Registration No. 33-25301
811-5685
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X /
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Pre-Effective Amendment No.
Post-Effective Amendment No. 29
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 32
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 LLP
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, 1997 was filed on May 30, 1997.
<PAGE>
WILLIAMSBURG INVESTMENT TRUST
CROSS-REFERENCE SHEET PURSUANT TO RULE 495(A)
<TABLE>
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Part A Prospectus
FORM ITEM CROSS-REFERENCE
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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
<CAPTION>
STATEMENT OF
PART B ADDITIONAL INFORMATION
FORM ITEM CROSS-REFERENCE
<S> <C> <C>
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 Objective 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
</TABLE>
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
FBP Contrarian Equity Fund
FBP Contrarian Balanced Fund
Prospectus
No-Load Funds
<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
Countrywide Fund Services, Inc.
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
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
Erwin H. Will, Jr.
Samuel B. Witt, III
<PAGE>
PROSPECTUS
NO-LOAD FUNDS
August 1, 1997
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, 1997, 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............................................... 15
Dividends, Distributions, Taxes and Other Information................. 17
Application........................................................... 21
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 Countrywide Fund
Services, Inc. (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
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Shareholder Transaction Expenses: .................................. None
Annual Fund Operating Expenses:
(As a percentage of average daily net assets)
Investment Advisory Fees (after waivers) ........................... 0.71%
Administrator's Fees ............................................... 0.21%
Other Expenses ..................................................... 0.29%
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Total Fund Operating Expenses ...................................... 1.21%
=====
</TABLE>
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 $38 $66 $147
FBP CONTRARIAN BALANCED FUND
<TABLE>
<CAPTION>
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Shareholder Transaction Expenses: .................................. None
Annual Fund Operating Expenses:
(As a percentage of average daily net assets)
Investment Advisory Fees ........................................... 0.75%
Administrator's Fees ............................................... 0.19%
Other Expenses ..................................................... 0.14%
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Total Fund Operating Expenses ...................................... 1.08%
=====
</TABLE>
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
$11 $34 $60 $132
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,
1997. Absent fee waivers 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 1.25% 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>
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, 1997 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
<TABLE>
<CAPTION>
Year Year Year July 30,
Ended Ended Ended 1993(a) To
March 31, March 31, March 31, March 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
Net asset value at beginning of period .................. $ 14.21 $ 11.21 $ 10.15 $ 10.00
-------- -------- ------- --------
Income from investment operations:
Net investment income .......................... 0.22 0.24 0.21 0.12
Net realized and unrealized gains on investments 2.24 3.05 1.14 0.19
-------- -------- ------- --------
Total from investment operations ........................ 2.46 3.29 1.35 0.31
-------- -------- ------- --------
Less distributions:
Dividends from net investment income ........... (0.22) (0.24) (0.23) (0.10)
Distributions from net realized gains (0.37) (0.05) (0.06) (0.06)
-------- -------- ------- --------
Total distributions ..................................... (0.59) (0.29) (0.29) (0.16)
-------- -------- ------- --------
Net asset value at end of period ........................ $ 16.08 $ 14.21 $ 11.21 $ 10.15
======== ======== ======= ========
Total return ............................................ 17.65% 29.54% 13.52% 4.59%(c)
======== ======== ======= ========
Net assets at end of period (000's) ..................... $ 16,34 $ 9,090 $ 5,323 $ 3,135
======== ======== ======= ========
Ratio of expenses to average net assets(b) .............. 1.21% 1.25% 1.25% 1.25%(c)
Ratio of net investment income to average net assets .... 1.50% 1.89% 2.15% 1.98%(c)
Portfolio turnover rate ................................. 9% 12% 9% 7%
Average commission rate per share ....................... $ 0.0925 -- -- --
<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 1.25%, 1.67%, 2.27% and
3.10%(c) for the periods ended March 31, 1997, 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,
1997 1996 1995 1994 1993 1992 1991 1990
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Net asset value at beginning of period ............$ 14.86 $ 12.80 $ 12.19 $ 12.10 $ 11.10 $ 9.90 $ 9.75 $ 10.16
------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income .................... 0.42 0.43 0.38 0.33 0.34 0.36 0.45 0.28
Net realized and unrealized gains (losses)
on investments .................. 1.49 2.44 0.87 0.15 1.06 1.17 0.18 (0.42)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations .................. 1.91 2.87 1.25 0.48 1.40 1.53 0.63 (0.14)
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income ..... (0.42) (0.43) (0.39) (0.32) (0.35) (0.33) (0.48) (0.27)
Distributions from net realized gains .... (0.48) (0.38) (0.25) (0.07) (0.05) -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions ............................... (0.90) (0.81) (0.64) (0.39) (0.40) (0.33) (0.48) (0.27)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value at end of period ..................$ 15.87 $ 14.86 $ 12.80 $ 12.19 $ 12.10 $ 11.10 $ 9.90 $ 9.75
======= ======= ======= ======= ======= ======= ======= =======
Total return ...................................... 13.15% 22.86% 10.54% 3.88% 12.76% 15.71% 6.98% (1.78%)(d)
======= ======= ======= ======= ======= ======= ======= =======
Net assets at end of period (000's) ...............$40,854 $35,641 $25,976 $21,969 $ 16,43 $ 9,572 $ 5,285 $ 3,270
======= ======= ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets ........... 1.08% 1.17% 1.17%(b) 1.25%(c) 1.31%(c) 1.35%(c) 1.40% 1.84%(c)(d)
Ratio of net investment income
to average net assets .................... 2.65% 3.04% 3.10% 2.64% 3.09% 3.61% 5.07% 4.90%
(d)
Portfolio turnover rate ........................... 24% 17% 14% 28% 27% 14% 13% 16%
Average commission rate per share .................$0.0779 -- -- -- -- -- -- --
<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.
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.
</FN>
</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.
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:
<PAGE>
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.")
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.
<PAGE>
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.
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.
<PAGE>
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, 1997 was 9% and 24%,
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
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)
<PAGE>
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 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
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.
<PAGE>
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. 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.
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.
<PAGE>
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, 1997, the Adviser received $89,290 in investment advisory fees
from the Equity Fund (net of fee waivers), which represented 0.71% of the Fund's
average daily net assets. For the fiscal year ended March 31, 1997, the Adviser
received $293,819 in investment advisory fees from the Balanced Fund, which
represented 0.75% of the Fund's 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 Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending.
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, 1997, the
expense ratio of the Balanced Fund was 1.08% of its average daily net assets and
the expense ratio of the Equity Fund was 1.21% of its average daily net assets
after expense reimbursements.
<PAGE>
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.
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 and The Jamestown Tax Exempt Virginia
Fund, which are managed by Lowe, Brockenbrough & Tattersall, Inc. of Richmond,
Virginia; shares of The Jamestown Bond Fund and The Jamestown Short Term Bond
Fund, which are managed by Lowe, Brockenbrough & Tattersall Strategic Advisors,
Inc. of Richmond, Virginia; and 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. 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.
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
o Individual
____________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
o Joint*
____________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of
survivorship unless otherwise indicated.
o UGMA/UTMA
__________________________________ under the _______ Uniform Gifts/Transfers
(First Name) (Middle Initial) (Last Name) (State) to Minors Act
________________________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
____________________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o 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)
o Enclosed is a check payable to THE FLIPPIN, BRUCE & PORTER FUNDS for
$____________ (Please indicate Fund below)
o FBP Contrarian Equity Fund (71) o FBP Contrarian Balanced Fund (70)
o 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
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o ByACH to my bank checking or savings or account.
PLEASE ATTACH A VOIDED CHECK.
===============================================================================
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.
o New Application
o 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.
O Please mail redemption proceeds to the name and address of record
O 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of o 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 acutomatic investment on:
___________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to my o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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) o.
_______________________________ _____________________________________
APPLICANT DATE JOINT APPLICANT DATE
_______________________________ _____________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE ALABAMA
TAX FREE
BOND FUND
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
Countrywide Fund Services, Inc.
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
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
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>
PROSPECTUS
August 1, 1997
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, 1997, 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.................................................... 12
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........................... 24
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 $385 million in assets,
of which approximately $175 million are equities and $210 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 Countrywide Fund Services,
Inc. (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 waivers) .......................... 0.23%
Administrator's Fees............................................... 0.15%
Other Expenses.................................................... 0.28%
---------
Total Fund Operating Expenses........................................ 0.66%
=========
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
-------------------------------------------------------------------------
$7 $21 $37 $82
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, 1997.
Absent fee waivers 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 0.78% 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, 1997 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>
<CAPTION>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
SEVEN MONTHS JANUARY 15,
YEARS ENDED MARCH 31, ENDED 1993(B) TO
MARCH 31, AUGUST 31,
1997 1996 1995 1994(A) 1993
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.......... $ 10.23 $ 9.96 $ 9.96 $ 10.30 $ 10.00
---------- --------- ---------- --------- -----------
Income from investment operations:
Net investment income........................ 0.43 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments.............. ( 0.05) 0.27 -- ( 0.34) 0.30
---------- --------- ---------- --------- -----------
Total from investment operations................ 0.38 0.69 0.45 ( 0.08 ) 0.53
---------- --------- ---------- --------- -----------
Less distributions:
Dividends from net investment income......... ( 0.43) ( 0.42) ( 0.45) ( 0.26 ) ( 0.23)
---------- --------- ---------- --------- -----------
Net asset value at end of period................ $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30
========== ========= ========== ========= ===========
Total return.................................... 3.82% 7.02% 4.66% (1.50%) (d) 8.79%(d)
========== ========= ========== ========= ===========
Net assets at end of period (000's)............. $ 16,801 $ 15,480 $ 12,816 $ 9,716 $ 3,429
========== ========= ========== ========= ===========
Ratio of expenses to average net assets(c) ..... 0.66% 0.75% 0.75% 0.75% (d) 0.75% (d)
Ratio of net investment income
to average net assets........................ 4.24% 4.11% 4.56% 4.46% (d) 4.01%(d)
Portfolio turnover rate......................... 6% 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 0.78%,
0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1997,
1996, 1995, 1994 and August 31, 1993, respectively.
(d) Annualized.
</FN>
</TABLE>
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.
<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.
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).
<PAGE>
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.
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.
<PAGE>
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 generally not exceed 100%. 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, 1997 was 6%.
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.
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:
<PAGE>
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 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
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
<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, 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, 1997, the Advisor received $36,816 in investment advisory fees from
the Fund (net of fee waivers), which represented 0.23% 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 0.65% 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 0.65% of its average daily net assets.
The Advisor's address is 150 Government Street, Post Office Box 1307, Mobile,
Alabama 36633.
<PAGE>
ADMINISTRATOR. The Fund has retained Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending.
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, 1997, the
expense ratio of the Fund was 0.66% 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.
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.
<PAGE>
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.
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.
<PAGE>
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 and The Jamestown Tax Exempt
Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall, Inc. of
Richmond, Virginia; shares of The Jamestown Bond Fund and The Jamestown Short
Term Bond Fund, which are managed by Lowe, Brockenbrough & Tattersall Strategic
Advisors, 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.
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.
<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 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.
<PAGE>
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.
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.
RGSP has grown at a slightly higher rate than the United States' Gross Domestic
Product (GDP) for several years. This trend continued in 1996 with the RGSP of
approximately 2.3%. In 1997, however, RGSP is expected to grow 1.9%, lower than
the expected GDP growth rate of 2.1%. The recent strength of Alabama's RGSP has
been derived primarily from the trade and services sectors.
The Alabama economy created almost 27,000 new jobs in 1996, with the trade and
services sectors contributing almost 57% of these. In contrast, the
manufacturing sector lost approximately 5,000 jobs with all of the losses
occurring in non-durable goods production.
Job growth in Alabama is consistent with national trends.
In 1996, the service and trade sectors of Alabama's economy employed
approximately 883,000 people and accounted for 32% of the State's total output.
Alabama's manufacturing sector employs approximately 386,400 people and accounts
for 23% of the State's total output.
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.
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. In recent years Alabama has ranked as the fifth largest
producer of timber in the nation. The State's growing chemical industry has been
the natural complement of production of wood pulp and paper.
Coal mining; oil and gas production; textiles and apparel; rubber and plastics;
printing and publishing; and steel are also important to Alabama's economy.
The continued movement toward diversification of Alabama's manufacturing base
and the enlargement and diversification of the transportation, communication,
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
o INDIVIDUAL___________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* ___________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA __________________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
______________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
__________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o For Corporations, Partnerships and 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)
o Enclosed is a check payable to THE ALABAMA TAX FREE BOND FUND for
$________________________________________
o 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
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
<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.
o New Application o 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.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o 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 acutomatic investment on:
_____________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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 GOVERNMENT
STREET EQUITY FUND
A No-Load Fund
Investment Advisor
T. Leavell & Associates,
Inc.
Founded 1979
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
Investment Advisor
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
Administrator
Countrywide Fund Services, Inc.
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
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
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>
PROSPECTUS
August 1, 1997
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, 1997, 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 Objective, Investment Policies and Risk Considerations...... 5
How to Purchase Shares................................................. 8
How to Redeem Shares................................................... 10
How Net Asset Value is Determined...................................... 11
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 $385
million in assets, of which approximately $175 million are equities and $210
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 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 Countrywide Fund Services,
Inc. (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.................................................... 0.10%
---------
Total Fund Operating Expenses........................................ 0.89%
---------
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 $28 $49 $110
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, 1997.
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, 1997 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>
<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,
1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37 $ 20.00
---------- ---------- --------- --------- --------- ----------
Income from investment operations:
Net investment income................... 0.37 0.40 0.38 0.30 0.34 0.28
Net realized and unrealized
gains (losses) on investments......... 4.50 5.75 1.19 ( 0.37 ) 1.71 1.35
---------- ---------- --------- --------- --------- ----------
Total from investment operations........... 4.87 6.15 1.57 ( 0.07 ) 2.05 1.63
---------- ---------- --------- --------- --------- ----------
Less distributions:
Dividends from net investment income.... ( 0.36) ( 0.40) ( 0.39 ) ( 0.30 ) ( 0.36 ) ( 0.26)
Distributions from net realized gains... ( 1.33) ( 0.21) -- -- -- --
---------- ---------- --------- --------- --------- ----------
Total distributions........................ ( 1.69) ( 0.61) ( 0.39 ) ( 0.30 ) ( 0.36 ) ( 0.26)
---------- ---------- --------- --------- --------- ----------
Net asset value at end of period........... $ 32.59 $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
========== ========== ========= ========= ========= ==========
Total return............................... 16.94% 25.96% 7.02% ( 0.31% ) 9.66% 9.99%(c)
========== ========== ========= ========= ========= ==========
Net assets at end of period (000's)........ $ 49,629 $ 41,421 $ 31,473 $ 27,101 $21,735 $14,971
========== ========== ========= ========= ========= ==========
Ratio of expenses to average net assets(b) 0.89% 0.94% 0.91% 1.00% 1.00% 1.00% (c)
Ratio of net investment income
to average net assets................... 1.17% 1.50% 1.71% 1.33% 1.55% 1.88%(c)
Portfolio turnover rate.................... 20% 31% 55% 63% 59% 20%
Average commission rate per share.......... $ 0.0410 -- -- -- -- --
<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>
</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 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.
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.
<PAGE>
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, 1997 was 20%.
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.
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 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
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 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.
<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.
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.
<PAGE>
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, 1997, the Advisor received $275,299 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 Countrywide Fund Services, Inc., P.O.
Box 5354, Cincinnati, Ohio 45201, to provide administrative, pricing,
accounting, dividend, disbursing, shareholder servicing and transfer agent
services. The Administrator is a wholly-owned indirect subsidiary of Countrywide
Credit Industries, Inc., a New York Stock Exchange listed company principally
engaged in the business of residential mortgage lending.
<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, 1997, the
expense ratio of the Fund was 0.89% 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.
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 and The Jamestown Tax Exempt
Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall, Inc. of
Richmond, Virginia; shares of The Jamestown Bond Fund and The Jamestown Short
Term Bond Fund, which are managed by Lowe, Brockenbrough & Tattersall Strategic
Advisors, 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.
<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 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.
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.
<PAGE>
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
o INDIVIDUAL __________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* ___________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA ________________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
_______________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
___________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o 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)
o Enclosed is a check payable to THE GOVERNMENT STREET EQUITY FUND for
$_____________________________________
o 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
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
<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.
o New Application o 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.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o 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:
_____________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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) o.
________________________________________ _________________________________
APPLICANT DATE JOINT APPLICANT DATE
________________________________________ _________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE GOVERNMENT
STREET BOND FUND
A No-Load Fund
Investment Advisor
T. Leavell & Associates,
Inc.
Founded 1979
<PAGE>
THE GOVERNMENT STREET BOND FUND
Investment Advisor
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
Administrator
Countrywide Fund Services, Inc.
