund ("T") is computed by using the
redeemable value at the end of a specified period of time ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time ("n")
according to the formula P(l+T)n=ERV. The average annual total return
quotations for the Equity Fund for the one year period ended March 31, 1996
and for the period since inception (June 18, 1991) to March 31, 1996 are
25.96% and 10.23%, respectively. The average annual total return quotations
for the Bond Fund for the one year period ended March 31, 1996 and for the
period since inception (June 7, 1991) to March 31, 1996 are 9.43% and 7.35%,
respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all
- 52 -
<PAGE>
elements of return (i.e., income and capital appreciation or depreciation); it
assumes reinvestment of all dividends and capital gain distributions.
Nonstandardized Return may consist of a cumulative percentage of return,
actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is
based on a 30-day (or one month) period and is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity
of each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day
prior to the start of the 30-day (or one month) period for which yield is
being calculated, or, with respect to obligations purchased during the month,
the purchase price (plus actual accrued interest). The yields of the Equity
Fund and the Bond Fund for the 30 days ended March 31, 1996 were 1.38% and
6.17%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Equity Fund may compare its performance to the
S&P 500 Index, which is generally considered to be representative of the
performance of unmanaged common stocks that are publicly traded in the United
States securities markets, and the Bond Fund may compare its performance to
the Merrill Lynch 1-5 Year Government Corporate Index and the Lehman
Government Corporate Intermediate Bond Index, which are generally considered
to be representative of the performance of a portfolio of domestic, taxable
fixed income securities of intermediate maturities. Comparative performance
may also be expressed by reference to a ranking prepared by a mutual fund
monitoring service, such as Lipper
- 53 -
<PAGE>
Analytical Services, Inc. or Morningstar, Inc. or by one or more
newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the
Funds' past performance to that of other mutual funds and
investment products. Of course, past performance is not a
guarantee of future results.
O LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain
a more complete view of the Funds' performance before investing. Of course,
when comparing the Funds' performance to any index, factors such as
composition of the index and prevailing market conditions should be considered
in assessing the significance of such comparisons. When comparing funds using
reporting services, or total return, investors should take into consideration
any relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Funds may quote total
returns that are calculated on nonstandardized base periods. The total returns
represent the historic change in the value of an investment in the Funds based
on monthly reinvestment of dividends over a specified period of time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Funds may also disclose from
time to time information about their portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Funds may also depict the
historical performance of the securities in which the Funds may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Funds may also include in
advertisements and in materials furnished to present and
- 54 -
<PAGE>
prospective shareholders statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be
employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Funds as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
The Alabama Tax Free Bond Fund
The Government Street Funds
The Alabama Tax Free Bond Fund
No Load Mutual Funds
Annual Report
March 31, 1996
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
===============================================================================
May 10, 1996
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report
of the condition of The Government Street Funds and of The Alabama Tax Free
Bond Fund and summaries of the Funds' portfolio assets as of March 31, 1996.
THE GOVERNMENT STREET EQUITY FUND
Steadily declining interest rates, improving corporate profitability,
and a huge flow of money into stock mutual funds all contributed to the stock
market surge that occurred during 1995 and the early part of 1996. For its
fiscal year ending March 31, 1996, The Government Street Equity Fund achieved
a total return of 25.96%. The net assets of the Fund were $41,420,823; net
asset value was $29.41. The total return of the S&P 500 Index was 32.10% for
the same twelve month period.
Continued growth in the value of common stocks will depend largely on
the growth of corporate earnings and on a low rate of inflation. A recent
increase in certain economic indicators has caused an upturn in interest
rates. Generally, rising interest rates have a negative impact on the stock
market. If growth in the economy proves to be moderate, however, the recent
rise in interest rates may prove to be only a temporary condition. In
addition, if there is a rebound in corporate earnings that is in step with the
economy, common stocks should continue their upward climb.
Forecasting interest rates and the direction of the United States
economy, however, is always a risky undertaking; it is even more so during a
Presidential election year. We make no effort to do so here. Investors in The
Government Street Equity Fund, with its broad diversification of quality
common stocks, will continue to participate in a growing stock market, yet
they also are well positioned defensively if the market experiences a
correction. On March 31, 1996, the Fund's portfolio consisted of 72 individual
equity issues divided almost equally between growth and value stocks. No
single investment in the portfolio exceeded 3% of the total value of the Fund.
THE GOVERNMENT STREET BOND FUND
In the face of a weakening economy last year, the Federal Reserve
Board eased credit by reducing the Federal Funds rate in July and again in
December. As a result, interest rates declined substantially throughout 1995.
Bond prices rose as yields fell across the range of maturities. In early 1996,
as data indicated that the economy was strengthening, bond prices, after
having peaked in January, declined slightly throughout the first quarter.
The Government Street Bond Fund achieved a total return of 9.43% for
its fiscal year ending March 31, 1996. This return compares favorably with the
Lehman Government/Corporate Intermediate Bond Index and with 3-month Treasury
bills which experienced returns of 9.56% and 5.75% for the same period,
respectively.
In keeping with the Fund's stated objective of maintaining an
intermediate term portfolio, on March 31, 1996, the Fund had a weighted
average maturity of 4.6 years. The portfolio consisted of 96 individual issues
with no single investment exceeding 3.9% of the total value of the Fund. U.S.
Treasury obligations and securities issued or guaranteed by agencies of the
U.S. Government represented approximately 40.3% of the Fund's total net
assets. High quality corporate bonds comprised 54.3% of the portfolio. The net
assets of the Fund were $28,717,758; net asset value was $20.87.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund also profited from the interest rate
environment that existed during 1995 and achieved a total investment return of
7.02% for the year ending March 31, 1996. This was in line with the 6.49%
return of the Lehman 3-Year Municipal Bond Index and with the 8.44% return of
the Lehman 7-Year General Obligation Municipal Bond Index achieved over the
same period.
The net assets of the Fund on March 31, 1996 were $15,480,479; net
asset value was $10.23. The weighted average maturity of the Fund's portfolio
was 6.3 years. All bonds were rated A or better by Standard & Poor's or
Moody's Investors Service (52% were rated AAA).
For the year ending March 31, 1996, the ratio of net investment
income to average net assets was 4.11%; to an Alabama investor in the maximum
combined federal and state income tax brackets (42.62%), the taxable
equivalent of this ratio was 7.16%.
The Alabama Tax Free Bond Fund has an intermediate average maturity;
bonds rated A or better; no 12b-1 fees; and no sales charges. With these
characteristics, we expect the Fund to continue to provide an attractive
investment option and reward those investors seeking current income exempt
from federal and Alabama income taxes.
Thank you for your continued confidence in The Government Street
Funds and in The Alabama Tax Free Bond Fund. Please call us if we can be of
further service to you.
Very truly yours,
/s/Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
/s/Richard Mitchell
Richard Mitchell
President
The Government Street Funds
The Alabama Tax Free Bond Fund
<PAGE>
A representation of the graphic material contained in the Government
Street Funds and The Alabama Tax Free Bond Fund Annual Report is set forth
below.
1. Comparison of the Change in Value of a $10,000 Investment in The
Government Street Equity Fund, the Standard & Poor's 500 Index and the
Consumer Price Index
STANDARD & POOR'S 500 INDEX: GOVERNMENT STREET EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
06/18/91 10,000 06/18/91 10,000
06/30/91 -1.87% 9,813 06/30/91 -2.05% 9,795
09/30/91 5.35% 10,338 09/30/91 5.12% 10,297
12/31/91 8.38% 11,204 12/31/91 8.26% 11,147
03/31/92 -2.53% 10,921 03/31/92 -2.96% 10,817
06/30/92 1.90% 11,128 06/30/92 0.05% 10,822
09/30/92 3.15% 11,479 09/30/92 3.62% 11,214
12/31/92 5.03% 12,056 12/31/92 5.42% 11,821
03/31/93 4.36% 12,582 03/31/93 0.35% 11,862
06/30/93 0.48% 12,642 06/30/93 -1.52% 11,682
09/30/93 2.58% 12,968 09/30/93 2.48% 11,971
12/31/93 2.32% 13,269 12/31/93 1.86% 12,194
03/31/94 -3.79% 12,766 03/31/94 -3.03% 11,825
06/30/94 0.42% 12,820 06/30/94 -3.00% 11,471
09/30/94 4.88% 13,446 09/30/94 5.37% 12,086
12/31/94 -0.02% 13,443 12/31/94 -1.91% 11,855
03/31/95 9.74% 14,752 03/31/95 6.75% 12,655
06/30/95 9.55% 16,161 06/30/95 7.18% 13,564
09/30/95 7.95% 17,445 09/30/95 6.05% 14,385
12/31/95 6.02% 18,495 12/31/95 5.01% 15,106
03/31/96 5.37% 19,488 03/31/96 5.53% 15,941
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
06/18/91 10,000
06/30/91 0.30% 10,030
09/30/91 0.60% 10,090
12/31/91 0.90% 10,181
03/31/92 0.70% 10,253
06/30/92 0.80% 10,335
09/30/92 0.70% 10,407
12/31/92 0.80% 10,491
03/31/93 0.90% 10,586
06/30/93 0.60% 10,649
09/30/93 0.40% 10,692
12/31/93 0.70% 10,767
03/31/94 0.50% 10,821
06/30/94 0.60% 10,886
09/30/94 0.90% 10,984
12/31/94 0.60% 11,050
03/31/95 0.80% 11,138
06/30/95 0.90% 11,239
09/30/95 0.40% 11,284
12/31/95 0.50% 11,340
03/31/96 0.80% 11,431
Past performance is not predictive of future performance.
The Government Street Equity Fund - Average Annual Total Returns
1 Year ........................25.96%
Since Inception*...............10.23%
*Initial public offering of shares was June 3, 1991.
<PAGE>
2. Comparison of the Change in Value of a $10,000 Investment in The
Government Street Bond Fund, the Lehman Government/Corporate Intermediate Bond
Index and the 90-Day Treasury Bill Index
LEHMAN INTERMEDIATE GOVERNMENT/ GOVERNMENT STREET BOND FUND:
CORPORATE BOND INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
06/07/91 10,000 06/07/91 10,000
06/30/91 0.07% 10,007 06/30/91 0.45% 10,045
09/30/91 4.81% 10,488 09/30/91 3.97% 10,444
12/31/91 4.80% 10,992 12/31/91 4.67% 10,931
03/31/92 -0.91% 10,892 03/31/92 -1.08% 10,813
06/30/92 3.96% 11,323 06/30/92 3.75% 11,218
09/30/92 4.41% 11,822 09/30/92 4.36% 11,706
12/31/92 -0.36% 11,780 12/31/92 -0.68% 11,627
03/31/93 3.98% 12,249 03/31/93 4.28% 12,125
06/30/93 2.16% 12,513 06/30/93 1.99% 12,366
09/30/93 2.26% 12,796 09/30/93 2.48% 12,673
12/31/93 0.17% 12,818 12/31/93 -0.18% 12,650
03/31/94 -2.03% 12,558 03/31/94 -2.38% 12,350
06/30/94 -0.60% 12,482 06/30/94 -0.72% 12,261
09/30/94 0.82% 12,585 09/30/94 0.70% 12,347
12/31/94 -0.11% 12,571 12/31/94 -0.30% 12,310
03/31/95 4.39% 13,123 03/31/95 4.46% 12,859
06/30/95 5.00% 13,778 06/30/95 5.24% 13,533
09/30/95 1.66% 14,006 09/30/95 1.44% 13,727
12/31/95 3.52% 14,499 12/31/95 3.54% 14,213
03/31/96 -0.83% 14,378 03/31/96 -0.99% 14,072
90 DAY TREASURY BILL INDEX:
QTRLY
DATE RETURN BALANCE
06/07/91 10,000
06/30/91 0.39% 10,039
09/30/91 1.53% 10,193
12/31/91 1.47% 10,342
03/31/92 0.99% 10,445
06/30/92 1.10% 10,559
09/30/92 1.01% 10,666
12/31/92 0.77% 10,748
03/31/93 0.78% 10,832
06/30/93 0.77% 10,916
09/30/93 0.82% 11,005
12/31/93 0.78% 11,091
03/31/94 0.77% 11,176
06/30/94 0.96% 11,283
09/30/94 1.08% 11,405
12/31/94 1.33% 11,556
03/31/95 1.50% 11,729
06/30/95 1.50% 11,905
09/30/95 1.42% 12,075
12/31/95 1.47% 12,253
03/31/96 1.23% 12,404
Past performance is not predictive of future performance.
The Government Street Bond Fund - Average Annual Total Returns
1 Year ........................ 9.43%
Since Inception*............... 7.35%
*Initial public offering of shares was June 3, 1991.
<PAGE>
3. Comparison of the Change in Value of a $10,000 Investment in The
Alabama Tax Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index and
the Lehman 3-Year Municipal Bond Index
LEHMAN 3 YEAR MUNICIPAL BOND INDEX: ALABAMA TAX FREE BOND FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
01/15/93 10,000 01/15/93 10,000
03/31/93 1.68% 10,168 03/31/93 0.96% 10,096
06/30/93 1.50% 10,321 06/30/93 2.81% 10,380
09/30/93 1.42% 10,467 09/30/93 2.79% 10,670
12/31/93 1.14% 10,586 12/31/93 1.05% 10,781
03/31/94 -1.34% 10,445 03/31/94 -3.17% 10,440
06/30/94 1.09% 10,558 06/30/94 0.63% 10,506
09/30/94 0.93% 10,657 09/30/94 0.54% 10,562
12/31/94 0.01% 10,658 12/31/94 -1.17% 10,439
03/31/95 2.81% 10,957 03/31/95 4.67% 10,927
06/30/95 2.12% 11,189 06/30/95 2.68% 11,219
09/30/95 2.14% 11,428 09/30/95 2.14% 11,459
12/31/95 1.54% 11,603 12/31/95 2.41% 11,735
03/31/96 0.56% 11,668 03/31/96 -0.36% 11,693
LEHMAN 7 YEAR G.O.MUNICIPAL BOND INDEX:
QTRLY
DATE RETURN BALANCE
01/15/93 10,000
03/31/93 2.55% 10,255
06/30/93 2.85% 10,547
09/30/93 2.93% 10,856
12/31/93 1.36% 11,004
03/31/94 -4.33% 10,527
06/30/94 1.38% 10,673
09/30/94 0.77% 10,755
12/31/94 -1.00% 10,647
03/31/95 5.42% 11,224
06/30/95 2.69% 11,526
09/30/95 3.29% 11,905
12/31/95 2.46% 12,198
03/31/96 -0.21% 12,172
Past performance is not predictive of future performance.
The Alabama Tax Free Bond Fund - Average Annual Total Returns
1 Year ........................ 7.02%
Since Inception*............... 4.99%
*Initial public offering of shares was January 15, 1993.
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1996
===================================================================================================================
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................... $ 29,396,048 $ 27,511,056 $ 15,041,049
=============== =============== ===============
At value (Note 1)..................................... $ 39,334,152 $ 27,353,249 $ 15,302,263
Investments in repurchase agreements (Note 1)............ 2,061,262 403,448 --
Cash .................................................... -- -- 1,492
Receivable for securities sold........................... -- 550,000 --
Receivable for capital shares sold....................... 2,370 100 1,360
Interest receivable...................................... 9,034 576,142 199,815
Dividends receivable..................................... 51,967 -- --
Other assets............................................. 2,841 2,414 965
--------------- --------------- ---------------
TOTAL ASSETS.......................................... 41,461,626 28,885,353 15,505,895
--------------- --------------- ---------------
LIABILITIES
Payable for securities purchased......................... -- 99,690 --
Payable for capital shares redeemed...................... 800 25,448 --
Dividends payable........................................ 6,361 22,052 14,916
Accrued advisory fees (Note 3)........................... 20,821 12,136 4,500
Accrued administration fees (Note 3)..................... 6,500 2,000 2,000
Other accrued expenses and liabilities................... 6,321 6,269 4,000
--------------- --------------- ---------------
TOTAL LIABILITIES..................................... 40,803 167,595 25,416
--------------- --------------- ---------------
NET ASSETS .............................................. $ 41,420,823 $ 28,717,758 $ 15,480,479
=============== =============== ===============
Net assets consist of:
Capital shares........................................... $ 30,687,750 $ 29,068,907 $ 15,425,435
Accumulated net realized gains (losses)
from security transactions............................ 792,841 ( 196,181 ) ( 206,170 )
Undistributed net investment income...................... 2,128 2,839 --
Net unrealized appreciation (depreciation)
on investments........................................ 9,938,104 ( 157,807 ) 261,214
--------------- --------------- ---------------
Net assets............................................... $ 41,420,823 $ 28,717,758 $ 15,480,479
=============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)............ 1,408,431 1,376,329 1,513,539
=============== =============== ===============
Net asset value, offering price and
redemption price per share (Note 1)................... $ 29.41 $ 20.87 $ 10.23
=============== =============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1996
===================================================================================================================
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest.............................................. $ 177,220 $ 2,048,899 $ 690,087
Dividends............................................. 722,968 -- --
--------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................. 900,188 2,048,899 690,087
--------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................... 221,551 143,643 49,770
Administrative fees (Note 3).......................... 71,060 24,000 24,000
Custodian fees........................................ 19,163 8,345 5,790
Professional fees..................................... 11,251 11,251 8,251
Pricing costs......................................... 1,626 11,854 13,801
Trustees' fees and expenses........................... 5,573 5,573 5,573
Registration fees..................................... 3,850 4,804 5,882
Postage and supplies.................................. 5,329 4,716 3,731
Printing of shareholder reports....................... 4,869 3,612 3,718
Other expenses........................................ 2,433 910 1,468
--------------- --------------- ---------------
TOTAL EXPENSES...................................... 346,705 218,708 121,984
Fees waived by the Adviser (Note 3)................... -- -- 15,334
--------------- --------------- ---------------
NET EXPENSES........................................ 346,705 218,708 106,650
--------------- --------------- ---------------
NET INVESTMENT INCOME ................................... 553,483 1,830,191 583,437
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions.......................... 1,093,838 ( 43,990 ) ( 3,107 )
Net change in unrealized appreciation/depreciation
on investments...................................... 6,795,880 791,184 340,163
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS ....................................... 7,889,718 747,194 337,056
--------------- --------------- ---------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 8,443,201 $ 2,577,385 $ 920,493
=============== =============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
===================================================================================================================
<CAPTION>
Government Street Government Street Alabama Tax Free
Equity Fund Bond Fund Bond Fund
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1996 1995 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income............. $ 553,483 $ 498,932 $1,830,191 $1,737,888 $ 583,437 $536,999
Net realized gains (losses)
from security transactions...... 1,093,838 102,880 (43,990) (127,816) (3,107) (200,904)
Net change in unrealized appreciation/
depreciation on investments...... 6,795,880 1,485,037 791,184 (519,326) 340,163 227,734
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
from operations 8,443,201 2,086,849 2,577,385 1,090,746 920,493 563,829
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income........ (552,981) (505,540) (1,829,817) (1,747,740) (583,437) (536,999)
From net realized gains........... (280,943) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from distributions
to shareholders.................. (833,924) (505,540) (1,829,817) (1,747,740) ( 583,437) (536,999)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS(A):
Proceeds from shares sold......... 7,310,859 5,282,887 2,484,795 7,150,809 2,543,833 5,439,330
Net asset value of shares issued in
reinvestment of distributions
to shareholders.................. 798,493 483,554 1,597,448 1,523,068 410,869 234,034
Payments for shares redeemed...... (5,771,194) (2,975,563) (3,891,999) (2,869,621) (627,496) (2,600,426)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from
capital share transactions........ 2,338,158 2,790,878 190,244 5,804,256 2,327,206 3,072,938
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ....... 9,947,435 4,372,187 937,812 5,147,262 2,664,262 3,099,768
NET ASSETS:
Beginning of year................. 31,473,388 27,101,201 27,779,946 22,632,684 12,816,217 9,716,449
----------- ----------- ----------- ----------- ----------- -----------
End of year....................... $41,420,823 $31,473,388 $28,717,758 $27,779,946 $15,480,479 $12,816,217
=========== =========== =========== =========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME ................ $ 2,128 $ 1,626 $ 2,839 $ 2,465 $ -- $ --
=========== =========== =========== =========== =========== ===========
(a) Summary of capital share activity:
Shares sold...................... 273,855 233,786 117,710 347,246 247,956 552,156
Shares issued in reinvestment of
distributions to shareholders 29,243 21,279 75,860 75,121 40,072 23,807
Shares redeemed.................. (213,229) (130,780) (183,993) (140,040) (61,341) (264,286)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in shares outstanding 89,869 124,285 9,577 282,327 226,687 311,677
Shares outstanding, beginning
of year 1,318,562 1,194,277 1,366,752 1,084,425 1,286,852 975,175
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of year.. 1,408,431 1,318,562 1,376,329 1,366,752 1,513,539 1,286,852
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 23.87 $ 22.69 $ 23.06 $ 21.37 $ 20.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.40 0.38 0.30 0.34 0.28
Net realized and unrealized
gains (losses) on investments........ 5.75 1.19 ( 0.37) 1.71 1.35
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 6.15 1.57 ( 0.07) 2.05 1.63
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... ( 0.40) ( 0.39) ( 0.30) ( 0.36) ( 0.26)
Distributions from net realized gains.. ( 0.21) -- -- -- --
----------- ----------- ---------- ---------- -----------
Total distributions....................... ( 0.61) ( 0.39 ) ( 0.30) ( 0.36) ( 0.26)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
=========== =========== ========== ========== ===========
Total return.............................. 25.96% 7.02% ( 0.31%) 9.66% 9.99% (c)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 41,421 $ 31,473 $ 27,101 $ 21,735 $ 14,971
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets (b) 0.94% 0.91% 1.00% 1.00% 1.00% (c)
Ratio of net investment income
to average net assets.................. 1.50% 1.71% 1.33% 1.55% 1.88% (c)
Portfolio turnover rate................... 31% 55% 63% 59% 20%
<FN>
(a)Commencement of operations.
(b)In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's administrative and custodian fees for periods ended prior to
March 31, 1996 were paid through an arrangement with a third-party
broker-dealer who was compensated through commission trades. Payment of the
fees was based on a percentage of commissions earned. Absent expenses
reimbursed through the directed brokerage arrangement, the ratios of
expenses to average net assets would have been 1.00%, 1.16%, 1.20% and
1.18%(c) for the periods ended March 31, 1995, 1994, 1993 and 1992,
respectively.
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 20.33 $ 20.87 $ 21.77 $ 20.67 $ 20.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 1.35 1.35 1.32 1.34 0.95
Net realized and unrealized
gains (losses) on investments........ 0.54 ( 0.53 ) ( 0.90) 1.10 0.67
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 1.89 0.82 0.42 2.44 1.62
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... ( 1.35) ( 1.36) ( 1.32) ( 1.33) ( 0.95)
Distributions from net realized gains.. -- -- -- ( 0.01) --
----------- ----------- ---------- ---------- -----------
Total distributions....................... ( 1.35) ( 1.36) ( 1.32) ( 1.34) ( 0.95)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
=========== =========== ========== ========== ===========
Total return.............................. 9.43% 4.12% 1.85% 12.14% 9.95% (c)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 28,718 $ 27,780 $ 22,633 $ 15,955 $ 6,506
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(b) 0.76% 0.85% 0.86% 0.88% 0.93% (c)
Ratio of net investment income
to average net assets.................. 6.38% 6.68% 6.15% 6.44% 7.02% (c)
Portfolio turnover rate................... 10% 11% 10% 17% 15%
<FN>
(a)Commencement of operations.
(b)Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03%, 1.09% and 1.30%(c) for
the periods ended March 31, 1994, 1993 and 1992, respectively (Note 3).
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
Seven Months January 15,
Years Ended March 31, Ended 1993(b) to
March 31, August 31,
1996 1995 1994(a) 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.......... $ 9.96 $ 9.96 $ 10.30 $ 10.00
------------- ------------- ------------- ------------
Income from investment operations:
Net investment income........................ 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments.............. 0.27 -- ( 0.34) 0.30
------------- ------------- ------------- ------------
Total from investment operations................ 0.69 0.45 ( 0.08) 0.53
------------- ------------- ------------- ------------
Less distributions:
Dividends from net investment income......... ( 0.42) ( 0.45) ( 0.26) ( 0.23)
------------- ------------- ------------- ------------
Net asset value at end of period................ $ 10.23 $ 9.96 $ 9.96 $ 10.30
============= ============= ============= ============
Total return.................................... 7.02% 4.66% (1.50%)(d) 8.79%(d)
============= ============= ============= ============
Net assets at end of period (000's)............. $ 15,480 $ 12,816 $ 9,716 $ 3,429
============= ============= ============= ============
Ratio of expenses to average net assets(c) ..... 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets........................ 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate......................... 4% 36% 3% 2%
<FN>
(a)Effective April 1, 1994, the Fund was reorganized and changed its fiscal
year end from August 31 to March 31.
(b)Commencement of operations.
(c)Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been 0.86%,
1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1996, March 31,
1995, March 31, 1994 and August 31, 1993, respectively (Note 3).
(d)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Shares COMMON STOCKS - 94.9% Value
- -------------------------------------------------------------------------------------------------------------------
CHEMICALS AND DRUGS - 19.9%
<S> <C> <C>
2,000 Abbott Laboratories........................................................ $ 81,500
10,000 Becton Dickinson & Company................................................. 818,750
12,000 Biomet, Inc.(a) ........................................................... 168,000
14,375 Cardinal Health, Inc....................................................... 923,594
14,000 duPont (E.I.) de Nemours & Company......................................... 1,162,000
14,000 First Mississippi Corporation.............................................. 334,250
9,000 Goodrich (B.F.) Company.................................................... 715,500
7,000 Johnson & Johnson.......................................................... 645,750
5,500 Lilly (Eli) & Company...................................................... 357,500
5,000 PPG Industries, Inc....................................................... 244,375
10,000 Schering-Plough Corporation................................................ 581,250
18,000 Schulman (A.), Inc......................................................... 380,250
12,000 Sigma-Aldrich.............................................................. 687,000
12,000 Union Carbide Corporation.................................................. 595,500
12,000 U. S. HealthCare, Inc...................................................... 550,500
--------------
......................................................................... 8,245,719
--------------
CONSTRUCTION - 5.1%
12,750 Blount, Inc. - Class A..................................................... 392,062
12,000 Caterpiller, Inc........................................................... 816,000
16,250 Clayton Homes, Inc......................................................... 339,219
12,800 Valspar Corporation........................................................ 580,800
--------------
......................................................................... 2,128,081
--------------
CONSUMER PRODUCTS - 10.9%
19,650 Archer-Daniels-Midland Company............................................. 361,069
13,000 Belo (A.H.) Corporation - Class A.......................................... 442,000
16,000 Gillette Company........................................................... 828,000
10,000 Kimberly-Clark Corporation................................................. 745,000
12,000 Motorola, Inc.............................................................. 636,000
13,300 Polygram NV................................................................ 801,325
8,500 Procter & Gamble Company................................................... 720,375
--------------
......................................................................... 4,533,769
--------------
DURABLE GOODS - 17.8%
12,000 AMP, Inc................................................................... 496,500
11,250 Cabletron Systems, Inc.(a) ................................................ 745,313
26,800 Cisco Systems, Inc.(a) .................................................... 1,242,850
7,000 Cummins Engine Company, Inc. .............................................. 282,625
6,500 General Electric Company .................................................. 506,188
4,600 International Business Machines Corporation................................ 511,175
21,800 Loral Corporation.......................................................... 1,068,200
9,000 McDonnell Douglas Corporation.............................................. 824,625
11,000 Philips Electronics N.V.(a) ............................................... 400,125
11,000 Raytheon Company........................................................... 563,750
7,000 Shared Medical Systems, Inc................................................ 421,750
11,000 Stewart & Stevenson Services, Inc.......................................... 309,375
--------------
......................................................................... 7,372,476
--------------
FINANCIAL - 7.4%
14,250 AFLAC, Inc................................................................. 445,312
9,000 American Express Company................................................... 444,375
3,500 General Re Corporation..................................................... 510,125
8,500 Mellon Bank Corporation.................................................... 468,563
14,500 Star Banc Corporation...................................................... 935,250
4,000 Travelers Group, Inc....................................................... 264,000
--------------
......................................................................... 3,067,625
--------------
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Shares COMMON STOCKS - 94.9% Value
===================================================================================================================
FOOD/BEVERAGES - 2.1%
<S> <C> <C>
20,000 Coca-Cola Enterprises...................................................... $ 617,500
17,500 Hudson Foods, Inc. - Class A............................................... 249,375
--------------
......................................................................... 866,875
--------------
METAL AND MINING - 5.5%
9,000 Aluminum Company of America................................................ 563,625
14,700 Broken Hill Proprietary Company, LTD....................................... 834,225
9,543 Freeport McMoran Copper & Gold, Inc. - Class B(a) ......................... 301,797
20,000 Placer Dome, Inc........................................................... 577,500
--------------
......................................................................... 2,277,147
--------------
OIL/ENERGY - 11.3%
12,500 Amoco Corporation.......................................................... 903,125
6,000 Atlantic Richfield Company................................................. 714,000
13,000 Chevron Corporation........................................................ 729,625
7,325 Exxon Corporation.......................................................... 597,903
12,500 Kerr McGee Corporation..................................................... 793,750
9,500 Shell Transport & Trading PLC.............................................. 762,375
5,000 Sonat, Inc................................................................. 180,000
--------------
......................................................................... 4,680,778
--------------
PAPER AND FOREST PRODUCTS - .5%
3,000 Georgia Pacific Corporation................................................ 208,125
--------------
RETAIL - 3.0%
4,500 Home Depot, Inc............................................................ 215,437
5,000 Nike, Inc. - Class B....................................................... 406,250
5,000 Wal-Mart Stores, Inc....................................................... 115,625
15,000 Walgreen Company........................................................... 489,375
--------------
......................................................................... 1,226,687
--------------
SERVICES - COMPUTER PROCESSING - .4%
4,000 Automatic Data Processing, Inc............................................. 157,500
--------------
TRANSPORTATION - 1.2%
7,000 Federal Express Corporation(a) ............................................ 489,125
--------------
UTILITIES - 9.8%
12,500 Ameritech Corporation...................................................... 681,250
11,000 AT&T Company............................................................... 673,750
12,800 Consolidated Edison Company of New York, Inc............................... 408,000
22,400 DPL, Inc................................................................... 534,800
14,890 Duke Power Company......................................................... 751,945
8,000 Hong Kong Telecommunications, LTD.......................................... 160,000
5,000 Nicor, Inc................................................................. 133,750
14,000 SBC Communications, Inc.................................................... 736,750
--------------
......................................................................... 4,080,245
--------------
TOTAL COMMON STOCKS (COST $29,396,048) ...................................... $ 39,334,152
--------------
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Face
Amount REPURCHASE AGREEMENTS(b) - 5.0% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lehman Brothers,
$ 2,061,262 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $2,062,186 (Cost $2,061,262)......................... $ 2,061,262
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE 99.9% ................. $ 41,395,414
OTHER ASSETS IN EXCESS OF LIABILITIES - .1% ................................. 25,409
--------------
NET ASSETS - 100.0% ......................................................... $ 41,420,823
==============
<FN>
(a)Non-income producing security.
(b)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $2,111,140.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS - 39.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES - 20.5%
$ 390,000 7.625%, due 05/31/1996..................................................... $ 391,462
500,000 7.00%, due 09/30/1996...................................................... 504,062
325,000 8.00%, due 10/15/1996...................................................... 329,570
50,000 6.125%, due 12/31/1996..................................................... 50,266
50,000 8.00%, due 01/15/1997...................................................... 50,984
150,000 6.25%, due 01/31/1997...................................................... 151,031
800,000 6.875%, due 03/31/1997..................................................... 810,500
975,000 6.75%, due 05/31/1997...................................................... 987,492
40,000 8.50%, due 07/15/1997...................................................... 41,425
65,000 8.75%, due 10/15/1997...................................................... 67,844
10,000 7.875%, due 01/15/1998..................................................... 10,350
70,000 7.875%, due 04/15/1998..................................................... 72,756
50,000 8.25%, due 07/15/1998...................................................... 52,531
855,000 7.125%, due 10/15/1998..................................................... 879,848
225,000 7.00%, due 04/15/1999...................................................... 231,188
150,000 6.375%, due 07/15/1999..................................................... 151,642
100,000 8.00%, due 08/15/1999...................................................... 106,000
200,000 6.00%, due 10/15/1999...................................................... 200,000
250,000 7.50%, due 10/31/1999...................................................... 261,406
50,000 7.875%, due 11/15/1999..................................................... 52,906
100,000 8.50%, due 02/15/2000...................................................... 108,313
20,000 8.75%, due 08/15/2000...................................................... 22,012
50,000 8.50%, due 11/15/2000...................................................... 54,766
140,000 8.00%, due 05/15/2001...................................................... 151,287
125,000 7.875%, due 08/15/2001..................................................... 134,649
--------------
......................................................................... 5,874,290
--------------
U.S. TREASURY STRIPS - .4%
Coupon Treasury Investment Growth Security,
11,000 due 05/15/1996........................................................... 10,929
37,188 due 11/15/1996........................................................... 35,962
13,140 due 02/15/1997........................................................... 12,536
11,000 due 08/15/1998........................................................... 9,572
--------------
......................................................................... 68,999
--------------
Government Trust Certificate,
16,000 due 05/15/1996........................................................... 15,896
--------------
Treasury Investment Growth Receipts,
17,000 due 11/15/1996........................................................... 16,446
--------------
......................................................................... 101,341
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS - 39.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL HOME LOAN BANK BONDS - 2.2%
$ 100,000 7.75%, due 04/25/1996...................................................... $ 100,164
500,000 7.57%, due 08/19/2004...................................................... 527,634
--------------
......................................................................... 627,798
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS - .7%
200,000 6.73%, due 01/05/2006...................................................... 194,076
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS - 8.5%
50,000 7.60%, due 01/10/1997...................................................... 50,778
750,000 7.85%, due 09/10/1998...................................................... 780,502
100,000 8.45%, due 07/12/1999...................................................... 106,360
200,000 5.98%, due 03/22/2000...................................................... 193,754
50,000 8.625%, due 04/10/2001..................................................... 50,000
250,000 8.70%, due 06/11/2001...................................................... 250,911
600,000 7.20%, due 01/10/2002...................................................... 596,421
175,000 7.90%, due 04/10/2002...................................................... 177,076
250,000 7.00%, due 08/12/2002...................................................... 247,235
--------------
......................................................................... 2,453,037
--------------
PRIVATE EXPORT FUNDING BONDS - 1.7%
470,000 7.90%, due 03/31/2000...................................................... 496,406
--------------
TENNESSEE VALLEY AUTHORITY BONDS - 5.4%
799,000 7.45%, due 10/15/2001...................................................... 817,106
745,000 6.875%, due 01/15/2002..................................................... 746,165
--------------
......................................................................... 1,563,271
--------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS (COST $11,443,259) ............... $ 11,310,219
--------------
<PAGE>
<CAPTION>
===================================================================================================================
Par Value MORTGAGE-BACKED SECURITIES - 1.6% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - .4%
$ 100,000 Series #G92-40, class G, 7.00%, due 07/25/2002............................. $ 100,065
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - .5%
40,436 Pool #15032, 7.50%, due 02/15/2007......................................... 40,410
27,079 Pool #176413, 7.50%, due 09/15/2016........................................ 27,062
47,968 Pool #170784, 8.00%, due 12/15/2016........................................ 49,002
38,419 Pool #181540, 8.00%, due 02/15/2017........................................ 39,247
--------------
......................................................................... 155,721
--------------
OTHER MORTGAGE-BACKED SECURITIES - .7%
Collateralized Mortgage Securities Corporation,
200,000 Series 1991-8PF, 7.30%, due 08/20/2020................................ 201,696
--------------
.........................................................................
TOTAL MORTGAGE-BACKED SECURITIES (COST $460,318) ............................ $ 457,482
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE - 26.7%
American Express Company,
$ 350,000 8.50%, due 08/15/2001.................................................... $ 380,484
--------------
American Express Credit,
250,000 7.75%, due 03/01/1997................................................... 254,347
--------------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999................................................... 458,595
300,000 7.75%, due 05/15/2004.................................................... 313,209
--------------
......................................................................... 771,804
--------------
Associates Corporation, N.A.,
300,000 8.80%, due 08/01/1998.................................................... 316,691
--------------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002................................................... 534,194
--------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001................................................... 189,357
--------------
Chevron Capital Corporation,
500,000 7.45%, due 08/15/2004.................................................... 512,639
--------------
Ford Motor Credit Corporation,
500,000 7.875%, due 01/15/1997................................................... 508,077
--------------
General Electric Capital Corporation,
50,000 7.875%, due 05/01/1996................................................... 50,098
110,000 8.75%, due 11/26/1996.................................................... 112,173
100,000 7.24%, due 01/15/2002.................................................... 103,094
150,000 7.50%, due 03/15/2002.................................................... 156,484
--------------
......................................................................... 421,849
--------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002................................................... 765,481
--------------
Regions Financial,
250,000 7.80%, due 12/01/2002.................................................... 259,376
--------------
Salomon, Inc.,
400,000 7.25%, due 01/15/2000.................................................... 401,239
480,000 7.50%, due 02/01/2003.................................................... 476,703
--------------
......................................................................... 877,942
--------------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004.................................................... 808,658
--------------
Wachovia Corporation,
1,035,000 7.00%, due 12/15/1999.................................................... 1,054,705
--------------
TOTAL FINANCE CORPORATE BONDS ............................................... 7,655,604
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL - 23.5%
Baxter Travenol Labs, Inc.,
$ 50,000 9.25%, due 09/15/1996................................................... $ 50,803
--------------
BP America Inc.,
265,000 8.50%, due 04/15/2001................................................... 287,288
--------------
Coca-Cola Company,
401,000 7.875%, due 09/15/1998.................................................. 416,586
--------------
duPont (E.I.) de Nemours & Company,
270,000 8.45%, due 10/15/1996.................................................... 274,262
150,000 9.15%, due 04/15/2000.................................................... 164,341
300,000 6.75%, due 10/15/2002.................................................... 301,266
--------------
......................................................................... 739,869
--------------
Exxon Capital Corporation,
100,000 7.875%, due 04/15/1996.................................................. 100,086
--------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003.................................................. 1,118,843
--------------
International Business Machines Corporation,
700,000 7.25%, due 11/01/2002................................................... 719,285
--------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001................................................... 261,872
--------------
Limited, Inc.,
150,000 8.875%, due 08/15/1999................................................... 155,254
--------------
Merck & Company, Inc.,
205,000 7.75%, due 05/01/1996.................................................... 205,396
--------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001................................................... 108,040
--------------
Philip Morris Companies, Inc.,
150,000 8.75%, due 06/15/1997.................................................... 154,723
305,000 7.375%, due 02/15/1999................................................... 312,322
175,000 7.75%, due 05/01/1999.................................................... 181,145
--------------
......................................................................... 648,190
--------------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001.................................................... 165,159
--------------
Raytheon Company,
550,000 6.50%, due 07/15/2005.................................................... 541,002
--------------
Wal-Mart Stores, Inc.,
160,000 8.00%, due 05/01/1996.................................................... 160,318
170,000 9.10%, due 07/15/2000.................................................... 186,527
100,000 8.625%, due 04/01/2001................................................... 108,992
745,000 7.50%, due 05/15/2004.................................................... 777,133
--------------
......................................................................... 1,232,970
--------------
TOTAL INDUSTRIAL CORPORATE BONDS ............................................ 6,750,643
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - 4.1%
Appalachian Power Company,
$ 25,000 7.50%, due 12/01/1998.................................................... $ 25,150
--------------
Consolidated Edison,
785,000 7.60%, due 01/15/2000.................................................... 811,914
--------------
Emerson Electric Company,
352,000 6.30%, due 11/01/2005.................................................... 342,237
--------------
TOTAL UTILITY CORPORATE BONDS ............................................... 1,179,301
--------------
TOTAL CORPORATE BONDS (COST $15,607,479) .................................... $ 15,585,548
--------------
TOTAL INVESTMENTS AT VALUE (COST $27,511,056) - 95.3% ...................... $27,353,249
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) - 1.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lehman Brothers,
$ 403,448 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $403,629 (Cost $403,448)............................. $ 403,448
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE - 96.7% ................ $ 27,756,697
OTHER ASSETS IN EXCESS OF LIABILITIES - 3.3% ................................ 961,061
--------------
NET ASSETS - 100.0% ......................................................... $28,717,758
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $413,210.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama Housing Finance Auth. Rev.,
$ 5,000 10.00%, due 12/01/1996..................................................... $ 5,068
25,000 6.00%, due 10/01/1997...................................................... 25,386
245,000 4.90%, due 10/01/1998...................................................... 248,643
25,000 6.45%, due 04/01/2001...................................................... 25,858
--------------
......................................................................... 304,955
--------------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006...................................................... 297,411
--------------
Alabama State GO,
200,000 5.90%, due 03/01/1999...................................................... 208,848
100,000 5.70%, due 12/01/2002...................................................... 105,946
--------------
......................................................................... 314,794
--------------
Alabama State Corrections Institutions Rev.,
100,000 4.20%, due 04/01/1998...................................................... 100,248
--------------
Alabama State Industrial Access Road & Bridge Corp. GO,
100,000 4.00%, due 06/01/1998...................................................... 99,420
85,000 5.25%, due 06/01/2003...................................................... 86,415
--------------
......................................................................... 185,835
--------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000..................................................... 156,876
340,000 5.75%, due 09/01/2001...................................................... 359,064
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101....................... 441,036
--------------
......................................................................... 956,976
--------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000...................................................... 99,627
50,000 5.00%, due 12/01/2005...................................................... 50,072
--------------
......................................................................... 149,699
--------------
Alabama Water Pollution Control Rev.,
150,000 4.60%, due 02/15/1997...................................................... 151,395
160,000 3.75%, due 08/15/1997...................................................... 159,952
25,000 7.00%, due 08/15/2001...................................................... 26,767
200,000 6.25%, due 08/15/2004...................................................... 218,070
--------------
......................................................................... 556,184
--------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004...................................................... 260,380
--------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
40,000 7.375%, due 07/01/2006, ETM................................................ 43,345
--------------
Auburn University, Alabama Rev.,
25,000 6.10%, due 06/01/1999...................................................... 26,221
50,000 4.90%, due 06/01/2001...................................................... 50,796
150,000 5.20%, due 06/01/2004...................................................... 152,889
325,000 5.25%, due 04/01/2005...................................................... 330,596
--------------
......................................................................... 560,502
--------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003...................................................... 213,382
400,000 5.00%, due 02/01/2007...................................................... 393,080
--------------
......................................................................... 606,462
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Baldwin Co., AL, Board of Education Rev.,
$ 50,000 5.40%, due 12/01/1998...................................................... $ 51,333
300,000 5.90%, due 12/01/2001...................................................... 312,522
--------------
......................................................................... 363,855
--------------
Birmingham, AL, GO,
100,000 5.80%, due 04/01/2002...................................................... 105,356
200,000 5.90%, due 04/01/2003...................................................... 211,958
--------------
......................................................................... 317,314
--------------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999...................................................... 100,259
100,000 4.75%, due 06/01/2001...................................................... 100,632
--------------
......................................................................... 200,891
--------------
Birmingham, AL, Industrial Water Board Rev.,
100,000 5.00%, due 03/01/2001...................................................... 101,829
100,000 6.00%, due 07/01/2007...................................................... 104,298
--------------
......................................................................... 206,127
--------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM................................................. 65,631
--------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
100,000 4.40%, due 01/01/2001...................................................... 99,098
50,000 5.90%, due 01/01/2003...................................................... 53,072
50,000 4.60%, due 01/01/2004...................................................... 48,812
400,000 6.15%, due 01/01/2006...................................................... 426,060
--------------
......................................................................... 627,042
--------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004...................................................... 54,960
--------------
Hoover, AL, Board of Education GO,
100,000 4.10%, due 02/15/1997...................................................... 100,509
400,000 6.00%, due 02/15/2006...................................................... 426,996
--------------
......................................................................... 527,505
--------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102...................... 220,952
--------------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998...................................................... 99,976
250,000 5.00%, due 07/01/2002...................................................... 253,465
--------------
......................................................................... 353,441
--------------
Huntsville, AL, GO,
40,000 4.50%, due 12/01/1996...................................................... 40,265
115,000 5.15%, due 08/01/2000...................................................... 117,955
100,000 5.20%, due 11/01/2000...................................................... 102,911
120,000 5.30%, due 08/01/2001...................................................... 123,986
500,000 5.50%, due 11/01/2002...................................................... 522,705
100,000 5.90%, due 11/01/2005...................................................... 106,203
--------------
......................................................................... 1,014,025
--------------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000...................................................... 159,482
150,000 5.00%, due 12/01/2003...................................................... 151,225
--------------
......................................................................... 310,707
--------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004...................................................... 152,373
150,000 5.25%, due 05/01/2005...................................................... 152,362
--------------
......................................................................... 304,735
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002...................................................... $ 155,730
50,000 4.75%, due 04/01/2002...................................................... 49,845
100,000 5.00%, due 04/01/2004...................................................... 99,934
--------------
......................................................................... 305,509
--------------
Jefferson Co., AL, Sewer Rev ..............................................
140,000 5.15%, due 09/01/2002...................................................... 143,843
50,000 5.50%, due 09/01/2003...................................................... 52,099
300,000 5.75%, due 09/01/2005...................................................... 314,877
--------------
......................................................................... 510,819
--------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007...................................................... 304,629
--------------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999...................................................... 101,953
--------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007...................................................... 334,714
--------------
Madison Co., AL, Board of Education Cap. Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004...................................................... 179,186
--------------
Mobile, AL, GO,
200,000 5.00%, due 08/15/1998...................................................... 204,166
150,000 5.20%, due 02/15/1999...................................................... 153,774
200,000 5.40%, due 08/15/2000...................................................... 207,472
25,000 6.25%, due 08/01/2001...................................................... 26,981
25,000 6.30%, due 08/01/2001...................................................... 27,039
275,000 6.20%, due 02/15/2007, ETM................................................. 294,632
--------------
......................................................................... 914,064
--------------
Mobile, AL, Water & Sewer Commrs. Rev.,
55,000 6.30%, due 01/01/2003...................................................... 59,404
--------------
Mobile Co., AL, GO,
100,000 4.80%, due 02/01/2002...................................................... 100,398
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102....................... 53,686
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102....................... 175,266
--------------
......................................................................... 329,350
--------------
Mobile Co., AL., Board of Education Cap. Outlay Warrants,
400,000 5.00%, due 03/01/2008...................................................... 387,076
--------------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 3.80%, due 02/01/1998...................................................... 99,564
100,000 4.50%, due 02/01/2003...................................................... 97,921
--------------
......................................................................... 197,485
--------------
Montgomery, AL, GO,
200,000 4.25%, due 05/01/1999, ETM................................................. 199,192
200,000 4.70%, due 05/01/2002...................................................... 199,468
--------------
......................................................................... 398,660
--------------
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Montgomery, AL, Waterworks & Sanitation Rev.,
$ 200,000 5.85%, due 03/01/2003...................................................... $ 210,912
--------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006...................................................... 100,684
--------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003...................................................... 99,085
100,000 5.30%, due 07/01/2003...................................................... 103,335
--------------
......................................................................... 202,420
--------------
Ozark, AL, Industrial Development Board Rev.,
50,000 7.00%, due 06/01/1996...................................................... 50,212
--------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000...................................................... 210,994
50,000 5.35%, due 08/01/2001...................................................... 51,874
--------------
......................................................................... 262,868
--------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM................................................. 37,956
25,000 6.60%, due 02/01/2002...................................................... 27,359
40,000 6.60%, due 02/01/2003...................................................... 44,079
--------------
......................................................................... 109,394
--------------
Shelby Co., AL, Board of Education Cap. Outlay Special Tax Warrants,
100,000 4.80%, due 02/01/1998...................................................... 101,417
--------------
Tuscaloosa, AL, Board of Education GO,
100,000 5.10%, due 02/01/2004...................................................... 101,608
--------------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005...................................................... 78,668
--------------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999...................................................... 247,910
50,000 5.00%, due 11/01/2000...................................................... 50,982
100,000 4.60%, due 10/01/2001...................................................... 99,952
200,000 5.10%, due 10/01/2002...................................................... 204,214
--------------
......................................................................... 603,058
--------------
Vestavia Hills, AL, Board of Education Cap. Outlay Rev.,
55,000 5.25%, due 02/01/2004...................................................... 56,201
--------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005...................................................... 123,195
--------------
TOTAL ALABAMA (COST $14,666,248) ............................................ $ 14,927,462
--------------
<PAGE>
<CAPTION>
===================================================================================================================
Principal
Amount MONEY MARKETS - 2.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 374,801 Biltmore Tax-Free Money Fund (Cost $374,801)................................. $ 374,801
-------------
TOTAL INVESTMENTS AT VALUE (COST $15,041,049) - 98.8% ...................... $ 15,302,263
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.2% ................................ 178,216
--------------
NET ASSETS - 100.0% ......................................................... $ 15,480,479
==============
<FN>
ETM -Escrowed to maturity.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
===============================================================================
1. Significant Accounting Policies
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load, open-end series of
The Williamsburg Investment Trust (the Trust). The Trust, a registered
management investment company under the Investment Company Act of 1940, as
amended, was organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is to seek
capital appreciation through the compounding of dividends and capital gains,
both realized and unrealized, on its investments in common stocks. Current
income is of secondary importance.
The Government Street Bond Fund's investment objectives are to preserve
capital, to provide current income and to protect the value of the portfolio
against the effects of inflation by limiting investments to securities in the
four highest quality ratings. Capital appreciation is of secondary importance.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from both federal income taxes and the personal income taxes of
Alabama and to preserve capital. Capital appreciation is of secondary
importance.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national stock exchange
are valued based upon the closing price on the principal exchange where the
security is traded. It is expected that fixed income securities will
ordinarily be traded on the over-the-counter market, and common stocks will
ordinarily be traded on a national securities exchange, but may also be traded
on the over-the-counter market. When market quotations are not readily
available, fixed income securities may be valued on the basis of prices
provided by an independent pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market value. At the time
the Funds enter into the joint repurchase agreement, the Funds take possession
of the underlying securities and the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal
to or exceed the face amount of the repurchase agreement. In addition, each
Fund actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities
purchased are amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street
Equity Fund; declared and paid monthly to shareholders of The Government
Street Bond Fund; and declared daily and paid monthly to shareholders of The
Alabama Tax Free Bond Fund. Net realized short-term capital gains, if any, may
be distributed throughout the year and net realized long-term capital gains,
if any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies, and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
<PAGE>
<TABLE>
The following information is based upon the federal income tax cost of
portfolio investments of each Fund as of March 31, 1996:
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation............................ $ 10,249,595 $ 434,872 $ 323,336
Gross unrealized depreciation............................ ( 311,491 ) ( 592,679 ) ( 62,122 )
--------------- --------------- ---------------
Net unrealized appreciation (depreciation)............... $ 9,938,104 $ ( 157,807 ) $ 261,214
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax basis of investments for each Fund is equal to the acquisition cost as
shown on the Statements of Assets and Liabilities.
As of March 31, 1996, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$178,365, and $203,770, respectively, which expire through the year 2004. In
addition, The Government Street Bond Fund and The Alabama Tax Free Bond Fund
realized net capital losses of $17,816 and $2,400, respectively, during the
period from November 1, 1995 through March 31, 1996, which are treated for
federal income tax purposes as arising in the tax year ending March 31, 1997.
These capital loss carryforwards and "post-October" losses may be utilized in
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments,
amounted to $13,641,468 and $10,423,185, respectively, for The Government
Street Equity Fund, $2,741,173 and $2,982,487, respectively, for The
Government Street Bond Fund, and $2,645,989 and $516,213, respectively, for
The Alabama Tax Free Bond Fund.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly at an
annual rate of .60% on its average daily net assets up to $100 million and
.50% on such assets in excess of $100 million. The Government Street Bond Fund
pays the Adviser a fee at an annual rate of .50% on its average daily net
assets up to $100 million and .40% on such net assets in excess of $100
million. The Alabama Tax Free Bond Fund pays the Adviser a fee at an annual
rate of .35% on its average daily net assets up to $100 million and .25% on
such net assets in excess of $100 million.
States in which shares of the Funds are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse each
Fund for expenses which exceed the most restrictive applicable expense
limitation of any state. For the year ended March 31, 1996, no such
reimbursement was required. The Adviser currently intends to limit the total
operating expenses of the Alabama Tax Free Bond Fund to .75% of average daily
net assets. Accordingly, the Adviser voluntarily waived $15,334 of its
investment advisory fees for the Fund during the year.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Funds. For these services, MGF receives a monthly fee from The Government
Street Equity Fund at an annual rate of .20% on its average daily net assets
up to $25 million; .175% on the next $25 million of such assets; and .15% on
such net assets in excess of $50 million. From The Government Street Bond
Fund, MGF receives a monthly fee of .075% on its average daily net assets up
to $200 million and .05% on such assets in excess of $200 million. From The
Alabama Tax Free Bond Fund, MGF receives a monthly fee of .15% on its average
daily net assets up to $200 million and .10% on such assets in excess of $200
million. The fee for each Fund is subject to a $2,000 monthly minimum. In
addition, each Fund pays out-of-pocket expenses including, but not limited to,
pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
<PAGE>
Report of Independent Certified Public Accountants
===============================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities
of The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 1996, and the
related statements of operations for the year then ended, and the statements
of changes in net assets for each of the two years in the period then ended
and the financial highlights for the periods indicated thereon. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Government Street Equity Fund, The Government Street Bond Fund
and The Alabama Tax Free Bond Fund, as of March 31, 1996, the results of their
operations for the year then ended, the changes in their net assets for each
of the two years in the period then ended and their financial highlights for
the periods referred to above, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
The Government Street Funds
The Alabama Tax Free Bond Fund
No Load Mutual Funds
Investment Adviser
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
Administrator
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-443-4249
Legal Counsel
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Board of Trustees
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr. M.D.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
Portfolio Managers
Thomas W. Leavell,
The Government Street Funds
Timothy S. Healey,
The Alabama Tax Free Bond Fund
<PAGE>
- 55 -
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE ALABAMA
TAX FREE BOND FUND
August 1, 1996
A series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES................................ 2
INVESTMENT LIMITATIONS............................................ 4
TRUSTEES AND OFFICERS............................................. 5
INVESTMENT ADVISOR................................................ 9
ADMINISTRATOR..................................................... 10
OTHER SERVICES.................................................... 11
BROKERAGE......................................................... 11
SPECIAL SHAREHOLDER SERVICES...................................... 12
PURCHASE OF SHARES............................................... 14
REDEMPTION OF SHARES.............................................. 14
NET ASSET VALUE DETERMINATION..................................... 15
ALLOCATION OF TRUST EXPENSES...................................... 15
ADDITIONAL TAX INFORMATION........................................ 16
CAPITAL SHARES AND VOTING......................................... 17
CALCULATION OF PERFORMANCE DATA................................... 18
FINANCIAL STATEMENTS AND REPORTS.................................. 21
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of The Alabama Tax Free Bond Fund
(the "Fund") dated August 1, 1996. The Prospectus may be obtained from the
Fund, at the address and phone number shown above, at no charge.
- 56 -
<PAGE>
alabama1.sai
July 29, 1996
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INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Fund are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time
the Fund purchases a security (normally a U.S. Treasury obligation), it also
resells it to the vendor (normally a member bank of the Federal Reserve System
or a registered Government Securities dealer) and must deliver the security
(and/or securities substituted for them under the repurchase agreement) to the
vendor on an agreed upon date in the future. Such securities, including any
securities so substituted, are referred to as the "Repurchase Securities." The
repurchase price exceeds the purchase price by an amount which reflects an
agreed upon market interest rate effective for the period of time during which
the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Fund's risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Fund holds a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times as least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Fund's
custodian either directly or through a securities depository.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they
mature in thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Fund. Money market
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instruments also may include Bankers' Acceptances and Certificates of Deposit
of domestic branches of U.S. banks, Commercial Paper and Variable Amount
Demand Master Notes ("Master Notes"). BANKERS' ACCEPTANCES are time drafts
drawn on and "accepted" by a bank, are the customary means of effecting
payment for merchandise sold in import-export transactions and are a source of
financing used extensively in international trade. When a bank "accepts" such
a time draft, it assumes liability for its payment. When the Fund acquires a
Bankers' Acceptance, the bank which "accepted" the time draft is liable for
payment of interest and principal when due. The Bankers' Acceptance,
therefore, carries the full faith and credit of such bank. A CERTIFICATE OF
DEPOSIT ("CD") is an unsecured interest-bearing debt obligation of a bank. CDs
acquired by the Fund would generally be in amounts of $100,000 or more.
COMMERCIAL PAPER is an unsecured, short term debt obligation of a bank,
corporation or other borrower. Commercial Paper maturity generally ranges from
two to 270 days and is usually sold on a discounted basis rather than as an
interest-bearing instrument. The Fund will invest in Commercial Paper only if
it is rated in the highest rating category by any nationally recognized
statistical rating organization ("NRSRO") or, if not rated, the issuer must
have an outstanding unsecured debt issue rated in the three highest categories
by any NRSRO or, if not so rated, be of equivalent quality in the Advisor's
assessment. Commercial Paper may include Master Notes of the same quality.
MASTER NOTES are unsecured obligations which are redeemable upon demand of the
holder and which permit the investment of fluctuating amounts at varying rates
of interest. Master Notes are acquired by the Fund only through the Master
Note program of the Fund's custodian, acting as administrator thereof. The
Advisor will monitor, on a continuous basis, the earnings power, cash flow and
other liquidity ratios of the issuer of a Master Note held by the Fund.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase
securities on a when-issued basis or for settlement at a future date if the
Fund holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date,
the Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Fund would generally purchase securities on a forward commitment or
when-issued basis with the intention of taking delivery, the Fund may sell
such a security prior to the settlement date if the Advisor felt such action
was appropriate. In such a case the Fund could incur a short-term gain or
loss.
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INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Fund. A
"majority" for this purpose, means the lesser of (i) 67% of the Fund's
outstanding shares represented in person or by proxy at a meeting at which
more than 50% of its outstanding shares are represented, or (ii) more than 50%
of its outstanding shares.
Under these limitations, the Fund MAY NOT:
(1) Invest for the purpose of exercising control or management
of another issuer;
(2) Invest in interests in real estate, real estate mortgage loans, oil,
gas or other mineral exploration or development programs, except that
the Fund may invest in the securities of companies (other than those
which are not readily marketable) which own or deal in such things;
(3) Underwrite securities issued by others, except to the extent the Fund
may be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(4) Purchase securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of
transactions);
(5) Make short sales of securities or maintain a short position, except
short sales "against the box" (A short sale is made by selling a
security the Fund does not own. A short sale is "against the box" to
the extent that the Fund contemporaneously owns or has the right to
obtain at no added cost securities identical to those sold short.);
(6) Participate on a joint or joint and several basis in any
trading account in securities;
(7) Make loans of money or securities, except that the Fund may
invest in repurchase agreements;
(8) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors), if more than 5% of its total assets would be
invested in such securities;
(9) Write, purchase or sell commodities, commodities contracts,
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futures contracts or related options;
(10) Invest, with respect to at least 50% of its total assets, more than
5% in the securities of any one issuer (other than the U.S.
Government, its agencies or instrumentalities) or acquire more than
25% of the outstanding voting securities of any issuer; or
(11) Invest more than an aggregate of 15% of the net assets of the Fund in
securities subject to legal or contractual restrictions on resale or
for which there are no readily available market quotations or in
other illiquid securities.
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 5, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
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TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or Fund,
age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
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<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John T. Bruce (age 42) Principal None
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<CAPTION>
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<S> <C> <C>
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
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<CAPTION>
<S> <C> <C>
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
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<CAPTION>
<S> <C> <C>
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Strategic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -----------------------------
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial matters, including
the adequacy of internal controls. On the basis of this review the Audit
Committee makes recommendations to the Trustees as to the appointment of
independent accountants for
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the following year. The Trustees have not appointed a compensation
committee or a nominating committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then outstanding shares of the Fund. On
the same date, Mr. John R. Miller, Jr., P.O. Box 469, Brewton, Alabama 36427,
beneficially owned 20.6% of the then outstanding shares of the Fund; Charles
Schwab & Co., Inc., 101 Montgomery Street, San Francisco, California 94104,
owned of record 10.4% of the then outstanding shares of the Fund; D.
Harrigan/V. Harrigan, P.O. Box 3067, Mobile Alabama 36652, owned of record
6.5% of the then outstanding shares of the Fund; and H. Apolinsky/S. Magnes as
trustees under the will of Sidney Magnes, P.O. Box 1307, Mobile, Alabama
36633, owned of record 6.6% of the then outstanding shares of the Fund.
INVESTMENT ADVISOR
T. Leavell & Associates, Inc. (the "Advisor") supervises the Fund's
investments pursuant to an Investment Advisory Agreement (the "Advisory
Agreement") described in the Prospectus. The Advisory Agreement is effective
until April 1, 1997 and will be renewed thereafter for one year periods only
so long as such renewal and continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of the Fund's
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust or the
Advisor by vote cast in person at a meeting called for the purpose of voting
on such approval. The Advisory Agreement is terminable without penalty on
sixty days notice by the Board of Trustees of the Trust or by the Advisor. The
Advisory Agreement provides that it will terminate automatically in the event
of its assignment.
Compensation of the Advisor is at the annual rate of 0.35% of the Fund's
average daily net assets. For the fiscal years ended March 31, 1996 and 1995,
the Fund paid the Advisor advisory fees of $34,436 (which was net of voluntary
fee waivers of $15,334) and $5,430 (net of voluntary fee waivers of $35,702),
respectively. The Advisor voluntarily waived its entire advisory fee and
reimbursed a portion of the Predecessor Fund's operating expenses for the
fiscal period ended March 31, 1994; the total fees waived and expenses
reimbursed amounted to $27,382.
The Advisor, organized as an Alabama corporation in 1979, is controlled
by its shareholders, Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill,
Timothy S. Healey and John R. Miller, Jr. In addition to acting as Advisor to
the Fund, the
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Advisor serves as investment advisor to two additional investment companies,
the subjects of separate prospectuses, and also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals.
The Advisor provides a continuous investment program for the Fund, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Fund. The Advisor determines
what securities and other investments will be purchased, retained or sold by
the Fund, and does so in accordance with the investment objectives and
policies of the Fund as described herein and in the Prospectus. The Advisor
places all securities orders for the Fund, determining with which broker,
dealer, or issuer to place the orders.
The Advisor must adhere to the brokerage policies of the Fund in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Fund and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Fund, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, the Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $200,000,000 and 0.10% of such assets in excess of
$200,000,000; provided, however, that the minimum fee is $2,000 per month. In
addition, the Fund pays out-of-pocket expenses, including but not limited to,
postage, envelopes, checks, drafts, forms, reports, record storage and
communication lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
from the Fund fees of $24,000 and $24,000, respectively.
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OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Fund's
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
The Custodian of the Fund's assets is Star Bank, N.A. (the "Custodian"), 425
Walnut Street, Cincinnati, Ohio 45202. The Custodian holds all cash and
securities of the Fund (either in its possession or in its favor through "book
entry systems" authorized by the Trustees in accordance with the 1940 Act),
collects all income and effects all securities transactions on behalf of the
Fund.
BROKERAGE
It is the Fund's practice to seek the best price and execution for all
portfolio securities transactions. The Advisor (subject to the general
supervision of the Board of Trustees) directs the execution of the Fund's
portfolio transactions. The Trust has adopted a policy which prohibits the
Advisor from effecting Fund portfolio transactions with broker-dealers which
may be interested persons of the Fund, the Trust, any Trustee, officer or
director of the Trust or its investment advisors or any interested person of
such persons.
The Fund's portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup.
No brokerage commissions were paid by the Fund or the Predecessor Fund for the
last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Advisor for the benefit of the other clients it may have.
Conversely, the Fund may benefit from such transactions effected for the
benefit of other clients. In all cases, the Advisor is obligated to effect
transactions for the Fund based upon obtaining the most favorable price and
execution. Factors considered by the Advisor in determining whether the Fund
will receive the most favorable price and execution include, among other
things: the size of the order, the broker's ability to effect and settle the
transaction promptly and efficiently and the Advisor's perception of the
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broker's reliability, integrity and financial condition.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder
services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates and others, investors are free to make additions and withdrawals to or
from their account as often as they wish. When an investor makes an initial
investment in the Fund, a shareholder account is opened in accordance with the
investor's registration instructions. Each time there is a transaction in a
shareholder account, such as an additional investment or the reinvestment of a
dividend or distribution, the shareholder will receive a statement showing the
current transaction and all prior transactions in the shareholder account
during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly or quarterly investment in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the public offering price on or about the last business day of the
month or quarter. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment,
by authorizing the Fund to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and
December). Checks will be made payable to the designated recipient and mailed
within three business days of the valuation date. If the designated recipient
is other than the registered shareholder, the signature of each shareholder
must be guaranteed on the application (see "Signature Guarantees"). A
corporation (or partnership) must also submit a "Corporate Resolution" (or
"Certification of Partnership") indicating the names, titles and required
number of signatures authorized to act on its behalf. The application must be
signed by a duly authorized officer(s) and the corporate seal affixed. No
redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Fund.
Shareholders should be aware that such systematic withdrawals may deplete or
use up entirely their initial investment and may result in
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realized long-term or short-term capital gains or losses. The Systematic
Withdrawal Plan may be terminated at any time by the Fund upon sixty days'
written notice or by a shareholder upon written notice to the Fund.
Applications and further details may be obtained by calling the Fund at
1-800-443-4249, or by writing to:
The Alabama Tax Free Bond Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment
for the purchase of shares of the Fund. The acceptance of such securities is
at the sole discretion of the Advisor based upon the suitability of the
securities accepted for inclusion as a long term investment of the Fund, the
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Fund does not intend, under normal circumstances, to
redeem its securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Fund to pay for all redemptions in cash.
In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Fund. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs when these securities are sold. An irrevocable election
may be filed under Rule 18f-1 of the 1940 Act, wherein the Fund commits itself
to pay redemptions in cash, rather than in kind, to any shareholder of record
of the Fund who redeems during any ninety day period, the lesser of (a)
$250,000 or (b) one percent (1%) of the Fund's net assets at the beginning of
such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include
the following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required
for transfer by corporations, administrators, executors, trustees, guardians,
etc. If you have any questions about transferring shares, call or write the
Fund.
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PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price computed on the date of receipt;
and an order received after that time will be executed at the price computed
on the next Business Day. An order to purchase shares is not binding on the
Fund until confirmed in writing (or unless other arrangements have been made
with the Fund, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
The Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUND. The Fund has adopted initial investment
minimums for the purpose of reducing the cost to the Fund (and consequently to
the shareholders) of communicating with and servicing its shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Fund, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange (the "Exchange") is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an
emergency exists as defined by the rules of the Commission as a result of
which it is not reasonably practicable for the Fund to dispose of securities
owned by it, or to fairly determine the value of its assets, and (iii) for
such other periods as the Commission may permit.
No charge is made by the Fund for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost
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depending on the market value of the securities held by the Fund.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Fund, and they have
adopted procedures to do so, as follows. The net asset value of the Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations
which may be deemed by the Trustees to be of overall benefit to the Fund and
its shareholders; legal and auditing expenses; and the cost of stationery and
forms prepared exclusively for the Fund. General Trust expenses are allocated
among the series, or funds, on a fair and equitable basis by the Board of
Trustees, which may be based on relative net assets of each fund (on the date
the expense is paid) or the nature of the services performed and the relative
applicability to each fund.
Under the Advisory Agreement, the Advisor may be required to reimburse the
Fund if its annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
- 71 -
<PAGE>
subject to year end adjustment. The Advisor in its discretion may, but is not
required to, reimburse the Fund an amount of money in excess of its advisory
fee.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUND. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, the Fund
must distribute annually at least 90% of its net taxable income plus 90% of
its net tax-exempt interest income. In addition to this distribution
requirement, the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities'
loans, gains from the disposition of stock or securities, and certain other
income. The Fund will also be required to derive less than 30% of its gross
income from the sale or other disposition of securities held for less than 90
days.
While the above requirements are aimed at qualification of the Fund as a
regulated investment company under Subchapter M of the Code, the Fund also
intends to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Fund remains qualified under Subchapter
M, it will not be subject to federal income tax to the extent it distributes
its taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on the Fund to the extent
it does not distribute at least 98% of its ordinary taxable income for a
calendar year, plus 98% of its capital gain net taxable income for the one
year period ending each October 31, plus certain undistributed amounts from
prior years. Such required distributions are based only on the Fund's taxable
income, however, so the excise tax generally would not apply to tax-exempt
income earned by the Fund. While the Fund intends to distribute its taxable
income and capital gains in a manner so as to avoid imposition of the federal
excise and income taxes, there can be no assurance that the Fund indeed will
make sufficient distributions to avoid entirely imposition of federal excise
or income taxes.
As of March 31, 1996, the Fund had capital loss carryforwards for federal
income tax purposes of $203,770 which expire through the year 2004. In
addition, the Fund realized net capital losses of $2,400 during the period
from November 1, 1995 through March 31, 1996, which are treated for federal
income tax purposes as arising in the tax year ending March 31, 1997. These
capital loss carryforwards and "post-October" losses may be utilized in future
years to offset net realized capital gains prior to distributing such gains to
shareholders.
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<PAGE>
Should additional series, or funds, be created by the Trustees, each fund
would be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Fund derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Since federal and Alabama tax laws exempt
income from qualifying municipal bond obligations, income dividends
attributable to such obligations are exempt from such taxes. A report will be
distributed to each shareholder as of December 31st of each year outlining the
percentage of income dividends which qualify for such tax exemptions.
Distributions, if any, of long-term capital gains are taxable to shareholders
as long-term capital gains, whether received in cash or reinvested in
additional shares, regardless of how long Fund shares have been held. Such
capital gain distributions are also subject to Alabama income tax, except to
the extent attributable to gains from certain obligations of the State of
Alabama and its political subdivisions. For information on "backup"
withholding, see "How to Purchase Shares" in the Prospectus.
For federal income tax purposes, any loss upon the sale of shares of the Fund
held for six months or less will be treated as long-term capital loss to the
extent of any long-term capital gain distributions received by the
shareholder. In addition, any loss of Fund shares held for six months or less
will be disallowed for both federal and Alabama income tax purposes to the
extent of any dividends received by the shareholder exempt from federal income
tax, even though, in the case of Alabama, some portion of such dividends
actually may have been subject to Alabama income tax.
CAPITAL SHARES AND VOTING
Shares of the Fund, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any Trustee may resign or retire and (2) any Trustee may be
removed with or without cause at any time (a) by a written instrument, signed
by at least two-thirds of the number of Trustees prior to such removal; or (b)
by vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c) by a written declaration signed by shareholders holding not
less
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<PAGE>
than two-thirds of the outstanding shares of the Trust and filed with the
Trust's custodian. Shareholders have certain rights, as set forth in the
Declaration of Trust, including the right to call a meeting of the
shareholders for the purpose of voting on the removal of one or more Trustees.
Shareholders holding not less than ten percent (10%) of the shares then
outstanding may require the Trustees to call such a meeting and the Trustees
are obligated to provide certain assistance to shareholders desiring to
communicate with other shareholders in such regard (e.g., providing access to
shareholder lists, etc.). In case a vacancy or an anticipated vacancy shall
for any reason exist, the vacancy shall be filled by the affirmative vote of a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act. The Trust does not expect to have an annual meeting of
shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, the Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Fund for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end
of the period (after adjusting for the reinvestment of any income dividends
and capital gain distributions), and dividing the result by the net asset
value per share at the beginning of the period. In particular, the average
annual total return of the Fund ("T") is computed by using the redeemable
value at the end of a specified period of time ("ERV") of a hypothetical
initial investment of $1,000 ("P") over a period of time ("n") according to
the formula P(l+T)n=ERV. The average annual total return quotations for the
Fund for the one year period ended March 31, 1996 and for the period since
inception (January 15, 1993) to March 31, 1996 are 7.02% and 4.99%,
respectively.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, the Fund may advertise its yield and tax- equivalent yield.
A yield quotation is based on a 30-day (or one month) period and is computed
by dividing the net investment income per share earned during the period by
the maximum offering
- 74 -
<PAGE>
price per share on the last day of the period, according to the
following formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Generally, interest earned (for the purpose of "a" above) on debt obligations
is computed by reference to the yield to maturity of each obligation held
based on the market value of the obligation (including actual accrued
interest) at the close of business on the last business day prior to the start
of the 30-day (or one month) period for which yield is being calculated, or,
with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The Fund's yield for the 30 days ended March
31, 1996 was 3.97%.
The tax-equivalent yield of the Fund is computed by using the tax-exempt yield
figure and dividing by one minus the applicable tax rate. The Fund's
tax-equivalent yield for the 30 days ended March 31, 1996, based on the
highest marginal combined federal and Alabama income tax rate, was 6.92%.
The Fund's performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Fund may compare its performance to the Lehman
7-Year Municipal Bond Index or the Lehman 3-Year Municipal Bond Index, which
are generally considered to be representative of the performance of
intermediate term municipal bonds. Comparative performance may also be
expressed by reference to a ranking prepared by a mutual fund monitoring
service, such as Lipper Analytical Services, Inc. or Morningstar, Inc., or by
one or more newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the Fund's past
performance to that of other mutual funds and investment products. Of course,
past performance is not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the
publisher of the bi-weekly Mutual Fund Values. Mutual Fund
- 75 -
<PAGE>
Values rates more than 1,000 NASDAQ-listed mutual funds of all types,
according to their risk-adjusted returns. The maximum rating is five
stars, and ratings are effective for two weeks.
Investors may use such indices in addition to the Fund's Prospectus to obtain
a more complete view of the Fund's performance before investing. Of course,
when comparing the Fund's performance to any index, factors such as
composition of the index and prevailing market conditions should be considered
in assessing the significance of such comparisons. When comparing funds using
reporting services, or total return, investors should take into consideration
any relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Fund may quote total returns
that are calculated on non-standardized base periods. The total returns
represent the historic change in the value of an investment in the Fund based
on monthly reinvestment of dividends over a specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Fund may also disclose from time
to time information about its portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Fund may also depict the
historical performance of the securities in which the Fund may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Fund may also include in
advertisements and in materials furnished to present and prospective
shareholders statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet specific
financial goals, such as saving for retirement, children's education, or other
future needs.
- 76 -
<PAGE>
FINANCIAL STATEMENTS AND REPORTS
The books of the Fund will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Fund as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
<PAGE>
The Alabama Tax Free Bond Fund
The Government Street Funds
The Alabama Tax Free Bond Fund
No Load Mutual Funds
Annual Report
March 31, 1996
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
===============================================================================
May 10, 1996
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report
of the condition of The Government Street Funds and of The Alabama Tax Free
Bond Fund and summaries of the Funds' portfolio assets as of March 31, 1996.
THE GOVERNMENT STREET EQUITY FUND
Steadily declining interest rates, improving corporate profitability,
and a huge flow of money into stock mutual funds all contributed to the stock
market surge that occurred during 1995 and the early part of 1996. For its
fiscal year ending March 31, 1996, The Government Street Equity Fund achieved
a total return of 25.96%. The net assets of the Fund were $41,420,823; net
asset value was $29.41. The total return of the S&P 500 Index was 32.10% for
the same twelve month period.
Continued growth in the value of common stocks will depend largely on
the growth of corporate earnings and on a low rate of inflation. A recent
increase in certain economic indicators has caused an upturn in interest
rates. Generally, rising interest rates have a negative impact on the stock
market. If growth in the economy proves to be moderate, however, the recent
rise in interest rates may prove to be only a temporary condition. In
addition, if there is a rebound in corporate earnings that is in step with the
economy, common stocks should continue their upward climb.
Forecasting interest rates and the direction of the United States
economy, however, is always a risky undertaking; it is even more so during a
Presidential election year. We make no effort to do so here. Investors in The
Government Street Equity Fund, with its broad diversification of quality
common stocks, will continue to participate in a growing stock market, yet
they also are well positioned defensively if the market experiences a
correction. On March 31, 1996, the Fund's portfolio consisted of 72 individual
equity issues divided almost equally between growth and value stocks. No
single investment in the portfolio exceeded 3% of the total value of the Fund.
THE GOVERNMENT STREET BOND FUND
In the face of a weakening economy last year, the Federal Reserve
Board eased credit by reducing the Federal Funds rate in July and again in
December. As a result, interest rates declined substantially throughout 1995.
Bond prices rose as yields fell across the range of maturities. In early 1996,
as data indicated that the economy was strengthening, bond prices, after
having peaked in January, declined slightly throughout the first quarter.
The Government Street Bond Fund achieved a total return of 9.43% for
its fiscal year ending March 31, 1996. This return compares favorably with the
Lehman Government/Corporate Intermediate Bond Index and with 3-month Treasury
bills which experienced returns of 9.56% and 5.75% for the same period,
respectively.
In keeping with the Fund's stated objective of maintaining an
intermediate term portfolio, on March 31, 1996, the Fund had a weighted
average maturity of 4.6 years. The portfolio consisted of 96 individual issues
with no single investment exceeding 3.9% of the total value of the Fund. U.S.
Treasury obligations and securities issued or guaranteed by agencies of the
U.S. Government represented approximately 40.3% of the Fund's total net
assets. High quality corporate bonds comprised 54.3% of the portfolio. The net
assets of the Fund were $28,717,758; net asset value was $20.87.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund also profited from the interest rate
environment that existed during 1995 and achieved a total investment return of
7.02% for the year ending March 31, 1996. This was in line with the 6.49%
return of the Lehman 3-Year Municipal Bond Index and with the 8.44% return of
the Lehman 7-Year General Obligation Municipal Bond Index achieved over the
same period.
The net assets of the Fund on March 31, 1996 were $15,480,479; net
asset value was $10.23. The weighted average maturity of the Fund's portfolio
was 6.3 years. All bonds were rated A or better by Standard & Poor's or
Moody's Investors Service (52% were rated AAA).
For the year ending March 31, 1996, the ratio of net investment
income to average net assets was 4.11%; to an Alabama investor in the maximum
combined federal and state income tax brackets (42.62%), the taxable
equivalent of this ratio was 7.16%.
The Alabama Tax Free Bond Fund has an intermediate average maturity;
bonds rated A or better; no 12b-1 fees; and no sales charges. With these
characteristics, we expect the Fund to continue to provide an attractive
investment option and reward those investors seeking current income exempt
from federal and Alabama income taxes.
Thank you for your continued confidence in The Government Street
Funds and in The Alabama Tax Free Bond Fund. Please call us if we can be of
further service to you.
Very truly yours,
/s/Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
/s/Richard Mitchell
Richard Mitchell
President
The Government Street Funds
The Alabama Tax Free Bond Fund
<PAGE>
A representation of the graphic material contained in the Government
Street Funds and The Alabama Tax Free Bond Fund Annual Report is set forth
below.
1. Comparison of the Change in Value of a $10,000 Investment in The
Government Street Equity Fund, the Standard & Poor's 500 Index and the
Consumer Price Index
STANDARD & POOR'S 500 INDEX: GOVERNMENT STREET EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
06/18/91 10,000 06/18/91 10,000
06/30/91 -1.87% 9,813 06/30/91 -2.05% 9,795
09/30/91 5.35% 10,338 09/30/91 5.12% 10,297
12/31/91 8.38% 11,204 12/31/91 8.26% 11,147
03/31/92 -2.53% 10,921 03/31/92 -2.96% 10,817
06/30/92 1.90% 11,128 06/30/92 0.05% 10,822
09/30/92 3.15% 11,479 09/30/92 3.62% 11,214
12/31/92 5.03% 12,056 12/31/92 5.42% 11,821
03/31/93 4.36% 12,582 03/31/93 0.35% 11,862
06/30/93 0.48% 12,642 06/30/93 -1.52% 11,682
09/30/93 2.58% 12,968 09/30/93 2.48% 11,971
12/31/93 2.32% 13,269 12/31/93 1.86% 12,194
03/31/94 -3.79% 12,766 03/31/94 -3.03% 11,825
06/30/94 0.42% 12,820 06/30/94 -3.00% 11,471
09/30/94 4.88% 13,446 09/30/94 5.37% 12,086
12/31/94 -0.02% 13,443 12/31/94 -1.91% 11,855
03/31/95 9.74% 14,752 03/31/95 6.75% 12,655
06/30/95 9.55% 16,161 06/30/95 7.18% 13,564
09/30/95 7.95% 17,445 09/30/95 6.05% 14,385
12/31/95 6.02% 18,495 12/31/95 5.01% 15,106
03/31/96 5.37% 19,488 03/31/96 5.53% 15,941
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
06/18/91 10,000
06/30/91 0.30% 10,030
09/30/91 0.60% 10,090
12/31/91 0.90% 10,181
03/31/92 0.70% 10,253
06/30/92 0.80% 10,335
09/30/92 0.70% 10,407
12/31/92 0.80% 10,491
03/31/93 0.90% 10,586
06/30/93 0.60% 10,649
09/30/93 0.40% 10,692
12/31/93 0.70% 10,767
03/31/94 0.50% 10,821
06/30/94 0.60% 10,886
09/30/94 0.90% 10,984
12/31/94 0.60% 11,050
03/31/95 0.80% 11,138
06/30/95 0.90% 11,239
09/30/95 0.40% 11,284
12/31/95 0.50% 11,340
03/31/96 0.80% 11,431
Past performance is not predictive of future performance.
The Government Street Equity Fund - Average Annual Total Returns
1 Year ........................25.96%
Since Inception*...............10.23%
*Initial public offering of shares was June 3, 1991.
<PAGE>
2. Comparison of the Change in Value of a $10,000 Investment in The
Government Street Bond Fund, the Lehman Government/Corporate Intermediate Bond
Index and the 90-Day Treasury Bill Index
LEHMAN INTERMEDIATE GOVERNMENT/ GOVERNMENT STREET BOND FUND:
CORPORATE BOND INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
06/07/91 10,000 06/07/91 10,000
06/30/91 0.07% 10,007 06/30/91 0.45% 10,045
09/30/91 4.81% 10,488 09/30/91 3.97% 10,444
12/31/91 4.80% 10,992 12/31/91 4.67% 10,931
03/31/92 -0.91% 10,892 03/31/92 -1.08% 10,813
06/30/92 3.96% 11,323 06/30/92 3.75% 11,218
09/30/92 4.41% 11,822 09/30/92 4.36% 11,706
12/31/92 -0.36% 11,780 12/31/92 -0.68% 11,627
03/31/93 3.98% 12,249 03/31/93 4.28% 12,125
06/30/93 2.16% 12,513 06/30/93 1.99% 12,366
09/30/93 2.26% 12,796 09/30/93 2.48% 12,673
12/31/93 0.17% 12,818 12/31/93 -0.18% 12,650
03/31/94 -2.03% 12,558 03/31/94 -2.38% 12,350
06/30/94 -0.60% 12,482 06/30/94 -0.72% 12,261
09/30/94 0.82% 12,585 09/30/94 0.70% 12,347
12/31/94 -0.11% 12,571 12/31/94 -0.30% 12,310
03/31/95 4.39% 13,123 03/31/95 4.46% 12,859
06/30/95 5.00% 13,778 06/30/95 5.24% 13,533
09/30/95 1.66% 14,006 09/30/95 1.44% 13,727
12/31/95 3.52% 14,499 12/31/95 3.54% 14,213
03/31/96 -0.83% 14,378 03/31/96 -0.99% 14,072
90 DAY TREASURY BILL INDEX:
QTRLY
DATE RETURN BALANCE
06/07/91 10,000
06/30/91 0.39% 10,039
09/30/91 1.53% 10,193
12/31/91 1.47% 10,342
03/31/92 0.99% 10,445
06/30/92 1.10% 10,559
09/30/92 1.01% 10,666
12/31/92 0.77% 10,748
03/31/93 0.78% 10,832
06/30/93 0.77% 10,916
09/30/93 0.82% 11,005
12/31/93 0.78% 11,091
03/31/94 0.77% 11,176
06/30/94 0.96% 11,283
09/30/94 1.08% 11,405
12/31/94 1.33% 11,556
03/31/95 1.50% 11,729
06/30/95 1.50% 11,905
09/30/95 1.42% 12,075
12/31/95 1.47% 12,253
03/31/96 1.23% 12,404
Past performance is not predictive of future performance.
The Government Street Bond Fund - Average Annual Total Returns
1 Year ........................ 9.43%
Since Inception*............... 7.35%
*Initial public offering of shares was June 3, 1991.
<PAGE>
3. Comparison of the Change in Value of a $10,000 Investment in The
Alabama Tax Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index and
the Lehman 3-Year Municipal Bond Index
LEHMAN 3 YEAR MUNICIPAL BOND INDEX: ALABAMA TAX FREE BOND FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
01/15/93 10,000 01/15/93 10,000
03/31/93 1.68% 10,168 03/31/93 0.96% 10,096
06/30/93 1.50% 10,321 06/30/93 2.81% 10,380
09/30/93 1.42% 10,467 09/30/93 2.79% 10,670
12/31/93 1.14% 10,586 12/31/93 1.05% 10,781
03/31/94 -1.34% 10,445 03/31/94 -3.17% 10,440
06/30/94 1.09% 10,558 06/30/94 0.63% 10,506
09/30/94 0.93% 10,657 09/30/94 0.54% 10,562
12/31/94 0.01% 10,658 12/31/94 -1.17% 10,439
03/31/95 2.81% 10,957 03/31/95 4.67% 10,927
06/30/95 2.12% 11,189 06/30/95 2.68% 11,219
09/30/95 2.14% 11,428 09/30/95 2.14% 11,459
12/31/95 1.54% 11,603 12/31/95 2.41% 11,735
03/31/96 0.56% 11,668 03/31/96 -0.36% 11,693
LEHMAN 7 YEAR G.O.MUNICIPAL BOND INDEX:
QTRLY
DATE RETURN BALANCE
01/15/93 10,000
03/31/93 2.55% 10,255
06/30/93 2.85% 10,547
09/30/93 2.93% 10,856
12/31/93 1.36% 11,004
03/31/94 -4.33% 10,527
06/30/94 1.38% 10,673
09/30/94 0.77% 10,755
12/31/94 -1.00% 10,647
03/31/95 5.42% 11,224
06/30/95 2.69% 11,526
09/30/95 3.29% 11,905
12/31/95 2.46% 12,198
03/31/96 -0.21% 12,172
Past performance is not predictive of future performance.
The Alabama Tax Free Bond Fund - Average Annual Total Returns
1 Year ........................ 7.02%
Since Inception*............... 4.99%
*Initial public offering of shares was January 15, 1993.
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1996
===================================================================================================================
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................... $ 29,396,048 $ 27,511,056 $ 15,041,049
=============== =============== ===============
At value (Note 1)..................................... $ 39,334,152 $ 27,353,249 $ 15,302,263
Investments in repurchase agreements (Note 1)............ 2,061,262 403,448 --
Cash .................................................... -- -- 1,492
Receivable for securities sold........................... -- 550,000 --
Receivable for capital shares sold....................... 2,370 100 1,360
Interest receivable...................................... 9,034 576,142 199,815
Dividends receivable..................................... 51,967 -- --
Other assets............................................. 2,841 2,414 965
--------------- --------------- ---------------
TOTAL ASSETS.......................................... 41,461,626 28,885,353 15,505,895
--------------- --------------- ---------------
LIABILITIES
Payable for securities purchased......................... -- 99,690 --
Payable for capital shares redeemed...................... 800 25,448 --
Dividends payable........................................ 6,361 22,052 14,916
Accrued advisory fees (Note 3)........................... 20,821 12,136 4,500
Accrued administration fees (Note 3)..................... 6,500 2,000 2,000
Other accrued expenses and liabilities................... 6,321 6,269 4,000
--------------- --------------- ---------------
TOTAL LIABILITIES..................................... 40,803 167,595 25,416
--------------- --------------- ---------------
NET ASSETS .............................................. $ 41,420,823 $ 28,717,758 $ 15,480,479
=============== =============== ===============
Net assets consist of:
Capital shares........................................... $ 30,687,750 $ 29,068,907 $ 15,425,435
Accumulated net realized gains (losses)
from security transactions............................ 792,841 ( 196,181 ) ( 206,170 )
Undistributed net investment income...................... 2,128 2,839 --
Net unrealized appreciation (depreciation)
on investments........................................ 9,938,104 ( 157,807 ) 261,214
--------------- --------------- ---------------
Net assets............................................... $ 41,420,823 $ 28,717,758 $ 15,480,479
=============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)............ 1,408,431 1,376,329 1,513,539
=============== =============== ===============
Net asset value, offering price and
redemption price per share (Note 1)................... $ 29.41 $ 20.87 $ 10.23
=============== =============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1996
===================================================================================================================
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest.............................................. $ 177,220 $ 2,048,899 $ 690,087
Dividends............................................. 722,968 -- --
--------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................. 900,188 2,048,899 690,087
--------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................... 221,551 143,643 49,770
Administrative fees (Note 3).......................... 71,060 24,000 24,000
Custodian fees........................................ 19,163 8,345 5,790
Professional fees..................................... 11,251 11,251 8,251
Pricing costs......................................... 1,626 11,854 13,801
Trustees' fees and expenses........................... 5,573 5,573 5,573
Registration fees..................................... 3,850 4,804 5,882
Postage and supplies.................................. 5,329 4,716 3,731
Printing of shareholder reports....................... 4,869 3,612 3,718
Other expenses........................................ 2,433 910 1,468
--------------- --------------- ---------------
TOTAL EXPENSES...................................... 346,705 218,708 121,984
Fees waived by the Adviser (Note 3)................... -- -- 15,334
--------------- --------------- ---------------
NET EXPENSES........................................ 346,705 218,708 106,650
--------------- --------------- ---------------
NET INVESTMENT INCOME ................................... 553,483 1,830,191 583,437
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions.......................... 1,093,838 ( 43,990 ) ( 3,107 )
Net change in unrealized appreciation/depreciation
on investments...................................... 6,795,880 791,184 340,163
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS ....................................... 7,889,718 747,194 337,056
--------------- --------------- ---------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 8,443,201 $ 2,577,385 $ 920,493
=============== =============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
===================================================================================================================
<CAPTION>
Government Street Government Street Alabama Tax Free
Equity Fund Bond Fund Bond Fund
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1996 1995 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income............. $ 553,483 $ 498,932 $1,830,191 $1,737,888 $ 583,437 $536,999
Net realized gains (losses)
from security transactions...... 1,093,838 102,880 (43,990) (127,816) (3,107) (200,904)
Net change in unrealized appreciation/
depreciation on investments...... 6,795,880 1,485,037 791,184 (519,326) 340,163 227,734
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
from operations 8,443,201 2,086,849 2,577,385 1,090,746 920,493 563,829
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income........ (552,981) (505,540) (1,829,817) (1,747,740) (583,437) (536,999)
From net realized gains........... (280,943) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from distributions
to shareholders.................. (833,924) (505,540) (1,829,817) (1,747,740) ( 583,437) (536,999)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS(A):
Proceeds from shares sold......... 7,310,859 5,282,887 2,484,795 7,150,809 2,543,833 5,439,330
Net asset value of shares issued in
reinvestment of distributions
to shareholders.................. 798,493 483,554 1,597,448 1,523,068 410,869 234,034
Payments for shares redeemed...... (5,771,194) (2,975,563) (3,891,999) (2,869,621) (627,496) (2,600,426)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from
capital share transactions........ 2,338,158 2,790,878 190,244 5,804,256 2,327,206 3,072,938
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ....... 9,947,435 4,372,187 937,812 5,147,262 2,664,262 3,099,768
NET ASSETS:
Beginning of year................. 31,473,388 27,101,201 27,779,946 22,632,684 12,816,217 9,716,449
----------- ----------- ----------- ----------- ----------- -----------
End of year....................... $41,420,823 $31,473,388 $28,717,758 $27,779,946 $15,480,479 $12,816,217
=========== =========== =========== =========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME ................ $ 2,128 $ 1,626 $ 2,839 $ 2,465 $ -- $ --
=========== =========== =========== =========== =========== ===========
(a) Summary of capital share activity:
Shares sold...................... 273,855 233,786 117,710 347,246 247,956 552,156
Shares issued in reinvestment of
distributions to shareholders 29,243 21,279 75,860 75,121 40,072 23,807
Shares redeemed.................. (213,229) (130,780) (183,993) (140,040) (61,341) (264,286)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in shares outstanding 89,869 124,285 9,577 282,327 226,687 311,677
Shares outstanding, beginning
of year 1,318,562 1,194,277 1,366,752 1,084,425 1,286,852 975,175
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of year.. 1,408,431 1,318,562 1,376,329 1,366,752 1,513,539 1,286,852
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 23.87 $ 22.69 $ 23.06 $ 21.37 $ 20.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.40 0.38 0.30 0.34 0.28
Net realized and unrealized
gains (losses) on investments........ 5.75 1.19 ( 0.37) 1.71 1.35
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 6.15 1.57 ( 0.07) 2.05 1.63
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... ( 0.40) ( 0.39) ( 0.30) ( 0.36) ( 0.26)
Distributions from net realized gains.. ( 0.21) -- -- -- --
----------- ----------- ---------- ---------- -----------
Total distributions....................... ( 0.61) ( 0.39 ) ( 0.30) ( 0.36) ( 0.26)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
=========== =========== ========== ========== ===========
Total return.............................. 25.96% 7.02% ( 0.31%) 9.66% 9.99% (c)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 41,421 $ 31,473 $ 27,101 $ 21,735 $ 14,971
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets (b) 0.94% 0.91% 1.00% 1.00% 1.00% (c)
Ratio of net investment income
to average net assets.................. 1.50% 1.71% 1.33% 1.55% 1.88% (c)
Portfolio turnover rate................... 31% 55% 63% 59% 20%
<FN>
(a)Commencement of operations.
(b)In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's administrative and custodian fees for periods ended prior to
March 31, 1996 were paid through an arrangement with a third-party
broker-dealer who was compensated through commission trades. Payment of the
fees was based on a percentage of commissions earned. Absent expenses
reimbursed through the directed brokerage arrangement, the ratios of
expenses to average net assets would have been 1.00%, 1.16%, 1.20% and
1.18%(c) for the periods ended March 31, 1995, 1994, 1993 and 1992,
respectively.
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
JUNE 3,
YEARS ENDED MARCH 31, 1991(A) TO
MARCH 31,
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 20.33 $ 20.87 $ 21.77 $ 20.67 $ 20.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 1.35 1.35 1.32 1.34 0.95
Net realized and unrealized
gains (losses) on investments........ 0.54 ( 0.53 ) ( 0.90) 1.10 0.67
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 1.89 0.82 0.42 2.44 1.62
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... ( 1.35) ( 1.36) ( 1.32) ( 1.33) ( 0.95)
Distributions from net realized gains.. -- -- -- ( 0.01) --
----------- ----------- ---------- ---------- -----------
Total distributions....................... ( 1.35) ( 1.36) ( 1.32) ( 1.34) ( 0.95)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
=========== =========== ========== ========== ===========
Total return.............................. 9.43% 4.12% 1.85% 12.14% 9.95% (c)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 28,718 $ 27,780 $ 22,633 $ 15,955 $ 6,506
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(b) 0.76% 0.85% 0.86% 0.88% 0.93% (c)
Ratio of net investment income
to average net assets.................. 6.38% 6.68% 6.15% 6.44% 7.02% (c)
Portfolio turnover rate................... 10% 11% 10% 17% 15%
<FN>
(a)Commencement of operations.
(b)Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03%, 1.09% and 1.30%(c) for
the periods ended March 31, 1994, 1993 and 1992, respectively (Note 3).
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
<CAPTION>
Seven Months January 15,
Years Ended March 31, Ended 1993(b) to
March 31, August 31,
1996 1995 1994(a) 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.......... $ 9.96 $ 9.96 $ 10.30 $ 10.00
------------- ------------- ------------- ------------
Income from investment operations:
Net investment income........................ 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments.............. 0.27 -- ( 0.34) 0.30
------------- ------------- ------------- ------------
Total from investment operations................ 0.69 0.45 ( 0.08) 0.53
------------- ------------- ------------- ------------
Less distributions:
Dividends from net investment income......... ( 0.42) ( 0.45) ( 0.26) ( 0.23)
------------- ------------- ------------- ------------
Net asset value at end of period................ $ 10.23 $ 9.96 $ 9.96 $ 10.30
============= ============= ============= ============
Total return.................................... 7.02% 4.66% (1.50%)(d) 8.79%(d)
============= ============= ============= ============
Net assets at end of period (000's)............. $ 15,480 $ 12,816 $ 9,716 $ 3,429
============= ============= ============= ============
Ratio of expenses to average net assets(c) ..... 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets........................ 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate......................... 4% 36% 3% 2%
<FN>
(a)Effective April 1, 1994, the Fund was reorganized and changed its fiscal
year end from August 31 to March 31.
(b)Commencement of operations.
(c)Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been 0.86%,
1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1996, March 31,
1995, March 31, 1994 and August 31, 1993, respectively (Note 3).
(d)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Shares COMMON STOCKS - 94.9% Value
- -------------------------------------------------------------------------------------------------------------------
CHEMICALS AND DRUGS - 19.9%
<S> <C> <C>
2,000 Abbott Laboratories........................................................ $ 81,500
10,000 Becton Dickinson & Company................................................. 818,750
12,000 Biomet, Inc.(a) ........................................................... 168,000
14,375 Cardinal Health, Inc....................................................... 923,594
14,000 duPont (E.I.) de Nemours & Company......................................... 1,162,000
14,000 First Mississippi Corporation.............................................. 334,250
9,000 Goodrich (B.F.) Company.................................................... 715,500
7,000 Johnson & Johnson.......................................................... 645,750
5,500 Lilly (Eli) & Company...................................................... 357,500
5,000 PPG Industries, Inc....................................................... 244,375
10,000 Schering-Plough Corporation................................................ 581,250
18,000 Schulman (A.), Inc......................................................... 380,250
12,000 Sigma-Aldrich.............................................................. 687,000
12,000 Union Carbide Corporation.................................................. 595,500
12,000 U. S. HealthCare, Inc...................................................... 550,500
--------------
......................................................................... 8,245,719
--------------
CONSTRUCTION - 5.1%
12,750 Blount, Inc. - Class A..................................................... 392,062
12,000 Caterpiller, Inc........................................................... 816,000
16,250 Clayton Homes, Inc......................................................... 339,219
12,800 Valspar Corporation........................................................ 580,800
--------------
......................................................................... 2,128,081
--------------
CONSUMER PRODUCTS - 10.9%
19,650 Archer-Daniels-Midland Company............................................. 361,069
13,000 Belo (A.H.) Corporation - Class A.......................................... 442,000
16,000 Gillette Company........................................................... 828,000
10,000 Kimberly-Clark Corporation................................................. 745,000
12,000 Motorola, Inc.............................................................. 636,000
13,300 Polygram NV................................................................ 801,325
8,500 Procter & Gamble Company................................................... 720,375
--------------
......................................................................... 4,533,769
--------------
DURABLE GOODS - 17.8%
12,000 AMP, Inc................................................................... 496,500
11,250 Cabletron Systems, Inc.(a) ................................................ 745,313
26,800 Cisco Systems, Inc.(a) .................................................... 1,242,850
7,000 Cummins Engine Company, Inc. .............................................. 282,625
6,500 General Electric Company .................................................. 506,188
4,600 International Business Machines Corporation................................ 511,175
21,800 Loral Corporation.......................................................... 1,068,200
9,000 McDonnell Douglas Corporation.............................................. 824,625
11,000 Philips Electronics N.V.(a) ............................................... 400,125
11,000 Raytheon Company........................................................... 563,750
7,000 Shared Medical Systems, Inc................................................ 421,750
11,000 Stewart & Stevenson Services, Inc.......................................... 309,375
--------------
......................................................................... 7,372,476
--------------
FINANCIAL - 7.4%
14,250 AFLAC, Inc................................................................. 445,312
9,000 American Express Company................................................... 444,375
3,500 General Re Corporation..................................................... 510,125
8,500 Mellon Bank Corporation.................................................... 468,563
14,500 Star Banc Corporation...................................................... 935,250
4,000 Travelers Group, Inc....................................................... 264,000
--------------
......................................................................... 3,067,625
--------------
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Shares COMMON STOCKS - 94.9% Value
===================================================================================================================
FOOD/BEVERAGES - 2.1%
<S> <C> <C>
20,000 Coca-Cola Enterprises...................................................... $ 617,500
17,500 Hudson Foods, Inc. - Class A............................................... 249,375
--------------
......................................................................... 866,875
--------------
METAL AND MINING - 5.5%
9,000 Aluminum Company of America................................................ 563,625
14,700 Broken Hill Proprietary Company, LTD....................................... 834,225
9,543 Freeport McMoran Copper & Gold, Inc. - Class B(a) ......................... 301,797
20,000 Placer Dome, Inc........................................................... 577,500
--------------
......................................................................... 2,277,147
--------------
OIL/ENERGY - 11.3%
12,500 Amoco Corporation.......................................................... 903,125
6,000 Atlantic Richfield Company................................................. 714,000
13,000 Chevron Corporation........................................................ 729,625
7,325 Exxon Corporation.......................................................... 597,903
12,500 Kerr McGee Corporation..................................................... 793,750
9,500 Shell Transport & Trading PLC.............................................. 762,375
5,000 Sonat, Inc................................................................. 180,000
--------------
......................................................................... 4,680,778
--------------
PAPER AND FOREST PRODUCTS - .5%
3,000 Georgia Pacific Corporation................................................ 208,125
--------------
RETAIL - 3.0%
4,500 Home Depot, Inc............................................................ 215,437
5,000 Nike, Inc. - Class B....................................................... 406,250
5,000 Wal-Mart Stores, Inc....................................................... 115,625
15,000 Walgreen Company........................................................... 489,375
--------------
......................................................................... 1,226,687
--------------
SERVICES - COMPUTER PROCESSING - .4%
4,000 Automatic Data Processing, Inc............................................. 157,500
--------------
TRANSPORTATION - 1.2%
7,000 Federal Express Corporation(a) ............................................ 489,125
--------------
UTILITIES - 9.8%
12,500 Ameritech Corporation...................................................... 681,250
11,000 AT&T Company............................................................... 673,750
12,800 Consolidated Edison Company of New York, Inc............................... 408,000
22,400 DPL, Inc................................................................... 534,800
14,890 Duke Power Company......................................................... 751,945
8,000 Hong Kong Telecommunications, LTD.......................................... 160,000
5,000 Nicor, Inc................................................................. 133,750
14,000 SBC Communications, Inc.................................................... 736,750
--------------
......................................................................... 4,080,245
--------------
TOTAL COMMON STOCKS (COST $29,396,048) ...................................... $ 39,334,152
--------------
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Face
Amount REPURCHASE AGREEMENTS(b) - 5.0% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lehman Brothers,
$ 2,061,262 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $2,062,186 (Cost $2,061,262)......................... $ 2,061,262
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE 99.9% ................. $ 41,395,414
OTHER ASSETS IN EXCESS OF LIABILITIES - .1% ................................. 25,409
--------------
NET ASSETS - 100.0% ......................................................... $ 41,420,823
==============
<FN>
(a)Non-income producing security.
(b)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $2,111,140.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS - 39.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES - 20.5%
$ 390,000 7.625%, due 05/31/1996..................................................... $ 391,462
500,000 7.00%, due 09/30/1996...................................................... 504,062
325,000 8.00%, due 10/15/1996...................................................... 329,570
50,000 6.125%, due 12/31/1996..................................................... 50,266
50,000 8.00%, due 01/15/1997...................................................... 50,984
150,000 6.25%, due 01/31/1997...................................................... 151,031
800,000 6.875%, due 03/31/1997..................................................... 810,500
975,000 6.75%, due 05/31/1997...................................................... 987,492
40,000 8.50%, due 07/15/1997...................................................... 41,425
65,000 8.75%, due 10/15/1997...................................................... 67,844
10,000 7.875%, due 01/15/1998..................................................... 10,350
70,000 7.875%, due 04/15/1998..................................................... 72,756
50,000 8.25%, due 07/15/1998...................................................... 52,531
855,000 7.125%, due 10/15/1998..................................................... 879,848
225,000 7.00%, due 04/15/1999...................................................... 231,188
150,000 6.375%, due 07/15/1999..................................................... 151,642
100,000 8.00%, due 08/15/1999...................................................... 106,000
200,000 6.00%, due 10/15/1999...................................................... 200,000
250,000 7.50%, due 10/31/1999...................................................... 261,406
50,000 7.875%, due 11/15/1999..................................................... 52,906
100,000 8.50%, due 02/15/2000...................................................... 108,313
20,000 8.75%, due 08/15/2000...................................................... 22,012
50,000 8.50%, due 11/15/2000...................................................... 54,766
140,000 8.00%, due 05/15/2001...................................................... 151,287
125,000 7.875%, due 08/15/2001..................................................... 134,649
--------------
......................................................................... 5,874,290
--------------
U.S. TREASURY STRIPS - .4%
Coupon Treasury Investment Growth Security,
11,000 due 05/15/1996........................................................... 10,929
37,188 due 11/15/1996........................................................... 35,962
13,140 due 02/15/1997........................................................... 12,536
11,000 due 08/15/1998........................................................... 9,572
--------------
......................................................................... 68,999
--------------
Government Trust Certificate,
16,000 due 05/15/1996........................................................... 15,896
--------------
Treasury Investment Growth Receipts,
17,000 due 11/15/1996........................................................... 16,446
--------------
......................................................................... 101,341
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS - 39.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL HOME LOAN BANK BONDS - 2.2%
$ 100,000 7.75%, due 04/25/1996...................................................... $ 100,164
500,000 7.57%, due 08/19/2004...................................................... 527,634
--------------
......................................................................... 627,798
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS - .7%
200,000 6.73%, due 01/05/2006...................................................... 194,076
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS - 8.5%
50,000 7.60%, due 01/10/1997...................................................... 50,778
750,000 7.85%, due 09/10/1998...................................................... 780,502
100,000 8.45%, due 07/12/1999...................................................... 106,360
200,000 5.98%, due 03/22/2000...................................................... 193,754
50,000 8.625%, due 04/10/2001..................................................... 50,000
250,000 8.70%, due 06/11/2001...................................................... 250,911
600,000 7.20%, due 01/10/2002...................................................... 596,421
175,000 7.90%, due 04/10/2002...................................................... 177,076
250,000 7.00%, due 08/12/2002...................................................... 247,235
--------------
......................................................................... 2,453,037
--------------
PRIVATE EXPORT FUNDING BONDS - 1.7%
470,000 7.90%, due 03/31/2000...................................................... 496,406
--------------
TENNESSEE VALLEY AUTHORITY BONDS - 5.4%
799,000 7.45%, due 10/15/2001...................................................... 817,106
745,000 6.875%, due 01/15/2002..................................................... 746,165
--------------
......................................................................... 1,563,271
--------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS (COST $11,443,259) ............... $ 11,310,219
--------------
<PAGE>
<CAPTION>
===================================================================================================================
Par Value MORTGAGE-BACKED SECURITIES - 1.6% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - .4%
$ 100,000 Series #G92-40, class G, 7.00%, due 07/25/2002............................. $ 100,065
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - .5%
40,436 Pool #15032, 7.50%, due 02/15/2007......................................... 40,410
27,079 Pool #176413, 7.50%, due 09/15/2016........................................ 27,062
47,968 Pool #170784, 8.00%, due 12/15/2016........................................ 49,002
38,419 Pool #181540, 8.00%, due 02/15/2017........................................ 39,247
--------------
......................................................................... 155,721
--------------
OTHER MORTGAGE-BACKED SECURITIES - .7%
Collateralized Mortgage Securities Corporation,
200,000 Series 1991-8PF, 7.30%, due 08/20/2020................................ 201,696
--------------
.........................................................................