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
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
Portfolio Manager
Mary Shannon Hope
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>
PROSPECTUS
August 1, 1997
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, 1997, 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......................................... 11
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 $385
million in assets, of which approximately $175 million are equities and $210
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
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 Countrywide Fund Services, Inc.
(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........................................... 0.50%
Administrator's Fees............................................... 0.08%
Other Expenses..................................................... 0.17%
--------
Total Fund Operating Expenses ....................................... 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, 1997.
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, 1997 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>
<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,
1997 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67 $ 20.00
---------- ---------- --------- --------- --------- ----------
Income from investment operations:
Net investment income................... 1.34 1.35 1.35 1.32 1.34 0.95
Net realized and unrealized
gains (losses) on investments......... ( 0.40) 0.54 ( 0.53 ) ( 0.90 ) 1.10 0.67
---------- ---------- --------- --------- --------- ----------
Total from investment operations........... 0.94 1.89 0.82 0.42 2.44 1.62
---------- ---------- --------- --------- --------- ----------
Less distributions:
Dividends from net investment income.... ( 1.34) ( 1.35) ( 1.36 ) ( 1.32 ) ( 1.33 ) ( 0.95)
Distributions from net realized gains... -- -- -- -- ( 0.01 ) --
---------- ---------- --------- --------- --------- ----------
Total distributions........................ ( 1.34) ( 1.35) ( 1.36 ) ( 1.32 ) ( 1.34 ) ( 0.95)
---------- ---------- --------- --------- --------- ----------
Net asset value at end of period........... $ 20.47 $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
========== ========== ========= ========= ========= ==========
Total return............................... 4.60% 9.43% 4.12% 1.85% 12.14% 9.95%(c)
========== ========== ========= ========= ========= ==========
Net assets at end of period (000's)........ $ 29,442 $ 28,718 $ 27,780 $ 22,633 $15,955 $ 6,506
========== ========== ========= ========= ========= ==========
Ratio of expenses to average net assets(b) 0.75% 0.76% 0.85% 0.86% 0.88% 0.93%(c)
Ratio of net investment income
to average net assets................... 6.44% 6.38% 6.68% 6.15% 6.44% 7.02%(c)
Portfolio turnover rate.................... 20% 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.
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.
<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 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.
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.
<PAGE>
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.
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 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, 1997 was 20%.
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.
<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 Bond Fund, and mail it to:
The Government Street 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 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 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
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.
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.")
<PAGE>
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. 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.
<PAGE>
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 Equity Fund
and The Alabama Tax Free Bond Fund (two series of the Trust), the subjects of
separate prospectuses.
Mary Shannon Hope is primarily responsible for managing the portfolio of the
Fund and has acted in this capacity since July, 1997. Mrs. Hope has been
employed by the Advisor since 1987. Mrs. Hope holds a B.S. degree from the
University of Alabama and an M.B.A. from the University of South Alabama.
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, 1997, the Advisor received $147,268 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 Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending.
<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, 1997, the
expense ratio of the Fund was 0.75% 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. 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.
<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.
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.
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 and The Jamestown Tax Exempt
Virginia Fund, which are managed by Lowe, Brockenbrough & Tattersall, Inc. of
Richmond, Virginia; shares of The Jamestown Bond Fund and The Jamestown Short
Term Bond Fund, which are managed by Lowe, Brockenbrough & Tattersall Strategic
Advisors, 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.
<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 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.
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.
<PAGE>
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 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
o INDIVIDUAL ________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* ________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA _______________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
_____________________________________________________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.
o For Corporations, Partnerships, Trusts,
Retirement Plans and Third Party IRAs
__________________________________________________________________
(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)
o Enclosed is a check payable to THE GOVERNMENT STREET BOND FUND for
$_______________________________________
o 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)
===============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank or savings account.
PLEASE ATTACH A VOIDED CHECK.
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.
o New Application o 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.
===============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o 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 acutomatic investment on:
___________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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
INTERNATIONAL
EQUITY FUND
A No-Load Fund
PROSPECTUS
AUGUST 1, 1997
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
SUB-ADVISOR
Oechsle International Advisors, Inc.
One International Place
Boston, Massachusetts 02110
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
The Northern Trust Company
50 South LaSalle Street
Chicago, Illinois 60675
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
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
Erwin H. Will, Jr.
Samuel B. Witt III
OFFICERS
Austin Brockenbrough III, President
Charles M. Caravati III, 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>
PROSPECTUS
August 1, 1997
THE JAMESTOWN INTERNATIONAL EQUITY FUND
A No-Load Fund
===============================================================================
The investment objective of THE JAMESTOWN INTERNATIONAL EQUITY FUND is to
achieve superior total returns through investment in equity securities of
issuers located outside the United States.
INVESTMENT ADVISOR
LOWE, BROCKENBROUGH & TATTERSALL, INC.
RICHMOND, VIRGINIA
The Jamestown International 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, 1997, 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 Objective, Investment Policies and Risk Considerations...........5
How to Purchase Shares.....................................................11
How to Redeem Shares.......................................................12
How Net Asset Value is Determined..........................................14
Management of the Fund.....................................................14
Dividends, Distributions, Taxes and Other Information......................16
Application................................................................21
- -------------------------------------------------------------------------------
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 Jamestown International 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 achieve superior total returns through investment in
equity securities of issuers located outside the United States. 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. Concentrated positions will be established in countries and
regions that look most attractive. In choosing a country or region for the
portfolio, the Fund will look for a favorable mix of positive monetary outlook,
attractive valuation levels, accelerating corporate earnings, and a good supply
and demand relationship for equities. In general, the country or region
concentration will be further focused on liquid investments in specific
companies where broadly defined value and accelerating earnings have been
identified. (See "Investment Objective, Investment Policies and Risk
Considerations.")
INVESTMENT ADVISOR AND SUB-ADVISOR. Lowe, Brockenbrough & Tattersall, Inc. (the
"Advisor") serves as investment manager to the Fund. For its services, the
Advisor receives compensation of 1.00% of the average daily net assets of the
Fund. The Advisor currently intends to waive its advisory fees to the extent
necessary to limit the Fund's total operating expenses to 1.60% per annum of its
average daily net assets.
Oechsle International Advisors, L.P. (the "Sub-Advisor") has been retained as
sub-advisor to the Fund. The Sub-Advisor receives compensation from the Advisor
(not the Fund) in the amount of one-half of the advisory fee received by the
Advisor (net of any advisory fee waivers). (See "Management of the Fund.")
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 $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. 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 distributions in cash or the dividends and
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 Countrywide Fund Services,
Inc. (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 net assets)
Investment Advisory Fees (after waivers)............................. .89%
Administrator's Fees................................................. .24%
Other Expenses....................................................... .47%
--------
Total Fund Operating Expenses........................................ 1.60%
========
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
- ----------------------------------------------------------------
$16 $50 $87 $190
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, 1997.
Absent fee waivers by the Advisor, the Fund's investment advisory fees would
have been 1.00% of average daily net assets and total fund operating expenses
would have been 1.71% 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, 1997 is contained in the Statement of Additional Information. This
information should be read in conjunction with the Fund's audited annual
financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which can be obtained at no
charge by calling the Fund.
<TABLE>
<CAPTION>
Selected per Share Data and Ratios for a Share Outstanding
Throughout the Period Ended March 31, 1997(a)
<S> <C>
Net asset value at beginning of period....................................................... $ 10.00
Income from investment operations:
Net investment loss....................................................................... ( 0.01 )
Net realized and unrealized losses
on investments and foreign currency..................................................... ( 0.14 )
-------------
Total from investment operations............................................................. ( 0.15 )
-------------
Less distributions:
Dividends in excess of net investment income.............................................. ( 0.04 )
-------------
Net asset value at end of period............................................................. $ 9.81
=============
Total return................................................................................ -1.56 (c)
=============
Net assets at end of period (000's).......................................................... $ 29,290
=============
Ratio of expenses to average net assets(b) ............................................. 1.60%(c)
=============
Ratio of net investment income to average net assets................................... -0.15%(c)
=============
Portfolio turnover rate...................................................................... 70%
=============
Average commission rate per share............................................................ $ 0.0258
=============
<FN>
(a) Represents the period from the start of business (April 16, 1996) through
March 31, 1997.
(b) Absent investment advisory fees waived by the Advisor, the ratio of expenses
to average net assets would have been 1.71%(c) for the period ended March 31,
1997.
(c) Annualized.
</FN>
</TABLE>
INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
===============================================================================
The Fund will seek superior total returns by actively investing substantially
all of its assets in equity securities of issuers located outside the United
States.
Concentrated positions will be established in countries and regions that look
most attractive. In choosing a country or region for the portfolio, the Fund
will look for a favorable mix of positive monetary outlook, attractive valuation
levels, accelerating corporate earnings, and a good supply and demand
relationship for equities. In general, the country or region concentration will
be further focused on liquid investments in specific companies where broadly
defined value and accelerating earnings have been identified.
The Fund will not invest in physical commodities or speculative currency
positions. Stock and currency options may be used in a limited way. Currency
forward contracts may also be purchased.
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.
INTERNATIONAL INVESTING. The Sub-Advisor believes that investors must scan the
world for investment opportunities. International diversification is important
because (i) non-U.S. stocks now account for more than sixty percent of the
world's stock market capitalization and (ii) the Sub-Advisor believes that
international investing meaningfully reduces risk while potentially improving
returns.
In 1967, the United States represented seventy percent of the world's stock
market capitalization, thus providing U.S. investors with ample choices at home.
However, by 1980 rapid growth in the economies of other countries and the
development of their equity markets reduced the U.S. percentage to approximately
50% of a much larger world market. By the end of 1996, the U.S. percentage had
declined further to approximately 45%. Therefore, non-U.S. stocks, now nearly
twice the amount of U.S. stocks in terms of market capitalization, represent a
large, increasingly significant pool presenting opportunities which investors
can no longer ignore.
The Sub-Advisor believes that international diversification significantly
reduces risk and potentially improves returns. Over the last 25 years, non-U.S.
stocks, as measured by the Europe, Austrailia and Far East ("EAFE") Index, have
outperformed U.S. equities, as measured by the Standard & Poor's 500 Index, by a
large margin. Furthermore, the Sub-Advisor believes that the inclusion of
international stocks to an existing portfolio of U.S. securities results in
lower risk mainly due to the fact that foreign economies and markets are not
synchronized with the U.S. economy or the U.S. equity market.
Recognition of the enhanced risk/reward characteristics of international
investing on the part of institutional investors is demonstrated by their
rapidly increasing exposure to international equity markets. By the end of 1996,
U.S. pension funds had invested nearly 11% of their equity portfolios in
international equities. This percentage is expected to significantly increase
over the next five years.
PHILOSOPHY. The Sub-Advisor combines top-down country selection with bottom-up
stock selection in order to exploit the inefficiencies within and between
international equity markets. Various academic studies have shown that 60 to 70
percent of a portfolio's returns are determined by the asset allocation mix,
while the remainder is the result of stock selection.
<PAGE>
The world's financial markets continually change, and it is the job of the fund
manager to understand and act upon these changing trends. Over the last 25
years:
o major inflation in the United States and Europe during the 1970s
decimated the performance of common stocks, resulting in major
gains in "hard assets";
o a disinflationary period in the 1980s provided some of the best
returns of this century for common stocks both in Europe and the
United States;
o the economies and securities markets of Japan and other Pacific
Rim countries performed spectacularly;
o Latin America reversed decades of economic stagnation in the mid-
to late-1980s as a result of dramatic political and economic
changes; and
o technology transformed political, economic and financial patterns
worldwide.
The Sub-Advisor believes that to consistently provide investors with superior
returns, it is imperative to focus on both country selection as well as stock
selection. Four primary factors are reviewed in the country selection process in
order to rank all the countries for potential returns in U.S. dollars. The
Sub-Advisor looks for a positive monetary environment that is likely to
stimulate economic growth. The Sub-Advisor looks for accelerating corporate
earnings in countries selling at reasonable valuation levels given the expected
growth. Finally, the Sub-Advisor looks at the demand and supply relationship for
equities in each country.
The Sub-Advisor seeks to control risk by diversifying across a number of foreign
markets. The Fund will generally have investments in 12 or more countries, and
the Fund will never be completely out of any major market in the EAFE Index. The
Fund will be further diversified by holding, on average, 80 stocks in the
portfolio. A quantitative review of the portfolio serves to identify the risk
and return parameters of the investments.
Once the macro-economic framework is developed, the Sub-Advisor seeks to add
value through security selection. The Sub-Advisor focuses on medium and large
capitalization stocks, but the Fund may hold up to 25% of the Fund's assets in
companies that have a market capitalization of less than $1 billion. The minimum
market capitalization for an investment is $50 million. Turnover in the
portfolio will generally average between 25% and 50%.
The stock selection process is earnings driven with a particular focus on cash
earnings. In international markets where the accounting and reporting standards
are not as standardized as in the United States, the Sub-Advisor believes that
cash earnings are the best reflection of the true earnings power of a
corporation. The Sub-Advisor analyzes accounting and legal differences in order
to compare investment among different countries. The core of the equity research
process is driven by fundamental research. The Sub-Advisor's investment research
professionals annually visit more than 600 companies around the globe that are
potential investments. The Sub-Advisor feels that these company visits are an
essential part of understanding the cash generation capabilities of the
companies. The Sub-Advisor is headquartered in Boston and has offices and
investment professionals in Frankfurt, London and Tokyo.
The Fund will use currency hedges only as a defensive measure. Given its outlook
for the various currencies, the Sub-Advisor first seeks beneficial currency
exposure through country allocation. Secondly, the Sub-Advisor will concentrate
investments in securities that are likely to benefit from the currency outlook.
Finally, as a defensive measure, the Sub-Advisor may hedge some of the Fund's
currency position to protect the portfolio against a rise in the dollar of the
United States. The Fund may hedge up to 50% of its investments in international
markets.
<PAGE>
Investing in foreign securities involves considerations and possible risks not
typically involved in investing in securities of companies domiciled and
operating in the United States, including the instability of some governments,
the possibility of expropriation, limitations on the use or removal of funds or
other assets, changes in governmental administration or economic or monetary
policy (in the United States or elsewhere) or changed circumstances in dealings
between nations. The application of non-U.S. tax laws (e.g., the imposition of
withholding taxes on dividend or interest payments) or confiscatory taxation may
also affect investment in such securities. Higher expenses may result from
investment in non-U.S. securities than would result from investment in U.S.
securities because of the costs that must be incurred in connection with
conversions between various currencies and brokerage commissions that may be
higher than those in the United States. Securities markets located outside the
United States also may be less liquid, more volatile and less subject to
governmental supervision than those in the United States. Investments in
countries other than the United States could be affected by other factors not
present in the United States, including lack of uniform accounting, auditing and
financial reporting standards and potential difficulties in enforcing
contractual obligations.
While the Fund intends to invest primarily in equity securities, up to 20% of
the Fund's assets may be invested in convertible bonds and other debt
securities. These debt obligations consist of U.S. and foreign government
securities and corporate debt securities. The Fund will limit its purchases of
debt securities to investment grade obligations. "Investment grade" debt refers
to those securities rated within one of the four highest categories by Moody's
Investors Service, Inc. or Standard & Poor's Ratings Group. While securities in
these categories are generally accepted as being of investment grade, the fourth
highest grade is considered to be a medium grade and has speculative
characteristics even though it is regarded as having adequate capacity to pay
interest and repay principal.
HEDGING TECHNIQUES
Unless otherwise indicated, the Sub-Advisor may invest in the following
derivative securities to seek to hedge all or a portion of the Fund's assets
against market value changes resulting from changes in securities prices and
currency fluctuations. Hedging is a means of attempting to offset, or
neutralize, the price movement of an investment by making another investment,
the price of which should tend to move in the opposite direction from the
original investment. The imperfect correlation in price movement between an
option and the underlying financial instrument and/or the costs of implementing
such an option may limit the effectiveness of the hedging strategy.
PUT AND CALL OPTIONS. The Fund may write (sell) covered put and call options as
a means of enhancing its return and may buy put and call options written by
others covering securities, futures contracts and foreign currencies to attempt
to provide protection against the adverse effects of anticipated changes in the
prices of such instruments. The Fund may write covered call options as a means
of enhancing its return through the receipt of premiums when the Adviser
determines that the underlying securities, futures contracts or foreign
currencies have achieved their potential for appreciation. However, by writing
such options, the Fund forgoes the opportunity to profit from an increase in the
market price of the underlying security, futures contract or foreign currency
above the exercise price except insofar as the premium represents such a profit.