TOTAL MORTGAGE-BACKED SECURITIES (COST $460,318) ............................ $ 457,482
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE - 26.7%
American Express Company,
$ 350,000 8.50%, due 08/15/2001.................................................... $ 380,484
--------------
American Express Credit,
250,000 7.75%, due 03/01/1997................................................... 254,347
--------------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999................................................... 458,595
300,000 7.75%, due 05/15/2004.................................................... 313,209
--------------
......................................................................... 771,804
--------------
Associates Corporation, N.A.,
300,000 8.80%, due 08/01/1998.................................................... 316,691
--------------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002................................................... 534,194
--------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001................................................... 189,357
--------------
Chevron Capital Corporation,
500,000 7.45%, due 08/15/2004.................................................... 512,639
--------------
Ford Motor Credit Corporation,
500,000 7.875%, due 01/15/1997................................................... 508,077
--------------
General Electric Capital Corporation,
50,000 7.875%, due 05/01/1996................................................... 50,098
110,000 8.75%, due 11/26/1996.................................................... 112,173
100,000 7.24%, due 01/15/2002.................................................... 103,094
150,000 7.50%, due 03/15/2002.................................................... 156,484
--------------
......................................................................... 421,849
--------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002................................................... 765,481
--------------
Regions Financial,
250,000 7.80%, due 12/01/2002.................................................... 259,376
--------------
Salomon, Inc.,
400,000 7.25%, due 01/15/2000.................................................... 401,239
480,000 7.50%, due 02/01/2003.................................................... 476,703
--------------
......................................................................... 877,942
--------------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004.................................................... 808,658
--------------
Wachovia Corporation,
1,035,000 7.00%, due 12/15/1999.................................................... 1,054,705
--------------
TOTAL FINANCE CORPORATE BONDS ............................................... 7,655,604
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL - 23.5%
Baxter Travenol Labs, Inc.,
$ 50,000 9.25%, due 09/15/1996................................................... $ 50,803
--------------
BP America Inc.,
265,000 8.50%, due 04/15/2001................................................... 287,288
--------------
Coca-Cola Company,
401,000 7.875%, due 09/15/1998.................................................. 416,586
--------------
duPont (E.I.) de Nemours & Company,
270,000 8.45%, due 10/15/1996.................................................... 274,262
150,000 9.15%, due 04/15/2000.................................................... 164,341
300,000 6.75%, due 10/15/2002.................................................... 301,266
--------------
......................................................................... 739,869
--------------
Exxon Capital Corporation,
100,000 7.875%, due 04/15/1996.................................................. 100,086
--------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003.................................................. 1,118,843
--------------
International Business Machines Corporation,
700,000 7.25%, due 11/01/2002................................................... 719,285
--------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001................................................... 261,872
--------------
Limited, Inc.,
150,000 8.875%, due 08/15/1999................................................... 155,254
--------------
Merck & Company, Inc.,
205,000 7.75%, due 05/01/1996.................................................... 205,396
--------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001................................................... 108,040
--------------
Philip Morris Companies, Inc.,
150,000 8.75%, due 06/15/1997.................................................... 154,723
305,000 7.375%, due 02/15/1999................................................... 312,322
175,000 7.75%, due 05/01/1999.................................................... 181,145
--------------
......................................................................... 648,190
--------------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001.................................................... 165,159
--------------
Raytheon Company,
550,000 6.50%, due 07/15/2005.................................................... 541,002
--------------
Wal-Mart Stores, Inc.,
160,000 8.00%, due 05/01/1996.................................................... 160,318
170,000 9.10%, due 07/15/2000.................................................... 186,527
100,000 8.625%, due 04/01/2001................................................... 108,992
745,000 7.50%, due 05/15/2004.................................................... 777,133
--------------
......................................................................... 1,232,970
--------------
TOTAL INDUSTRIAL CORPORATE BONDS ............................................ 6,750,643
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS - 54.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - 4.1%
Appalachian Power Company,
$ 25,000 7.50%, due 12/01/1998.................................................... $ 25,150
--------------
Consolidated Edison,
785,000 7.60%, due 01/15/2000.................................................... 811,914
--------------
Emerson Electric Company,
352,000 6.30%, due 11/01/2005.................................................... 342,237
--------------
TOTAL UTILITY CORPORATE BONDS ............................................... 1,179,301
--------------
TOTAL CORPORATE BONDS (COST $15,607,479) .................................... $ 15,585,548
--------------
TOTAL INVESTMENTS AT VALUE (COST $27,511,056) - 95.3% ...................... $27,353,249
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) - 1.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lehman Brothers,
$ 403,448 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $403,629 (Cost $403,448)............................. $ 403,448
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE - 96.7% ................ $ 27,756,697
OTHER ASSETS IN EXCESS OF LIABILITIES - 3.3% ................................ 961,061
--------------
NET ASSETS - 100.0% ......................................................... $28,717,758
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $413,210.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
===================================================================================================================
<CAPTION>
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama Housing Finance Auth. Rev.,
$ 5,000 10.00%, due 12/01/1996..................................................... $ 5,068
25,000 6.00%, due 10/01/1997...................................................... 25,386
245,000 4.90%, due 10/01/1998...................................................... 248,643
25,000 6.45%, due 04/01/2001...................................................... 25,858
--------------
......................................................................... 304,955
--------------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006...................................................... 297,411
--------------
Alabama State GO,
200,000 5.90%, due 03/01/1999...................................................... 208,848
100,000 5.70%, due 12/01/2002...................................................... 105,946
--------------
......................................................................... 314,794
--------------
Alabama State Corrections Institutions Rev.,
100,000 4.20%, due 04/01/1998...................................................... 100,248
--------------
Alabama State Industrial Access Road & Bridge Corp. GO,
100,000 4.00%, due 06/01/1998...................................................... 99,420
85,000 5.25%, due 06/01/2003...................................................... 86,415
--------------
......................................................................... 185,835
--------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000..................................................... 156,876
340,000 5.75%, due 09/01/2001...................................................... 359,064
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101....................... 441,036
--------------
......................................................................... 956,976
--------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000...................................................... 99,627
50,000 5.00%, due 12/01/2005...................................................... 50,072
--------------
......................................................................... 149,699
--------------
Alabama Water Pollution Control Rev.,
150,000 4.60%, due 02/15/1997...................................................... 151,395
160,000 3.75%, due 08/15/1997...................................................... 159,952
25,000 7.00%, due 08/15/2001...................................................... 26,767
200,000 6.25%, due 08/15/2004...................................................... 218,070
--------------
......................................................................... 556,184
--------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004...................................................... 260,380
--------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
40,000 7.375%, due 07/01/2006, ETM................................................ 43,345
--------------
Auburn University, Alabama Rev.,
25,000 6.10%, due 06/01/1999...................................................... 26,221
50,000 4.90%, due 06/01/2001...................................................... 50,796
150,000 5.20%, due 06/01/2004...................................................... 152,889
325,000 5.25%, due 04/01/2005...................................................... 330,596
--------------
......................................................................... 560,502
--------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003...................................................... 213,382
400,000 5.00%, due 02/01/2007...................................................... 393,080
--------------
......................................................................... 606,462
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Baldwin Co., AL, Board of Education Rev.,
$ 50,000 5.40%, due 12/01/1998...................................................... $ 51,333
300,000 5.90%, due 12/01/2001...................................................... 312,522
--------------
......................................................................... 363,855
--------------
Birmingham, AL, GO,
100,000 5.80%, due 04/01/2002...................................................... 105,356
200,000 5.90%, due 04/01/2003...................................................... 211,958
--------------
......................................................................... 317,314
--------------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999...................................................... 100,259
100,000 4.75%, due 06/01/2001...................................................... 100,632
--------------
......................................................................... 200,891
--------------
Birmingham, AL, Industrial Water Board Rev.,
100,000 5.00%, due 03/01/2001...................................................... 101,829
100,000 6.00%, due 07/01/2007...................................................... 104,298
--------------
......................................................................... 206,127
--------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM................................................. 65,631
--------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
100,000 4.40%, due 01/01/2001...................................................... 99,098
50,000 5.90%, due 01/01/2003...................................................... 53,072
50,000 4.60%, due 01/01/2004...................................................... 48,812
400,000 6.15%, due 01/01/2006...................................................... 426,060
--------------
......................................................................... 627,042
--------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004...................................................... 54,960
--------------
Hoover, AL, Board of Education GO,
100,000 4.10%, due 02/15/1997...................................................... 100,509
400,000 6.00%, due 02/15/2006...................................................... 426,996
--------------
......................................................................... 527,505
--------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102...................... 220,952
--------------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998...................................................... 99,976
250,000 5.00%, due 07/01/2002...................................................... 253,465
--------------
......................................................................... 353,441
--------------
Huntsville, AL, GO,
40,000 4.50%, due 12/01/1996...................................................... 40,265
115,000 5.15%, due 08/01/2000...................................................... 117,955
100,000 5.20%, due 11/01/2000...................................................... 102,911
120,000 5.30%, due 08/01/2001...................................................... 123,986
500,000 5.50%, due 11/01/2002...................................................... 522,705
100,000 5.90%, due 11/01/2005...................................................... 106,203
--------------
......................................................................... 1,014,025
--------------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000...................................................... 159,482
150,000 5.00%, due 12/01/2003...................................................... 151,225
--------------
......................................................................... 310,707
--------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004...................................................... 152,373
150,000 5.25%, due 05/01/2005...................................................... 152,362
--------------
......................................................................... 304,735
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002...................................................... $ 155,730
50,000 4.75%, due 04/01/2002...................................................... 49,845
100,000 5.00%, due 04/01/2004...................................................... 99,934
--------------
......................................................................... 305,509
--------------
Jefferson Co., AL, Sewer Rev ..............................................
140,000 5.15%, due 09/01/2002...................................................... 143,843
50,000 5.50%, due 09/01/2003...................................................... 52,099
300,000 5.75%, due 09/01/2005...................................................... 314,877
--------------
......................................................................... 510,819
--------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007...................................................... 304,629
--------------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999...................................................... 101,953
--------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007...................................................... 334,714
--------------
Madison Co., AL, Board of Education Cap. Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004...................................................... 179,186
--------------
Mobile, AL, GO,
200,000 5.00%, due 08/15/1998...................................................... 204,166
150,000 5.20%, due 02/15/1999...................................................... 153,774
200,000 5.40%, due 08/15/2000...................................................... 207,472
25,000 6.25%, due 08/01/2001...................................................... 26,981
25,000 6.30%, due 08/01/2001...................................................... 27,039
275,000 6.20%, due 02/15/2007, ETM................................................. 294,632
--------------
......................................................................... 914,064
--------------
Mobile, AL, Water & Sewer Commrs. Rev.,
55,000 6.30%, due 01/01/2003...................................................... 59,404
--------------
Mobile Co., AL, GO,
100,000 4.80%, due 02/01/2002...................................................... 100,398
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102....................... 53,686
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102....................... 175,266
--------------
......................................................................... 329,350
--------------
Mobile Co., AL., Board of Education Cap. Outlay Warrants,
400,000 5.00%, due 03/01/2008...................................................... 387,076
--------------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 3.80%, due 02/01/1998...................................................... 99,564
100,000 4.50%, due 02/01/2003...................................................... 97,921
--------------
......................................................................... 197,485
--------------
Montgomery, AL, GO,
200,000 4.25%, due 05/01/1999, ETM................................................. 199,192
200,000 4.70%, due 05/01/2002...................................................... 199,468
--------------
......................................................................... 398,660
--------------
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
<CAPTION>
Principal ALABAMA FIXED RATE REVENUE AND GENERAL
Amount OBLIGATION (GO) BONDS - 96.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Montgomery, AL, Waterworks & Sanitation Rev.,
$ 200,000 5.85%, due 03/01/2003...................................................... $ 210,912
--------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006...................................................... 100,684
--------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003...................................................... 99,085
100,000 5.30%, due 07/01/2003...................................................... 103,335
--------------
......................................................................... 202,420
--------------
Ozark, AL, Industrial Development Board Rev.,
50,000 7.00%, due 06/01/1996...................................................... 50,212
--------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000...................................................... 210,994
50,000 5.35%, due 08/01/2001...................................................... 51,874
--------------
......................................................................... 262,868
--------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM................................................. 37,956
25,000 6.60%, due 02/01/2002...................................................... 27,359
40,000 6.60%, due 02/01/2003...................................................... 44,079
--------------
......................................................................... 109,394
--------------
Shelby Co., AL, Board of Education Cap. Outlay Special Tax Warrants,
100,000 4.80%, due 02/01/1998...................................................... 101,417
--------------
Tuscaloosa, AL, Board of Education GO,
100,000 5.10%, due 02/01/2004...................................................... 101,608
--------------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005...................................................... 78,668
--------------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999...................................................... 247,910
50,000 5.00%, due 11/01/2000...................................................... 50,982
100,000 4.60%, due 10/01/2001...................................................... 99,952
200,000 5.10%, due 10/01/2002...................................................... 204,214
--------------
......................................................................... 603,058
--------------
Vestavia Hills, AL, Board of Education Cap. Outlay Rev.,
55,000 5.25%, due 02/01/2004...................................................... 56,201
--------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005...................................................... 123,195
--------------
TOTAL ALABAMA (COST $14,666,248) ............................................ $ 14,927,462
--------------
<PAGE>
<CAPTION>
===================================================================================================================
Principal
Amount MONEY MARKETS - 2.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 374,801 Biltmore Tax-Free Money Fund (Cost $374,801)................................. $ 374,801
-------------
TOTAL INVESTMENTS AT VALUE (COST $15,041,049) - 98.8% ...................... $ 15,302,263
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.2% ................................ 178,216
--------------
NET ASSETS - 100.0% ......................................................... $ 15,480,479
==============
<FN>
ETM -Escrowed to maturity.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
===============================================================================
1. Significant Accounting Policies
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load, open-end series of
The Williamsburg Investment Trust (the Trust). The Trust, a registered
management investment company under the Investment Company Act of 1940, as
amended, was organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is to seek
capital appreciation through the compounding of dividends and capital gains,
both realized and unrealized, on its investments in common stocks. Current
income is of secondary importance.
The Government Street Bond Fund's investment objectives are to preserve
capital, to provide current income and to protect the value of the portfolio
against the effects of inflation by limiting investments to securities in the
four highest quality ratings. Capital appreciation is of secondary importance.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from both federal income taxes and the personal income taxes of
Alabama and to preserve capital. Capital appreciation is of secondary
importance.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national stock exchange
are valued based upon the closing price on the principal exchange where the
security is traded. It is expected that fixed income securities will
ordinarily be traded on the over-the-counter market, and common stocks will
ordinarily be traded on a national securities exchange, but may also be traded
on the over-the-counter market. When market quotations are not readily
available, fixed income securities may be valued on the basis of prices
provided by an independent pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market value. At the time
the Funds enter into the joint repurchase agreement, the Funds take possession
of the underlying securities and the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal
to or exceed the face amount of the repurchase agreement. In addition, each
Fund actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities
purchased are amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street
Equity Fund; declared and paid monthly to shareholders of The Government
Street Bond Fund; and declared daily and paid monthly to shareholders of The
Alabama Tax Free Bond Fund. Net realized short-term capital gains, if any, may
be distributed throughout the year and net realized long-term capital gains,
if any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies, and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
<PAGE>
<TABLE>
The following information is based upon the federal income tax cost of
portfolio investments of each Fund as of March 31, 1996:
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation............................ $ 10,249,595 $ 434,872 $ 323,336
Gross unrealized depreciation............................ ( 311,491 ) ( 592,679 ) ( 62,122 )
--------------- --------------- ---------------
Net unrealized appreciation (depreciation)............... $ 9,938,104 $ ( 157,807 ) $ 261,214
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax basis of investments for each Fund is equal to the acquisition cost as
shown on the Statements of Assets and Liabilities.
As of March 31, 1996, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$178,365, and $203,770, respectively, which expire through the year 2004. In
addition, The Government Street Bond Fund and The Alabama Tax Free Bond Fund
realized net capital losses of $17,816 and $2,400, respectively, during the
period from November 1, 1995 through March 31, 1996, which are treated for
federal income tax purposes as arising in the tax year ending March 31, 1997.
These capital loss carryforwards and "post-October" losses may be utilized in
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments,
amounted to $13,641,468 and $10,423,185, respectively, for The Government
Street Equity Fund, $2,741,173 and $2,982,487, respectively, for The
Government Street Bond Fund, and $2,645,989 and $516,213, respectively, for
The Alabama Tax Free Bond Fund.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly at an
annual rate of .60% on its average daily net assets up to $100 million and
.50% on such assets in excess of $100 million. The Government Street Bond Fund
pays the Adviser a fee at an annual rate of .50% on its average daily net
assets up to $100 million and .40% on such net assets in excess of $100
million. The Alabama Tax Free Bond Fund pays the Adviser a fee at an annual
rate of .35% on its average daily net assets up to $100 million and .25% on
such net assets in excess of $100 million.
States in which shares of the Funds are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse each
Fund for expenses which exceed the most restrictive applicable expense
limitation of any state. For the year ended March 31, 1996, no such
reimbursement was required. The Adviser currently intends to limit the total
operating expenses of the Alabama Tax Free Bond Fund to .75% of average daily
net assets. Accordingly, the Adviser voluntarily waived $15,334 of its
investment advisory fees for the Fund during the year.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Funds. For these services, MGF receives a monthly fee from The Government
Street Equity Fund at an annual rate of .20% on its average daily net assets
up to $25 million; .175% on the next $25 million of such assets; and .15% on
such net assets in excess of $50 million. From The Government Street Bond
Fund, MGF receives a monthly fee of .075% on its average daily net assets up
to $200 million and .05% on such assets in excess of $200 million. From The
Alabama Tax Free Bond Fund, MGF receives a monthly fee of .15% on its average
daily net assets up to $200 million and .10% on such assets in excess of $200
million. The fee for each Fund is subject to a $2,000 monthly minimum. In
addition, each Fund pays out-of-pocket expenses including, but not limited to,
pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
<PAGE>
Report of Independent Certified Public Accountants
===============================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities
of The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 1996, and the
related statements of operations for the year then ended, and the statements
of changes in net assets for each of the two years in the period then ended
and the financial highlights for the periods indicated thereon. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Government Street Equity Fund, The Government Street Bond Fund
and The Alabama Tax Free Bond Fund, as of March 31, 1996, the results of their
operations for the year then ended, the changes in their net assets for each
of the two years in the period then ended and their financial highlights for
the periods referred to above, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
The Government Street Funds
The Alabama Tax Free Bond Fund
No Load Mutual Funds
Investment Adviser
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
Administrator
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-443-4249
Legal Counsel
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Board of Trustees
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr. M.D.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
Portfolio Managers
Thomas W. Leavell,
The Government Street Funds
Timothy S. Healey,
The Alabama Tax Free Bond Fund
<PAGE>
- 77 -
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
August 1, 1996
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES......................................... 2
DESCRIPTION OF BOND RATINGS................................................ 5
INVESTMENT LIMITATIONS..................................................... 8
TRUSTEES AND OFFICERS...................................................... 10
INVESTMENT ADVISOR......................................................... 13
ADMINISTRATOR.............................................................. 15
OTHER SERVICES............................................................. 15
BROKERAGE.................................................................. 15
SPECIAL SHAREHOLDER SERVICES............................................... 17
PURCHASE OF SHARES......................................................... 19
REDEMPTION OF SHARES....................................................... 20
NET ASSET VALUE DETERMINATION.............................................. 20
ALLOCATION OF TRUST EXPENSES............................................... 20
ADDITIONAL TAX INFORMATION................................................. 21
CAPITAL SHARES AND VOTING.................................................. 22
CALCULATION OF PERFORMANCE DATA............................................ 23
FINANCIAL STATEMENTS AND REPORTS........................................... 25
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of both The Jamestown Balanced Fund
and The Jamestown Equity Fund (the "Funds") dated August 1, 1996. The
Prospectus may be obtained from the Funds, at the address and phone number
shown above, at no charge.
jambaleq.sai
July 29, 1996
- 78 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Jamestown
Balanced Fund (the "Balanced Fund") and The Jamestown Equity Fund
(the "Equity Fund") unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a
short duration and are distributed directly by the issuer to its shareholders.
Rights and warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts (ADRs). The Funds may
invest in foreign securities if the Advisor believes such investment would be
consistent with the Funds' investment objectives. The same factors would be
considered in selecting foreign securities as with domestic securities, as
discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic
securities. Foreign taxes may reduce income. Currency exchange rates and
regulations may cause fluctuation in the value of foreign securities. Foreign
securities are subject to different regulatory environments than in the United
States and, compared to the United States, there may be a lack of uniform
accounting, auditing and financial reporting standards, less volume and
liquidity and more volatility, less public information, and less regulation of
foreign issuers. Countries have been known to expropriate or nationalize
assets, and foreign investments may be subject to political, financial or
social instability or adverse diplomatic developments. There may be
difficulties in obtaining service of process on foreign issuers and
difficulties in enforcing judgments with respect to claims under the U.S.
securities laws against such issuers. Favorable or unfavorable differences
between U.S. and foreign economies could affect foreign securities values. The
U.S. Government has, in the past, discouraged certain foreign investments by
U.S. investors through taxation or other restrictions and it is possible that
such restrictions could be imposed again.
- 79 -
<PAGE>
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities
subject to repurchase agreements. A repurchase transaction occurs when, at the
time a Fund purchases a security (normally a U.S. Treasury obligation), it
also resells it to the vendor (normally a member bank of the Federal Reserve
System or a registered Government Securities dealer) and must deliver the
security (and/or securities substituted for them under the repurchase
agreement) to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred to as the
"Repurchase Securities." The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate effective for the
period of time during which the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Funds hold a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times as least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Funds'
custodian either directly or through a securities depository.
U.S. GOVERNMENT SECURITIES. The Balanced Fund may invest in debt
obligations which are issued or guaranteed by the U.S.
Government, its agencies and instrumentalities ("U.S. Government
Securities") as described herein. U.S. Government Securities
include the following securities: (1) U.S. Treasury obligations
of various interest rates, maturities and issue dates, such as
U.S. Treasury bills (mature in one year or less), U.S. Treasury
notes (mature in one to seven years), and U.S. Treasury bonds
(mature in more than seven years), the payments of principal and
interest of which are all backed by the full faith and credit of
the U.S. Government; (2) obligations issued or guaranteed by U.S.
Government agencies or instrumentalities, some of which are
backed by the full faith and credit of the U.S. Government, e.g.,
- 80 -
<PAGE>
obligations of the Government National Mortgage Association ("GNMA"), the
Farmers Home Administration and the Export Import Bank; some of which do not
carry the full faith and credit of the U.S. Government but which are supported
by the right of the issuer to borrow from the U.S. Government, e.g.,
obligations of the Tennessee Valley Authority, the U.S. Postal Service, the
Federal National Mortgage Association ("FNMA"), and the Federal Home Loan
Mortgage Corporation ("FHLMC"); and some of which are backed only by the
credit of the issuer itself, e.g., obligations of the Student Loan Marketing
Association, the Federal Home Loan Banks and the Federal Farm Credit Bank; and
(3) any of the foregoing purchased subject to repurchase agreements as
described herein. The Balanced Fund does not intend to invest in "zero coupon"
Treasury securities. The guarantee of the U.S. Government does not extend to
the yield or value of the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have
lower yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they
mature in thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Funds. Money market instruments also
may include Bankers' Acceptances and Certificates of Deposit of domestic
branches of U.S. banks, Commercial Paper and Variable Amount Demand Master
Notes ("Master Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and
"accepted" by a bank, are the customary means of effecting payment for
merchandise sold in import-export transactions and are a source of financing
used extensively in international trade. When a bank "accepts" such a time
draft, it assumes liability for its payment. When the Funds acquire a Bankers'
Acceptance, the bank which "accepted" the time draft is liable for payment of
interest and principal when due. The Bankers' Acceptance, therefore, carries
the full faith and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an
unsecured interest-
- 81 -
<PAGE>
bearing debt obligation of a bank. CDs acquired by the Funds would generally
be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured, short
term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Funds will
invest in Commercial Paper only if it is rated in the highest rating category
by any nationally recognized statistical rating organization (NRSRO) or, if
not rated, the issuer must have an outstanding unsecured debt issue rated in
the three highest categories by any NRSRO or, if not so rated, be of
equivalent quality in the Advisor's assessment. Commercial Paper may include
Master Notes of the same quality. MASTER NOTES are unsecured obligations which
are redeemable upon demand of the holder and which permit the investment of
fluctuating amounts at varying rates of interest. Master Notes are acquired by
the Funds only through the Master Note program of the Funds' custodian, acting
as administrator thereof. The Advisor will monitor, on a continuous basis, the
earnings power, cash flow and other liquidity ratios of the issuer of a Master
Note held by the Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Balanced Fund may purchase
securities on a when-issued basis or for settlement at a future date if the
Fund holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date,
the Balanced Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Balanced Fund would generally purchase securities on a forward commitment
or when-issued basis with the intention of taking delivery, the Fund may sell
such a security prior to the settlement date if the Advisor felt such action
was appropriate. In such a case, the Fund could incur a short-term gain or
loss.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an
NRSRO represents the organization's opinion as to the credit quality of the
security being traded. However, the ratings are general and are not absolute
standards of quality or guarantees as to the creditworthiness of an issuer.
Consequently, the Advisor believes that the quality of fixed-income securities
in which the Balanced Fund may invest should be continuously reviewed and that
individual analysts give different weightings to the various factors involved
in credit analysis. A
- 82 -
<PAGE>
rating is not a recommendation to purchase, sell or hold a security because it
does not take into account market value or suitability for a particular
investor. When a security has received a rating from more than one NRSRO, each
rating is evaluated independently. Ratings are based on current information
furnished by the issuer or obtained by the NRSROs from other sources that they
consider reliable. Ratings may be changed, suspended or withdrawn as a result
of changes in or unavailability of such information, or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
AAA: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
AA: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large in Aa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements that make
the long term risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to
be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
that suggest a susceptibility to impairment sometime in the future.
BAA: Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated
Aa, A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
- 83 -
<PAGE>
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity
to pay principal and interest.
AA: Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to
be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds
rated AAA.
A: Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment.
- 84 -
<PAGE>
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk
factors are negligible, being only slightly more than for risk-
free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit
quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A: Bonds rated A have average protection factors. However
risk factors are more variable and greater in periods of economic
stress.
BBB: Bonds rated BBB have below average protection factors,
but are considered sufficient for prudent investment. There is
considerable variability in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's
outstanding shares represented in person or by proxy at a meeting at which
more than 50% of its outstanding shares are represented, or (ii) more than 50%
of its outstanding shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the
securities of any one corporate issuer or purchase more than 10%
of the outstanding voting securities or of any class of securities
of any one corporate issuer;
(2) Invest 25% or more of the value of its total assets in any
one industry or group of industries (except that
securities of the U.S. Government, its agencies and
instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or
trustees of the Trust or its Advisor who own beneficially more
than 1/2 of 1% of the outstanding securities of such issuer
together own more than 5% of the outstanding securities of such
issuer;
(4) Invest for the purpose of exercising control or management
of another issuer;
- 85 -
<PAGE>
(5) Invest in interests in real estate, real estate mortgage
loans, oil, gas or other mineral exploration or
development programs, except that the Funds may invest in
the securities of companies (other than those which are
not readily marketable) which own or deal in such things,
and the Funds may invest in certain mortgage backed
securities as described in the Prospectus under
"Investment Objectives, Investment Policies and Risk
Considerations";
(6) Underwrite securities issued by others, except to the extent a
Fund may be deemed to be an underwriter under the federal
securities laws in connection with the disposition of portfolio
securities;
(7) Purchase securities on margin (but the Funds may obtain
such short-term credits as may be necessary for the
clearance of transactions);
(8) Make short sales of securities or maintain a short position,
except short sales "against the box." (A short sale is made by
selling a security the Fund does not own. A short sale is "against
the box" to the extent that the Fund contemporaneously owns or has
the right to obtain at no added cost securities identical to those
sold short.);
(9) Participate on a joint or joint and several basis in any
trading account in securities;
(10) Make loans of money or securities, except that the Funds
may invest in repurchase agreements;
(11) Invest in securities of issuers which have a record of less than
three years' continuous operation (including predecessors and, in
the case of bonds, guarantors); or
(12) Write, purchase or sell commodities, commodities
contracts, commodities futures contracts, warrants on
commodities or related options.
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation. However, in the
case of the borrowing limitation (the first restriction in the Prospectus)
each Fund will, to the extent necessary, reduce its existing borrowings to
comply with the limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
- 86 -
<PAGE>
<TABLE>
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or Fund,
age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- --------------
<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John T. Bruce (age 42) Principal None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
- 87 -
<PAGE>
<CAPTION>
<S> <C> <C>
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
- 88 -
<PAGE>
<CAPTION>
<S> <C> <C>
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Strategic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
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<PAGE>
<CAPTION>
<S> <C> <C>
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -------------------------------
** Indicates that Trustee is an Interested Person for purposes of
the 1940 Act.
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial matters, including
the adequacy of internal controls. On the basis of this review the Audit
Committee makes recommendations to the Trustees as to the appointment of
independent accountants for the following year. The Trustees have not
appointed a compensation committee or a nominating committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 2.4% of the then outstanding shares of the Balanced Fund and
7.4% of the then outstanding shares of the Equity Fund. On the same date,
Wachovia Bank of North Carolina as trustee for the Halifax Hospital Pension
Plans, P.O. Box 3099, Winston-Salem, North Carolina 27102, owned of record
7.9% of the then outstanding shares of the Balanced Fund and Kathryn E.
Schwarzchild as trustee for the W. Harry Schwarzchild, Jr. Residual Trust and
Marital Trust, 210 Overlook Road, Richmond, Virginia 23229, owned of record
5.3% of the then outstanding shares of the Equity Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor") supervises each Fund's
investments pursuant to an Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until April
1, 1997 and will be renewed thereafter for one year periods only so long as
such renewal and continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the Funds' outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Advisor by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by
the Board of Trustees of the Trust or by the Advisor.
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The Advisory Agreement provides that it will terminate automatically in the
event of its assignment.
Compensation of the Advisor with respect to the Balanced Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $250 million, 0.65%; on the next $250 million, 0.60%; and on assets over
$500 million, 0.55%. For the fiscal years ended March 31, 1996, 1995 and 1994,
the Balanced Fund paid the Advisor advisory fees of $373,945, $315,464 and
$279,883, respectively.
Compensation of the Advisor with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the
first $500 million, 0.65%; and on assets over $500 million, 0.50%. For the
fiscal years ended March 31, 1996 and 1995, the Equity Fund paid the Advisor
advisory fees of $79,891 and $8,908 (which was net of voluntary fee waivers of
$24,281), respectively. The Advisor voluntarily waived its entire investment
advisory fee and reimbursed a portion of the Equity Fund's operating expenses
for the fiscal year ended March 31, 1994; the total fees waived and expenses
reimbursed amounted to $34,541.
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
shareholders, Austin Brockenbrough, III and Fred T. Tattersall. In addition to
acting as Advisor to the Funds, the Advisor serves as investment advisor to
four additional investment companies, the subjects of separate prospectuses,
and also provides investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional accounts and
individuals.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Funds. The Advisor determines
what securities and other investments will be purchased, retained or sold by
the Funds, and does so in accordance with the investment objectives and
policies of the Funds as described herein and in the Prospectus. The Advisor
places all securities orders for the Funds, determining with which broker,
dealer, or issuer to place the orders.
The Advisor must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
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ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.20% of the average value of its
daily net assets up to $25,000,000, 0.175% of such assets from $25,000,000 to
$50,000,000 and 0.15% of such assets in excess of $50,000,000; provided,
however, that the minimum fee is $2,000 per month for each Fund. In addition,
the Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
fees of $105,023 and $90,029, respectively, from the Balanced Fund and $26,514
and $23,412, respectively, from the Equity Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
The Custodian of the Funds' assets is Star Bank, N.A, 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the
Funds (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all
income and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution
for all portfolio securities transactions. The Advisor (subject
to the general supervision of the Board of Trustees) directs the
execution of the Funds' portfolio transactions. The Trust has
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adopted a policy which prohibits the Advisor from effecting Fund portfolio
transactions with broker-dealers which may be interested persons of either
Fund, the Trust, any Trustee, officer or director of the Trust or its
investment advisors or any interested person of such persons.
The Balanced Fund's fixed income portfolio transactions will normally be
principal transactions executed in over-the-counter markets and will be
executed on a "net" basis, which may include a dealer markup. The Funds'
common stock portfolio transactions will normally be exchange traded and will
be effected through broker-dealers who will charge brokerage commissions. With
respect to securities traded only in the over-the-counter market, orders will
be executed on a principal basis with primary market makers in such securities
except where better prices or executions may be obtained on an agency basis or
by dealing with other than a primary market maker.
For the fiscal years ended March 31, 1996, 1995 and 1994, the total amount of
brokerage commissions paid by the Balanced Fund was $63,217, $61,053 and
$115,748, respectively. For the fiscal years ended March 31, 1996, 1995 and
1994, the total amount of brokerage commissions paid by the Equity Fund was
$26,512, $16,795 and $8,782, respectively.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Advisor for the benefit of the other clients it may have.
Conversely, the Funds may benefit from such transactions effected for the
benefit of other clients. In all cases, the Advisor is obligated to effect
transactions for the Funds based upon obtaining the most favorable price and
execution. Factors considered by the Advisor in determining whether the Funds
will receive the most favorable price and execution include, among other
things: the size of the order, the broker's ability to effect and settle the
transaction promptly and efficiently and the Advisor's perception of the
broker's reliability, integrity and financial condition. During the fiscal
year ended March 31, 1996, the amount of brokerage transactions and related
commissions directed to brokers because of research services provided were
$11,906,478 and $18,791, respectively, for the Balanced Fund and $3,676,849
and $5,838, respectively, for the Equity Fund.
In an effort to reduce the total operating expenses of the Funds, a portion of
each Fund's custodian fees and other operating
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expenses have been reimbursed through an arrangement with a third party
broker-dealer who is compensated through security trades. Total custodian fees
and other operating expenses reimbursed by the broker-dealer for the fiscal
year ended March 31, 1996 were $30,268 for the Balanced Fund and $16,562 for
the Equity Fund.
As of March 31, 1996, the Balanced Fund held bonds (having a market value of
$386,370) issued by Bear Stearns Company, the parent of one of the Trust's
"regular broker-dealers" as defined in the 1940 Act.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder
services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly or quarterly investment in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the public offering price on or about the last business day of the
month or quarter. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $25,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment,
by authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and
December). Checks will be made payable to the designated recipient and mailed
within three business days of the valuation date. If the designated recipient
is other than the registered shareholder, the signature of each shareholder
must be guaranteed
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on the application (see "Signature Guarantees"). A corporation (or
partnership) must also submit a "Corporate Resolution" (or "Certification of
Partnership") indicating the names, titles and required number of signatures
authorized to act on its behalf. The application must be signed by a duly
authorized officer(s) and the corporate seal affixed. No redemption fees are
charged to shareholders under this plan. Costs in conjunction with the
administration of the plan are borne by the Funds. Shareholders should be
aware that such systematic withdrawals may deplete or use up entirely their
initial investment and may result in realized long-term or short-term capital
gains or losses. The Systematic Withdrawal Plan may be terminated at any time
by the Funds upon sixty days' written notice or by a shareholder upon written
notice to the Funds. Applications and further details may be obtained by
calling the Funds at 1-800-443-4249, or by writing to:
The Jamestown Balanced Fund
or
The Jamestown Equity Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is
at the sole discretion of the Advisor based upon the suitability of the
securities accepted for inclusion as a long term investment of the Funds, the
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Funds to pay for all redemptions in
cash. In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Funds. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs when these securities are sold. An irrevocable election
may be filed under Rule 18f-1 of the 1940 Act, wherein each Fund commits
itself to pay redemptions in cash, rather than in kind, to any shareholder of
record of the Funds who redeems during any ninety day period, the lesser of
(a) $250,000 or (b) one percent (1%) of a Fund's net assets at the beginning
of such period.
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TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s)
on the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price computed on the date of receipt;
and an order received after that time will be executed at the price computed
on the next Business Day. An order to purchase shares is not binding on the
Funds until confirmed in writing (or unless other arrangements have been made
with the Funds, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Each Fund reserves the right in its sole discretion (i) to suspend the
offering of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial
investment minimums for the purpose of reducing the cost to the Funds (and
consequently to the shareholders) of communicating with and servicing their
shareholders. However, a reduced minimum initial investment requirement of
$5,000 applies to Trustees, officers and employees of the Funds, the Advisor
and certain parties related thereto, including clients of the Advisor or any
sponsor, officer, committee member thereof, or the immediate family of any of
them. In addition, accounts having the same mailing address may be aggregated
for purposes of the minimum investment if they consent in writing to share a
single mailing of shareholder reports, proxy statements (but each such
shareholder would receive his/her own proxy) and other Fund literature.
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REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment
(i) during any period that the New York Stock Exchange (the "Exchange") is
closed, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission (the "Commission"), (ii) during any period
when an emergency exists as defined by the rules of the Commission as a result
of which it is not reasonably practicable for the Fund to dispose of
securities owned by it, or to fairly determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities
held by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations
which may be deemed by the Trustees to be of overall benefit to each Fund and
its shareholders; legal and auditing expenses; and the cost of stationery and
forms prepared exclusively for the Funds. General Trust expenses are allocated
among the series, or funds, on a fair and equitable basis by the Board of
Trustees, which may be based on relative net assets of each fund (on the date
the expense is paid) or the nature of the services performed and the relative
applicability to each fund.
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Under the Advisory Agreement, the Advisor may be required to reimburse a Fund
if that Fund's annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
subject to year end adjustment. The Advisor in its discretion may, but is not
required to, reimburse a Fund an amount of money in excess of its advisory
fee.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In
addition to this distribution requirement, each Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities' loans, gains from the disposition of stock or
securities, and certain other income. Each Fund will also be required to
derive less than 30% of its gross income from the sale or other disposition of
securities held for less than 90 days.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter
M, they will not be subject to federal income tax to the extent they
distribute their taxable net investment income and net realized capital gains.
A nondeductible 4% federal excise tax will be imposed on each Fund to the
extent it does not distribute at least 98% of its ordinary taxable income for
a calendar year, plus 98% of its capital gain net taxable income for the one
year period ending each October 31, plus certain undistributed amounts from
prior years. While each Fund intends to distribute its taxable income and
capital gains in a manner so as to avoid imposition of the federal excise and
income taxes, there can be no assurance that the Funds indeed will make
sufficient distributions to avoid entirely imposition of federal excise or
income taxes.
Should additional series, or funds, be created by the Trustees, each fund
would be treated as a separate tax entity for federal income tax purposes.
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TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from each Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital
gains, will be taxable to shareholders, whether received in cash or shares and
no matter how long you have held Fund shares, even if they reduce the net
asset value of shares below your cost and thus in effect result in a return of
a part of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have
no preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any Trustee may resign or retire and (2) any Trustee may be
removed with or without cause at any time (a) by a written instrument, signed
by at lease two-thirds of the number of Trustees prior to such removal; or (b)
by vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c) by a written declaration signed by shareholders holding not
less than two-thirds of the outstanding shares of the Trust and filed with the
Trust's custodian. Shareholders have certain rights, as set forth in the
Declaration of Trust, including the right to call a meeting of the
shareholders for the purpose of voting on the removal of one or more Trustees.
Shareholders holding not less than ten percent (10%) of the shares then
outstanding may require the Trustees to call such a meeting and the Trustees
are obligated to provide certain assistance to shareholders desiring to
communicate with other shareholders in such regard (e.g., providing access to
shareholder lists, etc.). In case a vacancy
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or an anticipated vacancy shall for any reason exist, the vacancy shall be
filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per
share at the beginning of the period from the net asset value per share at the
end of the period (after adjusting for the reinvestment of any income
dividends and capital gain distributions), and dividing the result by the net
asset value per share at the beginning of the period. In particular, the
average annual total return of a Fund ("T") is computed by using the
redeemable value at the end of a specified period of time ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time ("n")
according to the formula P(l+T)n=ERV. The average annual total return
quotations for the Balanced Fund for the one year period ended March 31, 1996,
for the five year period ended March 31, 1996 and for the period since
inception (July 3, 1989) to March 31, 1996 are 22.79%, 10.97% and 10.11%,
respectively. The average annual total return quotations for the Equity Fund
for the one year period ended March 31, 1996 and for the period since
inception (December 1, 1992) to March 31, 1996 are 28.00% and 12.48%,
respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is
based on a 30-day (or one month) period and is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
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c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity
of each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day
prior to the start of the 30-day (or one month) period for which yield is
being calculated, or, with respect to obligations purchased during the month,
the purchase price (plus actual accrued interest). The yields of the Balanced
Fund and the Equity Fund for the 30 days ended March 31, 1996 were 2.50% and
1.38%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, each Fund may compare its performance to the S&P
500 Index, which is generally considered to be representative of the
performance of unmanaged common stocks that are publicly traded in the United
States securities markets. Comparative performance may also be expressed by
reference to a ranking prepared by a mutual fund monitoring service, such as
Lipper Analytical Services, Inc. or Morningstar, Inc., or by one or more
newspapers, newsletters or financial periodicals. Performance comparisons may
be useful to investors who wish to compare the Funds' past performance to that
of other mutual funds and investment products. Of course, past performance is
not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain
a more complete view of the Funds' performance before investing. Of course,
when comparing the
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Funds' performance to any index, factors such as composition of the index and
prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting
services, or total return, investors should take into consideration any
relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Funds may quote total
returns that are calculated on non-standardized base periods. The total
returns represent the historic change in the value of an investment in the
Funds based on monthly reinvestment of dividends over a specified period of
time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Funds may also disclose from
time to time information about their portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Funds may also depict the
historical performance of the securities in which the Funds may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Funds may also include in
advertisements and in materials furnished to present and prospective
shareholders statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet specific
financial goals, such as saving for retirement, children's education, or other
future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Funds as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
<PAGE>
The Jamestown Balanced Fund
No Load Mutual Fund
Annual Report
March 31, 1996
Investment Adviser Administrator
Lowe, Brockenbrough & Tattersall, Inc. MGF Service Corp.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45202-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN BALANCED FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1996
Performance of The Jamestown Balanced Fund
The past fiscal year has been an excellent one for The Jamestown Balanced
Fund. For the twelve months ended March 31, 1996, your Fund had a total
return of 22.8% after operating expenses. This compared favorably to the
Lipper Balanced Fund Index which was up 20.3%. For the same period, the
Standard and Poor's 500 (S&P 500) Index, which is 100% invested in common
stocks, had a positive return of 32.1%. Since the Fund is invested in
stocks only to the extent of 60% to 70% at most times (67.4% as of March
31, 1996), we are pleased with the comparative total return results. Our
composite index, calculated assuming a portfolio mix of 60% equities, 30%
bonds and 10% cash, would have resulted in a total return of 22.7%.
Our equity sector allocations were mostly in line with those of the S&P
500 with only slight overweightings and underweightings. Sectors
outperforming the overall stock market for the fiscal year included
capital goods (+39.8%), finance (+48.6%) and health care (+47.5%), and
the Fund's comparative weightings in such sectors added value in those
instances. In the underperforming utilities sector of the market, the
Fund was underweighted relative to the S&P 500 which also added value to
performance for the twelve month period. The technology sector, while
performing in line with the market during the calendar year, was a
nominal drag on the Fund's performance during the fiscal year.
The bond portion of the Fund also provided positive returns for the
fiscal year, although less than was the case with stocks. The Lehman
Intermediate Government/Corporate Bond Index was up 9.56% during the
twelve months ended March 31, 1996.
Looking forward to the following year, we are somewhat cautious on both
the stock and bond markets but believe the portfolio is structured
accordingly.
For a comparison of the Fund's performance from inception versus the
Standard and Poor's 500 Index and the Consumer Price Index, please refer
to the chart below:
A representation of the graphic material contained in THE JAMESTOWN BALANCED
FUND Annual Report is set forth below.
Comparison of the Change in Value of a $10,000 Investment in the
Jamestown Balanced Fund, the Standard & Poor's 500 Index and the Consumer
Price Index
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN BALANCED FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
07/03/89 10,000 07/03/89 10,000
09/30/89 10.24% 11,024 09/30/89 0.00% 10,000
12/31/89 2.06% 11,251 12/31/89 6.25% 10,625
03/31/90 -3.00% 10,914 03/31/90 -2.62% 10,347
06/30/90 6.28% 11,599 06/30/90 4.90% 10,853
09/30/90 -13.75% 10,004 09/30/90 -9.33% 9,841
12/31/90 8.97% 10,902 12/31/90 5.17% 10,350
03/31/91 14.53% 12,486 03/31/91 9.96% 11,380
06/30/91 -0.23% 12,457 06/30/91 -0.91% 11,277
09/30/91 5.35% 13,123 09/30/91 5.12% 11,854
12/31/91 8.38% 14,223 12/31/91 6.97% 12,681
03/31/92 -2.53% 13,863 03/31/92 -2.03% 12,423
06/30/92 1.90% 14,127 06/30/92 2.03% 12,675
09/30/92 3.15% 14,572 09/30/92 4.46% 13,241
12/31/92 5.03% 15,305 12/31/92 3.74% 13,736
03/31/93 4.36% 15,972 03/31/93 1.75% 13,976
06/30/93 0.48% 16,049 06/30/93 -0.26% 13,941
09/30/93 2.58% 16,463 09/30/93 2.49% 14,287
12/31/93 2.32% 16,845 12/31/93 0.32% 14,333
03/31/94 -3.79% 16,206 03/31/94 -1.58% 14,107
06/30/94 0.42% 16,274 06/30/94 0.91% 14,235
09/30/94 4.88% 17,068 09/30/94 1.64% 14,469
12/31/94 -0.02% 17,065 12/31/94 -0.83% 14,349
03/31/95 9.74% 18,727 03/31/95 8.67% 15,594
06/30/95 9.55% 20,515 06/30/95 7.60% 16,779
09/30/95 7.95% 22,145 09/30/95 5.50% 17,702
12/31/95 6.02% 23,479 12/31/95 4.75% 18,542
03/31/96 5.37% 24,739 03/31/96 3.27% 19,148
<PAGE>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
07/03/89 10,000
09/30/89 0.75% 10,075
12/31/89 1.00% 10,176
03/31/90 2.01% 10,380
06/30/90 0.90% 10,474
09/30/90 1.71% 10,653
12/31/90 1.71% 10,835
03/31/91 0.90% 10,932
06/30/91 0.40% 10,976
09/30/91 0.60% 11,042
12/31/91 0.90% 11,141
03/31/92 0.70% 11,219
06/30/92 0.80% 11,309
09/30/92 0.70% 11,388
12/31/92 0.80% 11,479
03/31/93 0.90% 11,583
06/30/93 0.60% 11,652
09/30/93 0.40% 11,699
12/31/93 0.70% 11,781
03/31/94 0.50% 11,840
06/30/94 0.60% 11,911
09/30/94 0.90% 12,018
12/31/94 0.60% 12,090
03/31/95 0.80% 12,187
06/30/95 0.90% 12,297
09/30/95 0.40% 12,346
12/31/95 0.50% 12,408
03/31/96 0.80% 12,507
Past performance is not predictive of future performance.