The Fund may also seek to earn additional income through receipt of premiums by
writing covered put options. The risk involved in writing such options is that
there could be a decrease in the market value of the underlying security,
futures contract or foreign currency. If this occurred, the option could be
exercised and the underlying instrument would then be sold to the Fund at a
higher price than its then current market value. The Fund may purchase put and
call options to attempt to provide protection against adverse price effects from
anticipated changes in prevailing prices of securities, futures contracts or
foreign currencies. The purchase of a put option protects the value of portfolio
holdings in a falling market, while the purchase of a call option protects cash
reserves from a failure to participate in a rising market. In purchasing a call
option, the Fund would be in a position to realize a gain if, during the option
period, the price of the security, futures contract or foreign currency
increased by an amount greater than the premium paid. It would realize a loss if
the price of the security, futures contract or foreign currency decreased or
remained the same or did not increase during the period by more than the amount
of the premium. If a put or call option purchased by the Fund were permitted to
expire without being sold or exercised, its premium would represent a realized
loss to the Fund. When writing put options the Fund will be required to
segregate cash and/or liquid high-grade debt securities to meet its obligations.
When writing call options the Fund will be required to own the underlying
financial instrument or segregate with its Custodian cash and/or short-term high
quality securities to meet its obligations under written calls. By so doing, the
Fund's ability to meet current obligations, to honor redemptions or to achieve
its investment objective may be impaired. The staff of the Securities and
Exchange Commission has taken the position that over-the-counter options and the
assets used as "cover" for over-the-counter options are illiquid securities.
<PAGE>
FUTURES CONTRACTS. The Fund may buy and sell futures contracts as a hedge to
protect the value of the Fund's portfolio against anticipated changes in
securities prices and foreign currencies. There are several risks in using
futures contracts. One risk is that futures prices could correlate imperfectly
with the behavior of cash market prices of the financial instrument being hedged
so that even a correct forecast of general price trends may not result in a
successful transaction. Another risk is that the Sub-Advisor may be incorrect in
its expectation of future prices of the underlying financial instrument. There
is also a risk that a secondary market in the obligations that the Fund holds
may not exist or may not be adequately liquid to permit the Fund to close out
positions when it desires to do so. When buying or selling futures contracts the
Fund will be required to segregate cash and/or liquid high-grade debt
obligations to meet its obligations under these types of financial instruments.
By so doing, the Fund's ability to meet current obligations, to honor
redemptions or to operate in a manner consistent with its investment objective
may be impaired.
FORWARD CURRENCY EXCHANGE CONTRACTS. When the Sub-Advisor believes that the
currency of a particular foreign country may suffer a substantial decline
against the U.S. dollar, it may attempt to hedge some portion or all of this
anticipated risk by entering into a forward contract to sell an amount of
foreign currency approximating the value of some or all of the Fund's portfolio
obligations denominated in such foreign currency. It may also enter into such
contracts to protect against loss between trade and settlement dates resulting
from changes in foreign currency exchange rates. Such contracts will also have
the effect of limiting any gains to the Fund between trade and settlement dates
resulting from changes in such rates.
CERTAIN RISK CONSIDERATIONS
CURRENCY RISKS. The Fund's investments that are denominated in a currency other
than the U.S. dollar are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies including the
U.S. dollar. Among the factors that may affect currency values are trade
balances, the level of short-term interest rates, differences in relative values
of similar assets in different currencies, long-term opportunities for
investment and capital appreciation and political developments. The Fund may try
to hedge these risks by investing in foreign currencies, currency futures
contracts and options thereon, forward currency exchange contracts, or any
combination thereof, but there can be no assurance that such strategies will be
effective.
MARKET RISKS. General price movements of securities and other investments may
significantly affect the value of the Fund's portfolio. With respect to the
investment strategy utilized by the Fund, there is always some, and occasionally
a significant, degree of market risk. Investing in small companies involves
certain special risks. Small companies may have limited product lines, markets,
or financial resources, and their managements may be dependent on a limited
number of key individuals. The securities of small companies may have limited
market liquidity and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the market averages in
general.
EMERGING MARKETS. The risks of foreign investing are of greater concern in the
case of investments in emerging markets which may exhibit greater price
volatility and have less liquidity. Furthermore, the economies of emerging
market countries generally are heavily dependent upon international trade and,
accordingly, have been and may continue to be adversely affected by trade
barriers, managed adjustments in relative currency values, and other
protectionist measures applied internally or imposed by the countries with which
they trade. These emerging market economies also have been and may continue to
be adversely affected by economic conditions in the countries with which they
trade.
<PAGE>
HEDGING TECHNIQUES. The Fund's ability to establish and close out positions in
futures contracts and options will be subject to the existence of a liquid
secondary market. Although the Fund generally will purchase or sell only those
futures contracts and options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange will
exist for any particular futures contract or option or at any particular time.
Transactions in options involve special risks. The Fund may not be able to enter
into a closing transaction to cancel its obligations with respect to the options
it has written or purchased. If an option purchased by the Fund expires
unexercised, the Fund will lose the premium it paid. In addition, the Fund could
suffer a loss if the premium paid by the Fund in a closing transaction exceeds
the premium income it received. When the Fund writes a call option, its ability
to participate in the capital appreciation of the underlying obligation is
limited.
CONFLICTS OF INTEREST. The Sub-Advisor may determine from time to time that some
investment opportunities are appropriate for certain of its clients and not
others, including the Fund, as the Fund has an investment objective that may
vary from that of other clients. For these and other reasons, such as differing
time horizons, liquidity needs, tax consequences and assessments of general
market conditions and of individual securities (including options), Fund
investment transactions may or may not vary from decisions made for others by
the Sub-Advisor. It may also occasionally be necessary to allocate limited
investment opportunities among the Fund and other clients of the Sub-Advisor, on
a fair and equitable basis deemed appropriate by the Sub-Advisor.
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 the net asset value of
the Fund will be subject to greater fluctuation than a portfolio containing
mostly fixed income securities.
OTHER INVESTMENT TECHNIQUES
MONEY MARKET INSTRUMENTS. 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. For temporary
defensive purposes, when the Sub-Advisor determines that market conditions
warrant, the Fund may depart from its normal investment objective and money
market instruments may be emphasized, even to the point that 100% of the 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 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 Sub-Advisor's opinion. See the
Statement of Additional Information for a further description of money market
investments.
BORROWING. The 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 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>
LENDING PORTFOLIO SECURITIES. The Fund may make short-term loans of its
portfolio securities to banks, brokers and dealers. Lending portfolio securities
exposes the Fund to the risk that the borrower may fail to return the loaned
securities or may not be able to provide additional collateral or that the Fund
may experience delays in recovery of the loaned securities or loss of rights in
the collateral if the borrower fails financially. To minimize these risks, the
borrower must agree to maintain collateral marked to market daily, in the form
of cash and/or liquid high-grade debt obligations, with the Fund's Custodian in
an amount at least equal to the market value of the loaned securities. The Fund
will limit the amount of its loans of portfolio securities to no more than 25%
of its net assets. This lending policy may not be changed without the
affirmative vote of a majority of its outstanding shares.
PORTFOLIO TURNOVER. By utilizing the approach to investing described herein, and
assuming continuation of existing market dynamics, annual portfolio turnover is
expected to average between 25% and 50%, and will generally not exceed 100%.
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 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, 1997 was 70%.
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 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 15% of its assets to be invested in
repurchase agreements which extend beyond seven days and other illiquid
securities.
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 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.
<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.
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 International Equity Fund, and mail it to:
The Jamestown International 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 Jamestown International Equity Fund
(Shareholder name and account number or tax identification number)
<PAGE>
It is important that the wire contain all the information and that the Fund
receives 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 $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 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 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
net asset value 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.
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 $5,000 (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 $5,000 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 Jamestown
International 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;
<PAGE>
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 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 calling or 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). Securities held by the Fund may be primarily listed on
foreign exchanges or traded in foreign markets which are open on days (such as
Saturdays and U.S. holidays) when the New York Stock Exchange is not open for
business. As a result, the net asset value per share of the Fund may be
significantly affected by trading on days when the Fund is not open for
business. 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. Foreign securities are
valued on the basis of quotations from the primary market in which they are
traded and are translated from the local currency into U.S. dollars using
currency exchange rates. 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, Lowe,
Brockenbrough & Tattersall, Inc. (the "Advisor") provides the Fund with general
investment supervisory services pursuant to an Investment Advisory Agreement
with the Trust.
The Advisor was organized as a Virginia corporation in 1970 and is controlled by
Austin Brockenbrough III. 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 and The Jamestown Tax Exempt Virginia Fund (three
series of the Trust), the subjects of separate prospectuses.
Compensation of the Advisor is at the annual rate of 1.00% of the Fund's average
daily net assets. For the fiscal year ended March 31, 1997, the Advisor received
$211,861 in investment advisory fees from the Fund (net of fee waivers), which
represented 0.89% of the Fund's average daily net assets.
The Advisor currently intends to waive its advisory fees to the extent necessary
to limit the total operating expenses of the Fund to 1.60% 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 1.60% of its average daily net assets.
<PAGE>
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
SUB-ADVISOR. Subject to the authority of the Board of Trustees and the
supervision of the Advisor, Oechsle International Advisors, L.P. (the
"Sub-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 a Sub-Advisory Agreement with the
Trust and the Advisor. The Sub-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.
Oechsle Group, L.P. is the General Partner of the Sub-Advisor. The limited
partners of the Sub-Advisor are Dresdner Asset Management (U.S.A.) Corporation
(a subsidiary of Dresdner Bank A.G.) and the OIA Limited Partnership Interest
Trust (which is beneficially owned by the partners of the Sub-Advisor). The
Managing Partner of Oechsle Group, L.P. is Walter Oechsle. Mr. Oechsle, who has
35 years experience in the international investment arena, began his career at
Arnhold and S. Bleichroeder before moving to Putnam to become the President and
Chief Investment Officer of Putnam International Advisors. In 1986, Mr. Oechsle
left with most of the team from Putnam International Advisors and established
the Sub-Advisor. The founding partners of the Sub-Advisor have an average tenure
of fourteen years with the current investment team. The Sub-Advisor has twenty
investment professionals located in offices in Boston, Frankfurt, London and
Tokyo. The Sub-Advisor manages over $10 billion in international assets in
separately managed and commingled accounts for private and institutional
investors.
Since January 1997, Kathleen Harris has primary responsibility for the
day-to-day management of the Fund's portfolio. Ms. Harris has been employed by
the Sub-Advisor since January 1995. Prior to her employment with the
Sub-Advisor, she was Portfolio Manager and Investment Director for the State of
Wisconsin Investment Board, where she managed international equity assets.
Walter Oechsle participates in the management of the Fund particularly with
respect to country asset allocation decisions, which are made by both Mr.
Oechsle and Ms. Harris.
Compensation of the Sub-Advisor is paid by the Advisor (not the Fund) in the
amount of one-half of the advisory fee received by the Advisor (net of any
advisory fee waivers).
The Sub-Advisor's address is One International Place, Boston, Massachusetts
02110.
ADMINISTRATOR. The Fund has retained Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending. 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
0.25% of the average value of its daily net assets up to $25 million, 0.225% on
the next $25 million of such assets and 0.20% of such assets in excess of $50
million; provided, however, that the minimum fee is $4,000 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 The Northern Trust Company (the
"Custodian"). The Custodian's mailing address is 50 South LaSalle Street,
Chicago, Illinois 60675. The Advisor, Sub-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 or the Sub-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, 1997, the expense ratio of the Fund was 1.60% of its average net
assets after expense reimbursements.
BROKERAGE. The Fund as adopted brokerage policies which allow the Sub-Advisor to
prefer brokers which provide research or other valuable services to the
Sub-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
Sub-Advisor for its other clients; conversely, the Fund may benefit from
research services obtained through the brokerage transactions of the
Sub-Advisor's other clients. Subject to the requirements of the 1940 Act and
procedures adopted by the Board of Trustees, the Fund may execute portfolio
transactions through any broker or dealer and pay brokerage commissions to a
broker (i) which is an affiliated person of the Trust, or (ii) which is an
affiliated person of such person, or (iii) an affiliated person of which is an
affiliated person of the Trust, the Advisor or the Sub-Advisor. The Statement of
Additional Information contains more information about the management and
brokerage practices of the Fund.
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 qualify 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.
Distributions resulting from the sale of foreign currencies and foreign
obligations, to the extent of foreign exchange gains, are taxed as ordinary
income or loss. If these transactions result in reducing the Fund's net income,
a portion of the income may be classified as a return of capital (which will
lower your tax basis). If the Fund pays nonrefundable taxes to foreign
governments during the year, the taxes will reduce the Fund's net investment
income but still may be included in your taxable income. However, you may be
able to claim an offsetting tax credit or itemized deduction on your return for
your portion of foreign taxes paid by the Fund.
<PAGE>
Under applicable tax law, the Fund may be required to limit its gains from
hedging in foreign currency forwards, futures and options. Although it is
anticipated the Fund will comply with such limits, the Fund's extensive use of
these hedging techniques involves greater risk of unfavorable tax consequences
than funds not engaging in such techniques. Hedging may also result in the
application of the mark-to-market and straddle provisions of the Internal
Revenue Code. These provisions could result in an increase (or decrease) in the
amount of taxable dividends paid by the Fund as well as affect whether dividends
paid by the Fund are classified as capital gain or ordinary income.
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.
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 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; shares of The Jamestown Bond Fund
and The Jamestown Short Term Bond Fund, which are managed by Lowe, Brockenbrough
& Tattersall Strategic Advisors, Inc. of Richmond, Virginia; and shares of The
Jamestown Balanced Fund, The Jamestown 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.
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 Fund 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 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 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 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 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 JAMESTOWN INTERNATIONAL EQUITY FUND
Send completed application to:
THE JAMESTOWN INTERNATIONAL EQUITY FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
===============================================================================
ACCOUNT REGISTRATION
o INDIVIDUAL _________________________________________________________________
(First Name)(Middle Initial)(Last Name) (Birthdate) (SS#)
o JOINT* _________________________________________________________________
(First Name)(Middle Initial)(Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA ______________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial)(Last Name) (State) Transfers to
Minors Act
_____________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
_________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o 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________________________.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)
o Enclosed is a check payable to THE JAMESTOWN INTERNATIONAL EQUITY FUND
for $__________________
o 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 JAMESTOWN INTERNATIONAL EQUITY FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
===============================================================================
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
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.
o New Application o 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 INTERNATIONAL 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 INTERNATIONAL 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 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.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of The Jamestown International Equity Fund by withdrawing
from the commercial bank account below, per the instructions below:
Amount $_______________(minimum $100) Please make my acutomatic investment on:
_____________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to my o both the 15th and last business day
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 objective and policies stated therein. I hereby ratify
any instructions given pursuant to this Application and for myself and my
successors and assigns do hereby release Countrywide Fund Services, Inc.,
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) o.
___________________________________ _____________________________________
APPLICANT DATE JOINT APPLICANT DATE
___________________________________ _____________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN
TAX EXEMPT
VIRGINIA FUND
A No-Load Fund
PROSPECTUS
AUGUST 1, 1997
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<PAGE>
THE JAMESTOWN TAX EXEMPT
VIRGINIA FUND
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
Countrywide Fund Services, Inc.
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
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
Erwin H. Will, Jr.
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>
PROSPECTUS
August 1, 1997
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, 1997, 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......................................................9
How to Redeem Shares.......................................................10
How Net Asset Value is Determined..........................................12
Management of the Fund.....................................................12
Tax Status.................................................................13
Dividends, Distributions, Taxes and Other Information......................15
Appendix A: Description of Municipal Obligations...........................18
Appendix B: Factors Affecting Virginia Issuers.............................20
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 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.")
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 Countrywide Fund Services,
Inc. (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 net assets)
Investment Advisory Fees (after waivers)............................. 0.27%
Administrator's Fees................................................. 0.23%
Other Expenses....................................................... 0.25%
--------
Total Fund Operating Expenses........................................ 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
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$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, 1997.
Absent fee waivers 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 0.88% 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, 1997 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>
<CAPTION>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994(a)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 9.85 $ 9.68 $ 9.61 $ 10.00
------------ -------------- ------------- --------------
Income from investment operations:
Net investment income....................... 0.45 0.45 0.44 0.23
Net realized and unrealized gains (losses)
on investments.............................. ( 0.02) 0.17 0.07 ( 0.39 )
------------ -------------- ------------- --------------
Total from investment operations............... 0.43 0.62 0.51 ( 0.16 )
------------ -------------- ------------- --------------
Less distributions:
Dividends from net investment income........ ( 0.45) ( 0.45) ( 0.44 ) ( 0.23 )
------------ -------------- ------------- --------------
Net asset value at end of period............... $ 9.83 $ 9.85 $ 9.68 $ 9.61
============ ============== ============= ==============
Total return................................... 4.39% 6.51% 5.47% (2.96)% (c)
============ ============== ============= ==============
Net assets at end of period (000's)............ $ 11,197 $ 8,779 $ 7,712 $ 2,056
============ ============== ============= ==============
Ratio of expenses to average net assets(b) .... 0.75% 0.75% 0.75% 0.75% (c)
Ratio of net investment income to average net assets 4.51% 4.57% 4.64% 4.07% (c)
Portfolio turnover rate........................ 24% 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 0.88%,
1.04%, 1.62% and 4.83%(c) for the periods ended March 31, 1997, 1996, 1995
and 1994, respectively. (c)Annualized.
</FN>
</TABLE>
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.
<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.
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.
<PAGE>
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.
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).
<PAGE>
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.
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.
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.
<PAGE>
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.
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.
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, 1997 was 24%.
<PAGE>
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.")
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 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
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.
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.
<PAGE>
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.
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.
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 was organized as a Virginia corporation in 1970 and is controlled by
Austin Brockenbrough, III. 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 and The Jamestown International Equity Fund (three
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, 1997, the Advisor received $27,398 in
investment advisory fees from the Fund (net of fee waivers), which represented
0.27% 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.
<PAGE>
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Fund has retained Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending. 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 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, 1997, 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.
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.
<PAGE>
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.
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.
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; shares of The Jamestown Bond Fund
and The Jamestown Short Term Bond Fund, which are managed by Lowe, Brockenbrough
& Tattersall Strategic Advisors, Inc. of Richmond, Virginia; and shares of The
Jamestown Balanced Fund, The Jamestown Equity Fund and The Jamestown
International Equity 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.
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:
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.
In a Special Session in 1994, the General Assembly passed emergency legislation
to provide payments in five annual installments to federal retirees in
settlement of their claims as a result of Davis. In 1995 and 1996, the General
Assembly passed legislation allowing more retirees to participate in the
settlement. As of April 15, 1996, the estimated total cost to the Commonwealth
for the settlement was approximately $316.2 million.
On September 15, 1995 the Supreme Court of Virginia rendered its decision in
Harper. The Court reversed the judgment of the trial court and entered final
judgment in favor of the taxpayers, directing that the amounts unlawfully
collected be refunded with statutory interest. The Commonwealth issued refund
checks on November 9, 1995, and interest stopped accruing as of November 3,
1995. The 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 was approximately $78.7 million,
including interest earnings.
The total cost of refunding all Virginia income taxes paid on federal pensions
on account of the settlement (approximately $316.2 million) and the judgment
($78.7 million) is approximately $394.9 million, of which $203.2 million ($124.5
million in respect of the settlement and the entire $78.7 million in respect of
the judgment) has been paid, leaving $191.7 million payable in respect of the
settlement - approximately $63.2 million in fiscal year 1997, $62.5 million on
March 31, 1998, and (subject to appropriation) $66 million on March 31, 1999.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Send completed application to:
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
===============================================================================
ACCOUNT REGISTRATION
o INDIVIDUAL _________________________________________________________________
(First Name)(Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* _________________________________________________________________
(First Name)(Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA _______________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
____________________________________________________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.
o For Corporations, Partnerships & Trusts
________________________________________________________________
(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
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
<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.
o New Application o 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.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o 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 acutomatic investment on:
___________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to my o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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) o.
___________________________________ _____________________________________
APPLICANT DATE JOINT APPLICANT DATE
___________________________________ _____________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN
BALANCED FUND
THE JAMESTOWN
EQUITY FUND
No-Load Funds
PROSPECTUS
AUGUST 1, 1997
Investment Advisor
Lowe, Brockenbrough & Tattersall, Inc.
Richmond, Virginia
<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
Countrywide Fund Services, Inc.
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
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
Erwin H. Will, Jr.
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>
PROSPECTUS
August 1, 1997
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, 1997, 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.
- -------------------------------------------------------------------------------
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. The Advisor has retained Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc. (the "Sub-Advisor") to serve as the investment manager
to that portion of the Balanced Fund's portfolio invested in fixed income
securities. (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 Countrywide Fund Services,
Inc. (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....................................................... 0.08%
--------
Total Fund Operating Expenses........................................ 0.91%
========
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 $29 $50 $112
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.......................................... ...... 0.20%
Other Expenses....................................................... 0.13%
--------
Total Fund Operating Expenses................................... 0.98%
========
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 $31 $54 $120
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 estimated amounts for the current fiscal year ended March 31, 1997.
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.
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>
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, 1997 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.
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
July 3,
Years Ended March 31, 1989(a) to
March 31,
1997 1996 1995 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period...................... $ 14.77 $12.76 $ 12.15 $ 12.49 $ 11.52 $ 10.88 $ 10.27 $ 10.16
--------- -------- ------- ------- ------- ------- ------ --------
Income from investment operations:
Net investment income............... 0.35 0.36 0.33 0.30 0.31 0.32 0.38 0.25
Net realized and unrealized gains (losses)
on investments..................... 1.45 2.50 0.90 ( 0.18) 1.11 0.67 0.63 0.10
--------- -------- ------- ------- ------- ------- ------ --------
Total from investment operations...... 1.80 2.86 1.23 0.12 1.42 0.99 1.01 0.35
--------- -------- ------- ------- ------- ------- ------ --------
Less distributions:
Dividends from net investment income ( 0.35 ) ( 0.36 )( 0.33 ) ( 0.30) ( 0.31) ( 0.31) ( 0.39) ( 0.24)
Distributions from net realized gains. ( 1.05 ) ( 0.49 ) ( 0.29) ( 0.16) ( 0.14) ( 0.04) ( 0.01) --
--------- -------- ------- ------- ------- ------- ------ --------
Total distributions................... ( 1.40 ) ( 0.85 ) ( 0.62) ( 0.46) ( 0.45) ( 0.35) ( 0.40) ( 0.24)
--------- -------- ------- ------- ------- ------- ------ --------
Net asset value at end of period...... $ 15.17 $ 14.77 $ 12.76 $ 12.15 $ 12.49 $11.52 $ 10.88 $10.27
========= ======= ======= ======= ======= ======= ======== =======
Total return.......................... 12.29% 22.79% 10.54% 0.94% 12.50% 9.16% 9.99% 4.65%(c)
========= ======= ======= ======= ======= ======= ======== =======
Net assets at end of period (000's)... $70,654 $61,576 $52,062 $46,928 $40,512 $23,786 $13,180 $4,399
========= ======= ======= ======= ======= ======= ======== =======
Ratio of gross expenses to average
net assets.......................... 0.91% 0.93% 0.99% 1.01% 1.07% 1.19% 1.47% 1.61%(c)
Ratio of net expenses to average net
assets(b)........................... 0.87% 0.88% 0.96% 0.98% 0.99% -- -- --
Ratio of net investment income
to average net assets............... 2.31% 2.52% 2.72% 2.47% 2.59% 3.00% 5.52% 5.24%(c)
Portfolio turnover rate............... 58% 72% 95% 123% 134% 153% 110% 7%
Average commission rate per share..... $0.0667 -- -- -- -- -- -- --
<FN>
(a) Effective date of the Fund's initial registration under the Securities Act
of 1933, as amended.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement.
(c) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994 1993(a)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.......... $ 13.96 $ 11.29 $ 10.19 $ 10.18 $ 10.00
---------- --------- ---------- --------- -----------
Income from investment operations:
Net investment income........................ 0.13 0.15 0.10 0.08 0.04
Net realized and unrealized gains (losses)
on investments ............................ 2.00 2.98 1.15 ( 0.01 ) 0.18
---------- --------- ---------- --------- -----------
Total from investment operations................ 2.13 3.13 1.25 0.07 0.22
---------- --------- ---------- --------- -----------
Less distributions:
Dividends from net investment income......... ( 0.13) ( 0.15) ( 0.12) ( 0.06 ) ( 0.04)
Distributions from net realized gains........ ( 0.30) ( 0.31) ( 0.03) -- --
---------- --------- ---------- --------- -----------
Total distributions............................. ( 0.43) ( 0.46) ( 0.15) ( 0.06 ) ( 0.04)
---------- --------- ---------- --------- -----------
Net asset value at end of period................ $ 15.66 $ 13.96 $ 11.29 $ 10.19 $ 10.18
========== ========= ========== ========= ===========
Total return.................................... 15.27% 28.00% 12.33% 0.67% 6.81%(d)
========== ========= ========== ========= ===========
Net assets at end of period (000's)............. $ 31,180 $ 17,857 $ 8,111 $ 2,811 $ 1,953
========== ========= ========== ========= ===========
Ratio of gross expenses to average net assets... 0.98% 1.14% 1.99% 3.16% 3.19%(d)
Ratio of net expenses to average net assets..... 0.92%(b) 1.01%(b) 1.44%(c) 1.50% (c) 1.50%(c)(d)
Ratio of net investment income
to average net assets........................ 0.85% 1.27% 1.18% 0.82% 1.13%(d)
Portfolio turnover rate......................... 44% 54% 48% 92% 54%
Average commission rate per share............... $ 0.0688 -- -- -- --
<FN>
(a) Represents the period from the commencement of operations (December 1, 1992)
through March 31, 1993.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement.
(c)Ratios were determined based on net expenses after the Advisor waived all or
a portion of its advisory fee and/or reimbursed the Fund for operating
expenses.
(d) 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 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
Sub-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 Sub-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 Sub-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 Sub-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, 1997 was 58% and 44%, 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 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
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 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.
<PAGE>
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.
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 was organized as a Virginia corporation in 1970 and is controlled by
Austin Brockenbrough, III. 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 and The Jamestown Tax Exempt Virginia Fund (two 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, 1997, the Advisor received
$430,381 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, 1997, the Advisor
received $160,646 in investment advisory fees from the Equity Fund, which
represented 0.65% of the Fund's average daily net assets.
The Advisor has retained Lowe, Brockenbrough & Tattersall Strategic Advisors,
Inc. (the "Sub-Advisor") to manage that portion of the Balanced Fund invested in
fixed income securities, pursuant to a Sub-Advisory Agreement among the Trust,
the Advisor and the Sub-Advisor. The Sub-Advisor will select fixed income
securities for investment by the Balanced Fund, and, upon making any purchase or
sale decision, place orders for the execution of such portfolio transaction. The
fixed income portion of the Balanced Fund is managed on a day to day basis by a
committee comprised of the Sub-Advisor's fixed income portfolio management
professionals, each portfolio professional responsible for designated specific
sectors of the fixed income market. Compensation of the Sub-Advisor, with
respect to the Balanced Fund, is paid by the Advisor (not the Fund) at the rate
of $1,250 for each fiscal quarter of the Trust. The Sub-Advisor is a Virginia
corporation controlled by Fred T. Tattersall.
The address of both the Advisor and the Sub-Advisor is 6620 West Broad Street,
Suite 300, Richmond, Virginia 23230.
ADMINISTRATOR. The Funds have retained Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to provide administrative, pricing, accounting,
dividend disbursing, shareholder servicing and transfer agent services. The
Administrator is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in the business of residential mortgage lending.
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.
<PAGE>
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, 1997, the expense ratio of the Balanced Fund was 0.91% of its average daily
net assets and the expense ratio of the Equity Fund was 0.98% of its average
daily net assets.
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; shares of The Jamestown Bond Fund and The
Jamestown Short Term Bond Fund, which are managed by Lowe, Brockenbrough &
Tattersall Strategic Advisors, Inc. of Richmond, Virginia; and shares of 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.
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
o INDIVIDUAL _________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* _________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA _______________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
_____________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
_________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o For Corporations, Partnetships, 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)
o Enclosed is a check payable to the applicable Fund for $_____________________
(Please indicate Fund below)
o Jamestown Balanced Fund (80) o 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
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS
<PAGE>
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.
o Please mail redemption proceeds to the name and address of record
o 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: o Monthly o Quarterly
o Please DEPOSIT DIRECTLY the proceeds to the bank account below
o 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:
____________________________________ o the last business day of each month
(Name of Bank) o the 15th day of each month
is hereby authorized to charge to my o both the 15th and last business day
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 Countrywide Fund
Services, Inc., 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) o.
___________________________________ _____________________________________
APPLICANT DATE JOINT APPLICANT DATE
___________________________________ _____________________________________
OTHER AUTHORIZED SIGNATORY 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, 1997
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
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, 1997.
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 community. The same factors would be
considered in selecting foreign securities as with domestic securities, as
discussed in
- 2 -
<PAGE>
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.
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
- 3 -
<PAGE>
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.
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.
- 4 -
<PAGE>
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' 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.
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<PAGE>
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 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.
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<PAGE>
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.
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.
- 7 -
<PAGE>
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 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.
- 8 -
<PAGE>
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.);
(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
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<PAGE>
(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, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
Age ad Address During Past 5 Years From the Trust
- -------------- --------------------- --------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc.(plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 43) Principal of 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
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<PAGE>
Charles M. Caravati, Jr. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) Julian Price Professor Emeritus $8,000
Trustee of Business Administration
614 Croom Court University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of 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 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
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<PAGE>
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
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 44) Vice President of
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 56) Principal of
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 35) Vice President of Countrywide Fund
Treasurer Services, Inc. and Countrywide Financial
312 Walnut Street, 21st Floor Services, Inc.; Treasurer, Countrywide
Cincinnati, Ohio 45202 Investment Trust, Countrywide Tax-Free
Trust and Countrywide Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
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>
John F. Splain (age 40) Vice President, General Counsel and
Secretary Secretary of Countrywide Fund Services,
312 Walnut Street, 21st Floor Inc.; General Counsel and Secretary, e
Cincinnati, Ohio 45202 Countrywid Investments, Inc. and
Countrywide Financial Services, Inc.;
Secretary, Countrywide Investment Trust,
Countrywide Tax-Free Trust and
Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 46) 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 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
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.
Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the
Trust's Nominating Committee. Messrs. Caravati, Lee, Morrill,
Morrissette, Will and Witt constitute the Trust's Audit
Committee. The Audit Committee reviews annually the nature and
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<PAGE>
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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 4.2% of the then outstanding shares of the Equity Fund and
3.3% of the then outstanding shares of the Balanced Fund. On the same date, the
Trust Company of Knoxville, P.O. Box 789, Knoxville, Tennessee, 37901, owned of
record 13.0% 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, 1998 and will be renewed thereafter for one year periods only so
long as suc 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, 1997 and 1996, the Equity
Fund paid the Adviser advisory fees of $89,290 (which was net of voluntary fee
waivers of $5,300) and $21,816 (net of voluntary fee waivers of $27,849),
respectively. The Adviser voluntarily waived its entire advisory fee and
reimbursed a portion of the Equity Fund's operating expenses for the fiscal year
ended March 31, 1995. For the fiscal years ended March 31, 1997, 1996 and 1995,
the Balanced Fund paid the Adviser advisory fees of $293,819, $237,270 and
$176,987, 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 Adviser also provides investment advice to
corporations, trusts,
- 14 -
<PAGE>
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.
The Advisor may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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.
- 15 -
<PAGE>
For the fiscal years ended March 31, 1997, 1996 and 1995, the Administrator
received fees of $26,614, $24,000 and $23,250, respectively, from the Equity
Fund and $75,049, $61,819 and $46,102, respectively, from the Balanced 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 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, 1997, 1996 and 1995, the total amount of
brokerage commissions paid by the Balanced Fund was $14,442, $16,891 and
$11,419, respectively. During the fiscal years ended March 31, 1997, 1996 and
1995, the total amount of brokerage commissions paid by the Equity Fund was
$14,989, $8,779 and $5,216, respectively.
- 16 -
<PAGE>
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 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.
As of March 31, 1997, the Balanced Fund and the Equity Fund held securities
issued by NationsBank (the market value of which were $819,550 and $465,150,
respectively). NationsBank is 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
- 17 -
<PAGE>
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
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
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<PAGE>
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.
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
minimum investment if they consent in writing to share a single
- 19 -
<PAGE>
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 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
- 20 -
<PAGE>
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 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
- 21 -
<PAGE>
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)
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
- 22 -
<PAGE>
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, 1997 and for the period since inception (July 30, 1993)
to March 31, 1997 are 17.65% and 17.06%, respectively. The average annual total
return quotations for the Balanced Fund for the one year period ended March 31,
1997, for the five year period ended March 31, 1997 and for the period since
inception (July 3, 1989) to March 31, 1997 are 13.15%, 12.47% and 10.71%,
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:
- 23 -
<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
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, 1997 were 2.80% and 1.51%, 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.
- 24 -
<PAGE>
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, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
- 25 -
<PAGE>
THE
FLIPPIN, BRUCE & PORTER
FUNDS
ANNUAL REPORT
MARCH 31, 1997
FBP Contrarion Equity Fund
FBP Contrarion Balanced Fund
<PAGE>
LETTER TO SHAREHOLDERS MAY 22, 1997
==============================================================================
We are pleased to report on the progress of your Fund and its investments
for the fiscal year ending March 31, 1997. 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 9.9% 17.7%
FBP Contrarian Balanced Fund 7.6% 13.2%
REVIEW AND OUTLOOK
The past year has been a very favorable period to be invested in financial
assets. Economic growth in the U. S. has provided the environment for healthy
corporate profit growth with low inflation. Consumer confidence remained high
and unemployment remained low by historical standards. Mutual funds continued to
receive record inflows of funds throughout the year.