The Jamestown Balanced Fund - Average Annual Total Returns
1 Year ........................22.79%
5 Years .......................10.97%
Since Inception*...............10.11%
*Initial public offering of shares was July 3, 1989.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 46,867,552
===============
At value (Note 1) $ 57,887,554
Investments in repurchase agreements (Note 1) 3,191,737
Receivable for securities sold 545,102
Receivable for capital shares sold 47,088
Interest receivable 184,361
Dividends receivable 52,086
Other assets 4,641
---------------
TOTAL ASSETS 61,912,569
---------------
LIABILITIES
Payable for securities purchased 238,436
Payable for capital shares redeemed 22,233
Dividends payable 19,692
Accrued advisory fees (Note 3) 34,061
Accrued administration fees (Note 3) 9,300
Other accrued expenses 12,570
---------------
TOTAL LIABILITIES 336,292
---------------
NET ASSETS $ 61,576,277
===============
Net assets consist of:
Capital shares $ 48,084,415
Accumulated net realized gains from security transactions 2,460,504
Undistributed net investment income 11,356
Net unrealized appreciation on investments 11,020,002
---------------
Net assets $ 61,576,277
===============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 4,170,391
===============
Net asset value, offering price and redemption price per share (Note 1) $ 14.77
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1996
<S> <C>
INVESTMENT INCOME
Interest $ 1,173,779
Dividends 778,005
------------
TOTAL INVESTMENT INCOME 1,951,784
------------
EXPENSES
Investment advisory fees (Note 3) 373,945
Administrative fees (Note 3) 105,023
Custodian fees 18,990
Professional fees 14,271
Trustees' fees and expenses 5,598
Postage and supplies 4,220
Pricing costs 5,396
Registration fees 2,760
Printing of shareholder reports 1,686
Other expenses 3,553
------------
TOTAL EXPENSES 535,442
Expenses reimbursed through a directed brokerage arrangement (Note 4) (30,268)
------------
NET EXPENSES 505,174
------------
NET INVESTMENT INCOME 1,446,610
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 4,448,919
Net change in unrealized appreciation/depreciation on investments 5,730,142
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 10,179,061
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 11,625,671
============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1996 1995
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,446,610 $ 1,322,753
Net realized gains from security transactions 4,448,919 388,803
Net change in unrealized appreciation/depreciation
on investments 5,730,142 3,296,638
--------------- --------------
Net increase in net assets from operations 11,625,671 5,008,194
--------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,451,395) (1,312,434)
From net realized gains from security transactions (1,982,339) (1,138,083)
--------------- --------------
Decrease in net assets from distributions to shareholders (3,433,734) (2,450,517)
--------------- --------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 5,197,403 8,248,839
Net asset value of shares issued in reinvestment
of distributions to shareholders 3,265,651 2,325,314
Payments for shares redeemed (7,140,816) (7,997,241)
--------------- --------------
Net increase in net assets from capital share transactions 1,322,238 2,576,912
--------------- --------------
TOTAL INCREASE IN NET ASSETS 9,514,175 5,134,589
NET ASSETS:
Beginning of year 52,062,102 46,927,513
--------------- --------------
End of year - (including undistributed net investment
income of $11,356 and $16,141, respectively) $ 61,576,277 $ 52,062,102
(a)Summary of capital share activity follows:
Shares sold 370,290 674,378
Shares issued in reinvestment of distributions to shareholders 229,365 193,284
Shares redeemed (510,212) (649,875)
--------------- --------------
Net increase in shares outstanding 89,443 217,787
Shares outstanding, beginning of year 4,080,948 3,863,161
--------------- --------------
Shares outstanding, end of year 4,170,391 4,080,948
=============== ==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<CAPTION>
Years Ended March 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $12.76 $12.15 $12.49 $11.52 $10.88
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.36 0.33 0.30 0.31 0.32
Net realized and unrealized gains (losses)
on investments 2.50 0.90 (0.18) 1.11 0.67
------- ------- ------- ------- -------
Total from investment operations 2.86 1.23 0.12 1.42 0.99
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.36) (0.33) (0.30) (0.31) (0.31)
Distributions from net realized gains (0.49) (0.29) (0.16) (0.14) (0.04)
------- ------- ------- ------- -------
Total distributions (0.85) (0.62) (0.46) (0.45) (0.35)
------- ------- ------- ------- -------
Net asset value at end of year $14.77 $12.76 $12.15 $12.49 $11.52
======= ======= ======= ======= =======
Total return 22.79% 10.54% 0.94% 12.50% 9.16%
======= ======= ======= ======= =======
Net assets at end of year (000's) $61,576 $52,062 $46,928 $40,512 $23,786
======= ======= ======= ======= =======
Ratio of expenses to average net assets (a) 0.93% 0.96% 0.98% 0.99% 1.19%
Ratio of net investment income to average net assets 2.52% 2.72% 2.47% 2.59% 3.00%
Portfolio turnover rate 72% 95% 123% 134% 153%
<FN>
(a)For the year ended March 31, 1996, the ratio of expenses to average
net assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement. For years prior to
March 31,1996, the ratio was determined based on net expenses after expense
reimbursements through the directed brokerage arrangement. Absent such expense
reimbursements, the ratios of expenses to average net assets would have been
0.99%, 1.01% and 1.07% for the years ended March 31, 1995, 1994 and 1993,
respectively (Note 4).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 67.4%
Advertising - 1.7%
22,000 Interpublic Group of Companies, Inc. $ 1,039,500
--------------
Aerospace - 2.2%
26,000 Raytheon Company 1,332,500
--------------
Building and Construction - 1.6%
22,000 Foster Wheeler Corporation 976,250
--------------
Chemicals - 3.4%
12,000 Air Products & Chemicals 655,500
17,000 E.I. duPont de Nemours & Company 1,411,000
--------------
2,066,500
--------------
Commercial Banking - 4.2%
13,000 Crestar Financial Corporation 747,500
18,700 First Union Corporation 1,131,350
9,000 NationsBank Corporation 721,125
--------------
2,599,975
--------------
Communications - 7.5%
35,000 Alltel Corporation 1,085,000
20,000 AT&T Company 1,225,000
75,000 Equifax, Inc. 1,509,375
15,000 SBC Communications, Inc. 789,375
--------------
4,608,750
--------------
Computers/Computer Technology Services - 2.6%
14,000 Cisco Systems, Inc. (b) 649,250
6,100 Computer Sciences Corporation (b) 429,287
9,300 Intel Corporation 528,938
--------------
1,607,475
--------------
Consumer Products - 12.6%
15,000 Avon Products, Inc. 1,286,250
14,000 CPC International, Inc. 971,250
18,000 General Electric Company 1,401,750
8,000 Kimberly-Clark Corporation 596,000
10,000 Motorola, Inc. 530,000
7,500 Procter & Gamble Company 635,625
38,000 Sysco Corporation 1,249,250
44,000 Whitman Corporation 1,067,000
--------------
7,737,125
--------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
Drugs/Medical Equipment - 5.5%
30,000 Abbott Laboratories $ 1,222,500
11,900 Merck and Company, Inc. 740,775
24,000 Schering-Plough Corporation 1,395,000
--------------
3,358,275
--------------
Durable Goods - 1.6%
21,000 Avnet, Inc. 1,013,250
--------------
Electronics - 2.2%
14,500 Hewlett-Packard Company 1,363,000
--------------
Entertainment - 1.5%
14,270 Walt Disney Company 911,496
--------------
Fast Food Restaurants - 1.6%
20,000 McDonald's Corporation 960,000
--------------
Fire Systems - 2.5%
44,000 Tyco International Ltd. 1,573,000
--------------
Health Care Centers - 4.5%
29,000 Columbia/HCA Healthcare Corporation 1,674,750
28,000 Manor Care, Inc. 1,099,000
--------------
2,773,750
--------------
Insurance - 2.4%
16,000 American International Group 1,498,000
--------------
Oil and Gas Drilling - 5.0%
16,000 Amoco Corporation 1,156,000
31,000 Enron Corporation 1,143,125
9,200 Texaco, Inc. 791,200
--------------
3,090,325
--------------
Real Estate - 1.7%
72,000 United Dominion Realty Trust 1,053,000
--------------
Retail Stores - 3.1%
31,000 Circuit City Stores, Inc. 926,125
28,000 Lowe's Companies, Inc. 1,001,000
--------------
1,927,125
--------------
Total Common Stocks (Cost $30,634,553) $ 41,489,296
--------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
U.S. TREASURY NOTES - 9.8%
$ 500,000 5.875%, due 03/31/1999 $ 499,060
550,000 7.125%, due 02/29/2000 570,108
1,815,000 6.25%, due 02/15/2003 1,809,609
2,975,000 7.25%, due 08/15/2004 3,138,625
--------------
Total U.S. Treasury Notes (Cost $5,924,290) $ 6,017,402
--------------
MORTGAGE-BACKED SECURITIES - 5.9%
Federal Home Loan Mortgage Corporation - 2.6%
$ 274,918 Series #1139-D, 8.00%, due 09/15/1996 $ 275,520
415,456 Pool #G50153, 4.50%, due 05/01/1999 396,890
307,269 Series #162-E, 7.00%, due 02/15/2020 309,573
550,303 Series #D54864-G, 6.50%, due 06/01/2024 523,322
130,000 Pool #D69139, 6.50%, due 03/01/2026 123,663
--------------
1,628,968
--------------
Federal National Mortgage Association - .8%
3,429 Series #92-61F, 5.869%, floating rate, due 05/25/2001 3,430
304,707 Series #70, 8.50%, due 01/01/2012 319,067
148,977 Series #88-29B, 9.50%, due 12/25/2018 155,867
--------------
478,364
--------------
Government National Mortgage Association - 1.7%
255,055 Pool #780267, 9.00%, due 11/15/2017 274,939
97,947 Pool #327273, 7.50%, due 08/15/2022 98,195
649,866 Pool #343536, 7.50%, due 02/15/2023 651,510
--------------
1,024,644
--------------
Other Mortgage-Backed Securities - .8%
Lehman Brothers Mortgage Trust #91-2-A1,
222,325 8.00%, due 03/20/1999 226,910
Resolution Trust Corporation #95-1-A2B,
300,000 7.50%, due 10/25/2028 301,500
--------------
528,410
--------------
Total Mortgage-Backed Securities (Cost $3,635,065) $ 3,660,386
--------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
ASSET-BACKED SECURITIES - 3.4%
AFG Receivables Trust #95-A, A,
$ 408,224 6.15%, due 09/15/2000 $ 407,713
Fleetwood Credit Corporation Grantor Trust #95-A, A,
665,488 8.45%, due 11/15/2010 689,778
Nationscredit Grantor Trust #96-1, A,
490,653 5.85%, due 09/15/2011 482,508
The Money Store Home Equity Trust #94-A, A4,
575,000 6.275%, due 12/15/2022 538,028
--------------
Total Asset-Backed Securities (Cost $2,084,450) $ 2,118,027
--------------
CORPORATE BONDS - 7.5%
Bear Stearns Co.,
$ 375,000 7.625%, due 09/15/1999 $ 386,370
Beneficial Corporation Medium Term Notes,
275,000 8.05%, due 11/16/1998 286,214
Commercial Credit Corporation,
275,000 10.00%, due 05/01/1999 302,126
Commonwealth Edison,
350,000 7.00%, due 02/01/1997 352,188
Fleet Mortgage Group Medium Term Notes,
400,000 7.25%, due 01/15/1998 406,824
Ford Motor Credit Corporation Medium Term Notes,
225,000 7.55%, due 07/19/1999 232,488
Ford Motor Credit Corporation,
200,000 8.00%, due 12/01/1997 205,854
GMAC Medium Term Notes,
525,000 6.375%, due 09/01/1998 526,643
International Lease Finance Corporation,
425,000 6.42%, due 09/11/2000 421,047
J. C. Penny & Co. Medium Term Notes,
325,000 7.05%, due 05/23/2005 327,490
Meridian Bancorp, Inc.,
175,000 5.438%, floating rate, due 12/01/1996 175,044
National City Corporation,
175,000 5.566%, floating rate, due 01/31/1997 175,301
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
CORPORATE BONDS - Continued
Northern Trust Corporation,
100,000 9.00%, due 05/15/1998 105,587
Sears Roebuck & Co. Medium Term Notes,
275,000 5.96%, due 12/07/2000 267,493
World Savings and Loan Association,
425,000 7.625%, due 02/18/1997 431,774
--------------
Total Corporate Bonds (Cost $4,589,194) $ 4,602,443
--------------
Total Investments at Value (Cost $46,867,552) - 94.0% $ 57,887,554
--------------
<PAGE>
<CAPTION>
Face
Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 5.2%
$ 3,191,737 Lehman Brothers, 5.38%, dated 03/29/1996, due 04/01/1996
repurchase proceeds $3,193,168 (Cost $3,191,737) $ 3,191,737
--------------
Total Investments and Repurchase Agreements
at Value - 99.2% $ 61,079,291
Other Assets in Excess of Liabilities - .8% 496,986
--------------
Net Assets - 100.0% $ 61,576,277
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest in
the collateral at March 31, 1996 was $3,268,970.
(b)Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Significant Accounting Policies
The Jamestown Balanced Fund (the Fund) is a no-load, diversified, open-end
series of the Williamsburg Investment Trust (the Trust), a registered
management investment company under the Investment Company Act of 1940,
as amended. The Trust was organized as a Massachusetts business trust on
July 18, 1988. The Fund began operations on July 3, 1989.
The Fund's investment objectives are long term growth of capital and
income through investment in a balanced portfolio of equity and fixed
income securities. Capital protection and low volatility are important
investment goals.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of
the close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national stock exchange
are valued based upon the closing price on the principal exchange where the
security is traded. It is expected that fixed income securities of the Fund
will ordinarily be traded on the over-the-counter market, and common stocks of
the Fund will ordinarily be traded on a national securities exchange, but may
also be traded on the over-the-counter market. When market quotations are not
readily available, fixed income securities may be valued on the basis of
prices provided by an independent pricing service. If a pricing service cannot
provide a valuation, securities will be valued in good faith at fair market
value using methods consistent with those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase
agreement, which is collateralized by U.S. Government obligations, is
valued at cost which, together with accrued interest, approximates
market. At the time the Fund enters into the joint repurchase agreement,
the seller agrees that the value of the underlying securities, including
accrued interest, will at all times be equal to or exceed the face amount
of the repurchase agreement. In addition, the Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is
calculated daily by dividing the total value of the Fund's assets, less
liabilities, by the number of shares outstanding. The offering price and
redemption price per share of the Fund is equal to the net asset value
per share.
Investment income -- Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date. Discounts and premiums on
securities purchased are amortized in accordance with income tax
regulations which approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net
realized short-term capital gains, if any, may be distributed throughout
the year and net realized long-term capital gains, if any, are distri-
buted at least once each year. Income distributions and capital gain
distributions are determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Fund occasionally
trades securities on a "to-be-announced" (TBA) basis. In a TBA
transaction, the Fund has committed to purchase securities for which all
specific information is not yet known at the time of the trade,
particularly the face amount in mortgage-backed securities transactions.
Securities purchased on a TBA basis are not settled until they are
delivered to the Fund, normally 15 to 45 days later. These transactions
are subject to market fluctuations and their current value is determined
in the same manner as for other portfolio securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
<PAGE>
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated invest-
ment companies. As provided therein, in any fiscal year in which a Fund
so qualifies and distributes at least 90% of its taxable net income, the
Fund (but not the shareholders) will be relieved of federal income tax on
the income distributed. Accordingly, no provision for income taxes has
been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital
gains (earned during the twelve months ended October 31) plus
undistributed amounts from prior years.
The following information is based upon the federal income tax cost of
portfolio investments of the Fund as of March 31, 1996:
Gross unrealized appreciation . . . . . $ 11,254,710
Gross unrealized depreciation . . . . . (249,404)
-------------
Net unrealized appreciation . . . . . . $ 11,005,306
=============
As of March 31, 1996, the tax cost basis of investments for the Fund was
$46,882,248 and the Fund had $2,475,200 of accumulated undistributed net
capital gains for federal income tax purposes.
<PAGE>
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales
and maturities of investment securities, other than short-term invest-
ments, amounted to $39,432,174 and $41,571,963, respectively.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall,
Inc. (the Adviser) under the terms of an Investment Advisory Agreement.
Under the Investment Advisory Agreement, the Fund pays the Adviser a fee,
which is computed and accrued daily and paid monthly at an annual rate of
.65% on its average daily net assets up to $250 million; .60% on the next
$250 million of such net assets; and .55% on such net assets in excess of
$500 million.
States in which shares of the Fund are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse
the Fund for expenses which exceed the most restrictive applicable
expense limitation of any state. No reimbursement was required from the
Adviser for the year ended March 31, 1996.
Certain trustees and officers of the Trust are also officers of the
Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust
and MGF Service Corp. (MGF), MGF provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Fund. For these services, MGF receives a monthly fee
from the Fund at an annual rate of .20% on its average daily net assets
up to $25 million; .175% on the next $25 million of such net assets; and
.15% on such net assets in excess of $50 million, subject to a $2,000
minimum monthly fee. In addition, the Fund pays out-of-pocket expenses
including, but not limited to, pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
4. Directed Brokerage Arrangement
In order to reduce the total operating expenses of the Fund, the Fund's
custodian fees and a portion of other operating expenses have been paid
through an arrangement with a third-party broker-dealer who is
compensated through commission trades. Payment of expenses by the
broker-dealer is based on a percentage of commissions earned. Expenses
reimbursed through the directed brokerage arrangement totaled $30,268 for
the year ended March 31, 1996.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities
of The Jamestown Balanced Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1996, and
the related statement of operations for the year then ended, and the
statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 1996 by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Balanced Fund as of March 31, 1996, the results
of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
The Jamestown Equity Fund
No Load Mutual Fund
Annual Report
March 31, 1996
Investment Adviser Administrator
Lowe, Brockenbrough & Tattersall, Inc. MGF Service Corp.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45202-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1996
Performance of The Jamestown Equity Fund
The past fiscal year has been a very good one for The Jamestown Equity
Fund. For the twelve months ended March 31, 1996, your Fund had a total return
of 28.0% after operating expenses. For the same period, the Standard and
Poor's 500 (S&P 500) Index, which is 100% invested in common stocks, had a
positive return of 32.1%. Since the Fund is invested in stocks only to the
extent of 90% to 95% at most times (90.5% as of March 31, 1996), we are
pleased with the comparative total return results.
Our equity sector allocations were mostly in line with those of the S&P
500 with only slight overweightings and underweightings. Sectors outperforming
the overall stock market for the fiscal year included capital goods (+39.8%),
finance (+48.6%) and health care (+47.5%), and the Fund's comparative
weightings in such sectors added value in those instances. In the
underperforming utilities sector of the market, the Fund was underweighted
relative to the S&P 500 which also added value to performance for the twelve
month period. The technology sector, while performing in line with the market
during the calendar year, was a nominal drag on the Fund's performance during
the fiscal year.
Looking forward to the following year, we are somewhat cautious on the
stock market but believe the portfolio is structured accordingly. We will
continue to buy high quality issues on any significant pullbacks.
<PAGE>
For a comparison of the Fund's performance from inception versus the
Standard and Poor's 500 Index and the Consumer Price Index, please refer to
the chart below:
A representation of the graphic material contained in THE JAMESTOWN
EQUITY FUND Annual Report is set forth below.
Comparison of the Change in Value of a $10,000 Investment in the
Jamestown Equity Fund, the Standard & Poor's 500 Index and the Consumer Price
Index
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
12/01/92 10,000 12/01/92 10,000
12/31/92 1.23% 10,123 12/31/92 1.68% 10,168
03/31/93 4.36% 10,564 03/31/93 0.54% 10,223
06/30/93 0.48% 10,615 06/30/93 -1.00% 10,121
09/30/93 2.58% 10,889 09/30/93 1.85% 10,308
12/31/93 2.32% 11,142 12/31/93 0.67% 10,377
03/31/94 -3.79% 10,719 03/31/94 -0.82% 10,291
06/30/94 0.42% 10,764 06/30/94 1.64% 10,460
09/30/94 4.88% 11,290 09/30/94 1.70% 10,637
12/31/94 -0.02% 11,287 12/31/94 -1.35% 10,493
03/31/95 9.74% 12,387 03/31/95 10.17% 11,560
06/30/95 9.55% 13,569 06/30/95 8.46% 12,538
09/30/95 7.95% 14,648 09/30/95 6.80% 13,390
12/31/95 6.02% 15,530 12/31/95 5.22% 14,089
03/31/96 5.37% 16,363 03/31/96 5.03% 14,798
<PAGE>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
12/01/92 10,000
12/31/92 0.20% 10,020
03/31/93 0.90% 10,110
06/30/93 0.60% 10,171
09/30/93 0.40% 10,212
12/31/93 0.70% 10,283
03/31/94 0.50% 10,334
06/30/94 0.60% 10,396
09/30/94 0.90% 10,490
12/31/94 0.60% 10,553
03/31/95 0.80% 10,638
06/30/95 0.90% 10,734
09/30/95 0.40% 10,777
12/31/95 0.50% 10,831
03/31/96 0.80% 10,917
Past performance is not predictive of future performance.
The Jamestown Equity Fund - Average Annual Total Returns
1 Year ........................28.00%
Since Inception*...............12.48%
*Initial public offering of shares was December 1, 1992.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
ASSETS
<S> <C>
Investments in securities:
At acquisition cost $ 13,267,778
===================
At value (Note 1) $ 16,154,275
Investments in repurchase agreements (Note 1) 1,775,596
Dividends receivable 19,246
Interest receivable 5,458
Other assets 600
-------------------
TOTAL ASSETS 17,955,175
-------------------
LIABILITIES
Payable for securities purchased 75,705
Dividends payable 4,626
Payable for capital shares redeemed 5,229
Accrued advisory fees (Note 3) 9,496
Accrued administration fees (Note 3) 2,900
Other accrued expenses 697
-------------------
TOTAL LIABILITIES 98,653
-------------------
NET ASSETS $ 17,856,522
===================
Net assets consist of:
Capital shares $ 14,713,478
Accumulated net realized gains from security transactions 253,687
Undistributed net investment income 2,860
Net unrealized appreciation on investments 2,886,497
-------------------
Net assets $ 17,856,522
===================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,279,411
===================
Net asset value, offering price and redemption price per share (Note 1) $ 13.96
===================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1996
<S> <C>
INVESTMENT INCOME
Dividends $ 218,571
---------------
Interest 61,273
TOTAL INVESTMENT INCOME 279,844
---------------
EXPENSES
Investment advisory fees (Note 3) 79,891
Administrative fees (Note 3) 26,514
Custodian fees 10,317
Professional fees 8,251
Trustees' fees and expenses 5,580
Registration fees 3,645
Postage and supplies 1,914
Printing of shareholder reports 1,033
Pricing costs 895
Other expenses 2,485
---------------
TOTAL EXPENSES 140,525
Expenses reimbursed through a directed brokerage arrangement (Note 4) (16,562)
---------------
NET EXPENSES 123,963
---------------
NET INVESTMENT INCOME 155,881
---------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 567,635
Net change in unrealized appreciation/depreciation on investments 2,204,131
---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 2,771,766
---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,927,647
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1996 1995
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 155,881 $ 52,250
Net realized gains from security transactions 567,635 23,087
Net change in unrealized appreciation/depreciation
on investments 2,204,131 641,075
--------------- ----------------
Net increase in net assets from operations 2,927,647 716,412
--------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (153,763) (56,136)
From net realized gains from security transactions (304,491) (13,937)
--------------- ----------------
Decrease in net assets from distributions to shareholders (458,254) (70,073)
--------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 7,025,441 5,324,788
Net asset value of shares issued in reinvestment
of distributions to shareholders 420,203 61,777
Payments for shares redeemed (169,689) (733,223)
--------------- ----------------
Net increase in net assets from capital share transactions 7,275,955 4,653,342
--------------- ----------------
TOTAL INCREASE IN NET ASSETS 9,745,348 5,299,681
NET ASSETS:
Beginning of year 8,111,174 2,811,493
--------------- ----------------
End of year - (including undistributed net investment
income of $2,860 and $742, respectively) $ 17,856,522 $ 8,111,174
=============== ================
(a)Summary of capital share activity follows:
Shares sold 542,324 504,565
Shares issued in reinvestment of distributions to shareholders 31,979 5,806
Shares redeemed (13,292) (67,864)
--------------- ----------------
Net increase in shares outstanding 561,011 442,507
Shares outstanding, beginning of year 718,400 275,893
--------------- ----------------
Shares outstanding, end of year 1,279,411 718,400
=============== ================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<CAPTION>
Period
Years ended March 31, Ended
March 31,
1996 1995 1994 1993 (a)
<S> <C> <C> <C> <C>
Net asset value at beginning of period $11.29 $10.19 $10.18 $10.00
------- ------- ------- -------
Income from investment operations:
Net investment income 0.15 0.10 0.08 0.04
Net realized and unrealized gains (losses)
on investments 2.98 1.15 (0.01) 0.18
------- ------- ------- -------
Total from investment operations 3.13 1.25 0.07 0.22
------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.15) (0.12) (0.06) (0.04)
Distributions from net realized gains (0.31) (0.03) -- --
------- ------- ------- -------
Total distributions (0.46) (0.15) (0.06) (0.04)
------- ------- ------- -------
Net asset value at end of period $13.96 $11.29 $10.19 $10.18
======= ======= ======= =======
Total return 28.00% 12.33% 0.67% 6.81%(c)
======= ======= ======= =======
Net assets at end of period (000's) $17,857 $8,111 $2,811 $1,953
======= ======= ======= =======
Ratio of expenses to average net assets (b) 1.14% 1.44% 1.50% 1.50%(c)
Ratio of net investment income to average net assets 1.27% 1.18% 0.82% 1.13%(c)
Portfolio turnover rate 54% 48% 92% 54%
<FN>
(a)Represents the period from the commencement of operations (December 1,
1992) through March 31, 1993.
(b)For the year ended March 31, 1996, the ratio of expenses to average
net assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement (Note 4). For periods
prior to March 31, 1996, no expenses were reimbursed through a directed
brokerage arrangement, but investment advisory fees were waived and/or
expenses reimbursed by the Adviser. Absent fee waivers and/or expense
reimbursements by the Adviser, the ratio of expenses to average net assets
would have been 1.99%, 3.16% and 3.19% (c) for the periods ended March 31,
1995, 1994 and 1993, respectively.
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 90.5%
Advertising - 2.6%
10,000 Interpublic Group of Companies, Inc. $ 472,500
--------------
Aerospace - 2.7%
9,500 Raytheon Company 486,875
--------------
Building and Construction - 2.4%
9,500 Foster Wheeler Corporation 421,562
--------------
Chemicals - 4.1%
4,400 Air Products & Chemicals 240,350
5,900 E.I. duPont de Nemours & Company 489,700
--------------
730,050
--------------
Commercial Banking - 5.8%
5,000 Crestar Financial Corporation 287,500
7,000 First Union Corporation 423,500
4,000 NationsBank Corporation 320,500
--------------
1,031,500
--------------
Communications - 10.4%
15,300 Alltel Corporation 474,300
8,000 AT&T Company 490,000
27,000 Equifax, Inc. 543,375
6,500 SBC Communications, Inc. 342,062
--------------
1,849,737
--------------
Computers/Computer Technology Services - 4.0%
6,100 Cisco Systems, Inc. (b) 282,888
2,800 Computer Sciences Corporation (b) 197,050
4,000 Intel Corporation 227,500
--------------
707,438
--------------
Consumer Products - 16.8%
5,800 Avon Products, Inc. 497,350
4,800 CPC International, Inc. 333,000
6,800 General Electric Company 529,550
4,000 Kimberly-Clark Corporation 298,000
3,600 Motorola, Inc. 190,800
3,000 Procter & Gamble Company 254,250
15,000 Sysco Corporation 493,125
17,000 Whitman Corporation 412,250
--------------
3,008,325
--------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Drugs/Medical Equipment - 6.8%
10,400 Abbott Laboratories $ 423,800
4,800 Merck and Company, Inc. 298,800
8,500 Schering-Plough Corporation 494,062
--------------
1,216,662
--------------
Durable Goods - 2.2%
8,000 Avnet, Inc. 386,000
--------------
Electronics - 2.8%
5,400 Hewlett-Packard Company 507,600
--------------
Entertainment - 1.9%
5,246 Walt Disney Company 335,088
--------------
Fast Food Restaurants - 1.9%
7,000 McDonald's Corporation 336,000
--------------
Fire Systems - 3.3%
16,600 Tyco International Ltd. 593,450
--------------
Health Care Centers - 6.3%
12,000 Columbia/HCA Healthcare Corporation 693,000
10,900 Manor Care, Inc. 427,825
--------------
1,120,825
--------------
Insurance - 3.1%
6,000 American International Group 561,750
--------------
Oil and Gas Drilling - 6.8%
6,500 Amoco Corporation 469,625
13,500 Enron Corporation 497,813
2,900 Texaco, Inc. 249,400
--------------
1,216,838
--------------
Real Estate - 2.2%
26,500 United Dominion Realty Trust 387,563
--------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Retail Stores - 4.4%
11,900 Circuit City Stores, Inc. $ 355,512
12,000 Lowe's Companies, Inc. 429,000
--------------
784,512
--------------
Total Common Stocks (Cost $13,267,778) $ 16,154,275
--------------
<CAPTION>
Face
Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 9.9%
$ 1,775,596 Lehman Brothers, 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $1,776,392 (Cost $1,775,596) $ 1,775,596
--------------
Total Investments and Repurchase Agreements
at Value - 100.4% $ 17,929,871
Liabilities in Excess of Other Assets - (.4)% (73,349)
--------------
Net Assets - 100.0% $ 17,856,522
==============
<FN>
(a)Joint repurchase agreement is fully collateralized by $15,840,000 U.S. Treasury Note, 7.75%, due 03/31/1996.
The aggregate market value of the collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest
in the collateral at March 31, 1996 was $1,818,561.
(b)Non-income producing security.
See accompanying notes to the finacial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Significant Accounting Policies
The Jamestown Equity Fund (the Fund) is a no-load, diversified, open-end
series of the Williamsburg Investment Trust (the Trust), a registered
management investment company under the Investment Company Act of 1940, as
amended. The Trust was organized as a Massachusetts business trust on July 18,
1988. The Fund began operations on December 1, 1992.
The Fund's investment objective is long term growth of capital through
investment in a diversified portfolio composed primarily of common stocks.
Current income is incidental to this objective and may not be significant.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of
the close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national stock exchange
are valued based upon the closing price on the principal exchange where the
security is traded.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market. At the time the
Fund enters into the joint repurchase agreement, the seller agrees that the
value of the underlying securities, including accrued interest, will at all
times be equal to or exceed the face amount of the repurchase agreement. In
addition, the Fund actively monitors and seeks additional collateral, as
needed.
Share valuation -- The net asset value per share of the Fund is
calculated daily by dividing the total value of the Fund's assets, less
liabilities, by the number of shares outstanding. The offering price and
redemption price per share of the Fund is equal to the net asset value per
share.
Investment income -- Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date.
Distributions to shareholders -- Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net
realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at
least once each year. Income distributions and capital gain distributions are
determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
<PAGE>
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
The following information is based upon the federal income tax cost of
portfolio investments of the Fund as of March 31, 1996:
Gross unrealized appreciation...................$ 2,942,472
Gross unrealized depreciation.................. (78,537)
-----------
Net unrealized appreciation.....................$ 2,863,935
===========
As of March 31, 1996, the tax cost basis of investments for the Fund was
$13,290,340 and the Fund had $276,249 of accumulated undistributed net capital
gains for federal income tax purposes.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $11,730,917 and $6,163,071, respectively.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall,
Inc. (the Adviser) under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .65% on its
average daily net assets up to $500 million and .50% on such net assets in
excess of $500 million.
States in which shares of the Fund are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse the Fund
for expenses which exceed the most restrictive applicable expense limitation
of any state. No reimbursement was required from the Adviser for the year
ended March 31, 1996.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust
and MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Fund. For these services, MGF receives a monthly fee from the Fund at an
annual rate of .20% on its average daily net assets up to $25 million; .175%
on the next $25 million of such net assets; and .15% on such net assets in
excess of $50 million, subject to a $2,000 minimum monthly fee. In addition,
the Fund pays out-of-pocket expenses including, but not limited to, pricing
costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
4. Directed Brokerage Arrangement
In order to reduce the total operating expenses of the Fund, the Fund's
custodian fees and a portion of other operating expenses have been paid
through an arrangement with a third-party broker-dealer who is compensated
through commission trades. Payment of expenses by the broker-dealer is based
on a percentage of commissions earned. Expenses reimbursed through the
directed brokerage arrangement totaled $16,562 for the year ended March 31,
1996.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Equity Fund (a series of The Williamsburg Investment Trust),
including the portfolio of investments, as of March 31, 1996, and the related
statement of operations for the year then ended, and the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Equity Fund as of March 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for the
periods referred to above, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
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STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BOND FUNDS
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
August 1, 1996
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES....................................... 2
DESCRIPTION OF BOND RATINGS.............................................. 5
INVESTMENT LIMITATIONS................................................... 8
TRUSTEES AND OFFICERS.................................................... 10
INVESTMENT ADVISOR...................................................... 14
ADMINISTRATOR............................................................ 15
OTHER SERVICES........................................................... 15
BROKERAGE............................................................... 16
SPECIAL SHAREHOLDER SERVICES............................................. 17
PURCHASE OF SHARES....................................................... 18
REDEMPTION OF SHARES..................................................... 19
NET ASSET VALUE DETERMINATION............................................ 19
ALLOCATION OF TRUST EXPENSES............................................. 19
ADDITIONAL TAX INFORMATION............................................... 20
CAPITAL SHARES AND VOTING................................................ 21
CALCULATION OF PERFORMANCE DATA.......................................... 22
FINANCIAL STATEMENTS AND REPORTS......................................... 25
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of The Jamestown Bond Funds (the
"Funds") dated August 1, 1996. The Prospectus may be obtained from the Funds,
at the address and phone number shown above, at no charge.
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jambndfsa.sai
July 29, 1996
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Jamestown Bond Fund (the
"Bond Fund") and The Jamestown Short Term Bond Fund (the "Short Term Fund")
unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities
subject to repurchase agreements. A repurchase transaction occurs when, at the
time a Fund purchases a security (normally a U.S. Treasury obligation), it
also resells it to the vendor (normally a member bank of the Federal Reserve
System or a registered Government Securities dealer) and must deliver the
security (and/or securities substituted for them under the repurchase
agreement) to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred to as the
"Repurchase Securities." The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate effective for the
period of time during which the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Funds hold a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times as least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Funds'
custodian either directly or through a securities depository.
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SECURITIES OF UNSEASONED COMPANIES. The securities of unseasoned companies
(those in business less than three years, including predecessors and, in the
case of bonds, guarantors) may have a limited trading market, which may
adversely affect disposition. If other investors attempt to dispose of such
holdings when the Funds desire to do so, the Funds could receive lower prices
than might otherwise be obtained. Because of the increased risk over larger,
better known companies, each Fund limits its investments in the securities of
unseasoned issuers to no more than 5% of its total assets.
U.S. GOVERNMENT SECURITIES. Each Fund may invest in debt obligations which are
issued or guaranteed by the U.S. Government, its agencies and
instrumentalities ("U.S. Government Securities") as described herein. U.S.
Government Securities include the following securities: (1) U.S. Treasury
obligations of various interest rates, maturities and issue dates, such as
U.S. Treasury bills (mature in one year or less), U.S. Treasury notes (mature
in one to seven years), and U.S. Treasury bonds (mature in more than seven
years), the payments of principal and interest of which are all backed by the
full faith and credit of the U.S. Government; (2) obligations issued or
guaranteed by U.S. Government agencies or instrumentalities, some of which are
backed by the full faith and credit of the U.S. Government, e.g., obligations
of the Government National Mortgage Association ("GNMA"), the Farmers Home
Administration and the Export Import Bank; some of which do not carry the full
faith and credit of the U.S. Government but which are supported by the right
of the issuer to borrow from the U.S. Government, e.g., obligations of the
Tennessee Valley Authority, the U.S. Postal Service, the Federal National
Mortgage Association ("FNMA"), and the Federal Home Loan Mortgage Corporation
("FHLMC"); and some of which are backed only by the credit of the issuer
itself, e.g., obligations of the Student Loan Marketing Association, the
Federal Home Loan Banks and the Federal Farm Credit Bank; and (3) any of the
foregoing purchased subject to repurchase agreements as described herein. The
Funds do not intend to invest in "zero coupon" Treasury securities. The
guarantee of the U.S. Government does not extend to the yield or value of the
Funds' shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have
lower yields. To the extent such securities were purchased at a
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premium, such prepayments could result in capital losses. The
U.S. Government does not guarantee premiums and market value of
U.S. Government Securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they
mature in thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Funds. Money market instruments also
may include Bankers' Acceptances and Certificates of Deposit of domestic
branches of U.S. banks, Commercial Paper and Variable Amount Demand Master
Notes ("Master Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and
"accepted" by a bank, are the customary means of effecting payment for
merchandise sold in import-export transactions and are a source of financing
used extensively in international trade. When a bank "accepts" such a time
draft, it assumes liability for its payment. When the Funds acquire a Bankers'
Acceptance, the bank which "accepted" the time draft is liable for payment of
interest and principal when due. The Bankers' Acceptance, therefore, carries
the full faith and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an
unsecured interest-bearing debt obligation of a bank. CDs acquired by the
Funds would generally be in amounts of $100,000 or more. COMMERCIAL PAPER is
an unsecured, short-term debt obligation of a bank, corporation or other
borrower. Commercial Paper maturity generally ranges from two to 270 days and
is usually sold on a discounted basis rather than as an interest-bearing
instrument. The Funds will invest in Commercial Paper only if it is rated in
the highest rating category by any nationally recognized statistical rating
organization ("NRSRO") or, if not rated, the issuer must have an outstanding
unsecured debt issue rated in the three highest categories by any NRSRO or, if
not so rated, be of equivalent quality in the Advisor's assessment. Commercial
Paper may include Master Notes of the same quality. MASTER NOTES are unsecured
obligations which are redeemable upon demand of the holder and which permit
the investment of fluctuating amounts at varying rates of interest. Master
Notes are acquired by the Funds only through the Master Note program of the
Funds' custodian, acting as administrator thereof. The Advisor will monitor,
on a continuous basis, the earnings power, cash flow and other liquidity
ratios of the issuer of a Master Note held by the Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Funds may purchase
securities on a when-issued basis or for settlement at a future date if the
Funds hold sufficient assets to meet the purchase price. In such purchase
transactions the Funds will not accrue interest on the purchased security
until the actual settlement. Similarly, if a security is sold for a forward
date,
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the Funds will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Funds would generally purchase securities on a forward commitment or
when-issued basis with the intention of taking delivery, the Funds may sell
such a security prior to the settlement date if the Advisor felt such action
was appropriate. In such a case, the Funds could incur a short-term gain or
loss.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an
NRSRO represents the organization's opinion as to the credit quality of the
security being traded. However, the ratings are general and are not absolute
standards of quality or guarantees as to the creditworthiness of an issuer.
Consequently, the Advisor believes that the quality of fixed-income securities
in which the Funds may invest should be continuously reviewed and that
individual analysts give different weightings to the various factors involved
in credit analysis. A rating is not a recommendation to purchase, sell or hold
a security because it does not take into account market value or suitability
for a particular investor. When a security has received a rating from more
than one NRSRO, each rating is evaluated independently. Ratings are based on
current information furnished by the issuer or obtained by the NRSROs from
other sources that they consider reliable. Ratings may be changed, suspended
or withdrawn as a result of changes in or unavailability of such information,
or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
AAA: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
AA: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large in Aa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements that make
the long term risks appear somewhat larger than in Aaa securities.
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A: Bonds rated A possess many favorable investment attributes and are to
be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
that suggest a susceptibility to impairment sometime in the future.
BAA: Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated
Aa, A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity
to pay principal and interest.
AA: Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within these major rating categories.
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DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to
be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds
rated AAA.
A: Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show
relative standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk
factors are negligible, being only slightly more than for risk-
free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit
quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A: Bonds rated A have average protection factors. However
risk factors are more variable and greater in periods of economic
stress.
BBB: Bonds rated BBB have below average protection factors,
but are considered sufficient for prudent investment. There is
considerable variability in risk during economic cycles.
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INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's
outstanding shares represented in person or by proxy at a meeting at which
more than 50% of its outstanding shares are represented, or (ii) more than 50%
of its outstanding shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the
securities of any one issuer (except that securities of the
U.S. Government, its agencies or instrumentalities are not
subject to these limitations);
(2) Invest 25% or more of the value of its total assets in any
one industry or group of industries (except that securities
of the U.S. Government, its agencies and instrumentalities
are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or
trustees of the Trust or its Advisor who own beneficially more than
1/2 of 1% of the outstanding securities of such issuer together own
more than 5% of the outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management
of another issuer;
(5) Invest in interests in real estate, real estate mortgage
loans, oil, gas or other mineral exploration or development
programs, except that the Funds may invest in the securities
of companies (other than those which are not readily
marketable) which own or deal in such things, and the Funds
may invest in certain mortgage backed securities as
described in the Prospectus under "Investment Objectives,
Investment Policies and Risk Considerations";
(6) Underwrite securities issued by others, except to the extent a Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such
short-term credits as may be necessary for the clearance of
transactions);
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(8) Make short sales of securities or maintain a short position, except
short sales "against the box." (A short sale is made by selling a
security the Fund does not own. A short sale is "against the box" to
the extent the Fund contemporaneously owns or has the right to obtain
at no added cost securities identical to those sold short.);
(9) Participate on a joint or joint and several basis in any
trading account in securities;
(10) Purchase real estate or interests in real estate, except that
securities in which the Funds invest may themselves have investment
in real estate or interests in real estate (the Funds do invest in
securities composed of mortgages against real estate);
(11) Invest more than 10% in the aggregate in illiquid securities
(potentially including repurchase agreements with a maturity of
greater than 7 days, Interest Only or Principal Only securities, and
mortgage backed strips which may not be readily marketable); or
(12) Write, purchase or sell puts, calls or combinations thereof, or
purchase or sell commodities, commodities contracts, futures
contracts or related options, or purchase, sell or write warrants.
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
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<TABLE>
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or
Funds, age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- --------------
<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John T. Bruce (age 42) Principal None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
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<CAPTION>
<S> <C> <C>
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
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<CAPTION>
<S> <C> <C>
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Strategic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
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<CAPTION>
<S> <C> <C>
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
</TABLE>
- -----------------------------
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial matters, including
the adequacy of internal controls. On the basis of this review the Audit
Committee makes recommendations to the Trustees as to the appointment of
independent accountants for the following year. The Trustees have not
appointed a compensation committee or a nominating committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then outstanding shares of the Bond Fund
and 6.8% of the then outstanding shares of the Short Term Fund. On the same
date, Rockingham Health Care, Inc., 235 Cantrell Avenue, Harrisonburg,
Virginia 22801, owned of record 56.2% of the then outstanding shares of the
Short Term Fund and may therefore be deemed to control the Short Term Fund. On
the same date, Halifax Regional Hospital, 2204 Wilborn Avenue, South Boston,
Virginia 24592, owned of record 12.2% of the then outstanding shares of the
Bond Fund; Crestar Bank as Trustee for Hourly Employees Norshipco Pension
Plans, P.O. Box 2642, Norfolk, Virginia 23501, owned of record 5.4% of the
then outstanding shares of the Bond Fund; the Estate of Morton Blaustein, P.O.
Box 238, Baltimore, Maryland 21203, owned of record 11.0% of the then
outstanding shares of the Bond Fund; Rockingham Health Care, Inc., 235
Cantrell Avenue, Harrisonburg, Virginia 22801, owned of record 11.9% of the
then outstanding shares of the Bond Fund; Rockingham Memorial Hospital
Retirement Plan, 235 Cantrell Avenue, Harrisonburg, Virginia 22801, owned of
record 7.4% of the then outstanding shares of the Bond Fund; Calvert Memorial
Hospital, 100 Hospital Road, Prince Frederick, Maryland 20678, owned of record
9.6% of the then outstanding shares of the Bond Fund; Virginia International
Terminals, Inc. Pension Plan, P.O. Box 1387, Norfolk, Virginia 23501, owned of
record 10.9% of the then outstanding shares of the Bond Fund; Light & Co.,
P.O. Box 1596, Baltimore, Maryland, owned of record 6.1% of the then
outstanding shares of the Bond Fund; the Lowe, Brockenbrough & Tattersall
Money Purchase Pension
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Plan, 6620 West Broad Street, Richmond, Virginia 23230, owned of record 6.8%
of the then outstanding shares of the Short Term Fund; the McKay-Dee
Foundation, 3939 Harrison Boulevard, Ogden, Utah 84403, owned of record 9.5%
of the then outstanding shares of the Short Term Fund; and The Trust Company
of the South, P.O. Box 1898, Burlington, North Carolina 27216, owned of record
16.6% of the then outstanding shares of the Short Term Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor") supervises each Fund's
investments pursuant to an Investment Advisory Agreement (the "Advisory
Agreement") described in the Prospectus. The Advisory Agreement is effective
until April 1, 1997 and will be renewed thereafter for one year periods only
so long as such renewal and continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of the Funds'
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust or the
Advisor by vote cast in person at a meeting called for the purpose of voting
on such approval. The Advisory Agreement is terminable without penalty on
sixty days notice by the Board of Trustees of the Trust or by the Advisor. The
Advisory Agreement provides that it will terminate automatically in the event
of its assignment.
Compensation of the Advisor with respect to each Fund, is at the annual rate
of 0.375% of such Fund's average daily net assets. For the fiscal years ended
March 31, 1996, 1995 and 1994, the Bond Fund paid the Advisor advisory fees of
$305,247, $242,915 and $227,910, respectively. For the fiscal years ended
March 31, 1996, 1995 and 1994, the Short Term Fund paid the Advisor advisory
fees of $3,786 (which was net of voluntary fee waivers of $43,635), $3,372
(net of voluntary fee waivers of $49,560) and $11,707 (net of voluntary fee
waivers of $52,586).
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
shareholders, Austin Brockenbrough, III and Fred T. Tattersall. In addition to
acting as Advisor to the Funds, the Advisor serves as investment advisor to
four additional investment companies, the subjects of separate prospectuses,
and also provides investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional accounts and
individuals.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Funds. The Advisor determines
what securities and other investments will be purchased, retained or sold by
the Funds, and does so in accordance with the investment objectives and
policies
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of the Funds as described herein and in the Prospectus. The Advisor places all
securities orders for the Funds, determining with which broker, dealer, or
issuer to place the orders.
The Advisor must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.075% of the average value of its
daily net assets up to $200,000,000 and 0.05% of such assets in excess of
$200,000,000; provided, however, that the minimum fee is $2,000 per month for
each Fund. In addition, the Funds pay out-of-pocket expenses, including but
not limited to, postage, envelopes, checks, drafts, forms, reports, record
storage and communication lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
fees of $61,029 and $49,025, respectively, from the Bond Fund and $24,000 and
$23,301, respectively, from the Short Term Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
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The Custodian of the Funds' assets is Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the
Funds (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all
income and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all
portfolio securities transactions. The Advisor (subject to the general
supervision of the Board of Trustees) directs the execution of the Funds'
portfolio transactions. The Trust has adopted a policy which prohibits the
Advisor from effecting Fund portfolio transactions with broker-dealers which
may be interested persons of either Fund, the Trust, any Trustee, officer or
director of the Trust or its investment advisors or any interested person of
such persons.
The Funds' portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup. However, the Bond Fund typically transacts
in shares of closed-end investment companies on an agency basis, and pays
commissions in connection with these transactions.
For the fiscal years ended March 31, 1996, 1995 and 1994, the total amount of
brokerage commissions paid by the Bond Fund was $126,787, $0 and $0,
respectively. No brokerage commissions were paid by the Short Term Fund for
the last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Advisor for the benefit of the other clients it may have.
Conversely, the Funds may benefit from such transactions effected for the
benefit of other clients. In all cases, the Advisor is obligated to effect
transactions for the Funds based upon obtaining the most favorable price and
execution. Factors considered by the Advisor in determining whether the Funds
will receive the most favorable price and execution include, among other
things: the size of the order, the broker's ability to effect and settle the
transaction promptly and efficiently and the Advisor's perception of the
broker's reliability, integrity and financial condition. During the fiscal
year ended March 31, 1996, the amount of brokerage transactions and related
commissions directed by the Bond Fund to brokers because of research services
provided were $11,731,411 and $65,720.
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In an effort to reduce the total operating expenses of the Bond Fund, a
portion of the Fund's custodian fees have been reimbursed through an
arrangement with a third party broker-dealer who is compensated through
security trades. Total custodian expenses reimbursed by the broker-dealer for
the year ended March 31, 1996 were $22,423.
As of March 31, 1996, the Short Term Fund held bonds (having a market value of
$211,216) issued by Bear Stearns Company, the parent of one of the Trust's
"regular broker-dealers" as defined in the 1940 Act.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder
services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is
at the sole discretion of the Advisor based upon the suitability of the
securities accepted for inclusion as a long term investment of the Funds, the
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Funds to pay for all redemptions in
cash. In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Funds. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs
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when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay
redemptions in cash, rather than in kind, to any shareholder of record of the
Funds who redeems during any ninety day period, the lesser of (a) $250,000 or
(b) one percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s)
on the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price computed on the date of receipt;
and an order received after that time will be executed at the price computed
on the next Business Day. An order to purchase shares is not binding on the
Funds until confirmed in writing (or unless other arrangements have been made
with the Funds, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Each Fund reserves the right in its sole discretion (i) to suspend the
offering of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial
investment minimums for the purpose of reducing the cost to the Funds (and
consequently to the shareholders) of communicating with and servicing their
shareholders. However, a reduced minimum initial investment requirement of
$5,000 applies to Trustees, officers and employees of the Funds, the Advisor
and certain parties related thereto, including clients of the Advisor or any
sponsor, officer, committee member thereof, or the immediate family of any of
them. In addition, accounts having the same mailing address may be aggregated
for purposes of the
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minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment
(i) during any period that the New York Stock Exchange (the "Exchange") is
closed, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission (the "Commission"), (ii) during any period
when an emergency exists as defined by the rules of the Commission as a result
of which it is not reasonably practicable for the Fund to dispose of
securities owned by it, or to fairly determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities
held by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations
which may be deemed by the
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Trustees to be of overall benefit to the Fund and its shareholders; legal and
auditing expenses; and the cost of stationery and forms prepared exclusively
for the Funds. General Trust expenses are allocated among the series, or
funds, on a fair and equitable basis by the Board of Trustees, which may be
based on relative net assets of each fund (on the date the expense is paid) or
the nature of the services performed and the relative applicability to each
fund.
Under the Advisory Agreement, the Advisor may be required to reimburse a Fund
if that Fund's annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
subject to year end adjustment. The Advisor in its discretion may, but is not
required to, reimburse a Fund an amount of money in excess of its advisory
fee.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In
addition to this distribution requirement, each Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities' loans, gains from the disposition of stock or
securities, and certain other income. Each Fund will also be required to
derive less than 30% of its gross income from the sale or other disposition of
securities held for less than 90 days.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter
M, they will not be subject to federal income tax to the extent they
distribute their taxable net investment income and net realized capital gains.
A nondeductible 4% federal excise tax will be imposed on each Fund to the
extent it does not distribute at least 98% of its ordinary taxable income for
a calendar year, plus 98% of its capital gain net taxable income for the one
year period ending
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each October 31, plus certain undistributed amounts from prior years. While
each Fund intends to distribute its taxable income and capital gains in a
manner so as to avoid imposition of the federal excise and income taxes, there
can be no assurance that the Funds indeed will make sufficient distributions
to avoid entirely imposition of federal excise or income taxes.
As of March 31, 1996, the Bond Fund and the Short Term Fund had capital loss
carryforwards for federal income tax purposes of $1,046,606 and $443,059,
respectively, which expire on March 31, 2003. These capital loss carryforwards
may be utilized in future years to offset net realized gains prior to
distributing such gains to shareholders.
Should additional series, or funds, be created by the Trustees, each fund
would be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
Each Fund will send shareholders information each year on the tax status of
dividends and disbursements. A dividend or capital gains distribution paid
shortly after shares have been purchased, although in effect a return of
investment, is subject to federal income taxation. Dividends from net
investment income, along with capital gains, will be taxable to shareholders,
whether received in cash or shares and no matter how long you have held Fund
shares, even if they reduce the net asset value of shares below your cost and
thus in effect result in a return of part of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have
no preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any
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Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than
two-thirds of the outstanding shares of the Trust and filed with the Trust's
custodian. Shareholders have certain rights, as set forth in the Declaration
of Trust, including the right to call a meeting of the shareholders for the
purpose of voting on the removal of one or more Trustees. Shareholders holding
not less than ten percent (10%) of the shares then outstanding may require the
Trustees to call such a meeting and the Trustees are obligated to provide
certain assistance to shareholders desiring to communicate with other
shareholders in such regard (e.g., providing access to shareholder lists,
etc.). In case a vacancy or an anticipated vacancy shall for any reason exist,
the vacancy shall be filled by the affirmative vote of a majority of the
remaining Trustees, subject to the provisions of Section 16(a) of the 1940
Act. The Trust does not expect to have an annual meeting of shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per
share at the beginning of the period from the net asset value per share at the
end of the period (after adjusting for the reinvestment of any income
dividends and capital gain distributions), and dividing the result by the net
asset value per share at the beginning of the period. In particular, the
average annual total return of a Fund ("T") is computed by using the
redeemable value at the end of a specified period of time ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time ("n")
according to the formula P(l+T)n=ERV. The average annual total return
quotations for the Bond Fund for the one year period ended March 31, 1996, for
the five year period ended March 31, 1996 and for the period since inception
(December 13, 1990) to March 31, 1996 are 11.23%, 7.92% and 7.79%,
respectively. The average annual total return quotations for the Short Term
Fund for the one year period ended March 31, 1996 and for the period since
inception (January 21, 1992) to March 31, 1996 are 7.38% and 5.05%,
respectively.
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In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is
based on a 30-day (or one month) period and is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Generally, interest earned (for the purpose of "a" above) on debt obligations
is computed by reference to the yield to maturity of each obligation held
based on the market value of the obligation (including actual accrued
interest) at the close of business on the last business day prior to the start
of the 30-day (or one month) period for which yield is being calculated, or,
with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The yields of the Bond Fund and the Short Term
Fund for the 30 days ended March 31, 1996 were 6.30% and 5.84%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Bond Fund may compare its performance to the
Lehman Brothers Government/Corporate Index and the Lehman Brothers Aggregate
Index, which are generally considered to be representative of the performance
of taxable bonds, and the Short Term Fund may compare its performance to the
Merrill Lynch 1-3 Year Treasury Index. Comparative performance may also be
expressed by reference to a ranking prepared by a mutual fund monitoring
service, such as Lipper Analytical Services, Inc. or Morningstar, Inc., or by
one or more newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the Funds' past
performance to that of other mutual funds and investment products. Of course,
past performance is not a guarantee of future results.
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o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain
a more complete view of the Funds' performance before investing. Of course,
when comparing the Funds' performance to any index, factors such as
composition of the index and prevailing market conditions should be considered
in assessing the significance of such comparisons. When comparing funds using
reporting services, or total return, investors should take into consideration
any relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Funds may quote total
returns that are calculated on non-standardized base periods. The total
returns represent the historic change in the value of an investment in the
Funds based on monthly reinvestment of dividends over a specified period of
time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Funds may also disclose from
time to time information about its portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Funds may also depict the
historical performance of the securities in which the Funds may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Funds may also include in
advertisements and in materials furnished to present and prospective
shareholders statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet specific
financial goals, such as saving for retirement, children's education, or other
future needs.
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FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Funds as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
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The Jamestown Bond Fund
No Load Mutual Fund
Annual Report
March 31, 1996
Investment Adviser Administrator
Lowe, Brockenbrough & Tattersall, Inc. MGF Service Corp.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45202-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN BOND FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1996
Performance of The Jamestown Bond Fund
First Quarter 1996
What a difference a few months can make! The clearly bullish sentiment
that investors had at the end of 1995 was quickly reversed during the first
quarter of this year as the Lehman Aggregate Index fell 1.8% and the Lehman
Government/Corporate Index fell 2.3%. While the 3-month Treasury bill yield
remained fairly stable, 2-year and longer rates rose between 60 and 75 basis
points in reaction to an economy that caught investors off guard with its
strength. As economic growth rates were being revised up, expectations for
further rate cuts from the Federal Reserve were being revised down. Interest
rates also reflected disappointment with the prospects for a balanced budget
and a restructured tax system. Except for Italy and France, where rates fell
slightly, other G-7 countries followed our lead and experienced higher rates
for the quarter. Central Bankers did little to reverse the trend.
For the quarter, your Fund performed in line with its comparative
indices. Even though our maturity strategy remained slightly biased toward
falling interest rates, our sector strategies gave our performance a boost. In
assessing the economy, we underestimated the improvement in employment and the
stimulative effect that last year's low rates had on spending. The strength
appeared to transcend even the most obvious drags of unusually inclement
weather, the government shutdown and the General Motors strike. As for
sectors, our performance benefited from an overweighting in mortgages. Despite
the increased volatility in interest rates during the quarter, mortgages
performed well as higher rates helped to dispel prepayment fears. Our holdings
in seasoned mortgages performed even stronger than the mortgage market in
general. Closed-end mutual funds contributed to performance for the quarter as
renewed buying interest in the area caused discounts to narrow.
Fiscal Year Ended March 31, 1996
In 1995, the bond market experienced one of the best years in its history
on the heels of one of its worst. The stage was set for 1995's rally by 1994's
monetary tightening, although few investors foresaw it at the time. Except for
a brief backup in July, the bond market posted positive returns in every month
and its third best annual return ever on a calendar year basis. The market hit
a "sweet spot", benefiting from slower economic growth, subdued inflation and,
finally, the prospect of a balanced federal budget. For the year, 2 to 5-year
Treasury yields fell about 2.5%, while 10 to 30-year Treasury yields fell
about 2.0%. The year started with yields ranging between 5.5% for 3-month
Treasury bills and nearly 8.0% for 30-year Treasury bonds and closed the year
with all maturities yielding "5 something". Returns from overseas were
impressive but, in general, ranged between 13.5% and 17.5%.
For most of the year our strategy was to stay fully invested with a
duration either the same as or slightly longer than that of the Aggregate
Index. While we did not fully participate in the early stage of the rally, our
neutral to slightly bullish posture during the second half of 1995 enabled
your Fund to benefit from falling yields. Corporate bonds performed well,
largely due to corporate America's prospects for increased revenue growth, but
also due to the longer duration of the corporate market. We remained
underweighted in long corporates and overweighted in short corporates all
year. This strategy added value as most corporate spread narrowing occurred in
short maturities. We also concentrated on bank and finance paper which was the
best performing sector of the corporate market. Mortgage-backed securities had
a volatile year with strong relative performance in the first and third
quarters and weak relative performance in the second and fourth quarters. For
the year, mortgages underperformed on an absolute basis, but slightly
outperformed Treasuries on a duration-adjusted basis. Our mortgage strategies
also added value and were active as we shifted from an underweighting at the
beginning of the year when mortgages appeared to offer little value, to an
overweighting by year-end as the value of mortgages increased with higher
levels of volatility and lower levels of rates. We also correctly emphasized
seasoned production throughout the year.
<PAGE>
Your Fund participated fully in the rally throughout the last three
quarters of 1995 and held its ground during the first quarter of 1996. For the
fiscal year ended March 31, 1996, the Fund's total return (net of expenses)
was 11.23%, as compared to 10.93% for the Lehman Government/Corporate Index
and 10.78% for the Lehman Aggregate Index. We are particularly gratified that
the Fund, prior to expenses, has been able to outperform the market over the
past two years which encompassed one of the worst and one of the best years in
bond market history.
Looking Ahead
The market remains vulnerable to further signs of economic strength. It
is also vulnerable to higher grain, oil and other commodity prices. While we
believe the chance of further cuts in rates by the Federal Reserve is becoming
more and more remote for this year, we also believe that it is too soon in the
year to anticipate any rate increases. We are not yet convinced that the
economic strength will carry forward much beyond the Spring, but we certainly
respect the fact that the trend of the market remains negative. Rate cuts in
Europe are still a strong possibility as governments continue to downsize in
accordance with unification objectives. With Japan's recovery tentative and
Europe still sluggish, it is too early to look to the export sector as a
source of growth.
Although the economic climate remains uncertain, we believe that
long-term interest rates will trade in a range of 6.5% to 7.5% for the rest of
the year. There may be short-term opportunities to benefit from rates as they
fluctuate within this range, but we believe that the greater source of
outperformance for this year will come from sector strategies emphasizing
yield. Our corporate exposure is influenced by the late phase of the current
economic cycle and is limited to short maturities where credit risk is
minimal. This strategy allows us to match the yield of the corporate component
of the Aggregate Index, with less price volatility. Our overweighting in
mortgages is still appropriate since the mortgage market benefits from
stabilizing interest rates. We expect that our emphasis will shift away from
seasoned paper which has already performed so well in favor of more recently
issued passthroughs. As Lehman begins a tiering pricing in its mortgage index
to recognize each separate year of mortgage issuance, we believe some of the
inefficiencies and opportunities previously associated with "seasoning" may be
eliminated. Closed-end fund discounts still have room to narrow, which is why
we anticipate maintaining our commitment to the area. Term trusts, with their
known liquidation dates, are particularly attractive. Based on yields of close
to 7.5% from both mortgages and closed-end funds, we believe the risk/reward
profile of the portfolio is clearly in favor of reward and should continue to
prove effective going forward.
For a comparison of the Fund's performance from inception versus the
Lehman Government/Corporate Index, the Lehman Aggregate Index and the Consumer
Price Index, please refer to the chart below:
<PAGE>
A representation of the graphic material contained in THE JAMESTOWN BOND
FUND Annual Report is set forth below.
Comparison of the Change in Value of a $10,000 Investment in the
Jamestown Bond Fund, the Lehman Government/Corporate Index, the Lehman
Aggregate Index and the Consumer Price Index
LEHMAN BROTHERS GOVERNMENT THE JAMESTOWN BOND FUND:
CORPORATE INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
12/31/90 10,000 12/31/90 10,000
03/31/91 2.52% 10,252 03/31/91 1.63% 10,163
06/30/91 1.78% 10,434 06/30/91 1.39% 10,305
09/30/91 4.77% 10,932 09/30/91 5.02% 10,822
12/31/91 5.33% 11,515 12/31/91 5.18% 11,382
03/31/92 -1.50% 11,342 03/31/92 -1.49% 11,213
06/30/92 4.06% 11,803 06/30/92 3.35% 11,588
09/30/92 4.88% 12,379 09/30/92 3.83% 12,033
12/31/92 0.07% 12,387 12/31/92 0.27% 12,065
03/31/93 4.66% 12,965 03/31/93 3.81% 12,524
06/30/93 3.01% 13,355 06/30/93 2.26% 12,807
09/30/93 3.32% 13,798 09/30/93 2.22% 13,091
12/31/93 -0.29% 13,758 12/31/93 0.25% 13,124
03/31/94 -3.15% 13,325 03/31/94 -2.55% 12,789
06/30/94 -1.24% 13,160 06/30/94 -1.04% 12,656
09/30/94 0.50% 13,225 09/30/94 0.51% 12,719
12/31/94 0.37% 13,274 12/31/94 0.26% 12,752
03/31/95 4.98% 13,935 03/31/95 4.87% 13,372
06/30/95 6.49% 14,840 06/30/95 5.87% 14,157
09/30/95 1.91% 15,123 09/30/95 2.45% 14,505
12/31/95 4.66% 15,828 12/31/95 4.49% 15,156
03/31/96 -2.34% 15,458 03/31/96 -1.86% 14,874
<PAGE>
LEHMAN BROTHERS AGGREGATE INDEX: CONSUMER PRICE INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
12/31/90 10,000 12/31/90 10,000
03/31/91 2.81% 10,281 03/31/91 0.90% 10,090
06/30/91 1.62% 10,448 06/30/91 0.40% 10,130
09/30/91 5.68% 11,041 09/30/91 0.60% 10,191
12/31/91 5.07% 11,601 12/31/91 0.90% 10,283
03/31/92 -1.27% 11,453 03/31/92 0.70% 10,355
06/30/92 4.04% 11,916 06/30/92 0.80% 10,438
09/30/92 4.30% 12,429 09/30/92 0.70% 10,511
12/31/92 0.26% 12,461 12/31/92 0.80% 10,595
03/31/93 4.14% 12,977 03/31/93 0.90% 10,690
06/30/93 2.66% 13,322 06/30/93 0.60% 10,754
09/30/93 2.61% 13,670 09/30/93 0.40% 10,797
12/31/93 0.05% 13,676 12/31/93 0.70% 10,873
03/31/94 -2.87% 13,284 03/31/94 0.50% 10,927
06/30/94 -1.03% 13,147 06/30/94 0.60% 10,993
09/30/94 0.61% 13,227 09/30/94 0.90% 11,092
12/31/94 0.38% 13,278 12/31/94 0.60% 11,158
03/31/95 5.04% 13,947 03/31/95 0.80% 11,248
06/30/95 6.09% 14,796 06/30/95 0.90% 11,349
09/30/95 1.96% 15,086 09/30/95 0.40% 11,395
12/31/95 4.26% 15,729 12/31/95 0.50% 11,452
03/31/96 -1.77% 15,450 03/31/96 0.80% 11,544
Past performance is not predictive of future performance.
The Jamestown Bond Fund - Average Annual Total Returns
1 Year ........................11.23%
5 Years ....................... 7.92%
Since Inception*............... 7.79%
*Initial public offering of shares was December 13, 1990.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 73,410,257
===============
At value (Note 1) $ 73,305,618
Investments in repurchase agreements (Note 1) 2,750,854
Receivable for securities sold 3,225,020
Interest receivable 714,438
Dividends receivable 2,991
Other assets 5,748
---------------
TOTAL ASSETS 80,004,669
---------------
LIABILITIES
Payable for securities purchased 4,821,836
Dividends payable 369,855
Accrued advisory fees (Note 3) 25,745
Accrued administration fees (Note 3) 5,100
Other accrued expenses 8,014
---------------
TOTAL LIABILITIES 5,230,550
---------------
NET ASSETS $ 74,774,119
===============
Net assets consist of:
Capital shares $ 75,894,568
Accumulated net realized losses from security transactions (1,137,569)
Undistributed net investment income 121,759
Net unrealized depreciation on investments (104,639)
---------------
Net assets $ 74,774,119
===============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 7,195,530
===============
Net asset value, offering price and redemption price per share (Note 1) $ 10.39
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1996
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest $ 5,219,265
Dividends 521,632
--------------
TOTAL INVESTMENT INCOME 5,740,897
--------------
EXPENSES
Investment advisory fees (Note 3) 305,247
Administrative fees (Note 3) 61,029
Custodian fees 40,002
Professional fees 15,279
Pricing costs 8,037
Trustees' fees and expenses 5,573
Registration fees 5,198
Postage and supplies 1,060
Printing of shareholder reports 887
Other expenses 11,528
--------------
TOTAL EXPENSES 453,840
Expenses reimbursed through a directed brokerage arrangement (Note 4) (22,423)
--------------
NET EXPENSES 431,417
--------------
NET INVESTMENT INCOME 5,309,480
--------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions 3,596,533
Net change in unrealized appreciation/depreciation of investments (949,624)
--------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 2,646,909
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,956,389
==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1996 1995
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 5,309,480 $ 4,070,955
Net realized gains (losses) from security transactions 3,596,533 (3,791,347)
Net change in unrealized appreciation/depreciation
on investments (949,624) 2,701,756
--------------- ---------------
Net increase in net assets from operations 7,956,389 2,981,364
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (5,212,243) (4,060,588)
--------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 16,330,832 10,057,911
Net asset value of shares issued in reinvestment
of distributions to shareholders 4,066,804 3,496,446
Payments for shares redeemed (20,396,366) (4,475,836)
--------------- ---------------
Net increase in net assets from capital share transactions 1,270 9,078,521
--------------- ---------------
TOTAL INCREASE IN NET ASSETS 2,745,416 7,999,297
NET ASSETS:
Beginning of year 72,028,703 64,029,406
--------------- ---------------
End of year - (including undistributed net investment
income of $121,759 and $24,522, respectively) $ 74,774,119 $ 72,028,703
=============== ===============
(a) Summary of capital share activity follows:
Shares sold 1,534,918 1,014,124
Shares issued in reinvestment of distributions to shareholders 386,962 355,655
Shares redeemed (1,951,756) (454,880)
--------------- ---------------
Net increase (decrease) in shares outstanding (29,876) 914,899
Shares outstanding, beginning of year 7,225,406 6,310,507
--------------- ---------------
Shares outstanding, end of year 7,195,530 7,225,406
=============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<CAPTION>
Years Ended March 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $9.97 $10.15 $10.82 $10.42 $9.97
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.70 0.62 0.55 0.64 0.54
Net realized and unrealized gains (losses) on investments 0.41 (0.18) (0.30) 0.55 0.48
------- ------- ------- ------- -------
Total from investment operations 1.11 0.44 0.25 1.19 1.02
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.69) (0.62) (0.55) (0.64) (0.54)
Distributions from net realized gains -- -- (0.19) (0.15) (0.03)
Distributions in excess of net realized gains -- -- (0.18) -- --
------- ------- ------- ------- -------
Total distributions (0.69) (0.62) (0.92) (0.79) (0.57)
------- ------- ------- ------- -------
Net asset value at end of year $10.39 $9.97 $10.15 $10.82 $10.42
======= ======= ======= ======= =======
Total return 11.23% 4.56% 2.12% 11.69% 10.33%
======= ======= ======= ======= =======
Net assets at end of year (000's) $74,774 $72,029 $64,029 $55,718 $29,727
======= ======= ======= ======= =======
Ratio of expenses to average net assets (a) 0.56% 0.53% 0.60% 0.59% 0.60%
Ratio of net investment income to average net assets 6.54% 6.28% 5.03% 6.09% 6.67%
Portfolio turnover rate 268% 381% 381% 454% 484%
<FN>
(a)For the year ended March 31, 1996, the ratio of expenses to average
net assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement (Note 4). For the year
ended March 31, 1995, the ratio was determined based on net expenses after
expense reimbursements through the directed brokerage arrangement. Absent such
expense reimbursements, the ratio of expenses to average net assets would have
been 0.57% for the year ended March 31, 1995. Absent investment advisory fees
waived by the Adviser, the ratio of expenses to average net assets would have
been 0.80% for the year ended March 31, 1992.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
Par Value Value
<S> <C> <C>
U.S. TREASURY AND AGENCY OBLIGATIONS - 24.4%
U.S. Treasury Bonds - 13.0%
$ 3,135,000 8.50%, due 02/15/2020 $ 3,723,784
5,800,000 7.125%, due 02/15/2023 5,980,322
---------------
9,704,106
---------------
U.S. Treasury Notes - 11.4%
2,700,000 5.875%, due 03/31/1999 2,694,924
3,425,000 7.125%, due 02/29/2000 3,550,218
2,190,000 7.25%, due 08/15/2004 2,310,450
---------------
8,555,592
---------------
Total U.S. Treasury and Agency Obligations
(Cost $18,191,576) $ 18,259,698
---------------
MORTGAGE-BACKED SECURITIES - 40.0%
Federal Home Loan Mortgage Corporation - 13.4%
$ 1,398,850 Pool #C00248, 6.50%, due 07/01/2023 1,335,958
1,218,278 Pool #C00290, 6.50%, due 01/01/2024 1,158,546
1,228,218 Pool #C80091, 6.50%, due 01/01/2024 1,167,998
4,680,000 Pool #D69139, 6.50%, due 03/01/2026 4,451,850
2,025,000 Gold TBA, 6.50%, due 04/15/2026 1,926,281
---------------
10,040,633
---------------
Federal National Mortgage Association - 8.6%
857 Series #92-61F, 5.869%, floating rate, due 05/25/2001 858
950,000 Series #92-22HC, 7.00%, due 03/25/2007 955,339
1,020,000 Pool #340687, 6.00%, due 03/01/2011 977,537
750,000 TBA, 6.00%, due 04/01/2011 718,359
1,025,000 Series #89-76E, 9.00%, due 11/25/2019 1,098,985
625,000 Series #90-103K, 7.50%, due 09/25/2020 629,881
875,000 Series #91-10J, 7.95%, due 02/25/2021 880,189
585,000 Series #X-19B-EC, 6.50%, due 03/25/2021 533,264
555,306 Pool #224229, 9.50%, due 08/01/2021 597,392
---------------
6,391,804
---------------
Government National Mortgage Association - 13.3%
1,482,705 Pool #780215, 8.50%, due 10/15/2017 1,572,571
528,912 Pool #327273, 7.50%, due 08/15/2022 530,250
486,615 Pool #325612, 7.50%, due 10/15/2022 487,846
510,409 Pool #333658, 7.50%, due 01/15/2023 512,333
1,271,565 Pool #349314, 7.50%, due 02/15/2023 1,274,782
1,070,269 Pool #342526, 7.50%, due 02/15/2023 1,072,977
135,343 Pool #352166, 7.50%, due 06/15/2023 135,685
948,636 Pool #352143, 7.50%, due 07/15/2023 951,036
958,255 Pool #372822, 7.50%, due 11/15/2023 956,904
1,255,728 Pool #359451, 7.50%, due 12/15/2023 1,258,905
501,376 Pool #354831, 7.50%, due 06/15/2024 500,669
725,000 TBA, 6.00%, adjustable rate, due 04/15/2026 723,188
---------------
9,977,146
---------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
Other Mortgage-Backed Securities - 4.7%
Lehman Brothers Mortgage Trust #91-2-A1,
$ 1,102,731 8.00%, due 03/20/1999 $ 1,125,476
Resolution Trust Corporation #95-1A-A-2D,
1,295,000 7.50%, due 10/25/2028 1,284,478
Vendee Mortgage Trust #95-3-1J,
485,000 7.25%, due 10/15/2008 471,056
Vendee Mortgage Trust #96-1-1K,
635,000 6.75%, due 11/15/2012 600,075
---------------
3,481,085
---------------
Total Mortgage-Backed Securities (Cost $30,034,938) $ 29,890,668
---------------
ASSET-BACKED SECURITIES - 5.1%
CIT RV Trust #95-B, class A,
$ 472,724 6.50%, due 04/15/2011 $ 475,087
CIT RV Trust #96-A, class A,
1,132,538 5.40%, due 12/15/2011 1,107,056
Contimortgage Home Equity Loan Trust #95-4-A3,
1,495,000 6.20%, due 10/15/2010 1,491,412
Fleetwood Credit Corporation Grantor Trust #94-A-A,
798,647 4.70%, due 07/15/2009 769,695
---------------
Total Asset-Backed Securities (Cost $3,881,800) $ 3,843,250
---------------
CORPORATE BONDS - 18.3%
Associates Corporation,
$ 700,000 5.75%, due 10/15/2003 $ 653,912
Baltimore Gas & Electric Corporation,
1,000,000 8.90%, due 07/01/1998 1,055,600
Beneficial Corporation Medium Term Notes,
900,000 8.27%, due 11/30/1998 941,787
Ford Motor Credit Corporation,
1,150,000 5.625%, due 01/15/1999 1,125,643
General Motors Acceptance Corporation Medium Term Notes,
1,725,000 6.375%, due 09/01/1998 1,730,399
Golden West Financial Corporation,
590,000 8.625%, due 08/30/1998 619,512
International Lease Finance Medium Term Notes,
1,315,000 6.42%, due 09/11/2000 1,302,771
Key Corporation Medium Term Notes,
835,000 5.52%, due 03/25/1997 831,927
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
CORPORATE BONDS - Continued
Paccar Financial Corporation Medium Term Notes,
$ 785,000 8.09%, due 11/14/1997 $ 811,046
Public Service Electric and Gas Corporation,
1,500,000 7.125%, due 11/01/1997 1,518,615
Sears Roebuck & Company,
1,300,000 6.18%, due 12/01/2000 1,276,041
TCI Communications,
1,000,000 6.82%, floating rate, due 09/15/2010 1,000,510
Virginia Electric & Power Corporation,
825,000 7.25%, due 03/01/1997 835,189
---------------
Total Corporate Bonds (Cost $13,464,508) $ 13,702,952
---------------
<PAGE>
<CAPTION>
Shares
<S> <C> <C>
CLOSED-END MUTUAL FUNDS - 10.2%
134,200 Blackrock 2001 Term Trust, Inc. $ 1,006,500
1,500 Blackrock Broad Investment Grade 2009 Term Trust 16,125
53,900 Blackrock Investment Quality Term Trust, Inc. 404,250
70,300 Blackrock Strategic Term Trust, Inc. 527,250
7,400 Excelsior Income Shares, Inc. 115,625
88,600 Hyperion 1999 Term Trust 575,900
113,900 Hyperion 2002 Term Trust 797,300
51,300 Hyperion 2005 Investment Grade Opportunity Term Trust, Inc. 384,750
26,400 Income Opportunities Fund, Inc. - 1999 217,800
24,200 Kemper Intermediate Government Trust 175,450
14,700 Liberty Term Trust, Inc. - 1999 108,413
158,900 MFS Government Markets Income Trust 993,125
193,400 MFS Intermediate Income Trust 1,257,100
51,000 Putnam Intermediate Government Trust 382,500
40,300 TCW/DW Term Trust 2000 297,212
27,000 TCW/DW Term Trust 2003 195,750
22,000 Templeton Global Income Fund, Inc. 154,000
---------------
Total Closed-End Funds (Cost $7,837,435) $ 7,609,050
---------------
Total Investments at Value (Cost $73,410,257) - 98.0% $ 73,305,618
---------------
<PAGE>
<CAPTION>
Face
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENT (a) - 3.7%
Lehman Brothers,
$ 2,750,854 5.38%, dated 03/31/1996, due 04/01/1996
repurchase proceeds $2,752,087 (Cost $2,750,854) $ 2,750,854
---------------
Total Investments and Repurchase Agreements
at Value - 101.7% $ 76,056,472
Liabilities in Excess of Other Assets - (1.7)% (1,282,353)
---------------
Net Assets - 100.0% $ 74,774,119
===============
<FN>
(a) Joint repurchase agreement is fully collateralized by $15,840,000
U.S. Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest in
the collateral at March 31, 1996 was $2,817,418.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Significant Accounting Policies
The Jamestown Bond Fund (the Fund) is a no-load, diversified, open-end
series of the Williamsburg Investment Trust (the Trust), a registered
management investment company under the Investment Company Act of 1940, as
amended. The Trust was organized as a Massachusetts business trust on July 18,
1988. The Fund began operations on December 13, 1990.
The Fund's investment objective is to maximize total return, consisting
of current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of
investment grade fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of
the close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national exchange are
valued based upon the closing price on the principal exchange where the
security is traded. It is expected that fixed income securities of the Fund
will ordinarily be traded on the over-the-counter market. When market
quotations are not readily available, securities may be valued on the basis of
prices provided by an independent pricing service. If a pricing service cannot
provide a valuation, securities will be valued in good faith at fair market
value using methods consistent with those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market. At the time the
Fund enters into the joint repurchase agreement, the seller agrees that the
value of the underlying securities, including accrued interest, will at all
times be equal to or exceed the face amount of the repurchase agreement. In
addition, the Fund actively monitors and seeks additional collateral, as
needed.
Share valuation -- The net asset value per share of the Fund is
calculated daily by dividing the total value of the Fund's assets, less
liabilities, by the number of shares outstanding. The offering price and
redemption price per share of the Fund is equal to the net asset value per
share.
Investment income -- Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date. Discounts and premiums on
securities purchased are amortized in accordance with income tax regulations
which approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net
realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at
least once each year. Income distributions and capital gain distributions are
determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Fund occasionally
trades securities on a "to-be-announced" (TBA) basis. In a TBA transaction,
the Fund has committed to purchase securities for which all specific
information is not yet known at the time of the trade, particularly the face
amount in mortgage-backed securities transactions. Securities purchased on a
TBA basis are not settled until they are delivered to the Fund, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
The following information is based upon the federal income tax cost of
portfolio investments of the Fund as of March 31, 1996:
Gross unrealized appreciation ...................$ 827,951
Gross unrealized depreciation..................... (1,023,553)
--------------
Net unrealized depreciation.......................$ (195,602)
==============
As of March 31, 1996, the tax cost basis of investments of the Fund was
$73,501,220. As of March 31, 1996, the Fund had capital loss carryforwards for
federal income tax purposes of $1,046,606 which expire on March 31, 2003.
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains prior to distributing such gains to shareholders.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $208,417,443 and $204,599,441, respectively.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall,
Inc. (the Adviser) under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .375% on its
average daily net assets.
States in which shares of the Fund are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse the Fund
for expenses which exceed the most restrictive applicable expense limitation
of any state. No waiver or reimbursement was required from the Adviser for the
year ended March 31, 1996.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust
and MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Fund. For these services, MGF receives a monthly fee from the Fund at an
annual rate of .075% on its average daily net assets up to $200 million and
.05% on such net assets in excess of $200 million, subject to a $2,000 minimum
monthly fee. In addition, the Fund pays out-of-pocket expenses including, but
not limited to, pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
4. Directed Brokerage Arrangement
In order to reduce the total operating expenses of the Fund, a portion of
the Fund's custodian fees have been paid through an arrangement with a
third-party broker-dealer who is compensated through security trades. Expenses
reimbursed through the directed brokerage arrangement totaled $22,423 for the
year ended March 31, 1996.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Bond Fund (a series of The Williamsburg Investment Trust),
including the portfolio of investments, as of March 31, 1996, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Bond Fund as of March 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
The Jamestown Short Term Bond Fund
No Load Mutual Fund
Annual Report
March 31, 1996
Investment Adviser Administrator
Lowe, Brockenbrough & Tattersall, Inc. MGF Service Corp.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45202-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1996
Performance of The Jamestown Short Term Bond Fund
First Quarter 1996
What a difference a few months can make! The clearly bullish sentiment
that investors had at the end of 1995 was quickly reversed during the first
quarter of this year. While the 3-month Treasury bill yield remained fairly
stable, 2-year and longer rates rose between 60 and 75 basis points in
reaction to an economy that caught investors off guard with its strength. As
economic growth rates were being revised up, expectations for further rate
cuts from the Federal Reserve were being revised down. Interest rates also
reflected disappointment with the prospects for a balanced budget and a
restructured tax system. Except for Italy and France, where rates fell
slightly, other G-7 countries followed our lead and experienced higher rates
for the quarter. Central Bankers did little to reverse the trend.
Our maturity strategy had a negative impact on performance as we remained
slightly biased toward falling interest rates, but our sector strategies gave
performance a boost, enabling your Fund to perform in line with its
comparative index, the Merrill Lynch 1-3 Year Treasury Index. In assessing the
economy, we underestimated the improvement in employment and the stimulative
effect that last year's low rates had on spending. The strength appeared to
transcend even the most obvious drags of unusually inclement weather, the
government shutdown and the General Motors strike. As for sectors, our
performance benefited from an overweighting in mortgages. Despite the
increased volatility in interest rates during the quarter, mortgages performed
well as higher rates helped to dispel prepayment fears. Our holdings in
seasoned mortgages performed even stronger than the mortgage market in
general.
Fiscal Year Ended March 31, 1996
In 1995, the bond market experienced one of the best years in its history
on the heels of one of its worst. The stage was set for 1995's rally by 1994's
monetary tightening, although few investors foresaw it at the time. Except for
a brief backup in July, the bond market posted positive returns in every month
and its third best annual return ever on a calendar year basis. The market hit
a "sweet spot", benefiting from slower economic growth, subdued inflation and,
finally, the prospect of a balanced federal budget. For the year, 3-month
Treasury bill yields fell 0.5%, 2 to 5-year Treasury yields fell about 2.5%,
and 10 to 30-year Treasury yields fell about 2.0%. The year started with
yields ranging between 5.5% for 3-month Treasury bills and nearly 8.0% for
30-year Treasury bonds and closed the year with all maturities yielding "5
something". Returns from overseas were impressive but, in general, ranged
between 13.5% and 17.5%.
Your Fund participated fully in the rally throughout the last three
quarters of 1995 and held its ground during the first quarter of 1996. For the
fiscal year ended March 31, 1996, the Fund's total return (net of expenses)
was 7.38%, as compared to 7.76% for the Merrill Lynch 1-3 Year Treasury Index
and 5.75% for the 90-Day Treasury Bill Index. We are particularly gratified
that the Fund, prior to expenses, has been able to outperform the market over
the past two years which encompassed one of the worst and one of the best
years in bond market history.
Looking Ahead
The market remains vulnerable to further signs of economic strength. It
is also vulnerable to higher grain, oil and other commodity prices. While we
believe the chance of further cuts in rates by the Federal Reserve is becoming
more and more remote for this year, we also believe that it is too soon in the
year to anticipate any rate increases. We are not yet convinced that the
economic strength will carry forward much beyond the Spring, but we certainly
respect the fact that the trend of the market remains negative. Rate cuts in
Europe are still a strong possibility as governments continue to downsize in
accordance with unification objectives. With Japan's recovery tentative and
Europe still sluggish, it is too early to look to the export sector as a
source of growth.
<PAGE>
Although the economic climate remains uncertain, we believe that
long-term interest rates will trade in a range of 6.5% to 7.5% for the rest of
the year. There may be short-term opportunities to benefit from rates as they
fluctuate within this range, but we believe that the greater source of
outperformance for this year will come from sector strategies emphasizing
yield. Our corporate exposure is influenced by the late phase of the current
economic cycle and is limited to short maturities where credit risk is
minimal. This strategy allows us to match the yield of the corporate component
of the Aggregate Index, with less price volatility. Our overweighting in
mortgages is still appropriate since the mortgage market benefits from
stabilizing interest rates. We expect that our emphasis will shift away from
seasoned paper which has already performed so well in favor of more recently
issued passthroughs. As Lehman begins a tiering pricing in its mortgage index
to recognize each separate year of mortgage issuance, we believe some of the
inefficiencies and opportunities previously associated with "seasoning" may be
eliminated.
For a comparison of the Fund's performance from inception versus the
Merrill Lynch 1-3 Year Treasury Index, the 90-Day Treasury Bill Index and the
Consumer Price Index, please refer to the chart below:
A representation of the graphic material contained in THE JAMESTOWN SHORT
TERM BOND FUND Annual Report is set forth below.
Comparison of the Change in Value of a $10,000 Investment in the
Jamestown Short Term Bond Fund, the Merrill Lynch 1-3 Year Treasury Index, the
90-Day Treasury Bill Index and the Consumer Price Index
MERRILL LYNCH 1-3 YEAR TREASURY INDEX: THE JAMESTOWN SHORT TERM BOND FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
01/31/92 10,000 01/31/92 10,000
03/31/92 0.31% 10,031 03/31/92 0.25% 10,025
06/30/92 2.88% 10,319 06/30/92 2.03% 10,229
09/30/92 2.98% 10,627 09/30/92 2.14% 10,448
12/31/92 0.18% 10,646 12/31/92 0.15% 10,463
03/31/93 2.21% 10,882 03/31/93 1.95% 10,667
06/30/93 1.08% 10,999 06/30/93 1.27% 10,803
09/30/93 1.44% 11,157 09/30/93 1.34% 10,947
12/31/93 0.59% 11,222 12/31/93 0.61% 11,015
03/31/94 -0.50% 11,166 03/31/94 -0.48% 10,962
06/30/94 0.08% 11,176 06/30/94 0.23% 10,987
09/30/94 0.99% 11,286 09/30/94 0.93% 11,090
12/31/94 0.00% 11,286 12/31/94 -0.05% 11,084
03/31/95 3.36% 11,665 03/31/95 3.38% 11,458
06/30/95 3.21% 12,039 06/30/95 3.01% 11,803
09/30/95 1.50% 12,220 09/30/95 1.33% 11,960
12/31/95 2.52% 12,528 12/31/95 2.62% 12,273
03/31/96 0.33% 12,570 03/31/96 0.25% 12,304
<PAGE>
CONSUMER PRICE INDEX: 90-DAY TREASURY BILL INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
01/31/92 10,000 01/31/92 10,000
03/31/92 0.40% 10,040 03/31/92 0.64% 10,064
06/30/92 0.80% 10,120 06/30/92 1.10% 10,174
09/30/92 0.70% 10,191 09/30/92 1.01% 10,277
12/31/92 0.80% 10,273 12/31/92 0.77% 10,357
03/31/93 0.90% 10,365 03/31/93 0.78% 10,437
06/30/93 0.60% 10,427 06/30/93 0.77% 10,518
09/30/93 0.40% 10,469 09/30/93 0.82% 10,604
12/31/93 0.70% 10,542 12/31/93 0.78% 10,687
03/31/94 0.50% 10,595 03/31/94 0.77% 10,768
06/30/94 0.60% 10,659 06/30/94 0.96% 10,872
09/30/94 0.90% 10,755 09/30/94 1.08% 10,989
12/31/94 0.60% 10,819 12/31/94 1.33% 11,135
03/31/95 0.80% 10,906 03/31/95 1.50% 11,302
06/30/95 0.90% 11,004 06/30/95 1.50% 11,472
09/30/95 0.40% 11,048 09/30/95 1.42% 11,635
12/31/95 0.50% 11,104 12/31/95 1.47% 11,806
03/31/96 0.80% 11,193 03/31/96 1.23% 11,951
Past performance is not predictive of future performance.
The Jamestown Short Term Bond Fund - Average Annual Total Returns
1 Year ........................ 7.38%
Since Inception*............... 5.05%
*Initial public offering of shares was January 21, 1992.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 9,158,952
================
At value (Note 1) $ 9,111,381
Investments in repurchase agreements (Note 1) 144,684
Cash 1,232
Receivable for securities sold 463,777
Interest receivable 117,437
Other assets 968
----------------
TOTAL ASSETS 9,839,479
----------------
LIABILITIES
Payable for securities purchased 403,185
Dividends payable 2,292
Accrued advisory fees (Note 3) 3,786
Accrued administration fees (Note 3) 2,000
Other accrued expenses 2,460
----------------
TOTAL LIABILITIES 413,723
----------------
NET ASSETS $ 9,425,756
================
Net assets consist of:
Capital shares $ 9,914,073
Accumulated net realized losses from security transactions (444,405)
Undistributed net investment income 3,659
Net unrealized depreciation on investments (47,571)
----------------
Net assets $ 9,425,756
================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 969,934
================
Net asset value, offering price and redemption price per share (Note 1) $ 9.72
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1996
<S> <C>
INVESTMENT INCOME
Interest $ 853,612
----------------
EXPENSES
Investment advisory fees (Note 3) 47,421
Administrative fees (Note 3) 24,000
Professional fees 11,779
Custodian fees 8,213
Trustees' fees and expenses 5,572
Pricing costs 3,775
Registration fees 2,585
Postage and supplies 1,004
Printing of shareholder reports 741
Other expenses 1,772
----------------
TOTAL EXPENSES 106,862
Fees waived by the Adviser (Note 3) (43,635)
----------------
NET EXPENSES 63,227
----------------
NET INVESTMENT INCOME 790,385
----------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions 192,225
Net change in unrealized appreciation/depreciation on investments (10,516)
----------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 181,709
----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 972,094
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1996 1995
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 790,385 $ 852,780
Net realized gains (losses) from security transactions 192,225 (384,848)
Net change in unrealized appreciation/depreciation
on investments (10,516) 136,445
---------------- ---------------
Net increase in net assets from operations 972,094 604,377
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (793,655) (852,243)
From net realized gains from security transactions --- (4,059)
---------------- ---------------
Decrease in net assets from distributions to shareholders (793,655) (856,302)
---------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 2,046,872 1,529,815
Net asset value of shares issued in reinvestment
of distributions to shareholders 563,410 565,090
Payments for shares redeemed (7,485,406) (6,435,813)
---------------- ---------------
Net decrease in net assets from capital share transactions (4,875,124) (4,340,908)
---------------- ---------------
TOTAL DECREASE IN NET ASSETS (4,696,685) (4,592,833)
NET ASSETS:
Beginning of year 14,122,441 18,715,274
---------------- ---------------
End of year - (including undistributed net investment
income of $3,659 and $6,929, respectively) $ 9,425,756 $ 14,122,441
================ ===============
(a)Summary of capital share activity follows:
Shares sold 208,453 157,550
Shares issued in reinvestment of distributions to shareholders 57,652 58,839
Shares redeemed (761,014) (657,850)
---------------- ---------------
Net decrease in shares outstanding (494,909) (441,461)
Shares outstanding, beginning of year 1,464,843 1,906,304
---------------- ---------------
Shares outstanding, end of year 969,934 1,464,843
================ ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<CAPTION>
Period
Years Ended March 31, Ended
March 31,
1996 1995 1994 1993 1992 (a)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $9.64 $9.82 $10.07 $9.93 $10.00
------ ------- ------- ------- ------
Income from investment operations:
Net investment income 0.62 0.60 0.51 0.50 0.09
Net realized and unrealized gains (losses)
on investments 0.08 (0.17) (0.23) 0.13 (0.07)
------ ------- ------- ------- ------
Total from investment operations 0.70 0.43 0.28 0.63 0.02
------ ------- ------- ------- ------
Less distributions:
Dividends from net investment income (0.62) (0.61) (0.51) (0.49) (0.09)
Distributions from net realized gains -- -- (0.02) -- --
------ ------- ------- ------- ------
Total distributions (0.62) (0.61) (0.53) (0.49) (0.09)
------ ------- ------- ------- ------
Net asset value at end of period $9.72 $9.64 $9.82 $10.07 $9.93
====== ======= ======= ======= ======
Total return 7.38% 4.53% 2.76% 6.40% 0.99%(c)
====== ======= ======= ======= ======
Net assets at end of period (000's) $9,426 $14,122 $18,715 $15,580 $5,320
====== ======= ======= ======= ======
Ratio of expenses to average net assets (b) 0.50% 0.50% 0.50% 0.50% 0.50%(c)
Ratio of net investment income to average net assets 6.27% 6.04% 5.22% 5.24% 4.86%(c)
Portfolio turnover rate 157% 144% 324% 289% 97%
<FN>
(a) Represents the period from the commencement of operations (January
21, 1992) through March 31, 1992.
(b) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 0.85%, 0.85%, 0.81%, 0.82% and
0.81% (c) for the periods ended March 31, 1996, 1995, 1994, 1993 and 1992,
respectively (Note 3).
(c) Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
Par Value Value
<S> <C> <C>
U.S. TREASURY NOTES - 35.2%
$ 200,000 5.125%, due 04/30/1998 $ 197,374
1,015,000 5.875%, due 03/31/1999 1,013,092
2,100,000 6.25%, due 08/31/2000 2,110,500
-----------------
Total U.S. Treasury Notes (Cost $3,341,675) $ 3,320,966
-----------------
MORTGAGE-BACKED SECURITIES - 20.5%
Federal Home Loan Mortgage Corporation - 2.4%
$ 225,331 Series #162-E, 7.00%, due 02/15/2020 $ 227,020
-----------------
Federal National Mortgage Association - 13.4%
225,000 Series #91-131E, 7.709%, due 10/25/1998 231,397
274,266 Pool #124029, 8.00%, due 12/01/2002 282,148
392,700 Pool #322830, 7.50%, due 11/01/2010 398,713
306,755 Pool #303346, 11.50%, due 02/01/2020 346,955
-----------------
1,259,213
-----------------
Other Mortgage-Backed Securities - 4.7%
Lehman Brothers Mortgage Trust #91-2-A1,
166,744 8.00%, due 03/20/1999 170,183
Resolution Trust Corporation #95-1-A2B,
275,000 7.50%, due 10/25/2028 276,375
-----------------
446,558
-----------------
Total Mortgage-Backed Securities (Cost $1,935,167) $ 1,932,791
-----------------
ASSET-BACKED SECURITIES - 2.7%
Chemical Financial Acceptance Corporation Grantor Trust #90-A,
$ 246,686 9.40%, due 03/15/1997 (Cost $249,962) $ 248,149
-----------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
CORPORATE BONDS - 38.3%
Bear Stearns Company,
$ 205,000 7.625%, due 09/15/1999 $ 211,216
Beneficial Corporation,
400,000 8.27%, due 11/30/1998 418,572
Ford Motor Credit Corporation,
350,000 7.50%, due 02/14/1997 355,152
40,000 8.00%, due 12/01/1997 41,171
Golden West Financial,
350,000 8.625%, due 08/30/1998 367,507
International Bank Reconstruction and Development,
265,000 5.10%, due 09/15/1999 255,956
Mellon Financial,
375,000 6.50%, due 12/01/1997 376,976
National City Corporation,
215,000 5.659%, floating rate, due 01/31/1997 215,370
Norwest Financial,
275,000 6.25%, due 02/15/1997 275,811
J.C. Penny & Company,
300,000 10.00%, due 10/15/1997 316,932
Ryder System, Inc.,
300,000 8.38%, due 12/08/1999 317,757
Virginia Electric & Power Company,
275,000 7.25%, due 03/01/1997 278,396
Xerox Corporation Medium Term Notes,
175,000 7.13%, due 04/30/1999 178,659
-----------------
Total Corporate Bonds (Cost $3,632,148) $ 3,609,475
-----------------
Total Investments at Value (Cost $9,158,952) - 96.7% $ 9,111,381
-----------------
<PAGE>
<CAPTION>
Face
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 1.5%
$ 144,684 Lehman Brothers, 5.38%, dated 03/29/1996, due 04/01/1996,
repurchase proceeds $144,749 (Cost $144,684) $ 144,684
-----------------
Total Investments and Repurchase Agreements
at Value - 98.2% $ 9,256,065
Other Assets in Excess of Liabilities - 1.8% 169,691
-----------------
Net Assets - 100.0% $ 9,425,756
=================
<FN>
(a) Joint repurchase agreement is fully collaterized by $15,840,000 U.S.
Treasury Note, 7.75%, due 03/31/1996. The aggregate market value of the
collateral at March 31, 1996 was $16,453,800. The Fund's pro-rata interest in
the collateral at March 31, 1996 was $148,185.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Significant Accounting Policies
The Jamestown Short Term Bond Fund (the Fund) is a no-load, diversified,
open-end series of the Williamsburg Investment Trust (the Trust), a registered
management investment company under the Investment Company Act of 1940, as
amended. The Trust was organized as a Massachusetts business trust on July 18,
1988. The Fund began operations on January 21, 1992.
The Fund's investment objective is to maximize total return, consisting
of current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of high
quality short-term fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of
the close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. Securities traded on a national exchange are
valued based upon the closing price on the principal exchange where the
security is traded. It is expected that securities of the Fund will ordinarily
be traded on the over-the-counter market. When market quotations are not
readily available, securities may be valued on the basis of prices provided by
an independent pricing service. If a pricing service cannot provide a
valuation, securities will be valued in good faith at fair market value using
methods consistent with those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost
which, together with accrued interest, approximates market. At the time the
Fund enters into the joint repurchase agreement, the seller agrees that the
value of the underlying securities, including accrued interest, will at all
times be equal to or exceed the face amount of the repurchase agreement. In
addition, the Fund actively monitors and seeks additional collateral, as
needed.
Share valuation -- The net asset value per share of the Fund is
calculated daily by dividing the total value of the Fund's assets, less
liabilities, by the number of shares outstanding. The offering price and
redemption price per share of the Fund is equal to the net asset value per
share.
Investment income -- Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized in accordance with income tax
regulations which approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net
realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at
least once each year. Income distributions and capital gain distributions are
determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Fund occasionally
trades securities on a "to-be-announced" (TBA) basis. In a TBA transaction,
the Fund has committed to purchase securities for which all specific
information is not yet known at the time of the trade, particularly the face
amount in mortgage-backed securities transactions. Securities purchased on a
TBA basis are not settled until they are delivered to the Fund, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
The following information is based upon the federal income tax cost of
portfolio investments of the Fund as of March 31, 1996:
Gross unrealized appreciation................$ 45,579
Gross unrealized depreciation................. (94,496)
----------
Net unrealized depreciation..................$ (48,917)
==========
As of March 31, 1996, the tax cost basis of investments of the Fund was
$9,160,298 and the Fund had capital loss carryforwards for federal income tax
purposes of $443,059 which expire on March 31, 2003. These capital loss
carryforwards and may be utilized in future years to offset net realized
capital gains prior to distributing such gains to shareholders.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $17,899,670 and $21,645,446, respectively.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall,
Inc. (the Adviser) under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .375% on its
average daily net assets.
The Adviser currently intends to limit the total operating expenses of
the Fund to .50% of average net assets. Accordingly, the Adviser waived
$43,635 of its investment advisory fees for the year ended March 31, 1996.
Certain trustees and officers of the Trust are also officers of the
Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust
and MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Fund. For these services, MGF receives a monthly fee from the Fund at an
annual rate of .075% on its average daily net assets up to $200 million and
.05% on such net assets in excess of $200 million, subject to a $2,000 minimum
monthly fee. In addition, the Fund pays out-of-pocket expenses including, but
not limited to, pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Short Term Bond Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1996, and the
related statement of operations for the year then ended, and the statement of
changes in net assets for each of the two years in the period then ended and
the financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Short Term Bond Fund as of March 31, 1996, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended and the financial
highlights for the periods referred to above, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN
TAX EXEMPT VIRGINIA FUND
August 1, 1996
A series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES...................................... 2
INVESTMENT LIMITATIONS.................................................. 4
TRUSTEES AND OFFICERS................................................... 5
INVESTMENT ADVISOR...................................................... 9
ADMINISTRATOR........................................................... 10
OTHER SERVICES.......................................................... 10
BROKERAGE............................................................... 11
SPECIAL SHAREHOLDER SERVICES............................................ 11
PURCHASE OF SHARES...................................................... 13
REDEMPTION OF SHARES.................................................... 14
NET ASSET VALUE DETERMINATION........................................... 15
ALLOCATION OF TRUST EXPENSES............................................ 15
ADDITIONAL TAX INFORMATION.............................................. 16
CAPITAL SHARES AND VOTING............................................... 17
CALCULATION OF PERFORMANCE DATA......................................... 18
FINANCIAL STATEMENTS AND REPORTS........................................ 20
This Statement of Additional Information is not a prospectus and should only
be read in conjunction with the Prospectus of The Jamestown Tax Exempt
Virginia Fund (the "Fund") dated August 1, 1996. The Prospectus may be
obtained from the Fund, at the address and phone number shown above, at no
charge.
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<PAGE>
jamexpva.sai
July 29, 1996
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Fund are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time
the Fund purchases a security (normally a U.S. Treasury obligation), it also
resells it to the vendor (normally a member bank of the Federal Reserve System
or a registered Government Securities dealer) and must deliver the security
(and/or securities substituted for them under the repurchase agreement) to the
vendor on an agreed upon date in the future. Such securities, including any
securities so substituted, are referred to as the "Repurchase Securities." The
repurchase price exceeds the purchase price by an amount which reflects an
agreed upon market interest rate effective for the period of time during which
the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Fund's risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the
instrument purchased, decline in its value and loss of interest. These risks
are minimized when the Fund holds a perfected security interest in the
Repurchase Securities and can therefore sell the instrument promptly. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement. Repurchase
agreements are considered as loans collateralized by the Repurchase
Securities, such agreements being defined as "loans" under the Investment
Company Act of 1940 (the "1940 Act"). The return on such "collateral" may be
more or less than that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the "collateral" is
at all times as least equal to the value of the loan, including the accrued
interest earned thereon. All Repurchase Securities will be held by the Fund's
custodian either directly or through a securities depository.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market
instruments may include U.S. Government Securities or corporate
debt obligations (including those subject to repurchase
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<PAGE>
agreements) as described herein, provided that they mature in thirteen months
or less from the date of acquisition and are otherwise eligible for purchase
by the Fund. Money market instruments also may include Bankers' Acceptances
and Certificates of Deposit of domestic branches of U.S. banks, Commercial
Paper and Variable Amount Demand Master Notes ("Master Notes"). BANKERS'
ACCEPTANCES are time drafts drawn on and "accepted" by a bank, are the
customary means of effecting payment for merchandise sold in import-export
transactions and are a source of financing used extensively in international
trade. When a bank "accepts" such a time draft, it assumes liability for its
payment. When the Fund acquires a Bankers' Acceptance, the bank which
"accepted" the time draft is liable for payment of interest and principal when
due. The Bankers' Acceptance, therefore, carries the full faith and credit of
such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured interest-bearing
debt obligation of a bank. CDs acquired by the Fund would generally be in
amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured, short-term debt
obligation of a bank, corporation or other borrower. Commercial Paper maturity
generally ranges from two to 270 days and is usually sold on a discounted
basis rather than as an interest-bearing instrument. The Fund will invest in
Commercial Paper only if it is rated in the highest rating category by any
nationally recognized statistical rating organization ("NRSRO") or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Advisor's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are
redeemable upon demand of the holder and which permit the investment of
fluctuating amounts at varying rates of interest. Master Notes are acquired by
the Fund only through the Master Note program of the Fund's custodian, acting
as administrator thereof. The Advisor will monitor, on a continuous basis, the
earnings power, cash flow and other liquidity ratios of the issuer of a Master
Note held by the Fund.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase
securities on a when-issued basis or for settlement at a future date if the
Fund holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date,
the Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period
between the execution and settlement of the purchase or sale. As a result, the
exposure to the counterparty of the purchase or sale is increased. Although
the Fund would generally purchase securities on a forward commitment or
when-issued basis with the intention of taking
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<PAGE>
delivery, the Fund may sell such a security prior to the settlement date if
the Advisor felt such action was appropriate. In such a case the Fund could
incur a short-term gain or loss.
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<PAGE>
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Fund. A
"majority" for this purpose, means the lesser of (i) 67% of the Fund's
outstanding shares represented in person or by proxy at a meeting at which
more than 50% of its outstanding shares are represented, or (ii) more than 50%
of its outstanding shares.
Under these limitations, the Fund MAY NOT:
(1) Invest for the purpose of exercising control or management
of another issuer;
(2) Invest in interests in real estate, real estate mortgage loans, oil,
gas or other mineral exploration or development programs, except that
the Fund may invest in the securities of companies (other than those
which are not readily marketable) which own or deal in such things;
(3) Underwrite securities issued by others, except to the extent the Fund
may be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(4) Purchase securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of
transactions);
(5) Make short sales of securities or maintain a short position,
except short sales "against the box";
(6) Participate on a joint or joint and several basis in any
trading account in securities;
(7) Make loans of money or securities, except that the Fund may
invest in repurchase agreements;
(8) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors);
(9) Write, purchase or sell commodities, commodities contracts,
futures contracts or related options; or
(10) Invest in restricted securities.
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<PAGE>
Percentage restrictions stated as an investment policy or investment
limitation apply at the time of investment; if a later increase or decrease in
percentage beyond the specified limits results from a change in securities
values or total assets, it will not be considered a violation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 5, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg
Investment Trust (the "Trust"), their present position with the Trust or Fund,
age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 1996:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- --------------
<S> <C> <C>
Jack E. Brinson (age 64) President, Brinson Investment Co. $8,000
Trustee President, Brinson Chevrolet, Inc.
1105 Panola Street Tarboro, North Carolina
Tarboro, North Carolina 27886
Austin Brockenbrough III (age 59) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown International Equity Fund
The Jamestown Tax Exempt Virginia Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John T. Bruce (age 42) Principal None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 59) Physician $8,000
Trustee** Dermatology Associates of Richmond
5600 Grove Avenue Richmond, Virginia
Richmond, Virginia 23226
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<PAGE>
<CAPTION>
<S> <C> <C>
J. Finley Lee (age 56) Julian Price Professor Emeritus of $8,000
Trustee Business Administration
614 Croom Court University of North Carolina
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina
Richard Mitchell (age 47) Principal None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 57) President $8,000
Trustee University of Richmond
7000 River Road Richmond, Virginia
Richmond, Virginia 23229
Harris V. Morrissette (age 36) President $6,500
Trustee Marshall Biscuits
1500 S. Beltline Hwy. Mobile, Alabama
Mobile, Alabama 36693
Fred T. Tattersall (age 47) Managing Director None
Trustee** Lowe, Brockenbrough & Tattersall, Inc.
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Samuel B. Witt III (age 60) Attorney at Law $8,000
Trustee
2300 Clarendon Blvd.
Suite 407
Arlington, Virginia 22201
Charles M. Caravati III (age 30) Assistant Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
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<PAGE>
<CAPTION>
<S> <C> <C>
John M. Flippin (age 54) Principal
President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 43) Vice President
Vice President T. Leavell & Associates, Inc.
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
R. Gregory Porter, III (age 55) Principal
Vice President Flippin, Bruce & Porter, Inc.
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 34) Vice President, MGF Service Corp.
Treasurer and Leshner Financial, Inc.; Treasurer,
312 Walnut Street, 21st Floor Midwest Trust, Midwest Group
Cincinnati, Ohio 45202 Tax Free Trust and Midwest Strategic Trust
Henry C. Spalding, Jr. (age 58) Executive Vice President
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 39) Secretary and General Counsel,
Secretary MGF Service Corp., Midwest
312 Walnut Street, 21st Floor Group Financial Services, Inc. and
Cincinnati, Ohio 45202 Leshner Financial, Inc.; Secretary,
Midwest Trust, Midwest Group Tax
Free Trust and Midwest Strategic Trust
Ernest H. Stephenson, Jr. (age 51) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
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<PAGE>
<CAPTION>
<S> <C> <C>
Connie R. Taylor (age 45) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 37) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Bond Fund since 1992;
The Jamestown Short Term Bond Fund (previously Vice President,
6620 West Broad Street Julius Straus
Suite 300 Richmond, Virginia)
Richmond, Virginia 23230
Beth Ann Walk (age 37) Portfolio Manager
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -----------------------------
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Messrs. Brinson (Chairman), Caravati, Lee, Morrill, Morrissette and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their
findings and recommendations as to accounting and financial matters, including
the adequacy of internal controls. On the basis of this review the Audit
Committee makes recommendations to the Trustees as to the appointment of
independent accountants for the following year. The Trustees have not
appointed a compensation committee or a nominating committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 5, 1996, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 19.4% of the then outstanding shares of the Fund. On the
same date, Austin Brockenbrough, III and Robert F. Norfleet, Jr. as trustees
for the Emma Scott Taylor Trust, 325 Oak Lane, Richmond, Virginia 23226, owned
of record 10.8% of the then outstanding shares of the Fund; Criswell D.L.