However, the financial markets displayed a bit of uneasiness as the first
quarter of 1997 came to an end. The S&P 500 stock index was up only 2.7% after
rising as much as 10% earlier in the period. The NASDAQ index, heavily weighted
with technology issues, was down 5.1%. Bond returns, except for the shortest
maturities, were negative as interest rates rose approximately .50% across most
maturities. The yield curve flattened as 2 to 5 year issues saw the largest
increase in yield.
A combination of factors triggered the decline in stocks. Alan Greenspan,
Chairman of the Federal Reserve, began cautioning investors last December of his
belief that stock prices had risen ahead of earnings gains. Increased personal
income and spending, high consumer confidence, strong economic growth, a
somewhat overvalued stock market and concern over future wage gains prompted the
Federal Reserve's decision to raise the Federal Funds rate .25% on March 25th.
This was a pre-emptive measure to head off inflation not only in wages and
producer prices, but also in stock prices.
Despite these concerns, the S&P 500 index returned 19.8% and the Lipper
Balanced Fund index returned 11.0% for the year ending March 1997. However,
there was quite a divergence in returns depending on the companies chosen for
investment. The equity market was led by large capitalization companies
displaying consistent and growing earnings, whereas the average stock
performance was much lower. For example, the Valueline Composite, a much broader
but equal weighted index, was up only 7.5% for the same time period.
<PAGE>
We expect economic growth to moderate later this year and inflation to stay
under control. As ten year U.S. Treasury issues approach 7%, longer term bonds
are attractive and our focus for the Balanced Fund will be noncallable issues in
the 7 to 10 year maturity range. This is a shift from our previous successful
strategy, which was very defensive and focused on short to intermediate issues
and high coupon, callable corporate bonds.
After strong equity returns in 1995, 1996 and through May of this year,
stocks are susceptible to further corrections and continued volatility. We are
using periods of strength to reduce weightings in stocks that are approaching
our full value targets and are in vogue with Wall Street. We are constantly
searching for new investment opportunities, and the divergence discussed
previously is providing many potential candidates. Also, market selloffs, such
as occurred during April, provided the opportunity for the Equity Fund to invest
new cash received.
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. 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 T. Bruce
John T. Bruce, CFA
Vice President - Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
[line chart]
FBP Contrarian Equity Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
FBP Standard & Consumer
Contrarion Poor's Price
Fund 500 Index Index
<S> <C> <C> <C>
Jul 93 10000 10000 10000
10305 10299 10040
10510 10538 10110
Mar 94 10308 10139 10161
10379 10181 10222
11141 10678 10314
10996 10676 10376
Mar 95 11702 11716 10460
12798 12834 10554
13890 13854 10596
14340 14688 10649
Mar 96 15158 15477 10735
15846 16171 10853
16229 16671 10901
17604 18061 10991
Mar 97 17833 18545 11067
Past performance is not predictive of future performance.
FBP Contrarian Equity Fund Average Annual Total Returns
1 Year Since Inception*
17.65% 17.06%
* Initial public offering of shares was July 30, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
FBP Contrarian Balanced Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
FBP Standard & Consumer
Contrarion Poor's Price
Balanced Fund 500 Index Index
<S> <C> <C> <C>
Jul 89 10000 10000 10000
9892 11071 10075
9897 11299 10176
Mar 90 9867 10960 10380
10059 11648 10474
8749 10047 10653
9118 10948 10835
Mar 91 10555 12539 10933
10683 12510 10977
11130 13179 11043
11607 14284 11142
Mar 92 12214 13922 11221
12434 14187 11311
12545 14634 11390
13275 15370 11481
Mar 93 13772 16040 11585
13875 16117 11654
14448 16533 11701
14598 16916 11783
Mar 94 14306 16275 11842
14324 16343 11913
15015 17141 12020
14870 17138 12093
Mar 95 15814 18807 12190
17031 20602 12300
18126 22240 12349
18689 23579 12411
Mar 96 19429 24844 12510
20089 25959 12649
20431 26762 12704
21784 28992 12809
Mar 97 21983 29769 12897
Past Performance is not predictive of future performance.
FBP Contrarian Balanced Fund Average Annual Total Returns
1 Year 5 Years Since Inception*
13.15% 12.47% 10.71%
* Initial public offering of shares was July 3, 1989.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
=============================================================================================================
SHARES COMMON STOCKS -- 82.7% VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES -- 1.4%
4,200 Cognizant Corporation...................................................... $ 122,325
4,200 Dun & Bradstreet Corporation............................................... 106,575
---------------
228,900
---------------
CHEMICALS -- 3.8%
4,100 Dow Chemical Company....................................................... 328,000
11,500 Ethyl Corporation.......................................................... 99,188
4,000 Great Lakes Chemical Corporation........................................... 184,000
---------------
611,188
---------------
COMMERCIAL BANKING -- 12.0%
8,400 Banc One Corporation....................................................... 333,900
4,200 Chase Manhattan Corporation................................................ 393,225
4,600 Citicorp................................................................... 497,950
5,090 First Chicago NBD Corporation.............................................. 275,496
8,400 NationsBank Corporation.................................................... 465,150
---------------
1,965,721
---------------
COMMUNICATIONS -- 4.3%
7,600 GTE Corporation............................................................ 354,350
2,700 Harris Corporation......................................................... 207,563
16,600 Paging Network, Inc.(b) ................................................... 134,875
---------------
696,788
---------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 6.1%
2,600 Hewlett-Packard Company.................................................... 138,450
4,800 International Business Machines(c) ....................................... 659,400
16,100 Tandem Computers, Inc.(b) ................................................. 191,187
---------------
989,037
---------------
CONSUMER GOODS & SERVICES -- 6.2%
7,500 Dean Foods Company......................................................... 259,687
5,400 Philip Morris Companies, Inc............................................... 616,275
5,000 UST, Inc................................................................... 139,375
---------------
1,015,337
---------------
DRUGS/MEDICAL EQUIPMENT -- 8.3%
11,100 Allergan, Inc.............................................................. 323,288
6,800 Bristol-Myers Squibb Company(c) ........................................... 401,200
3,400 Johnson & Johnson ........................................................ 179,775
2,500 Merck & Company, Inc....................................................... 210,625
6,700 Pharmacia & Upjohn, Inc.................................................... 245,387
---------------
1,360,275
---------------
DURABLE GOODS -- 5.4%
11,000 Digital Equipment Corporation(b) ......................................... 301,125
1,200 General Electric Company................................................... 119,100
4,600 Genuine Parts Company...................................................... 214,475
8,300 WMX Technologies, Inc...................................................... 254,187
---------------
888,887
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
==============================================================================================================
SHARES COMMON STOCKS -- 82.7% VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICITY -- 1.9%
16,000 Unicom Corporation ........................................................ $ 312,000
---------------
FINANCE -- 2.8%
4,800 Student Loan Marketing Association......................................... 457,200
---------------
INSURANCE -- 3.7%
4,100 Aetna Life & Casualty Company(c) .......................................... 352,088
2,200 Marsh & McLennan Companies, Inc............................................ 249,150
---------------
. 601,238
---------------
MANAGEMENT SERVICES -- 1.2%
4,000 PHH Corporation............................................................ 184,500
---------------
OIL & OIL DRILLING -- 6.4%
8,000 Equitable Resources, Inc................................................... 245,000
17,000 Oryx Energy Company(b) .................................................... 327,250
6,400 Pennzoil Company........................................................... 331,200
1,400 Schlumberger Limited ..................................................... 150,150
---------------
1,053,600
---------------
PAPER & FOREST PRODUCTS -- .8%
3,000 Weyerhaeuser Company....................................................... 133,875
---------------
PHOTOGRAPHICAL PRODUCTS -- 1.2%
2,500 Eastman Kodak Company...................................................... 189,688
---------------
PRINTING -- 2.3%
11,000 R. R. Donnelley & Sons Company............................................. 383,625
---------------
RETAIL STORES -- 11.8%
20,900 Apple South, Inc........................................................... 274,312
6,900 Circuit City Stores, Inc................................................... 230,288
12,000 Cracker Barrel Old Country Store, Inc...................................... 313,500
27,000 K-Mart Corporation(b) ..................................................... 327,375
11,000 The Limited, Inc. ......................................................... 202,125
8,900 Toys R Us, Inc.(b) ........................................................ 249,200
11,800 Wal-Mart Stores, Inc....................................................... 328,925
---------------
1,925,725
---------------
TRANSPORTATION -- 2.4%
4,800 Alexander & Baldwin, Inc................................................... 124,200
5,000 Federal Express Corporation(b) ........................................... 260,625
---------------
384,825
---------------
TRAVEL & INVESTMENT SERVICES -- .7%
2,000 American Express Company................................................... 119,750
---------------
TOTAL COMMON STOCKS (COST $10,351,893) ................................... $ 13,502,159
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
==============================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) -- 19.1% VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,126,000 Star Bank N.A., 5.25%, dated 03/31/97, due 04/01/97,
repurchase proceeds $3,126,456 (Cost $3,126,000)........................... $ 3,126,000
---------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 101.8% ............. $ 16,628,159
LIABILITIES IN EXCESS OF OTHER ASSETS-- (1.8)% ............................ (287,891)
---------------
NET ASSETS-- 100.0% ....................................................... $ 16,340,268
===============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata
interest in the collateral at March 31, 1997 was $3,393,868.
(b) Non-income producing security.
(c) Security covers a call option.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1997
=============================================================================================================
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Life & Casualty Company,
1,000 07/19/97 at $95...................................... $ 1,625 $ 4,960
Bristol-Myers Squibb Company,
2,200 06/21/97 at $67.50................................... 1,788 8,691
International Business Machines,
500 04/19/97 at $170..................................... 31 4,522
-------------- ---------------
$ 3,444 $ 18,173
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
================================================================================================================
SHARES COMMON STOCKS -- 64.6% VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES -- 1.2%
9,000 Cognizant Corporation...................................................... $ 262,125
9,000 Dun & Bradstreet Corporation............................................... 228,375
---------------
490,500
---------------
CHEMICALS -- 2.8%
8,000 Dow Chemical Company....................................................... 640,000
20,000 Ethyl Corporation.......................................................... 172,500
7,000 Great Lakes Chemical Corporation........................................... 322,000
---------------
1,134,500
---------------
COMMERCIAL BANKING -- 7.4%
13,590 Banc One Corporation....................................................... 540,202
7,500 Chase Manhattan Corporation................................................ 702,188
6,000 Citicorp .................................................................. 649,500
5,430 First Chicago NBD Corporation.............................................. 293,899
14,800 NationsBank Corporation.................................................... 819,550
---------------
3,005,339
---------------
COMMUNICATIONS -- 3.7%
15,000 GTE Corporation............................................................ 699,375
8,500 Harris Corporation......................................................... 653,437
22,000 Paging Network, Inc.(b) ................................................... 178,750
---------------
1,531,562
---------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 5.2%
6,000 Hewlett-Packard Company.................................................... 319,500
10,000 International Business Machines(c) ....................................... 1,373,750
37,000 Tandem Computers, Inc.(b) ................................................. 439,375
---------------
2,132,625
---------------
CONSUMER GOODS & SERVICES -- 4.2%
10,000 Dean Foods Company......................................................... 346,250
10,000 Philip Morris Companies, Inc.(c) .......................................... 1,141,250
8,500 UST, Inc. ................................................................. 236,938
---------------
1,724,438
---------------
DRUGS/MEDICAL EQUIPMENT -- 6.9%
19,000 Allergan, Inc.............................................................. 553,375
9,400 Bristol-Myers Squibb Company(c) ........................................... 554,600
14,400 Johnson & Johnson ......................................................... 761,400
4,000 Merck & Company, Inc....................................................... 337,000
16,400 Pharmacia & Upjohn, Inc.................................................... 600,650
---------------
2,807,025
---------------
DURABLE GOODS -- 4.4%
20,000 Digital Equipment Corporation(b) .......................................... 547,500
5,600 General Electric Company................................................... 555,800
4,300 Genuine Parts Company...................................................... 200,487
16,000 WMX Technologies, Inc...................................................... 490,000
---------------
1,793,787
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
SHARES COMMON STOCKS -- 64.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICITY -- 1.3%
27,000 Unicom Corporation......................................................... $ 526,500
---------------
FINANCE -- 2.3%
10,000 Student Loan Marketing Association(c) ..................................... 952,500
---------------
INSURANCE -- 4.4%
8,300 Aetna Life & Casualty Company(c) .......................................... 712,763
4,275 American International Group(c) ........................................... 501,778
5,000 Marsh & McLennan Companies, Inc............................................ 566,250
---------------
1,780,791
---------------
MANAGEMENT SERVICES -- 1.0%
9,000 PHH Corporation............................................................ 415,125
---------------
OIL & OIL DRILLING -- 3.7%
6,800 Equitable Resources, Inc................................................... 208,250
25,000 Oryx Energy Company(b) .................................................... 481,250
9,600 Pennzoil Company........................................................... 496,800
3,000 Schlumberger Limited ...................................................... 321,750
---------------
1,508,050
---------------
PAPER & FOREST PRODUCTS -- 1.1%
10,000 Weyerhaeuser Company....................................................... 446,250
---------------
PHOTOGRAPHICAL PRODUCTS -- .9%
5,200 Eastman Kodak Company ..................................................... 394,550
---------------
PRINTING -- 1.5%
17,000 R. R. Donnelley & Sons Company............................................. 592,875
---------------
RETAIL STORES -- 9.2%
33,300 Apple South, Inc........................................................... 437,062
10,400 Circuit City Stores, Inc................................................... 347,100
25,200 Cracker Barrel Old Country Store, Inc...................................... 658,350
68,000 K-Mart Corporation(b) ..................................................... 824,500
20,000 The Limited, Inc. ......................................................... 367,500
19,000 Toys R Us, Inc.(b) ........................................................ 532,000
21,500 Wal-Mart Stores, Inc....................................................... 599,313
---------------
3,765,825
---------------
TRANSPORTATION -- 2.2%
8,600 Alexander & Baldwin, Inc................................................... 222,525
13,000 Federal Express Corporation(b) ............................................ 677,625
---------------
900,150
---------------
TRAVEL & INVESTMENT SERVICES -- 1.2%
8,000 American Express Company(c) ............................................... 479,000
---------------
TOTAL COMMON STOCKS (COST $16,811,073) ................................... $ 26,381,392
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS-- 20.0% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 16.3%
$ 500,000 5.625%, due 06/30/97.................................................... $ 500,157
200,000 5.50%, due 09/30/97..................................................... 199,688
500,000 5.375%, due 05/31/98.................................................... 495,156
500,000 5.875%, due 08/15/98.................................................... 497,031
500,000 5.50%, due 02/28/99..................................................... 491,719
500,000 6.75%, due 06/30/99..................................................... 502,656
500,000 7.75%, due 01/31/00..................................................... 514,375
500,000 5.625%, due 02/28/01.................................................... 481,563
750,000 6.125%, due 12/31/01.................................................... 730,547
500,000 6.375%, due 08/15/02.................................................... 490,782
500,000 6.25%, due 02/15/03..................................................... 486,250
500,000 7.25%, due 05/15/04..................................................... 509,844
750,000 7.00%, due 07/15/06..................................................... 751,406
---------------
6,651,174
---------------
FEDERAL HOME LOAN BANK -- 1.8%
750,000 8.00%, due 01/10/12..................................................... 733,060
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.9%
750,000 8.625%, due 10/18/21.................................................... 782,349
---------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (COST $8,219,688) ............ $ 8,166,583
---------------
<CAPTION>
===============================================================================================================
PAR VALUE CORPORATE BONDS -- 6.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 2.9%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/08.................................................... $ 733,686
Signet Banking Corporation,
150,000 9.625%, due 06/01/99.................................................... 157,347
United Dominion Realty,
300,000 7.25%, due 04/01/99..................................................... 301,150
---------------
1,192,183
---------------
INDUSTRIAL -- 2.5%
Baxter International, Inc.,
75,000 9.25%, due 12/15/99..................................................... 79,245
Boise Cascade Corporation,
175,000 10.125%, due 12/15/97................................................... 179,462
Dayton Hudson Corporation,
27,000 9.25%, due 11/15/16..................................................... 27,583
113,000 9.875%, due 06/01/17.................................................... 119,446
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
PAR VALUE CORPORATE BONDS -- 6.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Georgia Pacific Corporation,
$ 300,000 9.75%, due 01/15/18..................................................... $ 313,186
Hilton Hotels,
300,000 7.70%, due 07/15/02..................................................... 300,472
---------------
1,019,394
---------------
UTILITIES -- 1.2%
Niagara Mohawk Power,
500,000 9.50%, due 03/01/21..................................................... 505,693
---------------
TOTAL CORPORATE BONDS (COST $2,664,540) .................................. $ 2,717,270
---------------
TOTAL INVESTMENTS AT VALUE (COST $27,695,301)-- 91.2% .................... $ 37,265,245
---------------
<CAPTION>
===============================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) -- 8.3% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,371,000 Star Bank N.A., 5.25%, dated 03/31/97, due 04/01/97,
repurchase proceeds $3,371,492 (Cost $3,371,000)........................ $ 3,371,000
---------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 99.5% .............. $ 40,636,245
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.5% .............................. 218,107
---------------
NET ASSETS-- 100.0% ....................................................... $ 40,854,352
===============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata
interest in the collateral at March 31, 1997 was $3,659,863.