Perkins as trustee for the Katherine P. Perkins Trusts, 325 Charmian Road,
Richmond, Virginia 23226, owned of record 6.4% of the then outstanding shares
of the Fund; Austin Brockenbrough/Carol Bays/Dennis Belcher as trustees for
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</TABLE>
<PAGE>
the Mildred H. Cross Trust, 5516 Falmouth Street, Richmond, Virginia 23230,
owned of record 5.0% of the then outstanding shares of the Fund; Frederic
Bocock/Dennis Belcher as trustees for the Mildred Schoeller Trust, 5516
Falmouth Street, Richmond Virginia 23230, owned of record 6.0% of the then
outstanding shares of the Fund; Robert B. Seidensticker, 352 Rolling Lake
Court, Manakin, Virginia 23103, owned of record 11.2% of the then outstanding
shares of the Fund; John M. and Joanne N. Street, 315 Cheswick Lane, Richmond,
Virginia 23229, owned of record 5.7% of the then outstanding shares of the
Fund; and Elizabeth B. Towers, Rural Hill P.O. Box 677, Goochland, Virginia
23063, owned of record 8.3% of the then outstanding shares of the Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor") supervises the Fund's
investments pursuant to an Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until April
1, 1997 and will be renewed thereafter for one year periods only so long as
such renewal and continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Advisor by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by
the Board of Trustees of the Trust or by the Advisor. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Advisor, based upon the Fund's average daily net assets,
is at the following annual rates: On the first $250 million, 0.40%; on the
next $250 million, 0.35%; and on assets over $500 million, 0.30%. For the
fiscal year ended March 31, 1996, the Fund paid the Advisor advisory fees of
$9,576 (which was net of voluntary fee waivers of $23,645). The Advisor
voluntarily waived its entire advisory fee and reimbursed a portion of the
Fund's operating expenses for the fiscal years ended March 31, 1995 and 1994;
the total fees waived and expenses reimbursed amounted to $40,668 and $24,128,
respectively.
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
shareholders, Austin Brockenbrough, III and Fred T. Tattersall. In addition to
acting as Advisor to the Fund, the Advisor serves as investment advisor to
five additional investment companies, the subjects of separate prospectuses,
and also provides investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional accounts and
individuals.
The Advisor provides a continuous investment program for the Fund, including
investment research and management with respect to all securities,
investments, cash and cash equivalents of the Fund. The Advisor determines
what securities and other
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<PAGE>
investments will be purchased, retained or sold by the Fund, and does so in
accordance with the investment objectives and policies of the Fund as
described herein and in the Prospectus. The Advisor places all securities
orders for the Fund, determining with which broker, dealer, or issuer to place
the orders.
The Advisor must adhere to the brokerage policies of the Fund in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to
the Trust, and pays the entire cost of distributing Fund shares.
ADMINISTRATOR
MGF Service Corp. (the "Administrator") maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Fund and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Fund, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, the Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $200,000,000 and 0.10% of such assets in excess of
$200,000,000; provided, however, that the minimum fee is $2,000 per month. In
addition, the Fund pays out-of-pocket expenses, including but not limited to,
postage, envelopes, checks, drafts, forms, reports, record storage and
communication lines.
For the fiscal years ended March 31, 1996 and 1995, the Administrator received
from the Fund fees of $24,000 and $23,295, respectively.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Fund's
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
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<PAGE>
The Custodian of the Fund's assets is Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the
Fund (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all
income and effects all securities transactions on behalf of the Fund.
BROKERAGE
It is the Fund's practice to seek the best price and execution for all
portfolio securities transactions. The Advisor (subject to the general
supervision of the Board of Trustees) directs the execution of the Fund's
portfolio transactions. The Trust has adopted a policy which prohibits the
Advisor from effecting Fund portfolio transactions with broker-dealers which
may be interested persons of the Fund, the Trust, any Trustee, officer or
director of the Trust or its investment advisors or any interested person of
such persons.
The Fund's portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup.
No brokerage commissions were paid by the Fund for the last three fiscal
years.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Advisor for the benefit of the other clients it may have.
Conversely, the Fund may benefit from such transactions effected for the
benefit of other clients. In all cases, the Advisor is obligated to effect
transactions for the Fund based upon obtaining the most favorable price and
execution. Factors considered by the Advisor in determining whether the Fund
will receive the most favorable price and execution include, among other
things: the size of the order, the broker's ability to effect and settle the
transaction promptly and efficiently and the Advisor's perception of the
broker's reliability, integrity and financial condition.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder
services:
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<PAGE>
REGULAR ACCOUNT. The regular account allows for voluntary investments to be
made at any time. Available to individuals, custodians, corporations, trusts,
estates and others, investors are free to make additions and withdrawals to or
from their account as often as they wish. When an investor makes an initial
investment in the Fund, a shareholder account is opened in accordance with the
investor's registration instructions. Each time there is a transaction in a
shareholder account, such as an additional investment or the reinvestment of a
dividend or distribution, the shareholder will receive a statement showing the
current transaction and all prior transactions in the shareholder account
during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders
to make regular monthly or quarterly investment in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($100 minimum) which will be automatically invested in
shares at the public offering price on or about the last business day of the
month or quarter. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $25,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment,
by authorizing the Fund to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and
December). Checks will be made payable to the designated recipient and mailed
within three business days of the valuation date. If the designated recipient
is other than the registered shareholder, the signature of each shareholder
must be guaranteed on the application (see "Signature Guarantees"). A
corporation (or partnership) must also submit a "Corporate Resolution" (or
"Certification of Partnership") indicating the names, titles and required
number of signatures authorized to act on its behalf. The application must be
signed by a duly authorized officer(s) and the corporate seal affixed. No
redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Fund.
Shareholders should be aware that such systematic withdrawals may deplete or
use up entirely their initial investment and may result in realized long-term
or short-term capital gains or losses. The Systematic Withdrawal Plan may be
terminated at any time by the Fund upon sixty days' written notice or by a
shareholder upon written notice to the Fund. Applications and further details
may be obtained by calling the Fund at 1-800-443-4249, or by writing to:
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<PAGE>
The Jamestown Tax Exempt Virginia Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment
for the purchase of shares of the Fund. The acceptance of such securities is
at the sole discretion of the Advisor based upon the suitability of the
securities accepted for inclusion as a long term investment of the Fund, the
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same
criteria and methods as described in "How Net Asset Value is Determined" in
the Prospectus.
REDEMPTIONS IN KIND. The Fund does not intend, under normal circumstances, to
redeem its securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the
Trustees, make it undesirable for the Fund to pay for all redemptions in cash.
In such case, the Board of Trustees may authorize payment to be made in
portfolio securities or other property of the Fund. Securities delivered in
payment of redemptions would be valued at the same value assigned to them in
computing the net asset value per share. Shareholders receiving them would
incur brokerage costs when these securities are sold. An irrevocable election
may be filed under Rule 18f-1 of the 1940 Act, wherein the Fund commits itself
to pay redemptions in cash, rather than in kind, to any shareholder of record
of the Fund who redeems during any ninety day period, the lesser of (a)
$250,000 or (b) one percent (1%) of the Fund's net assets at the beginning of
such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include
the following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required
for transfer by corporations, administrators, executors, trustees, guardians,
etc. If you have any questions about transferring shares, call or write the
Fund.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next
determined after the order is received. An order received prior to 4:00 p.m.
Eastern time will be executed at the price
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<PAGE>
computed on the date of receipt; and an order received after that time will be
executed at the price computed on the next Business Day. An order to purchase
shares is not binding on the Fund until confirmed in writing (or unless other
arrangements have been made with the Fund, for example in the case of orders
utilizing wire transfer of funds) and payment has been received.
The Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of the Fund and its
shareholders, and (iii) to reduce or waive the minimum for initial and
subsequent investments under circumstances where certain economies can be
achieved in sales of Fund shares.
EMPLOYEES AND AFFILIATES OF THE FUND. The Fund has adopted initial investment
minimums for the purpose of reducing the cost to the Fund (and consequently to
the shareholders) of communicating with and servicing its shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Fund, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange (the "Exchange") is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an
emergency exists as defined by the rules of the Commission as a result of
which it is not reasonably practicable for the Fund to dispose of securities
owned by it, or to fairly determine the value of its assets, and (iii) for
such other periods as the Commission may permit.
No charge is made by the Fund for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities
held by the Fund.
- 142 -
<PAGE>
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Fund, and they have
adopted procedures to do so, as follows. The net asset value of the Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses;
clerical employees and junior level officers of the Trust as and if approved
by the Board of Trustees; taxes; expenses of the issuance and redemption of
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations
which may be deemed by the Trustees to be of overall benefit to the Fund and
its shareholders; legal and auditing expenses; and the cost of stationery and
forms prepared exclusively for the Fund. General Trust expenses are allocated
among the series, or funds, on a fair and equitable basis by the Board of
Trustees, which may be based on relative net assets of each fund (on the date
the expense is paid) or the nature of the services performed and the relative
applicability to each fund.
Under the Advisory Agreement, the Advisor may be required to reimburse the
Fund if its annual ordinary operating expenses exceed certain limits. This
expense limitation is calculated and administered separately with respect to
each series of the Trust in accordance with the requirements of state
securities authorities. Expenses which are not subject to this limitation are
interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and not as expenses. Reimbursement, if any, will be on a monthly basis,
subject to year end adjustment. The Advisor in its discretion may, but is not
required to, reimburse the Fund an amount of money in excess of its advisory
fee.
- 143 -
<PAGE>
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUND. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, the Fund
must distribute annually at least 90% of its net taxable income plus 90% of
its net tax-exempt interest income. In addition to this distribution
requirement, the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities'
loans, gains from the disposition of stock or securities, and certain other
income. The Fund will also be required to derive less than 30% of its gross
income from the sale or other disposition of securities held for less than 90
days.
While the above requirements are aimed at qualification of the Fund as a
regulated investment company under Subchapter M of the Code, the Fund also
intends to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Fund remains qualified under Subchapter
M, it will not be subject to federal income tax to the extent it distributes
its taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on the Fund to the extent
it does not distribute at least 98% of its ordinary taxable income for a
calendar year, plus 98% of its capital gain net taxable income for the one
year period ending each October 31, plus certain undistributed amounts from
prior years. Such required distributions are based only on the Fund's taxable
income, however, so the excise tax generally would not apply to tax-exempt
income earned by the Fund. While the Fund intends to distribute its taxable
income and capital gains in a manner so as to avoid imposition of the federal
excise and income taxes, there can be no assurance that the Fund indeed will
make sufficient distributions to avoid entirely imposition of federal excise
or income taxes.
As of March 31, 1996, the Fund had capital loss carryforwards for federal
income tax purposes of $73,867 which expire on March 31, 2003. These capital
loss carryforwards may be utilized in future years to offset realized capital
gains prior to distributing such gains to shareholders.
Should additional series, or funds, be created by the Trustees, each fund
would be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Fund derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional
- 144 -
<PAGE>
shares. Since federal and Virginia tax laws exempt income from qualifying
municipal bond obligations, income dividends attributable to such obligations
are exempt from such taxes. A report will be distributed to each shareholder
as of December 31st of each year outlining the percentage of income dividends
which qualify for such tax exemptions. Distributions, if any, of long-term
capital gains are taxable to shareholders as long-term capital gains, whether
received in cash or reinvested in additional shares, regardless of how long
Fund shares have been held. Such capital gain distributions are also subject
to Virginia income tax, except to the extent attributable to gains from
certain obligations of the Commonwealth of Virginia and its political
subdivisions. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
For federal income tax purposes, any loss upon the sale of shares of the Fund
held for six months or less will be treated as long-term capital loss to the
extent of any long-term capital gain distributions received by the
shareholder. In addition, any loss of Fund shares held for six months or less
will be disallowed for both federal and Virginia income tax purposes to the
extent of any dividends received by the shareholder exempt from federal income
tax, even though, in the case of Virginia, some portion of such dividends
actually may have been subject to Virginia income tax.
CAPITAL SHARES AND VOTING
Shares of the Fund, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for
each full share and a fractional vote for each fractional share held. Shares
have noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of Trustees can elect 100% of the
Trustees and, in this event, the holders of the remaining shares voting will
not be able to elect any Trustees. The Trustees will hold office indefinitely,
except that: (1) any Trustee may resign or retire and (2) any Trustee may be
removed with or without cause at any time (a) by a written instrument, signed
by at least two-thirds of the number of Trustees prior to such removal; or (b)
by vote of shareholders holding not less than two-thirds of the outstanding
shares of the Trust, cast in person or by proxy at a meeting called for that
purpose; or (c) by a written declaration signed by shareholders holding not
less than two-thirds of the outstanding shares of the Trust and filed with the
Trust's custodian. Shareholders have certain rights, as set forth in the
Declaration of Trust, including the right to call a meeting of the
shareholders for the purpose of voting on the removal of one or more Trustees.
Shareholders holding not less than ten percent (10%) of the shares then
outstanding may require the Trustees to call such a meeting and the Trustees
are
- 145 -
<PAGE>
obligated to provide certain assistance to shareholders desiring to
communicate with other shareholders in such regard (e.g., providing access to
shareholder lists, etc.). In case a vacancy or an anticipated vacancy shall
for any reason exist, the vacancy shall be filled by the affirmative vote of a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act. The Trust does not expect to have an annual meeting of
shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment
Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, the Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Fund for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end
of the period (after adjusting for the reinvestment of any income dividends
and capital gain distributions), and dividing the result by the net asset
value per share at the beginning of the period. In particular, the average
annual total return of the Fund ("T") is computed by using the redeemable
value at the end of a specified period of time ("ERV") of a hypothetical
initial investment of $1,000 ("P") over a period of time ("n") according to
the formula P(l+T)n=ERV. The average annual total return quotations for the
Fund for the one year period ended March 31, 1996 and for the period since
inception (September 1, 1993) to March 31, 1996 are 6.51% and 3.91%,
respectively.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate
of return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, the Fund may advertise its yield and tax- equivalent yield.
A yield quotation is based on a 30-day (or one month) period and is computed
by dividing the net investment income per share earned during the period by
the maximum offering price per share on the last day of the period, according
to the following formula:
- 146 -
<PAGE>
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Generally, interest earned (for the purpose of "a" above) on debt obligations
is computed by reference to the yield to maturity of each obligation held
based on the market value of the obligation (including actual accrued
interest) at the close of business on the last business day prior to the start
of the 30-day (or one month) period for which yield is being calculated, or,
with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The Fund's yield for the 30 days ended March
31, 1996 was 4.50%.
The tax-equivalent yield of the Fund is computed by using the tax-exempt yield
figure and dividing by one minus the applicable tax rate. The Fund's
tax-equivalent yield for the 30 days ended March 31, 1996, based on the
highest marginal combined federal and Virginia income tax rate, was 7.90%.
The Fund's performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Fund may compare its performance to the Lehman
Municipal Bond Index, which is generally considered to be representative of
the performance of municipal bonds. Comparative performance may also be
expressed by reference to a ranking prepared by a mutual fund monitoring
service, such as Lipper Analytical Services, Inc. or Morningstar, Inc., or by
one or more newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the Fund's past
performance to that of other mutual funds and investment products. Of course,
past performance is not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
- 147 -
<PAGE>
Investors may use such indices in addition to the Fund's Prospectus to obtain
a more complete view of the Fund's performance before investing. Of course,
when comparing the Fund's performance to any index, factors such as
composition of the index and prevailing market conditions should be considered
in assessing the significance of such comparisons. When comparing funds using
reporting services, or total return, investors should take into consideration
any relevant differences in funds such as permitted portfolio compositions and
methods used to value portfolio securities and compute offering price.
Advertisements and other sales literature for the Fund may quote total returns
that are calculated on non-standardized base periods. The total returns
represent the historic change in the value of an investment in the Fund based
on monthly reinvestment of dividends over a specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation
and the effects of inflation on the dollar, including the purchasing power of
the dollar at various rates of inflation. The Fund may also disclose from time
to time information about its portfolio allocation and holdings at a
particular date (including ratings of securities assigned by independent
rating services such as S&P and Moody's). The Fund may also depict the
historical performance of the securities in which the Fund may invest over
periods reflecting a variety of market or economic conditions either alone or
in comparison with alternative investments, performance indices of those
investments, or economic indicators. The Fund may also include in
advertisements and in materials furnished to present and prospective
shareholders statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet specific
financial goals, such as saving for retirement, children's education, or other
future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Fund will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of
all confirmable transactions in their account. A copy of the Annual Report
will accompany the Statement of Additional Information ("SAI") whenever the
SAI is requested by a shareholder or prospective investor. The Financial
Statements of the Fund as of March 31, 1996, together with the report of the
independent accountants thereon, are included on the following pages.
The Jamestown Tax Exempt Virginia Fund
No Load Mutual Fund
Annual Report
March 31, 1996
Investment Adviser Administrator
Lowe, Brockenbrough & Tattersall, Inc. MGF Service Corp.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45202-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1996
Performance of The Jamestown Tax Exempt Virginia Fund
For the fiscal year ended March 31, 1996, The Jamestown Tax Exempt
Virginia Fund had a total return of 6.51% after operating expenses. This
compared favorably to the Lipper Intermediate Municipal Fund Index which was
up 5.97%. The Lehman Municipal Bond Index advanced 8.38% during this same
period. The Fund maintained a fiscal year average maturity of approximately
seven years, while the Lehman Municipal Bond Index had an average maturity of
fourteen years. With our conservative style of management and neutral view of
the bond market, we believed it was prudent to be shorter than this Index,
which resulted in our relative underperformance as interest rates declined
throughout 1995.
The bond market psychology today is very different from the end of 1995.
Interest rates are higher and expectations for economic strength and inflation
have been revised upward. We respect the fact that the trend of the bond
market remains negative and believe that aggressive (long) maturity strategies
offer a poor risk/reward relationship until signs of economic weakness
develop. We continue to emphasize quality and yield (premium bonds), which
served us well as interest rates rose during the first quarter of 1996 and,
based on our market evaluation, keeps the Fund well positioned going forward.
For a comparison of the Fund's performance since inception versus the
Lehman Municipal Bond Index, please refer to the chart below:
A representation of the graphic material contained in THE JAMESTOWN TAX
EXEMPT VIRGINIA FUND Annual Report is set forth below.
Comparison of the Change in Value of a $10,000 Investment in the
Jamestown Tax Exempt Virginia Fund and the Lehman Municipal Bond Index
LEHMAN MUNICIPAL BOND INDEX: THE JAMESTOWN TAX EXEMPT VIRGINIA FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
09/01/93 10,000 09/01/93 10,000
09/30/93 1.14% 10,114 09/30/93 1.20% 10,120
12/31/93 1.41% 10,256 12/31/93 1.54% 10,275
03/31/94 -5.49% 9,693 03/31/94 -4.35% 9,828
06/30/94 1.11% 9,801 06/30/94 0.79% 9,906
09/30/94 0.68% 9,868 09/30/94 0.72% 9,978
12/31/94 -1.44% 9,726 12/31/94 -0.80% 9,898
03/31/95 7.07% 10,414 03/31/95 4.73% 10,366
06/30/95 2.41% 10,665 06/30/95 2.21% 10,596
09/30/95 2.87% 10,971 09/30/95 1.98% 10,806
12/31/95 4.13% 11,424 12/31/95 2.78% 11,106
03/31/96 -1.20% 11,287 03/31/96 -0.59% 11,041
Past performance is not predictive of future performance.
The Jamestown Tax Exempt Virginia Fund - Average Annual Total Returns
1 Year ........................ 6.51%
Since Inception*............... 3.91%
*Initial public offering of shares was September 1, 1993.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 8,457,609
================
At value (Note 1) $ 8,672,674
Cash 933
Interest receivable 127,276
----------------
TOTAL ASSETS 8,800,883
----------------
LIABILITIES
Dividends payable 15,609
Payable for capital shares redeemed 419
Accrued advisory fees (Note 3) 1,450
Accrued administration fees (Note 3) 2,000
Other accrued expenses 2,250
----------------
TOTAL LIABILITIES 21,728
----------------
NET ASSETS $ 8,779,155
================
Net assets consist of:
Capital shares $ 8,637,957
Accumulated net realized losses from security transactions (73,867)
Net unrealized appreciation on investments 215,065
----------------
Net assets $ 8,779,155
================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 890,918
================
Net asset value, offering price and redemption price per share (Note 1) $ 9.85
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1996
<S> <C>
INVESTMENT INCOME
Interest $ 440,910
----------------
EXPENSES
Investment advisory fees (Note 3) 33,221
Administrative fees (Note 3) 24,000
Professional fees 8,250
Trustees' fees and expenses 5,574
Pricing costs 4,546
Custodian fees 4,160
Registration fees 1,777
Printing of shareholder reports 1,586
Postage and supplies 1,564
Other expenses 1,257
----------------
TOTAL EXPENSES 85,935
Fees waived by the Adviser (Note 3) (23,645)
----------------
NET EXPENSES 62,290
----------------
NET INVESTMENT INCOME 378,620
----------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 44,594
Net change in unrealized appreciation/depreciation on investments 87,707
----------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 132,301
----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 510,921
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1996 and 1995
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1996 1995
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 378,620 $ 215,801
Net realized gains (losses) from security transactions 44,594 (117,113)
Net change in unrealized appreciation/depreciation
on investments 87,707 225,911
----------------- ----------------
Net increase in net assets from operations 510,921 324,599
----------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (378,620) (215,801)
----------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 1,576,152 6,137,385
Net asset value of shares issued in reinvestment
of distributions to shareholders 242,402 144,189
Payments for shares redeemed (883,247) (734,913)
----------------- ----------------
Net increase in net assets from capital share transactions 935,307 5,546,661
----------------- ----------------
TOTAL INCREASE IN NET ASSETS 1,067,608 5,655,459
NET ASSETS:
Beginning of year 7,711,547 2,056,088
----------------- ----------------
End of year $ 8,779,155 $ 7,711,547
================= ================
(a) Summary of capital share activity follows:
Shares sold 159,428 645,556
Shares issued in reinvestment of distributions to shareholders 24,511 15,122
Shares redeemed (89,606) (78,015)
----------------- ----------------
Net increase in shares outstanding 94,333 582,663
Shares outstanding, beginning of year 796,585 213,922
----------------- ----------------
Shares outstanding, end of year 890,918 796,585
================= ================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<CAPTION>
Year Year Period
Ended Ended Ended
March 31, March 31, March 31,
1996 1995 1994 (a)
<S> <C> <C> <C>
Net asset value at beginning of period $9.68 $9.61 $10.00
------ ------ -------
Income from investment operations:
Net investment income 0.45 0.44 0.23
Net realized and unrealized gains (losses) on investments 0.17 0.07 (0.39)
------ ------ -------
Total from investment operations 0.62 0.51 (0.16)
------ ------ -------
Less distributions:
Dividends from net investment income (0.45) (0.44) (0.23)
------ ------ -------
Net asset value at end of period $9.85 $9.68 $9.61
====== ====== =======
Total return 6.51% 5.47% (2.96)% (c)
====== ====== =======
Net assets at end of period (000's) $8,779 $7,712 $2,056
====== ====== =======
Ratio of expenses to average net assets (b) 0.75% 0.75% 0.75%(c)
Ratio of net investment income to average net assets 4.57% 4.64% 4.07%(c)
Portfolio turnover rate 14% 97% 33%
<FN>
(a)Represents the period from the commencement of operations (September
1, 1993) through March 31, 1994.
(b)Absent investment advisory fees waived and/or expenses reimbursed by
the Adviser, the ratios of expenses to average net assets would have been
1.04%, 1.62% and 4.83%(c) for the periods ended March 31, 1996, 1995 and 1994,
respectively (Note 3).
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
Principal
Amount Value
<S> <C> <C>
FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS - 95.1%
Virginia - 91.0%
Arlington Co., Virginia, GO,
$ 300,000 5.60%, due 08/01/2006 $ 315,609
---------------
Capital Region Virginia Airport, Revenue,
200,000 5.40%, due 07/01/2010 197,092
---------------
Cheasapeake, Virginia, GO,
100,000 5.70%, due 05/01/2007 104,658
---------------
Chesterfield Co., Virginia, GO,
100,000 5.80%, due 07/15/2001 106,279
100,000 5.90%, due 07/15/2002 107,241
---------------
213,520
---------------
Fairfax Co., Virginia, GO,
350,000 5.60%, due 05/01/2003 363,237
---------------
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 312,846
---------------
Hanover Co., Virginia, Industrial Dev. Authority, Revenue,
225,000 6.25%, due 10/01/2011 235,123
---------------
Hanover Co., Virginia, Water & Sewer Systems, Revenue,
250,000 5.20%, due 02/01/2011 239,895
---------------
Norfolk, Virginia, GO,
250,000 5.40%, due 02/01/2002 259,605
---------------
Newport News, Virginia, GO,
150,000 6.20%, due 12/01/2001 159,387
150,000 5.45%, due 11/01/2009 150,481
---------------
309,868
---------------
Pittsylvania Co., Virginia, GO,
300,000 5.65%, due 07/01/2006 310,359
---------------
Portsmouth, Virginia, GO,
200,000 5.90%, due 11/01/2001 212,758
---------------
Prince William Co., Virginia, Park Authority, Revenue,
250,000 6.10%, due 10/15/2004 265,710
---------------
<PAGE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Virginia - Continued
Prince William Co., Virginia, Service Auth. Water & Sewer, Revenue,
$ 150,000 6.40%, due 07/01/2004 $ 162,582
---------------
Richmond, Virginia, GO,
350,000 6.25%, due 01/15/2018 357,718
---------------
Richmond, Virginia, Metropolitan Authority, Revenue,
250,000 6.00%, due 07/15/2004 268,405
---------------
Richmond, Virginia, Public Utility, Revenue,
150,000 7.10%, due 01/15/2000 159,300
---------------
Riverside, Virginia, Regional Jail Authority, Revenue,
300,000 5.30%, due 07/01/2002 310,293
---------------
Roanoke, Virginia, GO,
300,000 6.40%, due 08/01/2012 318,924
---------------
Southeastern Public Service Authority, Revenue,
200,000 6.60%, due 07/01/1998 210,518
---------------
Virginia Beach, Virginia, GO,
150,000 6.60%, due 08/01/2001, prerefunded at 102 166,551
325,000 6.20%, due 09/01/2013 341,793
---------------
508,344
---------------
Virginia State, GO,
250,000 6.75%, due 07/01/1996, prerefunded at 102 257,022
300,000 5.90%, due 06/01/2005 316,902
---------------
573,924
---------------
Virginia State Housing Dev. Authority, Revenue,
150,000 5.60%, due 01/01/2002 152,150
150,000 6.60%, due 11/01/2012 155,953
---------------
308,103
---------------
Virginia State Public Building Authority, Revenue,
250,000 5.30%, due 08/01/1998 256,442
---------------
Virginia State Public School Authority, Revenue,
250,000 5.90%, due 08/01/2006 263,775
---------------
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012 369,009
---------------
<PAGE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Virginia - Continued
Winchester, Virginia, Industrial Dev. Authority, Revenue
$ 280,000 7.25%, due 01/01/2000, prerefunded at 102 $ 310,839
---------------
York Co., Virginia, Certificates of Participation, Revenue,
250,000 6.625%, due 03/01/2012 266,660
---------------
Total Virginia 7,985,116
---------------
Puerto Rico - 4.1%
Puerto Rico Commonwealth, GO,
100,000 5.80%, due 07/01/2003 104,996
---------------
Puerto Rico Commonwealth, Highway and Transp. Authority, Revenue,
150,000 6.375%, due 07/01/2007 158,373
---------------
Puerto Rico Commonwealth, Electric Power Authority, Revenue,
100,000 6.00%, due 07/01/1999 104,395
---------------
Total Puerto Rico 367,764
---------------
Total Fixed Rate Revenue and General Obligation Bonds
(Cost $8,137,815) $ 8,352,880
---------------
MONEY MARKETS - 3.7%
$ 319,794 Biltmore Tax-Free Money Fund (Cost $319,794) $ 319,794
---------------
Total Investments at Value (Cost $8,457,609) - 98.8% $ 8,672,674
Other Assets in Excess of Liabilities - 1.2% 106,481
---------------
Net Assets - 100.0% $ 8,779,155
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Significant Accounting Policies
The Jamestown Tax Exempt Virginia Fund (the Fund) is a no-load, open-end
series of the Williamsburg Investment Trust (the Trust), a registered
management investment company under the Investment Company Act of 1940, as
amended. The Trust was organized as a Massachusetts business trust on July 18,
1988. The Fund began operations on September 1, 1993.
The Fund's investment objectives are to provide current income exempt
from federal income taxes and from the personal income taxes of Virginia, to
preserve capital, to limit credit risk and to take advantage of opportunities
to increase and enhance the value of an investment in the Fund. The Fund
invests primarily in debt obligations issued by the State of Virginia and its
political subdivisions, agencies, authorities and instrumentalities and by
other issuers the interest from which is exempt from the personal income taxes
of Virginia. The marketability and market value of these obligations may be
affected by certain Virginia constitutional amendments, legislative measures,
executive orders, administrative regulations, voter initiatives and other
political and economic developments. If any such developments arise, they
could adversely affect the ability of various Virginia issuers to meet their
financial obligations and could impact the Fund's portfolio.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of
the close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise,
at the last quoted bid price. The Fund's securities will ordinarily be traded
on the over-the-counter market. When market quotations are not readily
available, securities may be valued on the basis of prices provided by an
independent pricing service. If a pricing service cannot provide a valuation,
securities will be valued in good faith at fair market value using methods
consistent with those determined by the Board of Trustees.
Share valuation -- The net asset value per share of the Fund is
calculated daily by dividing the total value of the Fund's assets, less
liabilities, by the number of shares outstanding. The offering price and
redemption price per share of the Fund is equal to the net asset value per
share.
Investment income -- Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized in accordance with income tax
regulations which approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment
income are declared daily and paid on the last business day of each month to
shareholders of the Fund. Net realized short-term capital gains, if any, may
be distributed throughout the year and net realized long-term capital gains,
if any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations.
Security transactions -- Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
<PAGE>
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during
the twelve months ended October 31) plus undistributed amounts from prior
years.
The following information is based upon the federal income tax cost of
portfolio investments of the Fund as of March 31, 1996:
Gross unrealized appreciation ............... $ 239,076
Gross unrealized depreciation ............... (24,011)
---------
Net unrealized appreciation ................. $ 215,065
=========
The tax basis of investments of the Fund is equal to the acquisition cost
as shown on the Statement of Assets and Liabilities. As of March 31, 1996, the
Fund had capital loss carryforwards for federal income tax purposes of $73,867
which expire on March 31, 2003. These capital loss carryforwards may be
utilized in future years to offset net realized capital gains prior to
distributing such gains to shareholders.
2. Investment Transactions
During the year ended March 31, 1996, purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $2,113,160 and $1,038,868, respectively.
3. Transactions with Affiliates
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall,
Inc. (the Adviser) under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .40% on its
average daily net assets up to $250 million; .35% on the next $250 million of
such net assets; and .30% on such net assets in excess of $500 million.
The Adviser currently intends to limit the total operating expenses of
the Fund to .75% of average daily net assets. Accordingly, the Adviser
voluntarily waived $23,645 of its investment advisory fee for the year ended
March 31, 1996.
Certain trustees and officers of the Trust are also officers of the
Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust
and MGF Service Corp. (MGF), MGF provides administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services for the
Fund. For these services, MGF receives a monthly fee from the Fund at an
annual rate of .15% on its average daily net assets up to $200 million and
.10% on such net assets in excess of $200 million, subject to a $2,000 minimum
monthly fee. In addition, the Fund pays out-of-pocket expenses including, but
not limited to, pricing costs and postage and supplies.
Certain officers of the Trust are also officers of MGF.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Tax Exempt Virginia Fund (a series of The Williamsburg
Investment Trust), including the portfolio of investments, as of March 31,
1996, and the related statement of operations for the year then ended, and the
statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for the periods indicated thereon.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1996 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Tax Exempt Virginia Fund as of March 31, 1996, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended and the financial
highlights for the periods referred to above, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
<PAGE>
- 148 -
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Included in Part A: Financial Highlights
Included in Part B: Statements of Assets and
Liabilities, Statements of
Operations, Statements of Changes
in Net Assets, Financial Highlights
and Portfolios of Investments
contained in Annual Report.
(b) Exhibits:
1. Declaration of Trust*
2. Bylaws*
3. Not Applicable
4. See Exhibits 1 and 2
5. (i) Investment Advisory Agreements*
(ii) Investment Advisory Agreement with Respect to
The Jamestown International Equity Fund**
(iii)Sub-Advisory Agreement with Respect to The
Jamestown International Equity Fund **
6. Not Applicable
7. Not Applicable
8. (i) Custodian Agreement with The Northern Trust
Company**
(ii) Custodian Agreement with Star Bank, N.A.**
9. Administration, Accounting and Transfer Agency
Agreement*
10. Opinion and Consent of Counsel*
11. Consent of Accountants**
12. Not Applicable
13. Not Applicable
- 149 -
<PAGE>
14. Not Applicable
n1-a.wmb
15. Not Applicable
16. Computation of Performance Quotations*
17. Financial Data Schedule**
18. Not Applicable
* Previously filed as Exhibit to Registration Statement on
Form N-1A
** Filed herewith
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
No person is directly or indirectly controlled by or under
common control with the Registrant.
Item 26. NUMBER OF HOLDERS OF SECURITIES
Set forth is the number of record holders, as of June 30,
1996, of the shares of the Trust:
NUMBER OF RECORD
TITLE OF CLASS HOLDERS
Shares of beneficial interest of
FBP Contrarian Equity Fund 217
Shares of beneficial interest of
FBP Contrarian Balanced Fund 422
Shares of beneficial interest of
The Government Street Equity Fund 346
Shares of beneficial interest of
The Government Street Bond Fund 167
Shares of beneficial interest of
The Alabama Tax Free Bond Fund 129
Shares of beneficial interest of
The Jamestown Balanced Fund 243
Shares of beneficial interest of
The Jamestown Equity Fund 149
Shares of beneficial interest of
- 2 -
<PAGE>
The Jamestown Bond Fund 34
Shares of beneficial interest of
The Jamestown Short Term Bond Fund 10
Shares of beneficial interest of
The Jamestown Tax Exempt Virginia Fund 33
Shares of beneficial interest of
The Jamestown International Equity Fund 150
Item 27. INDEMNIFICATION. Article VIII of the Registrant's
Agreement and Declaration of Trust provides for
indemnification of officers and trustees as follows:
SECTION 8.4 Indemnification of Trustees and
Officers. Subject to the limitations set forth in
this Section 8.4, the Trust shall indemnify (from
the assets of the Fund or Funds to which the
conduct in question relates) each of its Trustees
and officers, including persons who serve at the
Trust's request as directors, officers or trustees
of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise
(referred to hereinafter, together with such
person's heirs, executors, administrators or other
legal representatives, as a "covered person")
against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees,
incurred by any covered person in connection with
the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before
any court or administrative or legislative body, in
which such covered person may be or may have been
involved as a party or otherwise or with which such
covered person may be or may have been threatened,
while in office or thereafter, by reason of being
or having been such a Trustee or officer, director
or trustee, except with respect to any matter as to
which it has been determined that such covered
person (i) did not act in good faith in the
reasonable belief that his action was in or not
opposed to the best interests of the Trust or (ii)
had acted with willful misfeasance, bad faith,
gross negligence or reckless disregard of the
duties involved in the conduct of his office
(either and both of the conduct described in
clauses (i) and (ii) above being referred to
hereinafter as "Disabling
- 3 -
<PAGE>
Conduct"). A determination that the covered person
is entitled to indemnification may be made by (i) a
final decision on the merits by a court or other
body before whom the proceeding was brought that
such covered person was not liable by reason of
Disabling Conduct, (ii) dismissal of a court action
or an administrative action against such covered
person for insufficiency of evidence of Disabling
Conduct, or (iii) a reasonable determination, based
upon a review of the facts, that such covered
person was not liable by reason of Disabling
Conduct by (a) vote of a majority of a quorum of
Trustees who are neither "interested persons" of
the Trust as the quoted phrase is defined in
Section 2(a) (19) of the Investment Company Act of
1940 nor parties to the action, suit or other
proceeding on the same or similar grounds is then
or has been pending or threatened (such quorum of
such Trustees being referred to hereinafter as the
"Disinterested Trustees"), or (b) an independent
legal counsel in a written opinion. Expenses,
including accountants' and counsel fees so incurred
by any such covered person (but excluding amounts
paid in satisfaction of judgments, in compromise or
as fines or penalties), may be paid from time to
time by the Fund or Funds to which the conduct in
question related in advance of the final
disposition of any such action, suit or proceeding;
provided, that the covered person Shall have
undertaken to repay the amounts so paid if it is
ultimately determined that indemnification of such
expenses is not authorized under this Article VIII
and if (i) the covered person shall have provided
security for such undertaking, (ii) the Trust shall
be insured against losses arising by reason of any
lawful advances, or (iii) a majority of the
Independent Trustees, or an independent legal
counsel in a written opinion, shall have
determined, based on a review of readily available
facts (as opposed to a full inquiry), that there is
reason to believe that the covered person
ultimately will be entitled to indemnification
hereunder.
SECTION 8.5 Compromise Payment. As to any matter
disposed of by a compromise payment by any covered
person referred to in Section 8.4 hereof, pursuant
to a consent decree or otherwise, no such
indemnification either for said payment or for any
other expenses shall be provided unless such
indemnification shall be approved (i) by a
- 4 -
<PAGE>
majority of the Disinterested Trustees or (ii) by
an independent legal counsel in a written opinion.
Approval by the Independent Trustees pursuant to
clause (ii) shall not prevent the recovery from any
covered person of any amount paid to such covered
person in accordance with either of such clauses as
indemnification if such covered person is
subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the
reasonable belief that such covered person's action
was in or not opposed to the best interests of the
Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of
the duties involved in the conduct of such covered
person's office.
SECTION 8.6 Indemnification Not Exclusive. The
right of indemnification provided by this Article
VIII shall not be exclusive of or affect any of the
rights to which any covered person may be entitled.
Nothing contained in this Article VIII shall affect
any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and
other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf
of any such person.
The Trust's Advisory Agreements provide for indemnification
of each of the Advisors as follows:
8.(b) INDEMNIFICATION OF ADVISOR. Subject to the
limitations set forth in this Subsection 8(b), the
Trust shall indemnify, defend and hold harmless
(from the assets of the Fund or Funds to which the
conduct in question relates) the Advisor against
all loss, damage and liability, including but not
limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties,
and expenses, including reasonable accountants' and
counsel fees, incurred by the Advisor in connection
with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal,
before any court or administrative or legislative
body, related to or resulting from this Agreement
or the performance of services hereunder, except
with respect to any matter as to which it has been
determined that the loss, damage or liability is a
direct result of (i) a breach of fiduciary duty
with respect to the receipt of compensation for
- 5 -
<PAGE>
services; or (ii) wilful misfeasance, bad faith or
gross negligence on the part of the Advisor in the
performance of its duties or from reckless
disregard by it of its duties under this Agreement
(either and both of the conduct described in
clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A
determination that the Advisor is entitled to
indemnification may be made by (i) a final decision
on the merits by a court or other body before whom
the proceeding was brought that the Advisor was not
liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative
proceeding against the Advisor for insufficiency of
evidence of Disabling Conduct, or (iii) a
reasonable determination, based upon a review of
the facts, that the Advisor was not liable by
reason of Disabling Conduct by: (a) vote of a
majority of a quorum of Trustees who are neither
"interested persons" of the Trust as the quoted
phrase is defined in Section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the
action, suit or other proceeding on the same or
similar grounds that is then or has been pending or
threatened (such quorum of such Trustees being
referred to hereinafter as the "INDEPENDENT
TRUSTEES"), or (b) an independent legal counsel in
a written opinion. Expenses, including accountants'
and counsel fees so incurred by the Advisor (but
excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties),
may be paid from time to time by the Fund or Funds
to which the conduct in question related in advance
of the final disposition of any such action, suit
or proceeding; PROVIDED, that the Advisor shall
have undertaken to repay the amounts so paid if it
is ultimately determined that indemnification of
such expenses is not authorized under this
Subsection 8(b) and if (i) the Advisor shall have
provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority
of the Independent Trustees, or an independent
legal counsel in a written opinion, shall have
determined, based on a review of readily available
facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Advisor
ultimately will be entitled to indemnification
hereunder.
- 6 -
<PAGE>
As to any matter disposed of by a compromise
payment by the Advisor referred to in this
Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said
payment or for any other expenses shall be provided
unless such indemnification shall be approved (i)
by a majority of the Independent Trustees or (ii)
by an independent legal counsel in a written
opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid to the
Advisor in accordance with either of such clauses
as indemnification of the Advisor is subsequently
adjudicated by a court of competent jurisdiction
not to have acted in good faith in the reasonable
belief that the Advisor's action was in or not
opposed to the best interests of the Trust or to
have been liable to the Trust or its Shareholders
by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties
involved in its conduct under the Agreement.
The right of indemnification provided by this
Subsection 8(b) shall not be exclusive of or affect
any of the rights to which the Advisor may be
entitled. Nothing contained in this Subsection 8(b)
shall affect any rights to indemnification to which
Trustees, officers or other personnel of the Trust,
and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf
of any such person.
The Board of Trustees of the Trust shall take all
such action as may be necessary and appropriate to
authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b)
including, without limitation, to the extent
needed, to determine whether the Advisor is
entitled to indemnification hereunder and the
reasonable amount of any indemnity due it
hereunder, or employ independent legal counsel for
that purpose.
8.(c) The provisions contained in Section 8 shall
survive the expiration or other termination of this
Agreement, shall be deemed to include and protect
the Advisor and its directors, officers, employees
and agents and shall inure to the benefit of
its/their respective successors, assigns and
personal representatives.
- 7 -
<PAGE>
The Trust maintains a standard mutual fund and investment advisory
professional and directors and officers liability policy. Coverage under the
policy includes losses by reason of any act, error, omission, misstatement,
misleading statement, neglect or breach of duty. The Trust may not pay for
insurance which protects its Trustees and officers against liabilities arising
from action involving willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of their offices.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc. ("LB&T") is a
registered investment advisor providing general investment
advisory services to six series of Williamsburg Investment
Trust: The Jamestown Balanced Fund, The Jamestown Bond Fund,
The Jamestown Short-Term Bond Fund, The Jamestown Equity
Fund, The Jamestown Tax Exempt Virginia Fund and The
Jamestown International Equity Fund. LB&T acted as the
co-investment advisor with Bridgewater Associates, Inc. to
The Alpha World Fund, another registered investment company,
until July 1995. LB&T also provides investment advisory
services to corporations, trusts, pension and profit sharing
plans, other business and institutional accounts and
individuals. The following list sets forth the business and
other connections of the directors and officers of Lowe,
Brockenbrough & Tattersall, Inc., 6620 West Broad Street,
Suite 300, Richmond, Virginia 23230.
(1) Austin Brockenbrough III - A Managing Director of
LB&T.
(a) A Trustee of Williamsburg Investment Trust, a
registered investment company, and President
of The Jamestown Tax Exempt Virginia Fund.
(2) Fred T. Tattersall - A Managing Director of LB&T.
(a) A Trustee of Williamsburg Investment Trust
and President of The Jamestown Bond Fund and
The Jamestown Short Term Bond Fund.
(3) Henry C. Spalding, Jr. - Executive Vice President
of LB&T.
(a) President of The Jamestown Balanced Fund and
The Jamestown Equity Fund.
- 8 -
<PAGE>
(4) William F. Shumadine, Jr. - Senior Vice President
of LB&T.
(a) President of Central Fidelity Bank until
October, 1993.
(5) Ernest H. Stephensen, Jr. - Vice President of
LB&T.
(a) Vice President of The Jamestown Balanced Fund
and The Jamestown Equity Fund.
(6) Craig D. Truitt - Manager Client Services of LB&T.
(a) Vice President of The Jamestown Bond Fund and
The Jamestown Short Term Bond Fund.
(7) Beth Ann Walk - Portfolio Manager of LB&T.
(a) Vice President of The Jamestown Tax Exempt
Virginia Fund.
Oechsle International Advisors, L.P. ("Oechsle
International") is a registered investment advisor which
provides investment advisory services and acts as
sub-advisor to The Jamestown International Equity Fund. The
following are the partners of Oechsle International, One
International Place, Boston, Massachusetts 02110.
(1) Oechsle Group, L.P. (the Managing General
Partner of which is Walter Oechsle), a
general partner of Oechsle International.
(2) Dresdner Asset Management (U.S.A.)
Corporation (a subsidiary of Dresdner Bank
A.G.), a limited partner of Oechsle
International.
(3) OIA Limited Partnership Interest Trust
(the trustee of which is Oechsle Group,
L.P.), a limited partner of Oechsle
International.
Flippin, Bruce & Porter, Inc. ("FBP") is a registered
investment advisor providing investment advisory
services to two series of Williamsburg Investment
Trust: The FBP Contrarian Balanced Fund and the FBP
Contrarian Equity Fund. The Advisor also provides
investment advice to corporations, trusts, pension and
profit sharing plans, other business and institutional
account and individuals. The following list sets forth
- 9 -
<PAGE>
the business and other connections of the directors and
officers of Flippin, Bruce & Porter, Inc., 800 Main
Street, Suite 202, P.O. Box 6138, Lynchburg, Virginia
24505.
(1) John T. Bruce - A Principal of FBP.
(a) Chairman of the Board of Trustees of
Williamsburg Investment Trust and
Vice President of FBP Contrarian
Balanced Fund and FBP Contrarian
Equity Fund.
(2) John M. Flippin - A Principal of FBP
(a) President of FBP Contrarian Balanced
Fund and FBP Contrarian Equity Fund.
(3) Robert Gregory Porter III - A Principal of
FBP.
(a) Vice President of FBP Contrarian
Balanced Fund and FBP Contrarian Equity
Fund.
(4) Joseph T. Antonelli, Jr. - Portfolio Manager
of FBP.
(5) David J. Marshall - Portfolio Manager of FBP.
T. Leavell & Associates, Inc. ("TLA") is a registered
investment advisor providing investment advisory
services to three series of Williamsburg Investment
Trust: The Government Street Equity Fund, The
Government Street Bond Fund and The Alabama Tax Free
Bond Fund. TLA also provides investment advice to
corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and
individuals. The following list sets forth the
business and other connections of the directors and
officers of T. Leavell & Associates, Inc., 150
Government Street, P.O. Box 1307, Mobile, Alabama
36633.
(1) Thomas W. Leavell - President and a Principal
of TLA.
(2) Dorothy G. Gambill - Secretary/Treasurer and
a Principal of TLA.
- 10 -
<PAGE>
(3) Richard Mitchell - Executive Vice President
and a Principal of TLA.
(a) A Trustee of Williamsburg Investment
Trust and President of The Government
Street Bond Fund, The Government Street
Equity Fund and The Alabama Tax Free
Bond Fund.
(4) Kenneth P. Pulliam - Portfolio Manager of
TLA.
(5) Timothy S. Healy - Vice President and
Portfolio Manager of TLA.
(a) Vice President of The Alabama Tax Free
Bond Fund.
(6) Ann Damon Haas - Vice President of TLA.
Item 29. PRINCIPAL UNDERWRITER
Not Applicable
Item 30. LOCATIONS OF ACCOUNTS AND RECORDS
The Registrant maintains the records required by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1
to 31a-3 inclusive thereunder at its principal executive
office. Certain records, including records relating to the
Registrant's shareholders and the physical possession of its
securities, may be maintained pursuant to Rule 31a-3 at the
main offices of the Registrant's transfer and dividend
disbursing agent and custodian.
Item 31. MANAGEMENT SERVICES
See discussion in Part A under "Management of the Fund
Administrator" and in Part B under "Administrator."
Item 32. UNDERTAKINGS
(a) Not Applicable
(b) The Registrant undertakes to file a post-effective
amendment, using financial statements which need
not be certified, within four to six months from
the effective date of The Jamestown International
Equity Fund.
- 11 -
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon
request and without charge.
(d) The Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the Investment
Company Act of 1940, as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Cincinnati and the State of Ohio on the 31st day of July, 1996.
WILLIAMSBURG INVESTMENT TRUST
By: /S/ JOHN F. SPLAIN
John F. Splain,
Attorney-in-Fact
The term "Williamsburg Investment Trust" means and refers to the
Trustees from time to time serving under the Agreement and Declaration of
Trust of the Registrant dated July 18, 1988, as amended, a copy of which is on
file with the Secretary of State of The Commonwealth of Massachusetts. The
obligations of the Registrant hereunder are not binding personally upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Registrant, but bind only the trust property of the Registrant, as provided in
the Agreement and Declaration of Trust of the Registrant. The execution of
this Registration Statement has been authorized by the Trustees of the
Registrant and this Registration Statement has been signed by an authorized
officer of the Registrant, acting as such, and neither such authorization by
such Trustees nor such execution by such officer shall be deemed to have been
made by any of them, but shall bind only the trust property of the Registrant
as provided in its Declaration of Trust.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
/S/ JOHN T. BRUCE Trustee and Chairman July 31, 1996
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John T. Bruce (principal executive
officer)
/S/ MARK J. SEGER Treasurer (principal July 31, 1996
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Mark J. Seger financial and
accounting officer)
Jack E. Brinson* Trustee
Austin Brockenbrough III* Trustee
Charles M. Caravati* Trustee
J. Finley Lee, Jr.* Trustee
Richard Mitchell* Trustee
Richard L. Morrill* Trustee
Harris V. Morrissette* Trustee
Fred T. Tattersall* Trustee
Samuel B. Witt III* Trustee
*By: /S/ JOHN F. SPLAIN
John F. Splain
Attorney-in-Fact
July 31, 1996
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
1 Declaration of Trust*
2 Bylaws*
3 Not Applicable
4 See Exhibits 1 and 2
5 (i) Investment Advisory Agreements*
(ii) Investment Advisory Agreement with Respect to
The Jamestown International Equity Fund**
(iii) Sub-Advisory Agreement with Respect to The
Jamestown International Equity Fund**
6 Not Applicable
7 Not Applicable
8 (i) Custodian Agreement with The Northern Trust
Company**
(ii) Custodian Agreement with Star Bank, N.A.**
9 Administration, Accounting and
Transfer Agency Agreement*
10 Opinion and Consent of Counsel*
11 Consent of Accountants**
12 Not Applicable
13 Not Applicable
14 Not Applicable
15 Not Applicable
16 Computation of Performance Quotations*
17 Financial Data Schedule**
18 Not Applicable
* Previously filed as Exhibit to Registration
Statement on Form N-1A
** Filed herewith
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INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of April 1, 1996, by and between THE JAMESTOWN
INTERNATIONAL EQUITY FUND of WILLIAMSBURG INVESTMENT TRUST, a Massachusetts
Business Trust (the "Trust"), and Lowe, Brockenbrough & Tattersall, Inc., a
Virginia corporation (the "Adviser"), registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act").
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory and administrative services to The Jamestown International Equity
Fund series of the Trust, and the Adviser is willing to so furnish such
services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as
investment adviser to The Jamestown International Equity Fund series
of the Trust (the "Fund") for the period and on the terms set forth
in this Agreement. The Adviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment
Adviser with copies properly certified or authenticated of each
of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and
as it shall from time to time be amended, is herein called
the "Declaration");
(b) The Trust's Bylaws (such Bylaws, as presently in effect
and as they shall from time to time be amended, are herein
called the "Bylaws");
(c) Resolutions of the Trust's Board of Trustees authorizing
the appointment of the Adviser and approving this
Agreement;
(d) The Trust's Registration Statement on Form N-1A under the
1940 Act and under the Securities Act of 1933, as amended
(the "1933 Act"), relating to shares of beneficial interest
of the Trust (herein called the "Shares") as filed with the
Securities and Exchange Commission ("SEC") and all
amendments thereto;
(e) The Trust's Prospectus (such Prospectus, as presently in
effect and all amendments and supplements thereto are
herein called the "Prospectus").
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The Trust will furnish the Adviser from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements to the foregoing at the same time as such documents are
required to be filed with the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of
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Trustees, the Adviser will provide a continuous investment
program for the Fund, including investment research and
management with respect to all securities, investments, cash
and cash equivalents in the Fund. The Adviser will determine
from time to time what securities and other investments will be
purchased, retained or sold by the Fund. The Adviser will
provide the services under this Agreement in accordance with
the Fund's investment objectives, policies and restrictions as
stated in its Prospectus. The Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and
Regulations of the Securities and Exchange Commission and
will, in addition, conduct its activities under this
Agreement in accordance with regulations of any other
Federal and State agencies which may now or in the future
have jurisdiction over its activities under this Agreement;
(b) Will place orders pursuant to its investment
determinations for the Fund either directly with the
issuer or with any broker or dealer. In placing orders
with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when the
Adviser believes two or more brokers or dealers are
comparable in price and execution, the Adviser may prefer:
(i) brokers and dealers who provide the Fund with research
advice or other valuable services, or who recommend or
sell Fund shares, and (ii) brokers who are affiliated with
the Trust or its Adviser(s), PROVIDED, HOWEVER, that in no
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instance will portfolio securities be purchased from or
sold to the Adviser or any affiliated person of the
Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as
may be mutually agreed upon from time to time with the Board
of Trustees, the salaries and expenses of such personnel to
be borne by the Adviser unless otherwise mutually agreed
upon; and
(d) Will provide, at its own cost, all office space, facilities
and equipment necessary for the conduct of its advisory
activities on behalf of the Trust.
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Notwithstanding the foregoing, the Adviser may obtain the services of
an investment counselor or sub-adviser of its choice subject to the
approval of the Board of Trustees. The cost of employing such
counselor or sub-adviser will be paid by the Adviser and not by the
Trust.
4. SERVICES NOT EXCLUSIVE. The advisory services furnished by the
----------------------
Adviser hereunder are not to be deemed exclusive, and the
Adviser shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired
thereby PROVIDED, HOWEVER, that without the written consent of
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the Trustees, the Adviser will not serve as investment adviser
to any other investment company having a similar investment
objective to that of the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule
-----------------
31a-3 under the 1940 Act, the Adviser hereby agrees that all
records which it maintains for the benefit of the Trust are the
property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust's request. The
Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be
maintained by it pursuant to Rule 31a-1 under the Act that are
not maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will
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pay all expenses incurred by it in connection with its
investment advisory services pertaining to the Trust. In the
event that there is no distribution plan under Rule
12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay, out of the Adviser's resources generated from sources
other than fees received from the Trust, the entire cost of the
promotion and sale of Fund shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and
costs of the following:
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio
transactions of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio
securities;
(d) Fees and expenses of the Fund's administration agent, the
Fund's transfer and shareholder servicing agent and the
Fund's accounting agent or, if the Trust performs any such
services without an agent, the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal
entity;
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(g) Compensation of trustees who are not interested persons of
the Adviser as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and
expenses;
(j) Costs of setting in type, printing and mailing
Prospectuses, reports and notices to existing
shareholders;
(k) The investment advisory fee payable to the Adviser, as
provided in paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any
Distribution Plan as and if approved by the shareholders
of the Fund.
It is understood that the Trust may desire to register the Fund's
shares for sale in certain states which impose expense limitations on
mutual funds. The Trust agrees that it will register the Fund's
shares in such states only with the prior written consent of the
Adviser. It is further understood that the Trustees desire to limit
Fund expenses to 2% of average daily net assets, if such state
limitations are not so restrictive. The Adviser agrees to reimburse
the Trust an amount equal to any excess expenses incurred over the
lesser of either (i) the most stringent of such states' limitations
in which the Fund's shares are registered, or (ii) 2% of average
daily net assets. The Adviser shall in no event be required to
reimburse an amount greater than its fees received from the Trust
pursuant to paragraph 7, below.
7. COMPENSATION. For the services provided and the expenses assumed by
the Adviser pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation an
investment advisory fee, computed at the end of each month and
payable within five (5) business days thereafter, at the annual rate
of 1% of the Fund's average daily net assets.
8.(a) LIMITATION OF LIABILITY. The Adviser shall not be liable for
-----------------------
any error of judgment, mistake of law or for any other loss
whatsoever suffered by the Trust in connection with the
performance of this Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from wilful
misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement.
8.(b) INDEMNIFICATION OF ADVISER. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold
harmless (from the assets of the Fund or Funds to which the conduct
in question relates) the Adviser against all loss, damage and
liability, including but not limited to
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amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by the Adviser in
connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or
administrative or legislative body, related to or resulting from
this Agreement or the performance of services hereunder, except
with respect to any matter as to which it has been determined that
the loss, damage or liability is a direct result of (i) a breach of
fiduciary duty with respect to the receipt of compensation for
services; or (ii) wilful misfeasance, bad faith or gross negligence
on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its duties under this Agreement (either
and both of the conduct described in clauses (i) and (ii) above
being referred to hereinafter as "DISABLING CONDUCT"). A
determination that the Adviser is entitled to indemnification may
be made by (i) a final decision on the merits by a court or other
body before whom the proceeding was brought that the Adviser was
not liable by reason of Disabling Conduct, (ii) dismissal of a
court action or an administrative proceeding against the Adviser
for insufficiency of evidence of Disabling Conduct, or (iii) a
reasonable determination, based upon a review of the facts, that
the Adviser was not liable by reason of Disabling Conduct by: (a)
vote of a majority of a quorum of Trustees who are neither
"interested persons" of the Trust as the quoted phrase is defined
in Section 2(a)(19) of the 1940 Act nor parties to the action, suit
or other proceeding on the same or similar grounds that is then or
has been pending or threatened (such quorum of such Trustees being
referred to hereinafter as the "INDEPENDENT TRUSTEES"), or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by the Adviser (but
excluding amounts paid in satisfaction of judgments, in compromise
or as fines or penalties), may be paid from time to time by the
Fund or Funds to which the conduct in question related in advance
of the final disposition of any such action, suit or proceeding;
PROVIDED, that the Adviser shall have undertaken to repay the
amounts so paid if it is ultimately determined that indemnification
of such expenses is not authorized under this Subsection 8(b) and
if (i) the Adviser shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses arising
by reason of any lawful advances, or (iii) a majority of the
Independent Trustees, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the Adviser ultimately will be
entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree
or otherwise, no such indemnification either
20
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for said payment or for any other expenses shall be provided unless
such indemnification shall be approved (i) by a majority of the
Independent Trustees or (ii) by an independent legal counsel in a
written opinion. Approval by the Independent Trustees pursuant to
clause (i) shall not prevent the recovery from the Adviser of any
amount paid to the Adviser in accordance with either of such
clauses as indemnification of the Adviser is subsequently
adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that the Adviser's action
was in or not opposed to the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall
not be exclusive of or affect any of the rights to which the
Adviser may be entitled. Nothing contained in this Subsection 8(b)
shall affect any rights to indemnification to which Trustees,
officers or other personnel of the Trust, and other persons may be
entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any
such person.
The Board of Trustees of the Trust shall take all such action as
may be necessary and appropriate to authorize the Trust hereunder
to pay the indemnification required by this Subsection 8(b)
including, without limitation, to the extent needed, to determine
whether the Adviser is entitled to indemnification hereunder and
the reasonable amount of any indemnity due it hereunder, or employ
independent legal counsel for that purpose.
8.(c) The provisions contained in Section 8 shall survive the expiration
or other termination of this Agreement, shall be deemed to include
and protect the Adviser and its directors, officers, employees and
agents and shall inure to the benefit of its/their respective
successors, assigns and personal representatives.
21
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9. DURATION AND TERMINATION. This Agreement shall become effective on
the date hereof and, unless sooner terminated as provided herein,
shall continue in effect until April 1, 1998. Thereafter, this
Agreement shall be renewable for successive periods of one year
each, PROVIDED such continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of
Trustees who are not parties to this Agreement or interested
persons of any such party (as that term is defined in the
1940 Act), cast in person at a meeting called for the
purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is
defined in the 1940 Act) of the outstanding voting
securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by
the Fund or by the Adviser at any time on sixty (60) days' written
notice, without the payment of any penalty, provided that
termination by the Fund must be authorized either by vote of the
Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement will automatically
terminate in the event of its assignment (as that term is defined
in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
---------------------------
may be changed, waived, discharged or terminated orally, but
only by a written instrument signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought. No material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority
of the Fund's outstanding voting securities (as defined in the
1940 Act).
11. MISCELLANEOUS. The captions in this Agreement are included
-------------
for convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement
shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall
inure to the benefit of the parties hereto and their
respective successors.
22
<PAGE>
12. APPLICABLE LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of
Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and
year first above written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: /S/ JOHN F. SPLAIN By: /S/ AUSTIN BROCKENBROUGH III
Title: SECRETARY Title: TRUSTEE
ATTEST: LOWE, BROCKENBROUGH & TATTERSALL, INC.
By:____________________________ By:/S/ AUSTIN BROCKENBROUGH III
Title:_________________________ Title: PRESIDENT
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<PAGE>
SUB-ADVISORY AGREEMENT
Oechsle International Advisors, L.P.
One International Place
Boston, Massachusetts 02110
Gentlemen:
Williamsburg Investment Trust (the "Trust") is a diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Act"), and subject to the rules and regulations
promulgated thereunder. The Trust's shares of beneficial interest are divided
into separate series or funds. Each such share of a fund represents an
undivided interest in the assets, subject to the liabilities, allocated to
that fund. Each fund has separate investment objectives and policies. The
Jamestown International Equity Fund (the "Fund") has been established as a
series of the Trust.
Lowe, Brockenbrough & Tattersall, Inc. (the "Adviser") acts as the
investment manager for the Fund pursuant to the terms of an Investment
Advisory Agreement. The Adviser is responsible for the coordination of
investment of the Fund's assets in portfolio securities. However, specific
portfolio purchases and sales for the investment portfolio of the Fund are to
be made by advisory organizations recommended by the Adviser and approved by
the Board of Trustees of the Trust.
advagree.jie
24
<PAGE>
1. APPOINTMENT AS AN ADVISER. The Trust being duly
authorized hereby appoints and employs Oechsle International
Advisors, L.P. (the "Sub-Adviser") as the discretionary portfolio
manager of the Fund, on the terms and conditions set forth herein.
2. ACCEPTANCE OF APPOINTMENT; STANDARD OF PERFORMANCE. The
Sub-Adviser accepts the appointment as the discretionary portfolio
manager and agrees to use its best professional judgment to make
timely investment decisions for the Fund in accordance with the
provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF SUB-ADVISER. The Sub- Adviser is
hereby employed and authorized to select portfolio securities for investment
by the Fund, to purchase and sell securities of the Fund, and upon making any
purchase or sale decision, to place orders for the execution of such portfolio
transactions in accordance with paragraphs 5 and 6 hereof. In providing
portfolio management services to the Fund, the Sub- Adviser shall be subject
to such investment restrictions as are set forth in the Act and the rules
thereunder, the Internal Revenue Code, applicable state securities laws, the
supervision and control of the Board of Trustees of the Trust, such specific
instructions as the Board of Trustees may adopt and communicate to the
Sub-Adviser, the investment objectives, policies and restrictions of the Fund
furnished pursuant to paragraph 4, the provisions of Schedule A hereto and
instructions from the Adviser. The Sub-Adviser is not authorized by the Fund
to take any action, including the purchase or sale of securities for the Fund,
in contravention of any
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<PAGE>
restriction, limitation, objective, policy or instruction described in the
previous sentence. The Sub-Adviser shall maintain on behalf of the Fund the
records listed in Schedule A hereto (as amended from time to time). At the
Trust's reasonable request, the Sub-Adviser will consult with the Adviser with
respect to any decision made by it with respect to the investments of the
Fund.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Trust will
provide the Sub-Adviser with the statement of investment objectives, policies
and restrictions applicable to the Fund as contained in the Fund's
registration statements under the Act and the Securities Act of 1933, and any
instructions adopted by the Board of Trustees supplemental thereto. The Trust
will provide the Sub-Adviser with such further information concerning the
investment objectives, policies and restrictions applicable thereto as the
Sub- Adviser may from time to time reasonably request. The Trust retains the
right, on written notice to the Sub-Adviser from the Trust or the Adviser, to
modify any such objectives, policies or restrictions in any manner at any
time.
5. TRANSACTION PROCEDURES. All transactions will be consummated by
payment to or delivery by The Northern Trust Company or any successor
custodian (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Fund, and the Sub-Adviser shall not have
possession or custody thereof. The Sub-Adviser shall advise the Custodian and
confirm in writing to the Trust and to the Adviser all investment orders for
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<PAGE>
the Fund placed by it with brokers and dealers. The Sub-Adviser shall issue to
the Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Sub-Adviser. It shall be the
responsibility of the Sub-Adviser to take appropriate action if the Custodian
fails to confirm in writing proper execution of the instructions.
6. ALLOCATION OF BROKERAGE. The Sub-Adviser shall have the
authority and discretion to select brokers and dealers to execute
portfolio transactions initiated by the Sub-Adviser, and for the
selection of the markets on or in which the transactions will be
executed.
A. In doing so, the Sub-Adviser will give primary consideration to
securing the best net price and the most favorable execution, taking into
account such factors as price (including the applicable brokerage commission
or dealer spread), the execution capability, financial responsibility and
responsiveness of the broker or dealer and the brokerage and research services
provided by the broker or dealer. It is understood that neither the Fund, the
Adviser nor the Sub-Adviser have adopted a formula for allocation of the
Fund's investment transaction business. Consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., and subject
to seeking best qualitative execution, the Sub-Adviser may give consideration
to sales of shares of the Fund as a factor in the selection of brokers and
dealers to execute portfolio transactions of the Fund.
On occasions when the Sub-Adviser deems the purchase or sale of
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<PAGE>
a security to be in the best interest of the Fund as well as other clients,
the Sub-Adviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities to be sold
or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the Fund
with respect to the Fund and to such other clients.
For each fiscal quarter of the Fund, the Sub-Adviser shall prepare
and render reports to the Adviser and the Trust's Board of Trustees of the
total brokerage business placed and the manner in which the allocation has
been accomplished. Such reports shall set forth at a minimum the information
required to be maintained by Rule 31a-1(b)(9) under the Act.
B. Adviser may execute portfolio transactions for the Fund's
account with a broker or dealer which is an "affiliated person" (as defined in
the Act) of the Trust, the Adviser or the Sub-Adviser or any other investment
adviser of the Trust. The Adviser agrees that it will provide the Sub-Adviser
with a list of brokers and dealers which are "affiliated persons" of the
Trust, the Adviser or the Sub- Adviser.
7. PROXIES. The Trust will vote all proxies solicited by or
with respect to the issuers of securities in which assets of the
Fund may be invested from time to time. At the Fund's request, the
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<PAGE>
Sub-Adviser shall provide the Trust with its recommendations as to the voting
of such proxies.
8. REPORTS TO THE SUB-ADVISER. The Trust will provide the
Sub-Adviser with such periodic reports concerning the status of the
Fund as the Sub-Adviser may reasonably request.
9. FEES FOR SERVICES. For the services provided to the Fund,
the Adviser (not the Fund) shall pay the Sub-Adviser a fee equal to
one-half of the advisory fee (net of fee waivers, whether they be
required by law or undertaken voluntarily) received by the Adviser
from the Fund.
The Sub-Adviser's fees shall be payable monthly within ten days
following the end of each month. Pursuant to the provisions of the Investment
Advisory Agreement between the Trust and the Adviser, the Adviser is solely
responsible for the payment of fees to the Sub- Adviser, and the Sub-Adviser
agrees to seek payment of the Sub- Adviser's fees solely from the Adviser.
10. OTHER INVESTMENT ACTIVITIES OF THE SUB-ADVISER. The Trust
acknowledges that the Sub-Adviser or one or more of its affiliates
may have investment responsibilities or render
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<PAGE>
investment advice to or perform other investment advisory services for other
individuals or entities and that the Sub-Adviser, its affiliates or any of its
or their directors, officers, agents or employees may buy, sell or trade in
any securities for its or their respective accounts ("Affiliated Accounts").
Subject to the provisions of paragraph 2 hereof, the Trust agrees that the
Sub- Adviser or its affiliates may give advice or exercise investment
responsibility and take such other action with respect to other Affiliated
Accounts which may differ from the advice given or the timing or nature of
action taken with respect to the Fund, provided that the Sub-Adviser acts in
good faith, and provided further, that it is the Sub-Adviser's policy to
allocate, within its reasonable discretion, investment opportunities to the
Fund over a period of time on a fair and equitable basis relative to the
Affiliated Accounts, taking into account the investment objectives and
policies of the Fund and any specific investment restrictions applicable
thereto. The Trust acknowledges that one or more of the Affiliated Accounts
may at any time hold, acquire, increase, decrease, dispose of or otherwise
deal with positions in investments in which the Fund may have an interest from
time to time, whether in transactions which involve the Fund or otherwise. The
Sub-Adviser shall have no obligation to acquire for the Fund a position in any
investment which any Affiliated Account may acquire, and the Trust shall have
no first refusal, co-investment or other rights in respect of any such
investment, either for the Fund or otherwise.
11. CERTIFICATE OF AUTHORITY. The Trust, the Adviser and the
Sub-Adviser shall furnish to each other from time to time certified
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<PAGE>
copies of the resolutions of their Board of Trustees or Board of Directors or
executive committees, as the case may be, evidencing the authority of officers
and employees who are authorized to act on behalf of the Trust, the Fund, the
Adviser and/or the Sub-Adviser.
12. LIMITATION OF LIABILITY. The Sub-Adviser shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions
from the Trust, provided, however, that such acts or omissions shall not have
resulted from the Sub-Adviser's willful misfeasance, bad faith or negligence,
a violation of the standard of care established by and applicable to the
Sub-Adviser in its actions under this Agreement or breach of its duty or of
its obligations hereunder. Nothing in this paragraph 12 shall be construed in
a manner inconsistent with Sections 17(h) and (i) of the Act.
13. CONFIDENTIALITY. Subject to the duty of the Sub-Adviser
and the Trust to comply with applicable law, including any demand of
any regulatory or taxing authority having jurisdiction, the parties
hereto shall treat as confidential all information pertaining to the
Fund and the actions of the Sub-Adviser and the Trust in respect
thereof.
14. ASSIGNMENT. No assignment of this Agreement shall be made
by the Sub-Adviser, and this Agreement shall terminate automatically
in the event of such assignment. The Sub-Adviser shall notify the
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Trust in writing sufficiently in advance of any proposed change of control, as
defined in Section 2(a)(9) of the Act, as will enable the Trust to consider
whether an assignment will occur, and to take the steps necessary to enter
into a new contract with the Sub- Adviser.
15. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST.
The Trust represents, warrants and agrees that:
A. The Sub-Adviser has been duly appointed by the Board of
Trustees of the Trust to provide investment services to the Fund as
contemplated hereby.
B. The Trust will deliver to the Sub-Adviser a true and complete
copy of its then current prospectus and statement of additional information as
effective from time to time and such other documents or instruments governing
the investments of the Fund and such other information as is necessary for the
Sub-Adviser to carry out its obligations under this Agreement.
C. The Trust is currently in compliance and shall at all
times comply with the requirements imposed upon the Fund by
applicable laws and regulations.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SUB-
ADVISER. The Sub-Adviser represents, warrants and agrees that:
A. The Sub-Adviser is registered as an "investment adviser"
under the Investment Sub-Advisers Act of 1940.
B. The Sub-Adviser will maintain, keep current and preserve
on behalf of the Fund, in the manner and for the time periods
required or permitted by the Act, the records identified in Schedule
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A. The Sub-Adviser agrees that such records (unless otherwise
indicated on Schedule A) are the property of the Trust, and will be
surrendered to the Trust promptly upon request.
C. The Sub-Adviser will complete such reports concerning purchases
or sales of securities on behalf of the Fund as the Adviser or the Trust may
from time to time require to ensure compliance with the Act, the Internal
Revenue Code and applicable state securities laws.
D. The Sub-Adviser will adopt a written code of ethics complying
with the requirements of Rule 17j-1 under the Act and will provide the Trust
with a copy of the code of ethics and evidence of its adoption. Within
forty-five (45) days of the end of the last calendar quarter of each year
while this Agreement is in effect, the president or a vice president of the
Sub-Adviser shall certify to the Trust that the Sub-Adviser has complied with
the requirements of Rule 17j-1 during the previous year and that there has
been no violation of the Sub-Adviser's code of ethics or, if such a violation
has occurred, that appropriate action was taken in response to such violation.
Upon the written request of the Trust, the Sub-Adviser shall submit to the
Trust the reports required to be made to the Sub-Adviser by Rule 17j-1(c)(1).
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E. The Sub-Adviser will promptly after filing with the
Securities and Exchange Commission an amendment to its Form ADV
furnish a copy of such amendment to the Trust and to the Adviser.
F. Upon request of the Trust, the Sub-Adviser will provide
assistance to the Custodian in the collection of income due or payable to the
Fund. With respect to income from foreign sources, the Sub-Adviser will
undertake any reasonable procedural steps required to reduce, eliminate or
reclaim non-U.S. withholding taxes under the terms of applicable United States
income tax treaties.
G. The Sub-Adviser will immediately notify the Trust and the
Adviser of the occurrence of any event which would disqualify the Sub-Adviser
from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the Act or otherwise.
17. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Sub-Adviser and the Trust, which amendment,
other than amendments to Schedule A, is subject to the approval of the Board
of Trustees and the shareholders of the Fund in the manner required by the Act
and the rules thereunder, subject to any applicable exemptive order of the
Securities and Exchange Commission modifying the provisions of the Act with
respect to approval of amendments to this Agreement.
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18. EFFECTIVE DATE; TERM. This Agreement shall become effective on
the date of its execution and shall remain in force until April 1, 1998, and
from year to year thereafter but only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees who are not interested persons of the Trust, the Adviser or the
Sub-Adviser, cast in person at a meeting called for the purpose of voting on
such approval, and by a vote of the Board of Trustees or of a majority of the
outstanding voting securities of the Fund. The aforesaid requirement that this
Agreement may be continued "annually" shall be construed in a manner
consistent with the Act and the rules and regulations thereunder.
19. TERMINATION. This Agreement may be terminated by the Trust, by
the Adviser or by the Sub-Adviser, without the payment of any penalty,
immediately upon written notice to the other in the event of a breach of any
provision thereof by the party so notified, or otherwise upon sixty (60) days'
written notice to the other, but any such termination shall not affect the
status, obligations or liabilities of any party hereto to the other.
20. SHAREHOLDER LIABILITY. The Sub-Adviser is hereby
expressly put on notice of the limitation of shareholder liability
as set forth in the Declaration of Trust of the Trust and agrees
that obligations assumed by the Trust pursuant to this Agreement
shall be limited in all cases to the Fund and its assets. The Sub-
Adviser agrees that it shall not seek satisfaction of any such
obligations from the shareholders or any individual shareholder of
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the Fund, nor from the Trustees or any individual Trustee of the
Trust.
21. DEFINITIONS. As used in paragraphs 14 and 18 of this
Agreement, the terms "assignment," interested person" and "vote of a
majority of the outstanding voting securities" shall have the
meanings set forth in the Act and the rules and regulations
thereunder.
22. APPLICABLE LAW. To the extent that state law is not
preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from
time to time, this Agreement shall be administered, construed and
enforced according to the laws of the State of Virginia.
LOWE, BROCKENBROUGH & WILLIAMSBURG INVESTMENT TRUST
TATTERSALL, INC.
By:/S/ AUSTIN BROCKENBROUGH III By:/S/ AUSTIN BROCKENBROUGH III
Title: PRESIDENT Title: TRUSTEE
Date: April 1, 1996 Date: April 1, 1996
ACCEPTANCE
The foregoing Agreement is hereby accepted.
OECHSLE INTERNATIONAL
ADVISORS, L.P.
By: /S/ STEPHEN P. LANGER
Title: PARTNER
Date: April 1, 1996
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<PAGE>
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE SUB-ADVISER
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all
other portfolio purchases or sales, given by the Sub- Adviser on
behalf of the Fund for, or in connection with, the purchase or sale
of securities, whether executed or unexecuted.
Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any
modification or cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of
the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase
and sale of portfolio securities to named brokers or dealers was
effected, and the division of brokerage commissions or other
compensation on such purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or
dealers to:
(a) The Trust;
(b) the Adviser;
(c) the Sub-Adviser;
(d) any other investment adviser of the Trust; and
(e) any person affiliated with the foregoing
persons.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
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available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at
such allocation of purchase and sale orders and such
division of brokerage commissions or other compensation.
D. The name of the person responsible for making the
determination of such allocation and such division of
brokerage commissions or other compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate
memorandum identifying the person or persons, committees or
groups authorizing the purchase or sale of portfolio
securities. Where an authorization is made by a committee or
group, a record shall be kept of the names of its members who
participate in the authorization. There shall be retained as
part of this record: any memorandum, recommendation or
instruction supporting or authorizing the purchase or sale of
portfolio securities and such other information as is
appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rules
adopted under Section 204 of the Investment Sub- Advisers Act of
1940, to the extent such records are necessary or appropriate to
record the Sub-Adviser's transactions with respect to the Fund.
*Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendation; i.e., buy, sell, hold) or any internal
reports or portfolio adviser reviews.
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CUSTODY AGREEMENT
This AGREEMENT, dated as of August 1, 1996, by and between
WILLIAMSBURG INVESTMENT TRUST (the "Trust"), a business trust organized under
the laws of the Commonwealth of Massachusetts, acting with respect to FBP
CONTRARIAN BALANCED FUND, FBP CONTRARIAN EQUITY FUND, THE GOVERNMENT STREET
EQUITY FUND, THE GOVERNMENT STREET BOND FUND, THE ALABAMA TAX FREE BOND FUND,
THE JAMESTOWN EQUITY FUND, THE JAMESTOWN BALANCED FUND, THE JAMESTOWN BOND
FUND, THE JAMESTOWN SHORT TERM BOND FUND AND THE JAMESTOWN TAX EXEMPT VIRGINIA
FUND (individually, a "Fund" and, collectively, the "Funds"), each of them a
series of the Trust and each of them operated and administered by the Trust,
and STAR BANK, N.A., a national banking association (the "Custodian").
W I T N E S S E T H:
WHEREAS, the Trust desires that the Funds' Securities and cash be
held and administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Trust and the Custodian hereby agree as follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral Instructions
and Written Instructions on behalf of the Funds and named in Exhibit A hereto
or in such resolutions of the Board of Trustees, certified by an Officer, as
may be received by the Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the Trustees from time to time
serving under the Trust's Agreement and Declaration of Trust, as from time to
time amended.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B
of 31 CFR Part 350, or in such book-entry regulations of federal agencies as
are substantially in the form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a
settlement day by The New York Stock Exchange, Inc. and any other
day for which the Trust computes the net asset value of Shares of
any Fund.
1.5 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name
of the Trust, which is provided for in Section 3.2 below.
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1.6 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.7 "OFFICER" shall mean the Chairman, the President, any Vice
President, any Assistant Vice President, the Secretary, any
Assistant Secretary, the Treasurer, or any Assistant Treasurer of
the Trust.
1.8 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i) reasonably
believed by the Custodian to have been given by an Authorized Person, (ii)
recorded and kept among the records of the Custodian made in the ordinary
course of business and (iii) orally confirmed by the Custodian. The Trust
shall cause all Oral Instructions to be confirmed by Written Instructions
prior to the end of the next Business Day. If such Written Instructions
confirming Oral Instructions are not received by the Custodian prior to a
transaction, it shall in no way affect the validity of the transaction or the
authorization thereof by the Trust. If Oral Instructions vary from the Written
Instructions which purport to confirm them, the Custodian shall notify the
Trust of such variance but such Oral Instructions will govern unless the
Custodian has not yet acted.
1.9 "PROPER INSTRUCTIONS" shall mean Oral Instructions or
Written Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.
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<PAGE>
1.10 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company
and (provided that Custodian shall have received a copy of a resolution of the
Board of Trustees, certified by an Officer, specifically approving the use of
such clearing agency as a depository for the Funds) any other clearing agency
registered with the Securities and Exchange Commission under Section 17A of
the Securities and Exchange Act of 1934 as amended (the "1934 Act"), which
acts as a system for the central handling of Securities where all Securities
of any particular class or series of an issuer deposited within the system are
treated as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of the Securities.
1.11 "SECURITIES" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed securities or
other obligations, and any certificates, receipts, warrants or other
instruments or documents representing rights to receive, purchase or subscribe
for the same, or evidencing or representing any other rights or interests
therein, or any similar property or assets that the Custodian has the
facilities to clear and to service.
1.12 "SHARES" shall mean, with respect to a Fund, the units of
beneficial interest issued by the Trust on account of such Fund.
1.13 "SUB-CUSTODIAN" shall mean and include (i) any branch of a
"qualified U.S. bank," as that term is defined in Rule 17f-5 under the 1940
Act, (ii) any "eligible foreign custodian," as that term is defined in Rule
17f-5 under the 1940 Act, approved by the Board of
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Trustees and having a contract with the Custodian which contract has been
approved by the Board of Trustees, and (iii) any securities depository or
clearing agency, incorporated or organized under the laws of a country other
than the United States, which operates the central system for handling of
securities or equivalent book-entries in that country or a transnational
system for the central handling of securities or equivalent book-entries,
which securities depository or clearing agency has been approved by the Board
of Trustees; provided, that the Custodian, or a Sub-Custodian has entered into
an agreement with such securities depository or clearing agency.
1.14 "WRITTEN INSTRUCTIONS" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized Person, or (ii)
communications by telex or any other such system from one or more persons
reasonably believed by the Custodian to be Authorized Persons, or (iii)
communications between electro-mechanical or electronic devices provided that
the use of such devices and the procedures for the use thereof shall have been
approved by resolutions of the Board of Trustees, a copy of which, certified
by an Officer, shall have been delivered to the Custodian.
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ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby constitutes and appoints
the Custodian as custodian of all Securities and cash owned by or in
the possession of the Funds at any time during the period of this
Agreement.
2.2 ACCEPTANCE. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as
hereinafter set forth.
2.3 DOCUMENTS TO BE FURNISHED. The following documents, including any
amendments thereto, will be provided contemporaneously with the execution of
the Agreement to the Custodian by the Trust:
a. A copy of the Declaration of Trust of the Trust certified
by the Secretary;
b. A copy of the Bylaws of the Trust certified by the
Secretary;
c. A copy of the resolution of the Board of Trustees of the
Trust appointing the Custodian, certified by the
Secretary;
d. A copy of the then current Prospectus of each Fund; and
e. A certification of the Chairman and Secretary of the Trust
setting forth the names and signatures of the current
Officers of the Trust and other Authorized Persons.
2.4 NOTICE OF APPOINTMENT OF DIVIDEND AND TRANSFER AGENT. The
Trust agrees to notify the Custodian in writing of the appointment,
termination or change in appointment of any Dividend and Transfer
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Agent of the Funds.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of a Fund (other than Securities maintained in a
Securities Depository or Book-Entry System) shall be physically segregated
from other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall
be identified as subject to this Agreement.
3.2 FUND CUSTODY ACCOUNTS. As to each Fund, the Custodian shall open
and maintain in its trust department a custody account in the name of the
Trust coupled with the name of such Fund, subject only to draft or order of
the Custodian, in which the Custodian shall enter and carry all Securities,
cash and other assets of such Fund which are delivered to it.
3.3 APPOINTMENT OF AGENTS. (a) In its discretion, the Custodian may
appoint one or more Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Funds and to carry out such
other provisions of this Agreement as it may determine, provided, however,
that the appointment of any such agents and maintenance of any Securities and
cash of the Fund shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this Agreement.
(b) If, after the initial approval of Sub-Custodians by the
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Board of Trustees in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of the Funds, it will so notify
the Trust and provide it with information reasonably necessary to determine
any such new Sub-Custodian's eligibility under Rule 17f-5 under the 1940 Act,
including a copy of the proposed agreement with such Sub-Custodian. The Trust
shall at the meeting of the Board of Trustees next following receipt of such
notice and information give a written approval or disapproval of the proposed
action.
(c) The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule
17f-5(a)(1)(iii).
(d) If the Custodian intends to remove any Sub-Custodian previously
approved by the Board of Trustees, it shall so notify the Trust and move the
Securities and cash of the Funds deposited with such Sub-Custodian to another
Sub-Custodian previously approved by the Board of Trustees. The Custodian
shall promptly take such steps as may be required to remove any Sub-Custodian
that has ceased to meet the requirements of Rule 17f-5 under the 1940 Act.
(e) The Custodian hereby warrants to the Trust that in its opinion,
after due inquiry, the established procedures to be followed by each
Sub-Custodian in connection with the safekeeping of property of the Funds
pursuant to this Agreement afford protection for such property not materially
different from that afforded by the Custodian's established safekeeping
procedures with respect to
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similar property held by it (and its securities depositories) in
Cincinnati, Ohio.
(f) The Custodian shall oversee the maintenance of any Securities
held for the Funds by any Sub-Custodian. Any Securities held by a
Sub-Custodian will be subject only to the instructions of the Custodian or its
agents; and any Securities held in an eligible foreign securities depository
for the account of a Sub-Custodian will be subject only to the instructions of
such Sub-Custodian. In the event that a Sub-Custodian permits any of the
Securities placed in its care to be held in an eligible foreign securities
depository, such Sub-Custodian will be required by its agreement with the
Custodian to identify on its books such Securities as being held for the
account of the Custodian as a custodian for its customers.
3.4 DELIVERY OF ASSETS TO CUSTODIAN. The Trust shall deliver, or
cause to be delivered, to the Custodian all of the Funds' Securities, cash and
other assets, including (a) all payments of income, payments of principal and
capital distributions received by the Funds with respect to such Securities,
cash or other assets owned by the Funds at any time during the period of this
Agreement, and (b) all cash received by the Funds for the issuance, at any
time during such period, of Shares. The Custodian shall not be responsible for
such Securities, cash or other assets until actually received by it.
3.5 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The
Custodian may deposit and/or maintain Securities of the Funds in a
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Securities Depository or in a Book-Entry System, subject to the following
provisions:
(a) Prior to a deposit of Securities of the Funds in any
Securities Depository or Book-Entry System, the Trust
shall deliver to the Custodian a resolution of the Board
of Trustees, certified by an Officer, authorizing and
instructing the Custodian on an on-going basis to deposit
in such Securities Depository or Book-Entry System all
Securities eligible for deposit therein and to make use of
such Securities Depository or Book-Entry System to the
extent possible and practical in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and
returns of collateral consisting of Securities.
(b) Securities of the Funds kept in a Book-Entry System or
Securities Depository shall be kept in an account
("Depository Account") of the Custodian in such Book-Entry
System or Securities Depository which includes only assets
held by the Custodian as a fiduciary, custodian or otherwise
for customers.
(c) The records of the Custodian with respect to Securities of a
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to such Fund.
(d) If Securities purchased by a Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
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shall pay for such Securities upon (i) receipt of advice
from the Book-Entry System or Securities Depository that
such Securities have been transferred to the Depository
Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of such Fund. If Securities sold by a Fund are held
in a Book-Entry System or Securities Depository, the
Custodian shall transfer such Securities upon (i) receipt of
advice from the Book-Entry System or Securities Depository
that payment for such Securities has been transferred to the
Depository Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and
payment for the account of such Fund.
(e) The Custodian shall provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry System
or Securities Depository in which Securities of the Funds
are kept) on the internal accounting controls and procedures
for safeguarding Securities deposited in such Book-Entry
System or Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for any loss or
damage to a Fund resulting (i) from the use of a Book-Entry
System or Securities Depository by reason of any negligence
or willful misconduct on the part of Custodian or any
Sub-Custodian appointed pursuant to
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Section 3.3 above or any of its or their employees, or (ii)
from failure of Custodian or any such Sub-Custodian to
enforce effectively such rights as it may have against a
Book-Entry System or Securities Depository. At its election,
the Trust shall be subrogated to the rights of the Custodian
with respect to any claim against a Book- Entry System or
Securities Depository or any other person from any loss or
damage to the Funds arising from the use of such Book-Entry
System or Securities Depository, if and to the extent that
the Funds have not been made whole for any such loss or
damage.
3.6 DISBURSEMENT OF MONEYS FROM FUND CUSTODY ACCOUNTS. Upon
receipt of Proper Instructions, the Custodian shall disburse moneys
from a Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i)
in the case of Securities (other than options on
Securities, futures contracts and options on futures
contracts), against the delivery to the Custodian (or any
Sub-Custodian appointed pursuant to Section 3.3 above) of
such Securities registered as provided in Section 3.9
below or in proper form for transfer, or if the purchase
of such Securities is effected through a Book-Entry System
or Securities Depository, in accordance with the
conditions set forth in Section 3.5 above; (ii) in the
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case of options on Securities, against delivery to the
Custodian (or such Sub-Custodian) of such receipts as are
required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options
on futures contracts, against delivery to the Custodian (or
such Sub-Custodian) of evidence of title thereto in favor of
the Fund or any nominee referred to in Section 3.9 below;
and (iv) in the case of repurchase or reverse repurchase
agreements entered into between the Trust and a bank which
is a member of the Federal Reserve System or between the
Trust and a primary dealer in U.S. Government securities,
against delivery of the purchased Securities either in
certificate form or through an entry crediting the
Custodian's account at a Book-Entry System or Securities
Depository with such Securities;
(b) In connection with the conversion, exchange or surrender,
as set forth in Section 3.7(f) below, of Securities owned
by the Fund;
(c) For the payment of any dividends or capital gain
distributions declared by the Fund;
(d) In payment of the redemption price of Shares as provided
in Section 5.1 below;
(e) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: interest; taxes;
administration, investment advisory, accounting, auditing,
transfer agent, custodian, trustee and legal fees; and
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other operating expenses of the Fund; in all cases, whether
or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-
dealer registered under the 1934 Act and a member of the
NASD, relating to compliance with rules of The Options
Clearing Corporation and of any registered national
securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in
connection with transactions by the Fund;
(g) For transfer in accordance with the provision of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract
market (or any similar organization or organizations)
regarding account deposits in connection with transactions
by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a
term of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution
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of the Board of Trustees, certified by an Officer,
specifying the amount and purpose of such payment, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom such payment is to be made.
3.7 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNTS. Upon
receipt of Proper Instructions, the Custodian shall release and
deliver Securities from a Fund Custody Account but only in the
following cases:
(a) Upon the sale of Securities for the account of the Fund
but only against receipt of payment therefor in cash, by
certified or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System
or Securities Depository, in accordance with the
provisions of Section 3.5 above;
(c) To an offeror's depository agent in connection with tender
or other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is
to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian
appointed pursuant to Section 3.3 above, or of any nominee
or nominees of any of the foregoing, or (ii) for exchange
for a different number of certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new Securities
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are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant
to provisions for conversion contained in such Securities,
or pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any
repurchase or reverse repurchase agreement entered into by
the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the
new Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of
the Fund, but only against receipt of such collateral as the
Trust shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Trust, but
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only against receipt by the Custodian of the amounts
borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization
of the Trust;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-
dealer registered under the 1934 Act and a member of the
NASD, relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in
connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract
market (or any similar organization or organizations)
regarding account deposits in connection with transactions
by the Fund; or
(n) For any other proper corporate purpose, but only upon
receipt, in addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an
Officer, specifying the Securities to be delivered,
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setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery
of such Securities shall be made.
3.8 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless
otherwise instructed by the Trust, the Custodian shall with respect
to all Securities held for a Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled
either by law or pursuant to custom in the securities
business;
(b) Present for payment and, subject to Section 7.4 below,
collect on a timely basis the amount payable upon all
Securities which may mature or be called, redeemed, or
retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form
for Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws
or the laws or regulations of any other taxing authority now
or hereafter in effect, and prepare and submit reports to
the Internal Revenue Service ("IRS") and to the Trust at
such time, in such manner and containing
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such information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of
the Fund.
3.9 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held for
a Fund that are issued or issuable only in bearer form shall be held by the
Custodian in that form, provided that any such Securities shall be held in a
Book-Entry System if eligible therefor. All other Securities held for a Fund
may be registered in the name of such Fund, the Custodian, or any
Sub-Custodian appointed pursuant to Section 3.3 above, or in the name of any
nominee of any of them, or in the name of a Book-Entry System, Securities
Depository or any nominee of either thereof. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver
in proper form for transfer, or to register in the name of any of the nominees
hereinabove referred to or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of a Fund.
3.10 RECORDS. (a) The Custodian shall maintain, by Fund,
complete and accurate records with respect to Securities, cash or
other property held for the Funds, including (i) journals or other
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records of original entry containing an itemized daily record in detail of all
receipts and deliveries of Securities and all receipts and disbursements of
cash; (ii) ledgers (or other records) reflecting (A) Securities in transfer,
(B) Securities in physical possession, (C) monies and Securities borrowed and
monies and Securities loaned (together with a record of the collateral
therefor and substitutions of such collateral), (D) dividends and interest
received, and (E) dividends receivable and interest receivable; and (iii)
canceled checks and bank records related thereto. The Custodian shall keep
such other books and records of the Funds as the Trust shall reasonably
request, or as may be required by the 1940 Act, including, but not limited to,
Section 31 of the 1940 Act and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i)
be maintained in a form acceptable to the Trust and in compliance with rules
and regulations of the Securities and Exchange Commission, (ii) be the
property of the Trust and at all times during the regular business hours of
the Custodian be made available upon request for inspection by duly authorized
officers, employees or agents of the Trust and employees or agents of the
Securities and Exchange Commission, and (iii) if required to be maintained by
Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act.
3.11 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish
the Trust with a daily activity statement by Fund and a summary of
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all transfers to or from each Fund Custody Account on the day following such
transfers. At least monthly and from time to time, the Custodian shall furnish
the Trust with a detailed statement, by Fund, of the Securities and moneys
held by the Custodian and the Sub-Custodians for the Funds under this a
Agreement.
3.12 OTHER REPORTS BY CUSTODIAN. The Custodian shall provide the
Trust with such reports, as the Trust may reasonably request from time to
time, on the internal accounting controls and procedures for safeguarding
Securities, which are employed by the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above.
3.13 PROXIES AND OTHER MATERIALS. The Custodian shall cause all
proxies relating to Securities which are not registered in the name of a Fund,
to be promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities.
3.14 INFORMATION ON CORPORATE ACTIONS. The Custodian shall promptly
deliver to the Trust all information received by the Custodian and pertaining
to Securities being held by the Funds with respect to optional tender or
exchange offers, calls for redemption or purchase, or expiration of rights as
described in the Standards of Service Guide attached as Exhibit B. If the
Trust desires to
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take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust
will provide or cause to be provided to the Custodian all relevant information
for any Security which has unique put/option provisions at least five Business
Days prior to the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUNDS
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of Securities
for a Fund, Written Instructions shall be delivered to the Custodian,
specifying (a) the Fund for which the purchase was made, (b) the name of the
issuer or writer of such Securities, and the title or other description
thereof, (c) the number of shares, principal amount (and accrued interest, if
any) or other units purchased, (d) the date of purchase and settlement, (e)
the purchase price per unit, (f) the total amount payable upon such purchase,
and (g) the name of the person to whom such amount is payable. The Custodian
shall upon receipt of such Securities purchased by a Fund pay out of the
moneys held for the account of such Fund the total amount specified in such
Written Instructions to the person named therein. The Custodian shall not be
under any obligation to pay out moneys to cover the cost of a purchase of
Securities for a Fund, if in the relevant Fund Custody Account there is
insufficient cash
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available to the Fund for which such purchase was made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for the purchase of Securities
for a Fund is made by the Custodian in advance of receipt of the Securities
purchased but in the absence of specified Written Instructions to so pay in
advance, the Custodian shall be liable to the Fund for such Securities to the
same extent as if the Securities had been received by the Custodian.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by a
Fund, Written Instructions shall be delivered to the Custodian, specifying (a)
the Fund for which the sale was made, (b) the name of the issuer or writer of
such Securities, and the title or other description thereof, (c) the number of
shares, principal amount (and accrued interest, if any), or other units sold,
(d) the date of sale and settlement, (e) the sale price per unit, (f) the
total amount payable upon such sale, and (g) the person to whom such
Securities are to be delivered. Upon receipt of the total amount payable to
the Fund as specified in such Written Instructions, the Custodian shall
deliver such Securities to the person specified in such Written Instructions.
Subject to the foregoing, the Custodian may accept payment in such form as
shall be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3
above or any other provision of this Agreement, the Custodian, when
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instructed to deliver Securities against payment, shall be entitled, if in
accordance with generally accepted market practice, to deliver such Securities
prior to actual receipt of final payment therefor. In any such case, the Fund
for which such Securities were delivered shall bear the risk that final
payment for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person to whom
they were delivered, and the Custodian shall have no liability for any for the
foregoing.
4.5 PAYMENT FOR SECURITIES SOLD, ETC. In its sole discretion and from
time to time, the Custodian may credit the relevant Fund Custody Account,
prior to actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against payment,
(ii) proceeds from the redemption of Securities or other assets of the Fund,
and (iii) income from cash, Securities or other assets of the Fund. Any such
credit shall be conditional upon actual receipt by Custodian of final payment
and may be reversed if final payment is not actually received in full. The
Custodian may, in its sole discretion and from time to time, permit a Fund to
use funds so credited to its Fund Custody Account in anticipation of actual
receipt of final payment. Any such funds shall be repayable immediately upon
demand made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the Fund
Custody Account.
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4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its
sole discretion and from time to time, advance funds to the Trust to
facilitate the settlement of a Fund's transactions in its Fund Custody
Account. Any such advance shall be repayable immediately upon demand made by
Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 TRANSFER OF FUNDS. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt of Proper
Instructions specifying that the funds are required to redeem Shares of a
Fund, the Custodian shall wire each amount specified in such Proper
Instructions to or through such bank as the Trust may designate with respect
to such amount in such Proper Instructions.
5.2 NO DUTY REGARDING PAYING BANKS. The Custodian shall not be under
any obligation to effect payment or distribution by any bank designated in
Proper Instructions given pursuant to Section 5.1 above of any amount paid by
the Custodian to such bank in accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish
and maintain a segregated account or accounts for and on behalf of a Fund,
into which account or accounts may be transferred
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cash and/or Securities, including Securities maintained in a
Depository Account,
(a) in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered
under the 1934 Act and a member of the NASD (or any
futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding
escrow or other arrangements in connection with
transactions by the Fund,
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by the Fund or
in connection with financial futures contracts (or options
thereon) purchased or sold by the Fund,
(c) which constitute collateral for loans of Securities made
by the Fund,
(d) for purposes of compliance by the Fund with requirements
under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in connection
with reverse repurchase agreements and when-issued, delayed
delivery and firm commitment transactions, and
(e) for other proper corporate purposes, but only upon receipt
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of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Trustees, certified by an
Officer, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper
corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for a single Fund only. All Proper Instructions
relating to a segregated account shall specify the Fund involved.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 STANDARD OF CARE. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and
shall be without liability to the Trust or any Fund for any loss, damage,
cost, expense (including attorneys' fees and disbursements), liability or
claim unless such loss, damage, cost, expense, liability or claim arises from
negligence, bad faith or willful misconduct on its part or on the part of any
Sub- Custodian appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to rely on and may act upon advice of counsel on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice. The Custodian shall promptly notify the Trust of any action
taken or omitted by the Custodian pursuant to advice of counsel. The Custodian
shall not be under any obligation at any time to ascertain whether the Trust
or a Fund is in compliance with the 1940 Act, the regulations
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thereunder, the provisions of the Trust's charter documents or by-laws, or its
investment objectives and policies as then in effect.
7.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable
for, or considered to be the custodian of, any cash belonging to a Fund or any
money represented by a check, draft or other instrument for the payment of
money, until the Custodian or its agents actually receive such cash or collect
on such instrument.
7.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent
that it is in the exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any property or evidence
of title thereto received or delivered by it pursuant to this Agreement.
7.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for a Fund if such Securities are
in default or payment is not made after due demand or presentation.
7.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in writing
received by it and reasonably believed by it to be genuine. The Custodian
shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by it pursuant to this Agreement.
7.6 EXPRESS DUTIES ONLY. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are specifically
set forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
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7.7 CO-OPERATION. The Custodian shall cooperate with and supply
necessary information, by Fund, to the entity or entities appointed by the
Trust to keep the books of account of the Funds and/or compute the value of
the assets of the Funds. The Custodian shall take all such reasonable actions
as the Trust may from time to time request to enable the Trust to obtain, from
year to year, favorable opinions from the Trust's independent accountants with
respect to the Custodian's activities hereunder in connection with (a) the
preparation of the Trust's reports on Form N-1A and Form N- SAR and any other
reports required by the Securities and Exchange Commission, and (b) the
fulfillment by the Trust of any other requirements of the Securities and
Exchange Commission.
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ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold
harmless the Custodian and any Sub-Custodian appointed pursuant to Section 3.3
above, and any nominee of the Custodian or of such Sub-Custodian, from and
against any loss, damage, cost, expense (including attorneys' fees and
disbursements), liability (including, without limitation, liability arising
under the Securities Act of 1933, the 1934 Act, the 1940 Act, and any state or
foreign securities and/or banking laws) or claim arising directly or
indirectly (a) from the fact that Securities are registered in the name of any
such nominee, or (b) from any action or inaction by the Custodian or such
Sub-Custodian (i) at the request or direction of or in reliance on the advice
of the Trust, or (ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or any sub-custody
agreement with a Sub-Custodian appointed pursuant to Section 3.3 above,
provided that neither the Custodian nor any such Sub-Custodian shall be
indemnified and held harmless from and against any such loss, damage, cost,
expense, liability or claim arising from the Custodian's or such
Sub-Custodian's negligence, bad faith or willful misconduct.
8.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall
indemnify and hold harmless the Trust from and against any loss,
damage, cost, expense (including attorneys' fees and disbursements),
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liability (including without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state or foreign
securities and/or banking laws) or claim arising from the negligence, bad
faith or willful misconduct of the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above, or any nominee of the Custodian or of such
Sub-Custodian.
8.3 INDEMNITY TO BE PROVIDED. If the Trust requests the Custodian to
take any action with respect to Securities, which may, in the opinion of the
Custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian
shall not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
8.4 SECURITY. If the Custodian advances cash or Securities to a Fund
for any purpose, either at the Trust's request or as otherwise contemplated in
this Agreement, or in the event that the Custodian or its nominee incurs, in
connection with its performance under this Agreement, any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim
(except such as may arise from its or its nominee's negligence, bad faith or
willful misconduct), then, in any such event, any property at any time held
for the account of such Fund shall be security therefor, and should such Fund
fail promptly to repay or indemnify the Custodian, the Custodian shall be
entitled to utilize available cash
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of such Fund and to dispose of other assets of such Fund to the extent
necessary to obtain reimbursement or indemnification.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure
or delay in performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires;
floods; wars; civil or military disturbances; sabotage; strikes; epidemics;
riots; power failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a
failure or delay (i) shall not discriminate against the Funds in favor of any
other customer of the Custodian in making computer time and personnel
available to input or process the transactions contemplated by this Agreement
and (ii) shall use its best efforts to ameliorate the effects of any such
failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 EFFECTIVE PERIOD. This Agreement shall become effective
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as of its execution and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 TERMINATION. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than sixty (60) days after the date of
the giving of such notice. If a successor custodian shall have been appointed
by the Board of Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of termination
(a) deliver directly to the successor custodian all Securities (other than
Securities held in a Book-Entry System or Securities Depository) and cash then
owned by the Funds and held by the Custodian as custodian, and (b) transfer
any Securities held in a Book-Entry System or Securities Depository to an
account of or for the benefit of the Funds at the successor custodian,
provided that the Trust shall have paid to the Custodian all fees, expenses
and other amounts to the payment or reimbursement of which it shall then be
entitled. Upon such delivery and transfer, the Custodian shall be relieved of
all obligations under this Agreement. The Trust may at any time immediately
terminate this Agreement in the event of the appointment of a conservator or
receiver for the Custodian by regulatory authorities or upon the happening of
a like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
10.3 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor
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custodian is not designated by the Trust on or before the date of termination
specified pursuant to Section 10.1 above, then the Custodian shall have the
right to deliver to a bank or trust company of its own selection, which (a) is
a "bank" as defined in the 1940 Act and (b) has aggregate capital, surplus and
undivided profits as shown on its then most recent published report of not
less than $25 million, all Securities, cash and other property held by
Custodian under this Agreement and to transfer to an account of or for the
Funds at such bank or trust company all Securities of the Funds held in a
Book-Entry System or Securities Depository. Upon such delivery and transfer,
such bank or trust company shall be the successor custodian under this
Agreement and the Custodian shall be relieved of all obligations under this
Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from
time to time by the Trust and the Custodian. The fees and other charges in
effect on the date hereof and applicable to the Funds are set forth in Exhibit
C attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees,
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shareholders, nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust as provided in the Trust's
Agreement and Declaration of Trust, as from time to time amended. The
execution and delivery of this Agreement have been authorized by the Trustees,
and this Agreement has been signed and delivered by an authorized officer of
the Trust, acting as such, and neither such authorization by the Trustees nor
such execution and delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
the above-mentioned Agreement and Declaration of Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices,
instructions, and other communications to be given hereunder shall be in
writing and shall be sent or delivered to the recipient at the address set
forth after its name hereinbelow:
TO THE TRUST:
Williamsburg Investment Trust
312 Walnut Street, 21st Floor
Cincinnati, OH 45202
Telephone: (513) 629-2000
Facsimile: (513) 629-2041
TO CUSTODIAN:
Star Bank, N.A.