(b) Non-income producing security.
(c) Security covers a call option.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1997
===============================================================================================================
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Life & Casualty Company,
2,000 07/19/97 at $95...................................... $ 3,250 $ 9,920
American Express Company,
2,000 04/19/97 at $70...................................... 0 4,920
American International Group,
1,500 05/17/97 at $130..................................... 844 6,690
Bristol-Myers Squibb,
3,400 06/21/97 at $67.50................................... 2,762 13,106
International Business Machines,
1,000 04/19/97 at $170..................................... 63 9,085
Phillip Morris Companies, Inc.,
2,000 06/21/97 at $135..................................... 2,750 15,919
Student Loan Marketing Association,
2,500 07/19/97 at $115..................................... 3,750 18,649
-------------- ---------------
$ 13,419 $ 78,289
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
===============================================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................................. $ 10,351,893 $ 27,695,301
============== ===============
At value (Note 1)................................................... $ 13,502,159 $ 37,265,245
Investments in repurchase agreements (Note 1)......................... 3,126,000 3,371,000
Cash.................................................................. 874 2
Receivable for securities sold........................................ 21,251 45,538
Interest receivable................................................... 456 192,587
Dividends receivable.................................................. 31,233 56,220
Receivable for capital shares sold.................................... 133,450 8,842
Other assets.......................................................... -- 1,808
-------------- ---------------
TOTAL ASSETS........................................................ 16,815,423 40,941,242
-------------- ---------------
LIABILITIES
Payable for securities purchased...................................... 440,501 --
Payable for capital shares redeemed................................... 1,500 7,568
Dividends payable..................................................... 8,998 19,891
Accrued advisory fees (Note 3)........................................ 10,582 27,614
Accrued administration fees (Note 3).................................. 2,800 6,900
Other accrued expenses................................................ 7,330 11,498
Covered call options, at value (Notes 1 and 4)
(premiums received $18,173 and $78,289, respectively) .............. 3,444 13,419
-------------- ---------------
TOTAL LIABILITIES................................................... 475,155 86,890
-------------- ---------------
NET ASSETS .............................................................. $ 16,340,268 $ 40,854,352
============== ===============
Net assets consist of:
Paid-in capital....................................................... $ 13,012,026 $ 30,527,779
Undistributed net investment income................................... 1,308 7,701
Accumulated net realized gains from security transactions............. 161,939 684,058
Net unrealized appreciation on investments............................ 3,164,995 9,634,814
-------------- ---------------
Net assets............................................................... $ 16,340,268 $ 40,854,352
============== ===============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value)............................................. 1,016,083 2,573,969
============== ===============
Net asset value, offering price and redemption price per share (Note 1).. $ 16.08 $ 15.87
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1997
===============================================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest.............................................................. $ 128,149 $ 977,544
Dividends............................................................. 215,221 488,130
-------------- ---------------
TOTAL INVESTMENT INCOME............................................. 343,370 1,465,674
-------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................................... 94,590 293,819
Administration fees (Note 3).......................................... 26,614 75,049
Custodian fees........................................................ 8,103 12,316
Professional fees..................................................... 7,295 10,795
Registration fees..................................................... 5,924 6,574
Trustees' fees and expenses........................................... 5,002 5,002
Printing of shareholder reports....................................... 4,346 5,189
Postage and supplies.................................................. 3,302 4,725
Pricing costs......................................................... 1,233 4,747
Other expenses........................................................ 1,997 4,947
-------------- ---------------
TOTAL EXPENSES...................................................... 158,406 423,163
Fees waived by the Adviser (Note 3)................................... (5,300) --
-------------- ---------------
NET EXPENSES........................................................ 153,106 423,163
-------------- ---------------
NET INVESTMENT INCOME ................................................... 190,264 1,042,511
-------------- ---------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions......................... 309,235 1,386,944
Net realized gains on option contracts written........................ 11,061 41,494
Net change in unrealized appreciation/depreciation on investments..... 1,419,505 2,379,725
-------------- ---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ........................ 1,739,801 3,808,163
-------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............................. $ 1,930,065 $ 4,850,674
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 1997 AND 1996
===============================================================================================================
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income....................... $ 190,264 $ 124,921 $ 1,042,511 $ 959,151
Net realized gains on:
Security transactions..................... 309,235 162,612 1,386,944 1,151,459
Option contracts written.................. 11,061 5,145 41,494 17,162
Net change in unrealized appreciation/
depreciation on investments............... 1,419,505 1,328,851 2,379,725 4,142,023
------------ -------------- ------------- --------------
Net increase in net assets from operations..... 1,930,065 1,621,529 4,850,674 6,269,795
------------ -------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.................. (190,839) (124,493) (1,041,994) (958,803)
From net realized gains..................... (303,199) (22,509) (1,212,659) (863,702)
------------ -------------- ------------- --------------
Decrease in net assets from
distributions to shareholders............... (494,038) (147,002) (2,254,653) (1,822,505)
------------ -------------- ------------- --------------
FROM CAPITAL SHARE TRANSACTIONS(a)
Proceeds from shares sold................... 7,247,789 3,064,694 5,369,393 6,203,415
Net asset value of shares issued in reinvestment
of distributions to shareholders.......... 415,382 105,309 2,148,852 1,739,955
Payments for shares redeemed................ (1,848,844) (877,596) (4,900,645) (2,725,615)
------------ -------------- ------------- --------------
Net increase in net assets from
capital share transactions.................. 5,814,327 2,292,407 2,617,600 5,217,755
------------ -------------- ------------- --------------
TOTAL INCREASE IN NET ASSETS .................. 7,250,354 3,766,934 5,213,621 9,665,045
NET ASSETS
Beginning of year........................... 9,089,914 5,322,980 35,640,731 25,975,686
------------ -------------- ------------- --------------
End of year - (including undistributed net
investment income of $1,308, $1,883,
$7,701 and $7,184, respectively).......... $ 16,340,268 $ 9,089,914 $40,854,352 $35,640,731
============ ============== ============= ==============
(a) Summary of capital share activity:
Shares sold................................. 467,711 227,338 346,188 437,108
Shares issued in reinvestment of distributions
to shareholders........................... 27,437 7,962 140,100 122,643
Shares redeemed............................. (118,787) (70,241) (310,312) (191,450)
------------ -------------- ------------- --------------
Net increase in shares outstanding.......... 376,361 165,059 175,976 368,301
Shares outstanding, beginning of year....... 639,722 474,663 2,397,993 2,029,692
------------ -------------- ------------- --------------
Shares outstanding, end of year............. 1,016,083 639,722 2,573,969 2,397,993
============ ============== ============= ==============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
===================================================================================================================
YEAR YEAR YEAR JULY 30,
ENDED ENDED ENDED 1993(A) TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 14.21 $ 11.21 $ 10.15 $ 10.00
------------ -------------- ------------- --------------
Income from investment operations:
Net investment income....................... 0.22 0.24 0.21 0.12
Net realized and unrealized gains on investments 2.24 3.05 1.14 0.19
------------ -------------- ------------- --------------
Total from investment operations............... 2.46 3.29 1.35 0.31
------------ -------------- ------------- --------------
Less distributions:
Dividends from net investment income........ (0.22) (0.24) (0.23) (0.10)
Distributions from net realized gains....... (0.37) (0.05) (0.06) (0.06)
------------ -------------- ------------- --------------
Total distributions............................ (0.59) (0.29) (0.29) (0.16)
------------ -------------- ------------- --------------
Net asset value at end of period............... $ 16.08 $ 14.21 $ 11.21 $ 10.15
============ ============== ============= ==============
Total return................................... 17.65% 29.54% 13.52% 4.59%(c)
============ ============== ============= ==============
Net assets at end of period (000's)............ $ 16,340 $ 9,090 $ 5,323 $ 3,135
============ ============== ============= ==============
Ratio of expenses to average net assets(b) .... 1.21% 1.25% 1.25% 1.25%(c)
Ratio of net investment income to average
net assets.................................... 1.50% 1.89% 2.15% 1.98%(c)
Portfolio turnover rate........................ 9% 12% 9% 7%
Average commission rate per share.............. $ 0.0925 $ -- $ -- $ --
<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 1.25%, 1.67%, 2.27% and
3.10%(c) for the periods ended March 31, 1997, 1996, 1995 and 1994,
respectively (Note 3).
(c) Annualized.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===================================================================================================================
YEARS ENDED MARCH 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year............ $ 14.86 $ 12.80 $ 12.19 $ 12.10 $ 11.10
----------- ---------- ---------- --------- ----------
Income from investment operations:
Net investment income........................ 0.42 0.43 0.38 0.33 0.34
Net realized and unrealized gains
on investments............................. 1.49 2.44 0.87 0.15 1.06
----------- ---------- ---------- --------- ----------
Total from investment operations................ 1.91 2.87 1.25 0.48 1.40
----------- ---------- ---------- --------- ----------
Less distributions:
Dividends from net investment income......... (0.42) (0.43) (0.39) (0.32) (0.35)
Distributions from net realized gains........ (0.48) (0.38) (0.25) (0.07) (0.05)
----------- ---------- ---------- --------- ----------
Total distributions............................. (0.90) (0.81) (0.64) (0.39) (0.40)
----------- ---------- ---------- --------- ----------
Net asset value at end of year.................. $ 15.87 $ 14.86 $ 12.80 $ 12.19 $ 12.10
=========== ========== ========== ========= ==========
Total return.................................... 13.15% 22.86% 10.54% 3.88% 12.76%
=========== ========== ========== ========= ==========
Net assets at end of year (000's)............... $ 40,854 $ 35,641 $ 25,976 $ 21,969 $ 16,435
=========== ========== ========== ========= ==========
Ratio of expenses to average net assets......... 1.08% 1.17% 1.17%(a) 1.25%(b) 1.31%(b)
Ratio of net investment income
to average net assets........................ 2.65% 3.04% 3.10% 2.64% 3.09%
Portfolio turnover rate......................... 24% 17% 14% 28% 27%
Average commission rate per share............... $ 0.0779 $ -- $ -- $ -- $ --
<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% and 1.43% and for the
years ended March 31, 1994 and 1993, respectively (Note 3).
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
==============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the Funds)
are no-load, diversified series of the Williamsburg Investment Trust (the
Trust), an open-end management investment company registered 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
<PAGE>
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.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 1997:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
- -----------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized appreciation............... $ 3,507,323 $ 10,377,445
Gross unrealized depreciation............... (342,328) (742,631)
-------------- ---------------
Net unrealized appreciation................. $ 3,164,995 $ 9,634,814
============== ===============
- -----------------------------------------------------------------------------------
</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, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $5,429,535 and $915,391, respectively, for the FBP Contrarian Equity Fund and
$9,799,373 and $8,122,848, 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% of its
average daily net assets up to $250 million; .65% of the next $250 million of
such net assets; and .50% of such net assets in excess of $500 million.
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 $5,300 of its investment advisory fees from the FBP
Contrarian Equity Fund for the year ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Funds Services, Inc. (CFS), formerly MGF Service Corp., CFS provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Funds. For these services, CFS 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, postage, supplies, and costs of pricing the Funds' portfolio
securities.
Certain officers of the Trust are also officers of CFS.
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 1997
is as follows:
<TABLE>
<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....... 21 $ 13,224 100 $ 56,127
Options written................................ 37 18,173 194 96,274
Options cancelled in closing purchase
transactions................................ (3) (1,573) (22) (11,549)
Options expired................................ (14) (9,791) (75) (38,413)
Options exercised.............................. (4) (1,860) (53) (24,150)
------------ -------------- ------------- --------------
Options outstanding at end of year............. 37 $ 18,173 144 $ 78,289
============ ============== ============= ==============
- ---------------------------------------------------------------------------------------------------------------
</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, 1997, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, 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, 1997 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, 1997, 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 the financial highlights for the periods referred to above, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<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
Countrywide Fund Services, Inc.
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>
STATEMENT OF ADDITIONAL INFORMATION
THE ALABAMA
TAX FREE BOND FUND
August 1, 1997
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........................................... 20
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, 1997. The Prospectus may be obtained from the Fund,
at the address and phone number shown above, at no charge.
July 29, 1997
<PAGE>
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
- 2 -
<PAGE>
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.
- 3 -
<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" (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;
- 4 -
<PAGE>
(9) Write, purchase or sell commodities, commodities contracts,
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.
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, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
Age and Address During Past 5 Years From the Trust
- ---------------- -------------------- --------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 43) Principal of 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
- 5 -
<PAGE>
<CAPTION>
<S> <C> <C>
Charles M. Caravati, Jr. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) 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;
Director of Montgomery Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of 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 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
- 6 -
<PAGE>
<CAPTION>
<S> <C> <C>
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
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 44) Vice President of
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 56) Principal of
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 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 7 -
<PAGE>
<CAPTION>
<S> <C> <C>
John F. Splain (age 40) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 46) 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 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
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.
Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will 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
- 8 -
<PAGE>
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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, 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 19.9% of the then outstanding shares of the Fund; Charles
Schwab & Co., Inc., 101 Montgomery Street, San Francisco, California 94104,
owned of record 15.6% of the then outstanding shares of the Fund; H.
Apolinsky/S. Magnes as trustees under the will of Sidney Magnes, P.O. Box 1307,
Mobile, Alabama 36633, owned of record 6.4% of the then outstanding shares of
the Fund; and Dwight & Company, P.O. Box 3067, Mobile, Alabama 36652, owned of
record 5.8% 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, 1998 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, 1997, 1996 and
1995, the Fund paid the Advisor advisory fees of $36,816 (which was net of
voluntary fee waivers of $19,812), $34,436 (net of voluntary fee waivers of
$15,334), and $5,340 (net of voluntary fee waivers of $35,702), respectively.
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 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
- 9 -
<PAGE>
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.
The Advisor may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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.
- 10 -
<PAGE>
For the fiscal years ended March 31, 1997, 1996 and 1995, the Administrator
received from the Fund fees of $24,513, $24,000 and $24,000, 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.
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
- 11 -
<PAGE>
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:
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
- 12 -
<PAGE>
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:
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,
- 13 -
<PAGE>
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 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.
- 14 -
<PAGE>
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.
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
- 15 -
<PAGE>
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.
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, 1997, the Fund had capital loss carryforwards for federal
income tax purposes of $200,015 which expire through the year 2005. These
capital loss carryforwards 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 FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends
paid by the Fund derived from net investment income or net short-
- 16 -
<PAGE>
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 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.,
- 17 -
<PAGE>
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, 1997 and (January 15, 1993) to March 31, 1997 are 3.82% and
4.71%, 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:
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
- 18 -
<PAGE>
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, 1997 was 4.20%.
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, 1997, based on the highest
marginal combined federal and Alabama income tax rate, was 7.32%.
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 Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. he 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
- 19 -
<PAGE>
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, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
- 20 -
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
No Load Mutual Funds
Annual Report
March 31, 1997
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
==============================================================================
May 22, 1997
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report of The
Government Street Funds and of The Alabama Tax Free Bond Fund for the year
ending March 31, 1997.
THE GOVERNMENT STREET EQUITY FUND
With a nearly ideal environment of moderate economic growth, rising corporate
profits and continued low inflation, the U.S. stock market continued its advance
through the end of 1996 and into 1997's first quarter. Despite falling stock
prices in March, the Standard & Poor's 500 Index turned in a total return of
19.8% for the twelve month period ending March 31, 1997. For its fiscal year
ending March 31, 1997, The Government Street Equity Fund achieved a total return
of 16.9%.
Due to the decline in the stock market in March, the average fund investing in
diversified U.S. stocks lost 2.0% in 1997's first quarter; during this same
period, however, The Government Street Equity Fund achieved a positive return of
1.6%.
12/31/96- 3/31/96-
3/31/97 3/31/97
The Government Street Equity Fund 1.6% 16.9%
General Equity Funds Average -2.0% 10.8%
(source: Lipper Analytical Services)
Historically, the return of common stocks for shorter periods depends to a large
degree on prevailing interest rates. The Federal Reserve Board currently appears
poised to tighten credit further; yet, economic indicators continue to suggest a
continuing low rate of inflation. This uncertainty regarding the direction of
interest rates is likely to create an environment of stock market volatility.
Regardless of what the U.S. stock market may experience in the short term,
though, investors in The Government Street Equity Fund - with its broad
diversification of quality stocks, its low expenses and its tax efficiency will
be rewarded over extended periods.
As of March 31, 1997, the net assets of the Fund were $49,628,951; net asset
value was $32.59. The ratio of expenses to average net assets was 0.89%. The
Fund's portfolio consisted of 79 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
As the expansion of the U.S. economy reached its seventh year, most economists
were predicting a slow down during the first calendar quarter of 1997. And
though bond prices did rise during the first six weeks of the quarter, the
economy continued to grow. The anticipation of renewed inflation concerned bond
investors, and, in March, bond prices began to fall as a result. When the
Federal Reserve Board raised the federal funds rate to 5.5% from 5.25% on March
25, interest rates rose to their highest level in more than a year.
Fortunately, this year-end decline in bond prices did not completely undermine
what had been achieved in the bond market earlier in the year.
<PAGE>
For the fiscal year ending March 31, 1997, the total return of The Government
Street Bond Fund was 4.6%. This compares favorably both with the 4.5% return of
the average intermediate corporate debt fund (source: Lipper Analytical
Services) and with the 4.8% return of the Lehman Government Corporate
Intermediate Bond Index achieved during the same twelve month period. The ratio
of net investment income to average net assets was 6.44%.
On March 31, 1997, the Fund had a weighted average maturity of 5.1 years. The
portfolio consisted of 89 individual issues with no single investment exceeding
4% 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 40.5% of the Fund's total net assets; high quality corporate bonds
comprised 53.7% of the portfolio. The net assets of the Fund were $29,442,465;
net asset value was $20.47. The ratio of expenses to average net assets was
0.75%.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund continues to provide a tax free option for those
investors seeking current income exempt from both Federal and Alabama income
tax. It remains the only no-load Alabama municipal bond fund.
For its fiscal year ending March 31, 1997, the ratio of net investment income to
average net assets was 4.24%. To an Alabama investor in the maximum combined
federal and state tax brackets (42.6%), the taxable equivalent of this ratio was
7.39%.
The total return of the Fund for the year ending March 31, 1997 was 3.82%. This
return compares favorably with the 4.27% return of the Lehman 3-Year Municipal
Bond Index and with the 4.61% return of the Lehman 7-Year Municipal Bond Index
over the same period.
On March 31, 1997, the net assets of the Fund were $16,800,658; net asset value
was $10.18. The weighted average maturity of the Fund's portfolio was 6.9 years.
All bonds were rated A or better by Standard & Poor's or Moody's Investors
Service; more than 60% of the Fund's assets were rated AAA.
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>
<TABLE>
<CAPTION>
[line chart]
The Government Street Equity Fund
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
The Government Standard & Consumer
Street Equity Poor's 500 Price
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
9795 9813 10030
10297 10337 10090
11147 11203 10181
Mar 92 10812 10920 10253
10822 11127 10335
11214 11478 10407
11821 12056 10491
Mar 93 11857 12582 10586
11682 12642 10649
11971 12968 10692
12194 13269 10767
Mar 94 11825 12766 10821
11471 12820 10886
12086 13446 10984
11855 13443 11050
Mar 95 12655 14752 11138
13564 16161 11239
14385 17445 11284
15106 18495 11340
Mar 96 15941 19488 11431
16399 20363 11558
17247 20992 11609
18351 22742 11704
Mar 97 18642 23352 11785
Past performance is not predictive of future performance.
The Government Street Equity Fund Average Annual Total Return
1 Year 5 Years Since Inception*
16.94% 11.50% 11.36%
*Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Government Steet Bond Fund
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
Government/Corporate 90-Day
The Government Intermediate Treasury
Street Bond Bond Bill
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
10045 10007 10039
10444 10488 10193
10931 10992 10342
Mar 92 10813 10892 10445
11218 11323 10559
11706 11822 10666
11627 11780 10748
Mar 93 12125 12249 10832
12366 12513 10916
12673 12796 11005
12650 12818 11091
Mar 94 12350 12558 11176
12261 12452 11283
12347 12585 11405
12310 12571 11556
Mar 95 12859 13123 11729
13533 13778 11905
13727 14006 12075
14213 14499 12253
Mar 96 14072 14378 12404
14158 14469 12563
14403 14726 12737
14731 15087 12903
Mar 97 14719 15070 13067
Past performance is not predictive of future performance.
The Government Street Bond Fund Average Annual Total Return
1 Year 5 Years Since Inception*
4.60% 6.36% 6.87%
* Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Alabama Tax Free Bond Fund
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
The Alabama Lehman 7-Year Lehman 3-Year
Tax Free G.O. Municipal Municipal
Bond Fund Bond Index Bond Index
<S> <C> <C> <C>
10000 10000 10000
Mar 93 10096 10255 10168
10380 10547 10321
10670 10856 10467
10781 11004 10585
Mar 94 10440 10527 10445
10506 10673 10558
10562 10755 10657
10439 10647 10658
Mar 95 10927 11224 10957
11219 11526 11189
11459 11905 11428
11735 12198 11603
Mar 96 11693 12172 11668
11724 12208 11763
11921 12437 11918
12178 12757 12118
Mar 97 12140 12738 12168
Past performance is not predictive of future performance.
The Alabama Tax Free Bond Fund Average Total Return
1 Year Since Inception*
3.82% 4.71%
* Initial public offering of shares was January 15, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31,1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................... $ 32,714,617 $ 28,448,442 $ 16,395,277
=============== =============== ===============
At value (Note 1)..................................... $ 46,966,682 $ 27,928,563 $ 16,579,721
Investments in repurchase agreements (Note 1)............ 2,618,000 1,064,000 --
Cash .................................................... 197 618 20
Receivable for securities sold........................... 126,626 -- --
Receivable for capital shares sold....................... 7,530 1,039 28,660
Interest receivable...................................... 382 529,039 220,629
Dividends receivable..................................... 78,841 -- --
Other assets............................................. 1,609 1,270 444
--------------- --------------- ---------------
TOTAL ASSETS.......................................... 49,799,867 29,524,529 16,829,474
--------------- --------------- ---------------
LIABILITIES
Payable for securities purchased......................... 79,705 -- --
Payable for capital shares redeemed...................... 47,325 46,398 2,500
Dividends payable........................................ 7,274 17,530 16,623
Accrued advisory fees (Note 3)........................... 26,325 12,598 5,093
Accrued administration fees (Note 3)..................... 8,000 2,000 2,100
Other accrued expenses and liabilities................... 2,287 3,538 2,500
--------------- --------------- ---------------
TOTAL LIABILITIES..................................... 170,916 82,064 28,816
--------------- --------------- ---------------
NET ASSETS .............................................. $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Net assets consist of:
Paid-in capital ......................................... $ 34,220,612 $ 30,348,441 $ 16,816,229
Accumulated net realized gains (losses)
from security transactions............................ 1,144,252 (397,824) (200,015)
Undistributed net investment income...................... 12,022 11,727 --
Net unrealized appreciation (depreciation)
on investments........................................ 14,252,065 (519,879) 184,444
--------------- --------------- ---------------
Net assets............................................... $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)............ 1,523,001 1,438,620 1,649,601
=============== =============== ===============
Net asset value, offering price and
redemption price per share (Note 1)................... $ 32.59 $ 20.47 $ 10.18
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest.............................................. $ 125,441 $ 2,123,021 $ 795,132
Dividends............................................. 820,461 -- --
--------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................. 945,902 2,123,021 795,132
--------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................... 275,299 147,268 56,628
Administrative fees (Note 3).......................... 86,708 24,000 24,513
Professional fees..................................... 10,295 10,295 7,258
Pricing costs......................................... 1,881 10,848 13,653
Custodian fees........................................ 12,087 6,801 5,456
Printing of shareholder reports....................... 6,801 6,309 6,507
Trustees' fees and expenses........................... 5,002 5,002 5,002
Postage and supplies.................................. 4,242 4,150 2,762
Registration fees..................................... 3,448 3,885 2,521
Other expenses........................................ 3,717 3,234 2,288
--------------- --------------- ---------------
TOTAL EXPENSES...................................... 409,480 221,792 126,588
Fees waived by the Adviser (Note 3)................... -- -- (19,812)
--------------- --------------- ---------------
NET EXPENSES........................................ 409,480 221,792 106,776
--------------- --------------- ---------------
NET INVESTMENT INCOME ................................... 536,422 1,901,229 688,356
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions.......................... 2,262,399 (201,643) 6,155
Net change in unrealized appreciation/depreciation
on investments...................................... 4,313,961 (362,072) (76,770)
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS ....................................... 6,576,360 (563,715) (70,615)
--------------- --------------- ---------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 7,112,782 $ 1,337,514 $ 617,741
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
==================================================================================================================================
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,
1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 536,422 $ 553,483 $1,901,229 $1,830,191 $ 688,356 $583,437
Net realized gains (losses)
from security transactions.......... 2,262,399 1,093,838 (201,643) (43,990) 6,155 (3,107)
Net change in unrealized appreciation/
depreciation on investments.......... 4,313,961 6,795,880 (362,072) 791,184 (76,770) 340,163
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from operations 7,112,782 8,443,201 1,337,514 2,577,385 617,741 920,493
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (526,528) (552,981) (1,892,341) (1,829,817) (688,356) (583,437)
From net realized gains............... (1,910,988) ( 280,943) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from
distributions to shareholders........ (2,437,516) (833,924) (1,892,341) (1,829,817) (688,356) (583,437)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS(A):
Proceeds from shares sold............. 5,118,742 7,310,859 3,531,544 2,484,795 2,068,564 2,543,833
Net asset value of shares issued in
reinvestment of distributions
to shareholders...................... 2,347,971 798,493 1,663,544 1,597,448 480,364 410,869
Payments for shares redeemed.......... (3,933,851) (5,771,194) (3,915,554) (3,891,999) (1,158,134) (627,496)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from
capital share transactions............ 3,532,862 2,338,158 1,279,534 190,244 1,390,794 2,327,206
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ........... 8,208,128 9,947,435 724,707 937,812 1,320,179 2,664,262
NET ASSETS:
Beginning of year..................... 41,420,823 31,473,388 28,717,758 27,779,946 15,480,479 12,816,217
----------- ----------- ----------- ----------- ----------- -----------
End of year........................... $49,628,951 $ 41,420,823 $ 29,442,465 $ 28,717,758 $ 16,800,658 $15,480,479
=========== =========== ============ ============= =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME .................... $ 12,022 $ 2,128 $ 11,727 $ 2,839 $ -- $ --
=========== =========== ============ ============= ============ ===========
(a) Summary of capital share activity:
Shares sold.......................... 162,325 273,855 170,003 117,710 202,023 247,956
Shares issued in reinvestment of
distributions to shareholders 76,331 29,243 80,355 75,860 46,910 40,072
Shares redeemed...................... (124,086) (213,229) (188,067) (183,993) (112,871) (61,341)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in shares outstanding 114,570 89,869 62,291 9,577 136,062 226,687
Shares outstanding, beginning of year 1,408,431 1,318,562 1,376,329 1,366,752 1,513,539 1,286,852
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of year...... 1,523,001 1,408,431 1,438,620 1,376,329 1,649,601 1,513,539
=========== =========== =========== =========== =========== ===========
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
==========================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
==========================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.37 0.40 0.38 0.30 0.34
Net realized and unrealized
gains (losses) on investments........ 4.50 5.75 1.19 (0.37) 1.71
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 4.87 6.15 1.57 (0.07) 2.05
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.36) (0.40) (0.39) (0.30) (0.36)
Distributions from net realized gains.. (1.33) (0.21) -- -- --
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.69) (0.61) (0.39) (0.30) (0.36)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 32.59 $ 29.41 $ 23.87 $ 22.69 $ 23.06
=========== =========== ========== ========== ===========
Total return.............................. 16.94% 25.96% 7.02% (0.31%) 9.66%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 49,629 $ 41,421 $ 31,473 $ 27,101 $ 21,735
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets (a) 0.89% 0.94% 0.91% 1.00% 1.00%
Ratio of net investment income
to average net assets.................. 1.17% 1.50% 1.71% 1.33% 1.55%
Portfolio turnover rate................... 20% 31% 55% 63% 59%
Average commission rate per share......... $ 0.0410 $ -- $ -- $ -- $ --
<FN>
(a) 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% and 1.20% for the years
ended March 31, 1995, 1994 and 1993, respectively.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
===================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 1.34 1.35 1.35 1.32 1.34
Net realized and unrealized
gains (losses) on investments........ (0.40) 0.54 (0.53) (0.90) 1.10
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.94 1.89 0.82 0.42 2.44
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (1.34) (1.35) (1.36) (1.32) (1.33)
Distributions from net realized gains.. -- -- -- -- (0.01)
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.34) (1.35) (1.36) (1.32) (1.34)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 20.47 $ 20.87 $ 20.33 $ 20.87 $ 21.77
=========== =========== ========== ========== ===========
Total return.............................. 4.60% 9.43% 4.12% 1.85% 12.14%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 29,442 $ 28,718 $ 27,780 $ 22,633 $ 15,955
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(a) 0.75% 0.76% 0.85% 0.86% 0.88%
Ratio of net investment income
to average net assets.................. 6.44% 6.38% 6.68% 6.15% 6.44%
Portfolio turnover rate................... 20% 10% 11% 10% 17%
<FN>
(a) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03% and 1.09% for the years
ended March 31, 1994 and 1993, respectively (Note 3).
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
Seven
Months January 15,
Years Ended March 31, Ended 1993(b) to
March 31, August 31,
1997 1996 1995 1994(a) 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 10.23 $ 9.96 $ 9.96 $ 10.30 $ 10.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.43 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments........ (0.05) 0.27 -- (0.34) 0.30
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.38 0.69 0.45 (0.08) 0.53
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.43) (0.42) (0.45) (0.26) (0.23)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30
=========== =========== ========== ========== ===========
Total return.............................. 3.82% 7.02% 4.66% (1.50%)(d) 8.79%(d)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 16,801 $ 15,480 $ 12,816 $ 9,716 $ 3,429
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(c) 0.66% 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets.................. 4.24% 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate................... 6% 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 0.78%,
0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1997,
1996, 1995, 1994 and August 31, 1993, respectively (Note 3).