425 Walnut Street, M.L. 6118
Cincinnati, Ohio 45202
Attention: Mutual Fund Custody Services
Telephone: (513) 632-3016
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Facsimile: (513) 632-4448
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
14.2 REFERENCES TO CUSTODIAN. The Trust shall not circulate any
printed matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in the
prospectus or statement of additional information for a Fund and such other
printed matter as merely identifies Custodian as custodian for one or more
Funds. The Trust shall submit printed matter requiring approval to Custodian
in draft form, allowing sufficient time for review by Custodian and its
counsel prior to any deadline for printing.
14.3 NO WAIVER. No failure by either party hereto to
exercise, and no delay by such party in exercising, any right
hereunder shall operate as a waiver thereof. The exercise by either
party hereto of any right hereunder shall not preclude the exercise
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of any other right, and the remedies provided herein are cumulative and not
exclusive of any remedies provided at law or in equity.
14.4 AMENDMENTS. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by an
instrument in writing executed by the parties hereto.
14.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of
which shall be deemed an original but all of which together shall constitute
but one and the same instrument.
14.6 SEVERABILITY. If any provision of this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
14.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that this Agreement shall not be
assignable by either party hereto without the written consent of the other
party hereto.
14.8 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered in its name and on its behalf by its
representatives thereunto duly authorized, all as of the day and year first
above written.
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<PAGE>
ATTEST: WILLIAMSBURG INVESTMENT TRUST
/s/ John F. Splain By:/s/ John T. Bruce
Secretary Chairman
STAR BANK, N.A.
By:/s/ Lynette Gibson
Vice President
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<PAGE>
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
NAME SIGNATURE
John T. Bruce ______________________________
John F. Splain ______________________________
Robert G. Dorsey ______________________________
Mark J. Seger ______________________________
M. Kathleen Leugers ______________________________
- 39 -
<PAGE>
EXHIBIT B
STAR BANK, N.A.
STANDARDS OF SERVICE GUIDE
Star Bank, N.A., is committeed to providing superior quality service
to all customers and their agents at all times. We have compiled this guide as
a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for Star Bank to
guarantee processing. Failure to meet these deadlines will result in
settlement at our client's risk. In all cases, Star Bank will make every
effort to complete all processing on a timely basis.
Star Bank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the
Bankers Trust Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Star Bank utilizes SEI's Reorg
Source, Financial Information, Inc., XCITEK, DTC Important Notices,
and the WALL STREET JOURNAL,
For bond calls and mandatory puts, Star Bank utilizes SEI's Bond
Source, Kenny Information Systems, Standard & Poor's Corporation, and DTC
Important Notices. Star Bank will not notify
clients of optional put opportunities.
Any securities delivered free to Star Bank or its agents must be
received three (3) business days prior to any payment or settlement in order
for the Star Bank standards of service to apply.
Should you have any quesitons regarding the information contained in
this guide, please feel free to contact your account representative.
The information contained in this Standards of of Service Guide is
subject to change. Should any changes be made Star Bank will
provide you with an updated copy of its Standards of Service Guide.
<PAGE>
<TABLE>
STAR BANK SECURITY SETTLEMENT STANDARDS
<CAPTION>
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
<S> <C> <C>
DTC 1:30 P.M. on Settlement Date DTC Participant #2219
Agent Bank ID #27895
Institutional # _________
For Account # __________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of
Cinti/Trust for Star Bank, N.A.
ABA# 042000013
For Account # __________
Federal Reserve Book Entry 1:00 P.M. on Settlement Date Federal Reserve Bank of
(Repurchase Agreement Cinti/Spec for Star Bank, N.A.
Collateral Only) ABA# 042000013
For Account # __________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BTRST/CUST
(GNMA Book Entry) Sub Account: Star Bank, N.A.
#090334
Physical Securities 9:30 A.M. EST on Settlement Date Bankers Trust Company
(for Deliveries, by 4:00 P.M. on 16 Wall Street 4th Floor,
Settlement Date minus 1) Window 43
for Star Bank Account #090334
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Date Eurclear Via Cedel Bridge
minus 2 In favor of Bankers Trust Comp
Cedel 53355
For Star Bank Account
#501526354
Cash Wire Transfer 3:00 P.M. Star Bank, N.A. Cinti/Trust ABA#
042000013
Credit Account #9901877
Further Credit to __________
Account # __________
*All times listed are Cincinnati time.
41
</TABLE>
<PAGE>
STAR BANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank
Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date+ 1
CMOs*
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Payable Date Payable Date
Certificates*
Certificates of Deposit* Payable Date Payable Date
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank
Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will be
made on the immediately following business day.
42
<PAGE>
<TABLE>
STAR BANK CORPORATE REORGANIZATION STANDARDS
<CAPTION>
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO STAR BANK POSTING
<S> <C> <C> <C>
Rights, Warrants, Later of 10 business days prior 5 business days prior to expiration Upon receipt
and Optional Mergers to expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior 5 business days prior to expiration Upon receipt
Option to Retain to expiration or receipt of notice
Class Actions 10 business days prior to 5 business days prior to expiration Upon receipt
expiration date
Voluntary Tenders, Later of 10 business days prior 5 business days prior to expiration Upon receipt
Exchanges, to expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities None Upon receipt
Liquidations, Bankruptcies, received
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior None Upon receipt
to expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will
be sold.
</TABLE>
43
<PAGE>
EXHIBIT C
STAR BANK, N.A.
DOMESTIC CUSTODY FEE SCHEDULE
Star Bank, N.A., as Custodian, will receive monthly compensation for services
according to the terms of the following Schedule:
I. PORTFOLIO TRANSACTION FEES:
(a) For each repurchase agreement trade not
executed by Star Bank, N.A. No Charge
(b) For each non-Star Bank repurchase
agreement trade executed by Star Bank, N.A. $50.00
(c) For each portfolio transaction processed
through DTC or Federal Reserve $ 9.00
(d) For each portfolio transaction processed
through our New York custodian $25.00
(e) For each GNMA/Amortized Security Purchase $16.00
(f) For each GNMA/Prin/Int Paydown, GNMA Sales $ 5.00
(g) For each option/future contract written,
exercised or expired $40.00
(h) For each Disbursement (Fund expenses only) $ 5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange.
II. AGGREGATE MARKET VALUE FEE
Based upon an annual rate of: MILLION
.0003 (3 Basis Points) on First $10
.0002 (2 Basis Points) on Next $10
.0001 (1 Basis Points) on Next $330
.00005 (1/2 Basis Points) on Balance
III. MONTHLY MINIMUM FEE-PER FUND $300.00
IV. OUT-OF-POCKET EXPENSES
The only out-of-pocket expenses charged to your account will be shipping fees
or transfer fees.
V. EARNINGS CREDITS
On a montly basis any earnings credits generated from uninvested custody
balances will be applied against any cash management service fees generated.
Earnings credits are based on the average yield on the 91 day U.S. Treasury
Bill for the preceding thirteen weeks less the 10% reserve.
44
<PAGE>
STAR BANK, N.A.
THIRD PARTY ACCESS COMPENSATION SCHEDULE
Third Party access is available within two (2) weeks and requires dial-up
software which will allow your organization to access its Star Bank account
from any location.
REQUIREMENTS AND EXPENSES
There will be a one time expense for the purchase of
software from SEI which includes internal password
control and ability to dial a local IBM Information
Systems number. (Generally anywhere in the continental
U.S.A.) $250.00
ONGOING EXPENSES
Telephone Connect time $.37/minute
45
<PAGE>
STAR BANK, N.A.
PROPOSED CASH MANAGEMENT FEE SCHEDULE
UNIT COST MONTHLY COST
BUSINESS CHECKING FEES
D.D.A. Account Maintenance $14.00
Deposits .399
Deposited Items .109
Checks Paid .159
Deposited Items Returned 6.00
International Returned Items 10.00
NSF Returned Check 25.00
Stop Payments 22.00
CASH MANAGEMENT FEES
Balance Reporting - P.C. Access 50.00 1st Acct
35.00 each add
ACH Transaction .095
ACH Maintenance 40.00
ACH Additions, Deletions,
Changes 3.50
Lockbox Maintenance 55.00
Lockbox items Processed
(with copy of check) .32
(without copy of check) .26
Issued Items .015
Deposited Items Returned 6.00
International Items Returned 10.00
NSF Returned Checks 25.00
Stop Payments 22.00
Data Transmission per account 110.00
Data Capture* .10
Wires Incoming
Domestic: 7.00
International: 10.00
Wires Outgoing
Domestic:
Repetitive 8.00
Non Repetitive 8.00
International:
Repetitive 35.00
Non Repetitive 40.00
PC - Initiated Wires:
Domestic:
Repetitive 8.00
Non Repetitive 8.00
International:
Repetitive 25.00
Non Repetitive 25.00
UNCOLLECTED CHARGE
Star Bank assesses a penalty of prime rate plus 4% on any combined
relationship with average uncollected balances for the month.
46
<PAGE>
47
<PAGE>
CUSTODY AGREEMENT
AGREEMENT dated as of April 1, 1996, between WILLIAMSBURG INVESTMENT TRUST, a
business trust organized under the laws of the Commonwealth of Massachusetts,
having its principal office and place of business at 312 Walnut Street, 21st
Floor, Cincinnati, Ohio 45202 (the "Company"), and THE NORTHERN TRUST COMPANY
(the "Custodian"), an Illinois Company with its principal place of business at
50 South LaSalle Street, Chicago, Illinois 60675.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth,
the Company and the Custodian agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement or in any Schedules to this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) The "1940 Act" shall mean the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
(b) "Administrator" shall mean the person which performs the
administration functions for the Company.
(c) "Authorized Person" shall be deemed to include the Chairman of the
Board of Trustees, the President, and any Vice President, the Secretary,
the Treasurer or any other person, whether or not any such person is an
officer or employee of the Company, duly authorized by the Board of
Trustees to give Oral Instructions and Written Instructions on behalf of
the Company and listed in the certification annexed hereto as Schedule A
or such other certification as may be received by the Custodian from
time to time.
(d) "Board of Trustees" shall mean the Board of
Trustees of the Company.
(e) "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency
Securities, its successor or successors and its nominee or
nominees.
(f) "Certificate" shall mean any notice, instruction or other instrument
in writing, authorized or required by this Agreement to be given to
the Custodian, which is actually received by the Custodian and
signed on behalf of the Company by any two Authorized Persons or
any two officers thereof.
notrcust.agr
48
<PAGE>
(g) "Declaration of Trust" shall mean the Declaration of Trust of the
Company dated July 18, 1988, as amended.
(h) "Depository" shall mean The Depository Trust Company, a clearing
agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the
Custodian is hereby specifically authorized to make deposits. The
term "Depository" shall further mean and include any other person to
be named in a Certificate authorized to act as a depository under the
1940 Act, its successor or successors and its nominee or nominees.
(i) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the Government of the United States or agencies or
instrumentalities thereof, commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations,
where the purchase or sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale,
and repurchase agreements with respect to any of the foregoing types
of securities.
(j) "Oral Instructions" shall mean an oral communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person.
(k) "Portfolio" refers to the The Jamestown International Equity Fund
or any such other separate and distinct investment portfolio as may
from time to time be created and designated by the Company in
accordance with the provisions of the Declaration of Trust and which
the Company and the Custodian shall have agreed in writing shall be
subject to this Agreement pursuant to the provisions of Section 5(b).
(l) "Prospectus" shall mean the Portfolio's current prospectus and
statement of additional information relating to the registration of
the Portfolio's Shares under the Securities Act of 1933, as amended.
(m) "Shares" refers to the shares of beneficial interest of
the Portfolio.
- 49 -
<PAGE>
(n) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and
other securities, commodity interests and investments from time to
time owned by the Portfolio.
(o) "Sub-Custodian" shall mean and include (i) any branch of the
Custodian, (ii) any branch of a "qualified U.S. bank," as that term
is defined in Rule 17f-5 under the 1940 Act, (iii) any "eligible
foreign custodian," as that term is defined in Rule 17f-5 under the
1940 Act, approved by the Board of Trustees and having a contract
with the Custodian which contract has been approved by the Board of
Trustees, and (iv) any securities depository or clearing agency,
incorporated or organized under the laws of a country other than the
United States, which operates the central system for handling of
securities or equivalent book-entries in that country or a
transnational system for the central handling of securities or
equivalent book- entries, which securities depository or clearing
agency has been approved by the Board of Trustees; provided, that the
Custodian or a Sub-Custodian has entered into an agreement with such
securities depository or clearing agency.
(p) "Transfer Agent" shall mean the person which performs as the
transfer agent, dividend disbursing agent and shareholder servicing
agent for the Company.
(q) "Written Instructions" shall mean a written communication
actually received by the Custodian from a person reasonably believed
by the Custodian to be an Authorized Person by any system whereby
the receiver of such communication is able to verify through codes
or otherwise with a reasonable degree of certainty the authenticity
of the sender of such communication; however, "Written Instructions"
from the Administrator to the Custodian shall mean an electronic
communication transmitted by fund accountants, transfer agents
and/or their manager(s) (who have been provided an access code by
the Administrator) and actually received by the Custodian. Except as
otherwise provided in this Agreement, "Written Instructions" may
include instructions given on a standing basis.
2. APPOINTMENT OF CUSTODIAN.
(a) The Company hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies owned by or in the
possession of the Portfolio during the period of this Agreement.
- 50 -
<PAGE>
(b) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
3. APPOINTMENT AND REMOVAL OF SUB-CUSTODIANS.
(a) The Custodian may appoint one or more Sub-Custodians to act as
Depository or Depositories or as sub-custodian or sub-custodians of
Securities and moneys at any time owned by the Portfolio, upon terms
and conditions as are specified in this Agreement. The Custodian
shall oversee the maintenance of any Securities or moneys of the
Portfolio by any Sub- Custodian.
(b) If, after the initial approval of Sub-Custodians by the Board of
Trustees in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of the Portfolios, it
will so notify the Company and provide it with information reasonably
necessary to determine any such new Sub-Custodian's eligibility under
Rule 17f-5 under the 1940 Act, including a copy of the proposed
agreement with such Sub-Custodian. The Company shall at the meeting
of the Board of Trustees next following receipt of such notice and
information give a written approval or disapproval of the proposed
action.
(c) The Agreement between the Custodian and each Sub- Custodian
acting hereunder shall contain the required provisions set forth in
Rule 17f-5(a)(1)(iii).
(d) If the Custodian intends to remove any Sub-Custodian previously
approved by the Board of Trustees, it shall so notify the Company and
move the property of the Portfolio deposited with such Sub-Custodian
to another Sub-Custodian previously approved by the Board of
Trustees. The Custodian shall promptly take such steps as may be
required to remove any Sub-Custodian that has ceased to meet the
requirements of Rule 17f-5 under the 1940 Act.
(e) The Custodian hereby warrants to the Company that in its opinion,
after due inquiry, the established procedures to be followed by each
Sub-Custodian (that is not being used as a foreign securities
depository or clearing agency) in connection with the safekeeping of
property of the Portfolio pursuant to this Agreement afford
protection for such property not materially different from that
afforded by the Custodian's established safekeeping procedures with
respect to similar property held by it (and its securities
depositories) in Chicago, Illinois.
4. USE OF SUB-CUSTODIANS.
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<PAGE>
With respect to property of a Portfolio which is maintained by the
Custodian in the custody of a Sub-Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as belonging
to the Portfolio any property held by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of the Securities
placed in its care to be held in an eligible foreign securities
depository, such Sub-Custodian will be required by its agreement with
the Custodian to identify on its books such Securities as being held
for the account of the Custodian as a custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be subject only to
the instructions of the Custodian or its agents; and any Securities
held in an eligible foreign securities depository for the account of
a Sub-Custodian will be subject only to the instructions of such
Sub-Custodian.
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<PAGE>
(d) The Custodian will only deposit property of the Portfolio in an
account with a Sub-Custodian which includes exclusively the assets
held by the Custodian for its customers, and will cause such account
to be designated by such Sub-Custodian as a special custody account
for the exclusive benefit of customers of the Custodian.
5. COMPENSATION.
(a) The Portfolio will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set forth
in the Fee Schedule annexed hereto as Schedule B and incorporated
herein. Such Fee Schedule does not include out-of-pocket
disbursements of the Custodian for which the Custodian shall be
entitled to bill separately. Out-of-pocket disbursements may include
only the items specified in Schedule B and which may be modified by
the Custodian if the Company consents in writing to the modification.
(b) The parties hereto will agree upon the compensation for acting as
Custodian for any series hereafter established and designated, and at
the time that the Custodian commences serving as such for said
series, such agreement shall be reflected in a Fee Schedule for that
series, dated and signed by an officer of each party hereto, which
shall be attached to Schedule B of this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule B of this Agreement a revised Fee
Schedule, dated and signed by an officer of each party hereto.
(d) The Custodian will bill the Company for its services to the
Portfolio hereunder as soon as practicable after the end of each
calendar quarter, and said billings will be detailed in accordance
with the Fee Schedule for the Company. The Company will promptly pay
to the Custodian the amount of such billing. The Custodian shall have
a claim of payment against the property of the Portfolio for any
compensation or expense amount owing to the Custodian from time to
time under this Agreement.
(e) The Custodian (not the Company) will be responsible for
the payment of the compensation of each Sub-Custodian.
6. CUSTODY OF CASH AND SECURITIES
(a) RECEIPT AND HOLDING OF ASSETS. The Company will
deliver or cause to be delivered to the Custodian and the
Sub-Custodians all Securities and monies owned by the
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<PAGE>
Portfolio at any time during the period of this Agreement and shall
specify the Portfolio to which the Securities and monies are to be
specifically allocated. The Custodian will not be responsible for
such Securities and monies until actually received by it or by a
Sub-Custodian. The Company shall instruct the Custodian from time to
time in its sole discretion, by means of Written Instructions, as to
the manner in which and in what amounts Securities, and monies of the
Portfolio are to be deposited on behalf of the Portfolio in the
Book-Entry System or a Depository; provided, however, that prior to
the deposit of Securities of the Portfolio in the Book-Entry System
or a Depository, including a deposit in connection with the
settlement of a purchase or sale, the Custodian shall have received a
Certificate specifically approving such deposits by the Custodian or
a Sub-Custodian in the Book-Entry System or a Depository. Securities
and monies of the Portfolio deposited in the Book-Entry System or a
Depository will be deposited in accounts which include only assets
held by the Custodian for its customers.
(b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and
maintain a separate account for the Portfolio and shall credit to the
separate account all monies received by it or a Sub-Custodian for the
account of the Portfolio and shall disburse, or cause a Sub-Custodian
to disburse, the same only:
1. In payment for Securities purchased for the
Portfolio, as provided in Section 7 hereof;
2. In payment of dividends or distributions with
respect to the Shares of the Portfolio, as provided in Section 10
hereof;
3. In payment of original issue or other taxes with
respect to the Shares of the Portfolio, as provided in Section 11(c)
hereof;
4. In payment for Shares which have been redeemed by
the Portfolio, as provided in Section 11 hereof;
5. In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable to the
Portfolio, as provided in Sections 5 and 15(h) hereof;
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<PAGE>
6. Pursuant to Written Instructions setting forth the
name of the Portfolio and the name and address of the person to
whom the payment is to be made, the amount to be paid and the
purpose for which payment is to be made.
(c) FAIL FLOAT. In the event that any payment made for the Portfolio
under this Section 6 exceeds the funds available in the Portfolio's
account, the Custodian or relevant Sub- Custodian, as the case may
be, may, in its discretion, advance the Company on behalf of the
Portfolio an amount equal to such excess and such advance shall be
deemed an overdraft from the Custodian or such Sub-Custodian to the
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<PAGE>
Portfolio payable on demand, bearing interest at the rate of interest
customarily charged by the Custodian or such Sub- Custodian on
similar overdrafts.
(d) CONFIRMATION AND STATEMENTS. Promptly after the close of business
on each business day, the Custodian shall furnish the Company with
confirmations and a summary of all transfers to or from the account
of the Portfolio during said day. Such summary shall include without
limitation, as to property acquired for the Portfolio, the identity
of the entity having physical possession of such property. Where
securities purchased by the Portfolio are in a fungible bulk of
securities registered in the name of the Custodian (or its nominee)
or shown on the Custodian's account on the books of a Depository, the
Book-Entry System or a Sub- Custodian, the Custodian shall by book
entry or otherwise identify the quantity of those securities
belonging to the Portfolio. At least monthly, the Custodian shall
furnish the Company with a detailed statement of the Securities and
monies held by it and all Sub-Custodians for the Portfolio. In the
absence of the filing in writing with the Custodian by the Company of
exceptions or objections to any such statement within 120 days after
the date that a material defect is reasonably discoverable, the
Company shall be deemed to have approved such statement; and in such
case or upon written approval of the Company of any such statement
the Custodian shall, to the extent permitted by law and provided the
Custodian has met the standard of care in Section 14 hereof, be
released, relieved and discharged with respect to all matters and
things set forth in such statement as though such statement had been
settled by the decree of a court of competent jurisdiction in an
action in which the Company and all persons having any equity
interest in the Company were parties.
(e) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All
Securities held for the Portfolio which are issued or issuable only
in bearer form, except such Securities as are held in the Book-Entry
System, shall be held by the Custodian or a Sub-Custodian in that
form; all other Securities held for the Portfolio may be registered
in the name of the Portfolio, in the name of any duly appointed
registered nominee of the Custodian or a Sub-Custodian as the
Custodian or such Sub-Custodian may from time to time determine, or
in the name of the Book-Entry System or a Depository or their
successor or successors, or their nominee or nominees. The Company
reserves the right to instruct the Custodian as to the method of
registration and safekeeping of the Securities. The Company agrees to
furnish to the Custodian appropriate instruments to enable the
Custodian or any Sub-Custodian to hold or deliver in
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<PAGE>
proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a
Depository, any Securities which the Custodian or a Sub-Custodian may
hold for the account of the Portfolio and which may from time to time
be registered in the name of the Portfolio. The Custodian shall hold
all such Securities specifically allocated to the Portfolio which are
not held in the Book-Entry System or a Depository in a separate
account for the Portfolio, in the name of the Portfolio, physically
segregated at all times from those of any other person or persons.
(f) SEGREGATED ACCOUNTS. Upon receipt of a Written Instruction, the
Custodian will establish segregated accounts on behalf of the
Portfolio to hold liquid or other assets as it shall be directed by a
Written Instruction and shall increase or decrease the assets in such
Segregated Accounts only as it shall be directed by subsequent
Written Instruction.
(g) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES.
Unless otherwise instructed to the contrary by a Written Instruction,
the Custodian, by itself or through the use of the Book-Entry System
or a Depository with respect to Securities therein deposited, shall,
or shall instruct the relevant Sub-Custodian to:
1. Collect all income due or payable with respect to
Securities held for the Portfolio in accordance with this
Agreement;
2. Present for payment and collect the amount payable
upon all Securities which may mature or be called, redeemed or
retired, or otherwise become payable;
3. Surrender Securities in temporary form for
definitive Securities;
4. Execute any necessary declarations or certificates
of ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter
in effect; and
5. Hold directly, or through the Book-Entry System or
a Depository with respect to Securities therein
deposited, for the account of the Portfolio all rights and
similar Securities issued with respect to any Securities held
by the Custodian or relevant Sub-Custodian for the Portfolio.
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<PAGE>
If the Custodian or any Sub-Custodian causes the
account of the Portfolio to be credited on the payable date
for interest, dividends or redemptions, the Portfolio will
promptly return to the Custodian any such amount or property
so credited upon oral or written notification that neither
the custodian nor the relevant Sub-Custodian can collect
such amount or property in the ordinary course of business.
The Custodian or such Sub-Custodian, as the case may be,
shall have no duty or obligation to institute legal
proceedings, file a claim or proof of claim in any
insolvency proceeding or take any other action with respect
to the collection of such amount or property beyond its
ordinary collection procedures unless it is specifically
requested to do so by the Company and indemnified to its
satisfaction for any liability, cost or expense arising
therefrom.
(h) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon
receipt of a Written Instruction and not otherwise, except
for subparagraphs 5, 6, 7, and 8 of this section 6(h) which
may be effected by Oral or Written Instructions, the
Custodian, directly or through the use of the Book-Entry
System or a Depository, shall, or shall instruct the
relevant Sub- Custodian to:
1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated in such
Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the
authority of the Company as owner of any Securities may
be exercised;
2. Deliver or cause to be delivered any Securities held for
the Portfolio in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any
conversion privilege;
3. Deliver or cause to be delivered any Securities held for
the Portfolio to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement in the
separate account for the Portfolio certificates of deposit,
interim receipts or
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other instruments or documents as may be issued to it
to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of
the assets specifically allocated to the separate account of
the Portfolio and take such other steps as shall be stated
in Written Instructions to be for the purpose of
effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Company;
5. Deliver Securities upon sale of such Securities
for the account of the Portfolio pursuant to Section 7;
6. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by the Portfolio;
7. Deliver Securities owned by the Portfolio to the
issuer thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided,
however, that in any such case the cash or other
consideration is to be delivered to the Custodian or
Sub-Custodian, as the case may be;
8. Deliver Securities for delivery in connection with
any loans of securities made by the Portfolio but only
against receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Company which may be in
the form of cash or obligations issued by the United States
Government, its agencies or instrumentalities;
9. Deliver Securities for delivery as security in
connection with any borrowings by the Portfolio requiring a
pledge of Portfolio assets, but only against receipt of the
amounts borrowed;
10. Deliver Securities to the Transfer Agent or to the
holders of Shares in connection with distributions in
kind, as may be described from time to time in the Prospectus,
in satisfaction of requests by holders of Shares for
repurchase or redemption;
11. Deliver Securities owned by the Portfolio for any
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purpose expressly permitted by and in accordance with
procedures described in the Prospectus; and
12. Deliver Securities owned by the Portfolio for any other
proper business purpose, but only upon receipt of, in
addition to Written Instructions, a certified copy of a
resolution of the Board of Trustees signed by an Authorized
Person and certified by the Secretary of the Company,
specifying the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring
such purpose to be a proper business purpose, and naming the
person or persons to whom delivery of such Securities shall
be made.
(i) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The
Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Portfolio.
7. PURCHASE AND SALE OF INVESTMENTS OF THE PORTFOLIO.
(a) Promptly after each purchase of Securities for the Portfolio, the
Company shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, a
Written Instruction and (ii) with respect to each purchase of Money
Market Securities, either a Written Instruction or Oral Instruction,
in either case specifying with respect to each purchase: (1) the name
of the Portfolio to which such Securities are to be specifically
allocated; (2) the name of the issuer and the title of the
Securities; (3) the number of shares or the principal amount
purchased and accrued interest, if any; (4) the date of purchase and
settlement; (5) the purchase price per unit; (6) the total amount
payable upon such purchase; and 7) the name of the person from whom
or the broker through whom the purchase was made, if any. The
Custodian or specified Sub-Custodian shall receive the Securities
purchased by or for the Portfolio and upon receipt thereof shall pay
to the broker or other person designated by the Company out of the
monies held for the account of the Portfolio the total amount payable
upon such purchase, provided that the same conforms to the total
amount payable as set forth in such Written or Oral Instruction.
(b) Promptly after each sale of Securities of the Portfolio, the
Company shall deliver to the Custodian (i) with respect to each sale
of Securities which are not Money Market Securities, a Written
Instruction, and (ii) with respect to each sale of Money Market
Securities, either Written Instructions or Oral Instructions, in
either case
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specifying with respect to such sale: (1) the name of the Portfolio
to which the Securities sold were specifically allocated; (2) the
name of the issuer and the title of the Securities; (3) the number of
shares or principal amount sold, and accrued interest, if any; (4)
the date of sale; (5) the sale price per unit; (6) the total amount
payable to the Portfolio upon such sale; and (7) the name of the
broker through whom or the person to whom the sale was made. The
Custodian or relevant Sub-Custodian shall deliver or cause to be
delivered the Securities to the broker or other person designated by
the Company upon receipt of the total amount payable to the Portfolio
upon such sale, provided that the same conforms to the total amount
payable to the Portfolio as set forth in such Written or Oral
Instruction. Subject to the foregoing, the Custodian or relevant
Sub-Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in
Securities.
(c) Notwithstanding (a) and (b) above, cash of the Portfolio may be
invested by the Custodian for short term purposes pursuant to
standing Written Instructions from the Company.
8. INVESTMENT IN FUTURES AND OPTIONS
The Custodian shall pursuant to Written Instructions (which may be
standing instructions) from an Authorized Person (i) transfer initial
margin to a safekeeping bank or, with respect to options, broker;
(ii) pay or demand variation margin to or from a designated futures
commission merchant or other broker based on daily marking to market
calculations and in accordance with accepted industry practices; and
(iii) subject to the consent of the Custodian, enter into separate
procedural, safekeeping or other agreements with safekeeping banks,
futures commission merchants and other brokers pursuant to which such
banks and, in the case of options, brokers, will act as custodian for
initial margin deposits in transactions involving futures contracts
and options. The Custodian shall have no custodial or investment
responsibility for any assets transferred to a safekeeping bank,
futures commission merchant or broker pursuant to this paragraph.
9. LENDING OF SECURITIES.
If the Portfolio is permitted by the terms of the Declaration of
Trust and the Prospectus to lend Securities, then the Board of
Trustees may approve a separate written agreement between the Company
and the Custodian authorizing
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the Custodian to lend such Securities. Such agreement may
provide for the payment of additional reasonable
compensation to the Custodian.
10. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS.
(a) The Company shall furnish to the Custodian the vote of the Board
of Trustees or the Dividend Committee thereof, as the case may be,
certified by the Secretary of the Company (i) authorizing the
declaration of distributions with respect to the Portfolio on a
specified periodic basis and authorizing the Custodian to rely on
Oral or Written Instructions specifying the date of the declaration
of such distribution, the date of payment thereof, the record date as
of which shareholders entitled to payment shall be determined, the
amount payable per Share to the shareholders of record as of the
record date and the total amount payable to the Transfer Agent on the
payment date, or (ii) setting forth the date of declaration of any
distribution by the Portfolio, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be
determined, the amount payable per share to the shareholders of
record as of the record date and the total amount payable to the
Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral Instructions,
or Written Instructions, as the case may be, the Custodian shall pay
the total amount payable to the Transfer Agent out of the monies
specifically allocated to and held for the account of the Portfolio.
11.. SALE AND REDEMPTION OF SHARES OF THE PORFOLIO.
(a) Whenever the Company shall sell any Shares of the Portfolio, the
Company shall deliver or cause to be delivered to the Custodian a
Written Instruction duly specifying:
1. The name of the Portfolio whose Shares were sold;
2. The number of Shares sold, trade date, and
price; and
3. The amount of money to be received by the
Custodian for the sale of such Shares.
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The Custodian understands and agrees that Written Instructions may be
furnished subsequent to the purchase of Shares of the Portfolio and
that the information contained therein will be derived from the sales
of Shares as reported to the Company by the Transfer Agent.
(b) Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account of the Portfolio.
(c) Upon issuance of any Shares of the Portfolio in accordance with
the foregoing provisions of this Section 11, the Custodian shall pay
all original issue or other taxes required to be paid in connection
with such issuance upon the receipt of a Written Instruction
specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares of the
Portfolio are redeemed, the Company shall cause the Transfer Agent to
promptly furnish to the Custodian Written Instructions specifying:
1. The name of the Portfolio whose Shares were redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information contained in
such Written Instructions will be derived from the redemption of
Shares as reported to the Company by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the
number of Shares of the Portfolio being redeemed pursuant to valid
instructions as described in the Prospectus, the Custodian shall make
payment to the Transfer Agent out of the monies specifically
allocated to and held for the account of the Portfolio the total
amount specified in a Written Instruction issued pursuant to
paragraph (d) of this Section 11.
12. INDEBTEDNESS.
(a) The Company will cause to be delivered to the Custodian by any
bank (excluding the Custodian) from which the Company borrows money,
using Securities as collateral, a notice or undertaking in the form
currently employed by any such bank setting forth the amount which
such bank will loan to the Company against delivery of a stated
amount of collateral.
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The Company shall promptly deliver to the Custodian Written
Instructions stating with respect to each such borrowing: (1) the
name of the Portfolio for which the borrowing is to be made; (2) the
name of the bank; (3) the amount and terms of the borrowing, which
may be set forth by incorporating by reference an attached promissory
note, duly endorsed by the Company, or other loan agreement; (4) the
time and date, if known, on which the loan is to be entered into (the
"borrowing date"); (5) the date on which the loan becomes due and
payable; (6) the total amount payable to the Company for the separate
account of the Portfolio on the borrowing date; (7) the market value
of Securities to be delivered as collateral for such loan, including
the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities; (8) whether the
Custodian is to deliver such collateral through the Book-Entry System
or a Depository; and (9) a statement that such loan is in conformance
with the 1940 Act and the Prospectus.
(b) Upon receipt of the Written Instruction referred to in paragraph
(a) above, the Custodian shall deliver on the borrowing date the
specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount payable
as set forth in the Written Instruction. The Custodian may, at the
option of the lending bank, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan agreement. The
Custodian shall deliver as additional collateral in the manner
directed by the Company from time to time such Securities
specifically allocated to the Portfolio as may be specified in
Written Instruction to collateralize further any transaction
described in this Section 12. The Company shall cause all Securities
released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the
Company fails to specify in Written Instruction all of the
information required by this Section 12, the Custodian shall not be
under any obligation to deliver any Securities. Collateral returned
to the Custodian shall be held hereunder as it was prior to being
used as collateral.
13. CORPORATE ACTION
Whenever the Custodian or any Sub-Custodian (other than a foreign
securities depository or clearing agency) receives information
concerning Securities held for the Portfolio which requires
discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bond issues, stock
repurchase plans and rights
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offerings, or legal notices or other material intended to be
transmitted to Securities holders ("Corporate Actions"), the
Custodian will give the Company notice of such Corporate Actions to
the extent that the Custodian's central corporate actions department
has actual knowledge of a Corporate Action in time to notify its
customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action
is received which bears an expiration date, the Custodian will
endeavor to obtain Written or Oral Instructions from the Company, but
if such Instructions are not received in time for the Custodian to
take timely action, or actual notice of such Corporate Action was
received too late to seek such Instructions, the Custodian is
authorized to sell, or cause a Sub-Custodian to sell, such rights
entitlement or fractional interest and to credit the applicable
account with the proceeds and to take any other action it deems, in
good faith, to be appropriate, in which case, provided it has met the
standard of care in Section 15 hereof, it shall be held harmless by
the Portfolio for any such action.
The Custodian will deliver proxies to the Company or its designated
agent pursuant to special arrangements which may have been agreed to
in writing between the parties hereto. Such proxies shall be executed
in the appropriate nominee name relating to Securities registered in
the name of such nominee but without indicating the manner in which
such proxies are to be voted; and where bearer Securities are
involved, proxies will be delivered in accordance with Written or
Oral Instructions from Authorized Persons.
14. PERSONS HAVING ACCESS TO THE PORTFOLIO.
(a) No officer, director, employee or agent of the Company, or of the
Company's investment adviser, or of any sub- investment adviser of
the Company, or of the Administrator, shall have physical access to
the assets of the Portfolio held by the Custodian or any
Sub-Custodian or be authorized or permitted to withdraw any
investments of the Portfolio, nor shall the Custodian or any
Sub-Custodian deliver any assets of the Portfolio to any such person.
No officer, director, employee or agent of the Custodian who holds
any similar position with the Company's investment adviser, with any
sub-investment adviser of the Company or with the Administrator shall
have access to the assets of the Portfolio.
(b) Nothing in this Section 14 shall prohibit any officer,
employee or agent of the Company, or any officer, director,
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employee or agent of the investment adviser, of any sub- investment
adviser of the Company or of the Administrator, from giving Oral
Instructions or Written Instructions to the Custodian or executing a
Certificate so long as it does not result in delivery of or access to
assets of the Portfolio prohibited by paragraph (a) of this Section
14.
(c) The Custodian represents that it maintains a system that is
reasonably designed to prevent unauthorized persons from having
access to the assets that it holds (by any means) for its customers.
15. CONCERNING THE CUSTODIAN.
(a) SCOPE OF SERVICES. The Custodian shall be obligated to
perform only such services as are set forth in this Agreement or
expressly contained in a Certificate, Written Instructions or Oral
Instructions given to the Custodian which are not contrary to the
provisions of this Agreement.
(b) STANDARD OF CARE.
1. The Custodian will use reasonable care with respect to
its obligations under this Agreement and the safekeeping of
property of the Portfolio. The Custodian shall be liable to,
and shall indemnify and hold harmless the Company from and
against any loss which shall occur as the result of the
failure of the Custodian or a Sub-Custodian (other than a
foreign securities depository or clearing agency) to
exercise reasonable care with respect to their respective
obligations under this Agreement and the safekeeping of such
property. The determination of whether the Custodian or
Sub-Custodian has exercised reasonable care in connection
with the safekeeping of Portfolio property shall be made in
light of the standards applicable to a professional asset
custodian acting without negligence. The determination of
whether the Custodian or Sub-Custodian has exercised
reasonable care in connection with their other obligations
under this Agreement shall be made in light of prevailing
standards applicable to professional custodians in the
jurisdiction in which such custodial services are performed.
In the event of any loss to the Company by reason of the
failure of the Custodian or a Sub- Custodian (other than a
foreign securities depository or clearing agency) to
exercise reasonable care, the Custodian shall be liable to
the Company only to the extent of all of the Company's
direct damages and
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expenses incurred or borne on account of such loss, which
damages, for purposes of property only, shall be determined
based on the market value of the property which is the
subject of the loss.
2. Subject to the provisions of paragraph (b)(1) above, the
Custodian will not be responsible for any act, omission,
default or for the solvency of any foreign securities
depository or clearing agency approved by the Board of
Trustees pursuant to Section 3 hereof.
3. The Custodian will not be responsible for any act,
omission, default or for the solvency of any broker or agent
(not referred to in paragraph (b)(2) above) which it or a
Sub-Custodian appoints and uses unless such appointment and
use is made or done negligently or in bad faith. In the
event such an appointment and use is made or done
negligently or in bad faith, the Custodian shall be liable
to the Company only for direct damages and expenses
(determined in the manner described in paragraph (b)(1)
above) resulting from such appointment and use and, in the
case of any loss due to an act, omission or default of such
agent or broker, only to the extent that such loss occurs as
a result of the failure of the agent or broker to exercise
reasonable care ("reasonable care" for this purpose to be
determined in light of the prevailing standards applicable
to agents or brokers, as appropriate, in the jurisdiction
where services are performed).
4. The Custodian shall be entitled to rely, and may act upon
the advice of counsel (who may be counsel for the Company)
on all matters and shall be without liability for any action
reasonably taken or omitted in good faith and without
negligence pursuant to such advice.
5. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received
by the Custodian and reasonably believed by the Custodian to
be genuine and to be signed by two officers of the Company.
The Custodian shall be entitled to rely upon any Written
Instructions or Oral Instructions actually received by the
Custodian pursuant to the applicable Sections of this
Agreement and reasonably believed by the Custodian to be
genuine and to be given by an Authorized Person. The Company
agrees to forward to the Custodian Written Instructions from
an Authorized Person confirming such Oral Instructions in
such manner so that such Written
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Instructions are received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business on
the same day that such Oral Instructions are given to the
Custodian. The Company agrees that the fact that such
confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the
Company. The Company agrees that the Custodian shall incur
no liability to the Company in (i) acting upon Oral
Instructions given to the Custodian hereunder concerning
such transactions provided such instructions reasonably
appear to have been received from a duly Authorized Person
or (ii) deciding not to act solely upon Oral Instructions,
provided that the Custodian shall be required to contact the
giver of such Oral Instructions and request written
confirmation immediately following any such decision not to
act.
6. The Custodian shall supply the Administrator with such
daily information regarding the cash and securities
positions and activity of the Portfolio as the Custodian and
the Administrator shall from time to time agree. It is
understood that such information will not be audited by
Custodian and Custodian represents that such information
will be the best information then available to the
Custodian. The Custodian shall have no responsibility
whatsoever for the pricing of Portfolio Securities or for
the failure of the Administrator to reconcile differences
between the information supplied by the Custodian and
information obtained by theAdministrator from other sources,
including but not limited to pricing vendors and the
Company's investment adviser. Subject to the foregoing, to
the extent that any miscalculation by the Administrator of
the Portfolio's net asset value is attributable to the
willful misfeasance, bad faith or negligence of the
Custodian (including any Sub- Custodian other than a foreign
securities depository or clearing agency) in supplying or
omitting to supply the Administrator with information as
aforesaid, the Custodian shall be liable to the Company for
any resulting loss (subject to such de minimus rule of
change in value as the Board of Trustees may from time to
time adopt).
(c) LIMIT OF DUTIES. Without limiting the generality of
the foregoing, the Custodian shall be under no duty or
obligation to inquire into, and shall not be liable for:
1. The validity of the issue of any Securities
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purchased by the Portfolio, the legality of the
purchase thereof, or the propriety of the amount
specified by the Company for payment therefor;
2. The legality of the sale of any Securities by the
Portfolio or the propriety of the amount of
consideration for which the same are sold;
3. The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received
therefor;
4. The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Portfolio;
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the exclusive
benefit of the Company, but hereby warrants that as of the date of
this Agreement it is maintaining a bankers Blanket Bond and hereby
agrees to notify the Company in the event that such bond is canceled
or otherwise lapses.
(e) Consistent with and without limiting the language contained in
Section 15(b), it is specifically acknowledged that the Custodian
shall have no duty or responsibility to:
1. Question Written Instructions or Oral Instructions
or make any suggestions to the Company or an
Authorized Person regarding such Instructions;
2. Supervise or make recommendations with respect to
investments or the retention of Securities;
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3. Subject to Section 15(b)(3) hereof, evaluate or
report to the Company or an Authorized Person
regarding the financial condition of any broker,
agent or other party to which Securities are
delivered or payments are made pursuant to this
Agreement; or
4. Review or reconcile trade confirmations received
from brokers.
(f) AMOUNTS DUE FOR TRANSFER AGENT. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount due to the Portfolio from the Transfer Agent nor to take any
action to effect payment or distribution by the Transfer Agent of any
amount paid by the Custodian to the Transfer Agent in accordance with
this Agreement.
(g) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any
time delivered to or held by it for the Company and specifically
allocated to the Portfolio are such as may properly be held by the
Company under the provisions of the Declaration of Trust and the
Prospectus.
(h) INDEMNIFICATION. The Company agrees to indemnify and hold the
Custodian harmless from all loss, cost, taxes, charges, assessments,
claims, and liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the 1940 Act and state or foreign securities laws) and
expenses (including reasonable attorneys fees and disbursements)
arising directly or indirectly from any action taken or omitted by
the Custodian (i) at the request or on the direction of or in
reliance on the advice of the Company or in reasonable reliance upon
the Prospectus or (ii) upon a Certificate or Oral or Written
Instructions; provided, that the aforegoing indemnity shall not apply
to any loss, cost, tax, charge, assessment, claim, liability or
expense to the extent the same is attributable to the Custodian's or
any Sub-Custodian's (other than a foreign securities depository or
clearing agency) negligence, willful misconduct, bad faith or
reckless disregard of duties and obligations under this Agreement or
any other agreement relating to the custody of Company property.
(i) The Company, on behalf of the Portfolio, agrees to hold the
Custodian harmless from any liability or loss resulting from the
imposition or assessment of any taxes or other governmental charges
on the Portfolio.
(j) Without limiting the foregoing, the Custodian shall not
be liable for any loss which results from:
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1. the general risk of investing, or
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2. subject to Section 15(b) hereof, investing or
holding property in a particular country
including, but not limited to, losses resulting
from nationalization, expropriation or other
governmental actions; regulation of the banking or
securities industry; currency restrictions,
devaluations or fluctuations; and market
conditions which prevent the orderly execution of
securities transactions or affect the value of
property held pursuant to this Agreement.
(k) No party shall be liable to the other for any loss due to forces
beyond their control including but not limited to strikes or work
stoppages (other than strikes or work stoppages of the Custodian),
acts of war or terrorism, insurrection, revolution, nuclear fusion,
fission or radiation, or acts of God.
(1) INSPECTION OF BOOKS AND RECORDS. The books and records of the
Custodian shall be open to inspection and audit at reasonable times
by officers and auditors employed by the Company and by the
appropriate employees of the Securities and Exchange Commission.
(m) ACCOUNTING CONTROL REPORTS. The Custodian shall provide the
Company with any report obtained by the Custodian on the system of
internal accounting control of the Book-Entry System, each
Depository, and each Sub- Custodian and with an annual report on its
own systems of internal accounting control.
16. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter
as the parties may mutually agree.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which, in case the Company is the terminating
party, shall be not less than 60 days after the date of receipt of
such notice or, in case the Custodian is the terminating party, shall
be not less than 90 days after the date of receipt of such notice. In
the event such notice is given by the Company, it shall be
accompanied by a certified vote of the Board of Trustees, electing to
terminate this Agreement and designating a successor custodian or
custodians, which shall be a person qualified to so act under the
1940 Act.
In the event such notice is given by the Custodian, the Company
shall, on or before the termination date, deliver to the Custodian a
certified vote of the Board of Trustees, designating a successor
custodian or custodians. In the
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absence of such designation by the Company, the Custodian may
designate a successor custodian, which shall be a person qualified to
so act under the 1940 Act. If the Company fails to designate a
successor custodian, the Company shall upon the date specified in the
notice of termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Company) and
monies then owned by the Portfolio, be deemed to be its own custodian
and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Company.
(c) Upon the date set forth in such notice under paragraph
(b) of this Section
15, this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly
to the successor custodian all Securities and monies then held by the
Custodian and specifically allocated to the Portfolio, after
deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled with respect to the
Portfolio.
17. LIMITATION OF LIABILITY.
The Company and the Custodian agree that the obligations of the
Company under this Agreement shall not be binding upon any of the
Trustees, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Company individually, but are
binding only upon the assets and property of the Portfolio, as
provided in the Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Board of Trustees of the
Company, and signed by an authorized officer of the Company, acting
as such, and neither such authorization by the Board of Trustees nor
such execution and delivery by such officer shall be deemed to have
been made by any of them or any shareholder of the Company
individually or to impose any liability on any of them or any
shareholder of the Company personally, but shall bind only the assets
and property of the Portfolio as provided in the Declaration of
Trust.
18. MISCELLANEOUS.
(a) Annexed hereto as Schedule A is a certification signed by two of
the present officers of the Company setting forth the names and the
signatures of the present Authorized Persons. The Company agrees to
furnish to the Custodian a new certification in similar form in the
event that any such present Authorized Person ceases to be such an
Authorized
- 73 -
<PAGE>
Person or in the event that other or additional Authorized Persons
are elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of
the present Authorized Persons as set forth in the last delivered
certification.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at its address stated on the first page hereof or at such
other place as the Custodian may from time to time designate in
writing.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Company, shall be sufficiently
given if addressed to the Company and mailed or delivered to it at
its offices at its address shown on the first page hereof or at such
other place as the Company may from time to time designate in
writing.
(d) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the same
formality as this Agreement, (i) authorized and approved by a vote of
the Board of Trustees, including a majority of the members of the
Board of Trustees who are not "interested persons" of the Company (as
defined in the 1940 Act), or (ii) authorized and approved by such
other procedures as may be permitted or required by the 1940 Act.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the
Company without the written consent of the Custodian, or by the
Custodian without the written consent of the Company authorized or
approved by a vote of the Board of Trustees, and any attempted
assignment without such written consent shall be null and void.
(f) This Agreement shall be construed in accordance with
the laws of the State of Illinois.
(g) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
- 74 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective representatives duly authorized
as of the day and year first above written.
WILLIAMSBURG INVESTMENT TRUST
By: /s/ Austin Brockenbrough III
Name: Austin Brockenbrough III
Title: Trustee
THE NORTHERN TRUST COMPANY
By: /s/ Peggy O'Leary
Name: Peggy O'Leary
Title: Vice President
A Global Custody Fee PROPOSAL for
LOWE, BROCKENBROUGH & TATTERSALL's
JAMESTOWN FUND FAMILY
o International Equity Fund
ASSUMPTIONS USED:
o Initial market value of $35 - 40 million -- roughly EAFE weighted
o No more than 100 security holdings
o 100% per annum security turnover (200)
o 1 portfolio
o Daily on-line interface with Fund Accountant and Transfer Agent
o Approximately 5% excess cash invested with Northern
o Utilization of our on-line inquiry system for all parties involved
o Some portion of foreign exchange volume transacted through Northern
SERVICES PROVIDED:
o Safekeeping of securities
o Settlement of trades
o Foreign exchange services
o Investment and management of excess cash balances
o Interest and dividend collection and payable date crediting
o Tax withholding and reclamation
o Corporate action and proxy handling
o Relationship servicing to the client, the Fund
Accountant/Administrator and Transfer Agent
o Daily on-line reporting to all parties
o Monthly fund level reporting
- 75 -
<PAGE>
CUSTODY FEE PROPOSAL:
Account-based charges:
$5,000 per portfolio/account per annum (1 x $5,000 = $5,000)
Asset-based charges:
U.S. Assets
4.0 Basis points on the first $50 million in market value
2.0 Basis points on over $50 million in market value
Non-U.S. Assets
9.0 Basis points on the first $50 million in market value
($35 mm x .0009 = $31,500)
Emerging Markets Assets
35.0 Basis points on the first $50 million in market value
25.0 Basis points on over $50 million in market value
Transaction-based charges (per purchase/sale):
U.S.
Securities $10 per
Wire Transfers (incoming/outgoing) $10 per
Non-U.S. & Emerging Markets
Securities $15 per
Non-Northern foreign exchange contracts $50 per
(200 x $15 = $3,000)
We do NOT impose additional charges for facsimile, telex, income
collection, tax reclamation, administration, or other "miscellaneous"
activities. Costs attributable, but not limited, to settlement in
specific markets, such as stamp duty, security re-registration
charges and subcustodian delivery/receipt charges will be passed
through at cost as and where applicable.
- 76 -
<PAGE>
Total Estimated Annual Fee = $39,500
A $40,000 minimum annual fee applies.
DESKTOP SERVICES:
Full access to Northern Trust's on-line customized reporting system,
PASSPORT, will be made available free of charge. A one-time charge of
$5,000 per personal computer LAN applies for licensing, installation
and training of the PASSPORT software.
MATERIAL CHANGES:
The fees quoted above are offered contingent upon the information
provided and assume that actual experience will not be materially
different from projected activity. "Material" changes, for the
purposes of this provision, will be changes in excess of 10% from the
account, holdings and transaction assumptions used.
REFERENCE:
Presently, the following markets are defined as Emerging Markets by
Northern:
Bangladesh, Botswana, Brazil, Czeck Republic, Chile, Columbia,
Cyprus, Ghana, Greece, Hungary, India, Indonesia, Israel, Jordan,
Morocco, Namibia, Nigeria, Pakistan, Peru, Philippines, Poland,
Portugal, Slovak Republic, South Africa, Uruguay, Venezuela and
Zimbabwe.
- 77 -
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our firm in the Post- Effective
Amendment to the Registration Statement on Form N-1A of the Williamsburg
Investment Trust, comprised of The Jamestown Bond Fund, The Jamestown Short
Term Bond Fund, The Jamestown Balanced Fund, The Jamestown Equity Fund, The
Jamestown Tax Exempt Virginia Fund, FBP Contrarian Balanced Fund, FBP
Contrarian Equity Fund, The Government Street Equity Fund, The Government
Street Bond Fund and The Alabama Tax Free Bond Fund, and to the use of our
reports dated April 26, 1996 on the financial statements and financial
highlights. Such financial statements and financial highlights appear in each
series' respective 1996 Annual Report to Shareholders which accompanies the
Statement of Additional Information.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 26, 1996
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<DIVIDEND-INCOME> 450,838
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<EXPENSES-NET> 370,665
<NET-INVESTMENT-INCOME> 959,151
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<NET-CHANGE-FROM-OPS> 6,269,795
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<DISTRIBUTIONS-OF-INCOME> 958,803
<DISTRIBUTIONS-OF-GAINS> 863,702
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<GROSS-EXPENSE> 370,665
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<NET-CHANGE-FROM-OPS> 11,625,671
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<DISTRIBUTIONS-OF-GAINS> 1,982,339
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<OTHER-ITEMS-LIABILITIES> 408,714
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<AVG-DEBT-PER-SHARE> 0
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<PERIOD-END> MAR-31-1996
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,914,073
<SHARES-COMMON-STOCK> 969,934
<SHARES-COMMON-PRIOR> 1,464,843
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (444,405)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (47,571)
<NET-ASSETS> 9,425,756
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 853,612
<OTHER-INCOME> 0
<EXPENSES-NET> 63,227
<NET-INVESTMENT-INCOME> 790,385
<REALIZED-GAINS-CURRENT> 192,225
<APPREC-INCREASE-CURRENT> (10,516)
<NET-CHANGE-FROM-OPS> 972,094
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 793,655
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 208,453
<NUMBER-OF-SHARES-REDEEMED> 761,014
<SHARES-REINVESTED> 57,652
<NET-CHANGE-IN-ASSETS> (4,696,685)
<ACCUMULATED-NII-PRIOR> 6,929
<ACCUMULATED-GAINS-PRIOR> (636,630)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 106,862
<AVERAGE-NET-ASSETS> 12,604,460
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