(d) Annualized.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS AND DRUGS -- 16.5%
20,000 Becton Dickinson & Company................................................. $ 900,000
13,000 Biomet, Inc.(a) ........................................................... 219,375
20,000 Cardinal Health, Inc....................................................... 1,087,527
20,000 ChemFirst, Inc............................................................. 425,000
13,200 duPont (E.I.) de Nemours & Company......................................... 1,399,200
6,500 Eli Lilly & Company........................................................ 534,625
18,000 Goodrich (B.F.) Company.................................................... 659,250
15,000 Johnson & Johnson.......................................................... 793,125
3,500 Merck & Company, Inc....................................................... 294,875
6,679 Mississippi Chemical Corporation........................................... 159,484
10,000 Schering-Plough Corporation................................................ 727,500
16,000 Schulman (A.), Inc......................................................... 304,000
22,000 Sigma-Aldrich.............................................................. 679,250
--------------
8,183,211
--------------
CONSTRUCTION -- 5.6%
12,750 Blount, Inc. - Class A..................................................... 525,937
12,000 Caterpiller, Inc........................................................... 963,000
20,312 Clayton Homes, Inc......................................................... 258,984
5,000 Florida Rock Industries, Inc............................................... 163,750
4,000 Lowe's Companies, Inc...................................................... 149,500
25,600 Valspar Corporation........................................................ 736,000
--------------
2,797,171
--------------
CONSUMER PRODUCTS -- 11.7%
20,632 Archer-Daniels-Midland Company............................................. 368,797
13,500 Belo (A.H.) Corporation - Class A.......................................... 499,500
12,000 General Motors Corporation................................................. 664,500
15,000 Gillette Company........................................................... 1,089,375
10,000 Kimberly-Clark Corporation................................................. 993,750
10,000 Motorola, Inc.............................................................. 603,750
12,000 Polygram NV................................................................ 591,000
8,500 Procter & Gamble Company................................................... 977,500
--------------
5,788,172
--------------
DURABLE GOODS -- 15.0%
10,000 AMP, Inc................................................................... 343,750
12,000 Cabletron Systems, Inc.(a) ................................................ 351,000
26,000 Cisco Systems, Inc.(a) .................................................... 1,251,250
4,000 Compaq Computer Corp.(a) .................................................. 306,500
7,000 Cummins Engine Company, Inc. .............................................. 358,750
7,000 Deere & Company............................................................ 304,500
11,500 General Electric Company .................................................. 1,141,375
2,500 Intel Corporation.......................................................... 347,812
4,600 International Business Machines Corporation................................ 631,925
10,000 Loral Space & Communications(a) ........................................... 141,250
14,000 McDonnell Douglas Corporation.............................................. 854,000
16,000 Philips Electronics NV..................................................... 712,000
11,500 Raytheon Company........................................................... 518,938
4,000 Shared Medical Systems, Inc................................................ 186,000
--------------
7,449,050
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- 12.0%
9,195 Aetna, Inc................................................................. $ 789,621
15,000 AFLAC, Inc................................................................. 562,500
10,000 American Express Company................................................... 598,750
3,000 Citicorp................................................................... 324,750
22,000 Federal Home Loan Mortgage Corporation..................................... 599,500
8,000 Fleet Financial Group, Inc................................................. 458,000
14,000 Mellon Bank Corporation.................................................... 1,018,500
35,000 Star Banc Corporation...................................................... 1,395,625
4,000 Travelers, Inc............................................................. 191,500
--------------
5,938,746
--------------
FOOD/BEVERAGES -- 2.9%
20,000 Coca-Cola Enterprises...................................................... 1,147,500
20,000 Hudson Foods, Inc. - Class A............................................... 312,500
--------------
1,460,000
--------------
METAL AND MINING -- 2.7%
9,000 Aluminum Company of America................................................ 612,000
17,400 Broken Hill Proprietary Company, LTD....................................... 461,100
9,543 Freeport McMoran Copper & Gold, Inc. - Class B............................. 289,869
--------------
1,362,969
--------------
OIL/ENERGY -- 10.7%
12,500 Amoco Corporation.......................................................... 1,082,812
13,000 Chevron Corporation........................................................ 905,125
7,325 Exxon Corporation.......................................................... 789,269
3,000 Halliburton Company........................................................ 203,250
12,500 Kerr McGee Corporation..................................................... 773,437
9,500 Shell Transport & Trading PLC.............................................. 992,750
10,000 Sonat, Inc................................................................. 545,000
--------------
5,291,643
--------------
PAPER AND FOREST PRODUCTS -- 1.3%
9,000 Georgia Pacific Corporation................................................ 652,500
--------------
RETAIL -- 6.0%
6,000 American Stores Company.................................................... 267,000
11,800 Home Depot, Inc............................................................ 631,300
15,000 Nike, Inc. - Class B....................................................... 930,000
12,000 Pep Boys - Manny, Moe & Jack............................................... 360,000
5,000 Wal-Mart Stores, Inc....................................................... 139,375
15,000 Walgreen Company........................................................... 628,125
--------------
2,955,800
--------------
SERVICES - COMPUTER -- 1.7%
11,100 Automatic Data Processing, Inc............................................. 464,813
6,000 Computer Sciences Corporation(a) .......................................... 370,500
--------------
835,313
--------------
TELECOMMUNICATION EQUIPMENT -- .8%
6,000 Corning, Inc............................................................... 266,250
10,000 Scientific - Atlanta, Inc.................................................. 152,500
--------------
418,750
--------------
TRANSPORTATION -- 1.7%
16,000 Federal Express Corporation(a) ............................................ 834,000
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 5.9%
14,500 Ameritech Corporation...................................................... $ 891,750
20,000 DPL, Inc................................................................... 482,500
15,490 Duke Power Company......................................................... 683,496
8,000 Hong Kong Telecommunications, LTD.......................................... 131,000
14,000 SBC Communications, Inc.................................................... 736,750
--------------
2,925,496
--------------
TOTAL COMMON STOCKS (COST $32,661,488) ...................................... $46,892,821
--------------
<CAPTION>
===================================================================================================================
Shares PREFERRED STOCKS -- .1% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- .1%
898 Aetna Inc., Convertible.................................................... $ 73,861
--------------
TOTAL PREFERRED STOCKS (COST $53,129)........................................ $ 73,861
--------------
TOTAL INVESTMENTS AT VALUE (COST $32,714,617) - 94.6%........................ $ 46,966,682
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 5.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 2,618,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $2,618,382 (Cost $2,618,000)......................... $ 2,618,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE 99.9% ................. $ 49,584,682
OTHER ASSETS IN EXCESS OF LIABILITIES-- .1% ................................. 44,269
--------------
NET ASSETS-- 100.0% ......................................................... $ 49,628,951
==============
<FN>
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,842,338.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS-- 39.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 12.0%
$ 975,000 6.75%, due 05/31/1997...................................................... $ 976,524
40,000 8.50%, due 07/15/1997...................................................... 40,325
65,000 8.75%, due 10/15/1997...................................................... 65,975
10,000 7.875%, due 01/15/1998..................................................... 10,137
70,000 7.875%, due 04/15/1998..................................................... 71,203
50,000 8.25%, due 07/15/1998...................................................... 51,219
855,000 7.125%, due 10/15/1998..................................................... 864,619
225,000 7.00%, due 04/15/1999...................................................... 227,320
150,000 6.375%, due 07/15/1999..................................................... 149,672
100,000 8.00%, due 08/15/1999...................................................... 103,187
200,000 6.00%, due 10/15/1999...................................................... 197,688
250,000 7.50%, due 10/31/1999...................................................... 255,391
50,000 7.875%, due 11/15/1999..................................................... 51,547
100,000 8.50%, due 02/15/2000...................................................... 104,875
20,000 8.75%, due 08/15/2000...................................................... 21,244
50,000 8.50%, due 11/15/2000...................................................... 52,875
140,000 8.00%, due 05/15/2001...................................................... 146,300
125,000 7.875%, due 08/15/2001..................................................... 130,234
--------------
3,520,335
--------------
U.S. TREASURY STRIPS -- .1%
Coupon Treasury Investment Growth Security,
11,000 due 08/15/1998........................................................... 10,103
--------------
FEDERAL HOME LOAN BANK BONDS -- 1.7%
500,000 7.57%, due 08/19/2004...................................................... 513,600
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- 8.8%
240,000 7.12%, due 09/30/2005...................................................... 232,825
200,000 6.73%, due 01/05/2006...................................................... 191,458
300,000 7.52%, due 04/21/2006...................................................... 298,351
500,000 7.55%, due 04/26/2006...................................................... 494,646
800,000 7.44%, due 09/20/2006...................................................... 792,443
600,000 7.04%, due 01/09/2007...................................................... 582,475
--------------
2,592,198
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- 10.3%
750,000 7.85%, due 09/10/1998...................................................... 764,785
100,000 8.45%, due 07/12/1999...................................................... 103,850
100,000 5.98%, due 03/22/2000...................................................... 98,138
650,000 6.85%, due 05/04/2001...................................................... 647,204
175,000 7.90%, due 04/10/2002...................................................... 175,000
250,000 7.00%, due 08/12/2002...................................................... 245,219
500,000 8.00%, due 06/15/2006...................................................... 506,462
500,000 7.36%, due 02/07/2007...................................................... 489,737
--------------
3,030,395
--------------
PRIVATE EXPORT FUNDING BONDS -- 1.6%
470,000 7.90%, due 03/31/2000...................................................... 484,854
--------------
TENNESSEE VALLEY AUTHORITY BONDS -- 5.2%
799,000 7.45%, due 10/15/2001...................................................... 807,963
745,000 6.875%, due 01/15/2002..................................................... 740,396
--------------
1,548,359
--------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS (COST $11,906,301) ............... $ 11,699,844
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value MORTGAGE-BACKED SECURITIES -- 1.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- .3%
$ 100,000 Series #G92-40, Class G, 7.00%, due 07/25/2002............................. $ 99,916
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- .5%
32,247 Pool #15032, 7.50%, due 02/15/2007......................................... 31,592
22,855 Pool #176413, 7.50%, due 09/15/2016........................................ 22,392
43,908 Pool #170784, 8.00%, due 12/15/2016........................................ 44,115
32,518 Pool #181540, 8.00%, due 02/15/2017........................................ 32,671
--------------
130,770
--------------
OTHER MORTGAGE-BACKED SECURITIES -- .7%
Collateralized Mortgage Securities Corporation,
200,000 Series 1991-8PF, 7.30%, due 08/20/2020................................ 200,902
--------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $437,575) ............................ $ 431,588
--------------
<CAPTION>
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 26.6%
American Express Company,
$ 350,000 8.50%, due 08/15/2001.................................................... $ 367,987
--------------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999................................................... 445,200
300,000 7.75%, due 05/15/2004.................................................... 302,356
--------------
747,556
--------------
Associates Corporation, N.A.,
300,000 8.80%, due 08/01/1998.................................................... 308,546
--------------
Banc One Corporation,
600,000 7.00%, due 07/15/2005.................................................... 585,532
--------------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002................................................... 518,319
--------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001................................................... 183,246
--------------
Chevron Capital Corporation,
500,000 7.45%, due 08/15/2004.................................................... 498,056
--------------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002.................................................... 101,071
150,000 7.50%, due 03/15/2002.................................................... 153,182
--------------
254,253
--------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002................................................... 751,566
--------------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002.................................................... 502,630
--------------
NationsBank,
550,000 7.625%, due 04/15/2005................................................... 555,208
--------------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002.................................................... 353,102
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Salomon, Inc.,
$ 400,000 7.25%, due 01/15/2000.................................................... $ 401,993
480,000 7.50%, due 02/01/2003.................................................... 479,841
--------------
881,834
--------------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004.................................................... 787,846
--------------
Wachovia Corporation,
535,000 7.00%, due 12/15/1999.................................................... 537,047
--------------
TOTAL FINANCE CORPORATE BONDS ............................................... 7,832,728
--------------
INDUSTRIAL -- 23.2%
BP America Inc.,
265,000 8.50%, due 04/15/2001................................................... 278,731
--------------
Campbell Soup Company,
500,000 6.90%, due 10/15/2006.................................................... 487,866
--------------
Coca-Cola Company,
401,000 7.875%, due 09/15/1998.................................................. 408,274
--------------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000.................................................... 159,201
300,000 6.75%, due 10/15/2002.................................................... 295,334
--------------
454,535
--------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003................................................... 1,100,075
--------------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002.................................................... 1,005,990
--------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001................................................... 253,824
--------------
Limited, Inc.,
150,000 8.875%, due 08/15/1999................................................... 154,742
--------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001................................................... 104,691
--------------
Philip Morris Companies, Inc.,
150,000 8.75%, due 06/15/1997.................................................... 150,856
305,000 7.375%, due 02/15/1999................................................... 307,605
175,000 7.75%, due 05/01/1999.................................................... 177,660
--------------
636,121
--------------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001.................................................... 159,232
--------------
Raytheon Company,
800,000 6.50%, due 07/15/2005.................................................... 749,411
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wal-Mart Stores, Inc.,
$ 170,000 9.10%, due 07/15/2000.................................................... $ 180,863
100,000 8.625%, due 04/01/2001................................................... 105,545
745,000 7.50%, due 05/15/2004.................................................... 755,890
--------------
1,042,298
--------------
TOTAL INDUSTRIAL CORPORATE BONDS ............................................ 6,835,790
--------------
UTILITY -- 3.9%
Consolidated Edison,
785,000 7.60%, due 01/15/2000.................................................... 797,871
--------------
Emerson Electric Company,
352,000 6.30%, due 11/01/2005.................................................... 330,742
--------------
TOTAL UTILITY CORPORATE BONDS ............................................... 1,128,613
--------------
TOTAL CORPORATE BONDS (COST $16,104,566) .................................... $ 15,797,131
--------------
TOTAL INVESTMENTS AT VALUE (COST $28,448,442)-- 94.9% ...................... $ 27,928,563
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) -- 3.6% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 1,064,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $1,064,155 (Cost $1,064,000)......................... $ 1,064,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 98.5% ................ $ 28,992,563
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.5% ................................ 449,902
--------------
NET ASSETS-- 100.0% ......................................................... $ 29,442,465
==============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2004. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $1,155,175.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama Housing Finance Auth. Rev.,
$ 15,000 6.00%, due 10/01/1997...................................................... $ 15,091
245,000 4.90%, due 10/01/1998...................................................... 247,553
--------------
262,644
--------------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006...................................................... 296,541
--------------
Alabama State GO,
200,000 5.90%, due 03/01/1999...................................................... 205,700
100,000 5.70%, due 12/01/2002...................................................... 104,563
--------------
310,263
--------------
Alabama State Corrections Institutions Rev.,
100,000 4.20%, due 04/01/1998...................................................... 100,369
--------------
Alabama State Industrial Access Road & Bridge Corp. GO,
100,000 4.00%, due 06/01/1998...................................................... 99,893
85,000 5.25%, due 06/01/2003...................................................... 85,885
--------------
185,778
--------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000..................................................... 154,661
340,000 5.75%, due 09/01/2001...................................................... 353,661
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101....................... 431,156
--------------
939,478
--------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000...................................................... 99,300
250,000 5.25%, due 11/01/2005...................................................... 252,915
50,000 5.00%, due 12/01/2005...................................................... 49,753
--------------
401,968
--------------
Alabama Water Pollution Control Rev.,
160,000 3.75%, due 08/15/1997...................................................... 159,974
25,000 7.00%, due 08/15/2001...................................................... 26,223
200,000 6.25%, due 08/15/2004...................................................... 215,244
--------------
401,441
--------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004...................................................... 258,948
--------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
30,000 7.375%, due 07/01/2006, ETM................................................ 32,438
--------------
Auburn University, Alabama Rev.,
25,000 6.10%, due 06/01/1999...................................................... 25,820
50,000 4.90%, due 06/01/2001...................................................... 50,427
150,000 5.20%, due 06/01/2004...................................................... 151,868
325,000 5.25%, due 04/01/2005...................................................... 328,595
--------------
556,710
--------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003...................................................... 210,668
400,000 5.00%, due 02/01/2007...................................................... 393,572
--------------
604,240
--------------
Baldwin Co., AL, Board of Education Rev.,
50,000 5.40%, due 12/01/1998...................................................... 50,880
300,000 5.90%, due 12/01/2001...................................................... 309,087
--------------
359,967
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Birmingham, AL, GO,
$ 100,000 5.80%, due 04/01/2002...................................................... $ 104,038
200,000 5.90%, due 04/01/2003...................................................... 209,548
--------------
313,586
--------------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999...................................................... 100,015
--------------
Birmingham, AL, Industrial Water Board Rev.,
100,000 5.00%, due 03/01/2001...................................................... 100,987
100,000 6.00%, due 07/01/2007...................................................... 106,449
--------------
207,436
--------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM................................................. 65,339
--------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003...................................................... 52,424
400,000 6.15%, due 01/01/2006...................................................... 422,152
--------------
474,576
--------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004...................................................... 54,800
--------------
Fairhope, AL, Utility, Rev.,
200,000 5.10%, due 12/01/2008...................................................... 195,348
--------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009...................................................... 290,727
--------------
Hoover, AL, Board of Education GO,
400,000 6.00%, due 02/15/2006...................................................... 423,652
--------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102...................... 216,804
--------------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998...................................................... 100,052
250,000 5.00%, due 07/01/2002...................................................... 251,585
--------------
351,637
--------------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000...................................................... 116,891
100,000 5.20%, due 11/01/2000...................................................... 101,924
500,000 5.50%, due 11/01/2002...................................................... 516,695
100,000 5.90%, due 11/01/2005...................................................... 105,231
--------------
840,741
--------------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000...................................................... 157,089
150,000 5.00%, due 12/01/2003...................................................... 150,243
--------------
307,332
--------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004...................................................... 151,410
150,000 5.25%, due 05/01/2005...................................................... 151,494
--------------
302,904
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002...................................................... $ 154,278
100,000 5.00%, due 04/01/2004...................................................... 99,650
--------------
253,928
--------------
Jefferson Co., AL, Board of Education Capital Outlay Warrants,
300,000 5.70%, due 02/15/2011...................................................... 302,727
--------------
Jefferson Co., AL, Sewer Rev
140,000 5.15%, due 09/01/2002...................................................... 142,227
50,000 5.50%, due 09/01/2003...................................................... 51,800
300,000 5.75%, due 09/01/2005...................................................... 314,730
--------------
508,757
--------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007...................................................... 306,606
--------------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999...................................................... 101,210
--------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007...................................................... 335,062
--------------
Madison Co., AL, Board of Education Capital Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004...................................................... 177,898
--------------
Mobile, AL, GO,
200,000 5.00%, due 08/15/1998...................................................... 202,662
150,000 5.20%, due 02/15/1999...................................................... 152,347
200,000 5.40%, due 08/15/2000...................................................... 205,122
25,000 6.25%, due 08/01/2001...................................................... 26,295
25,000 6.30%, due 08/01/2001...................................................... 26,520
275,000 6.20%, due 02/15/2007, ETM................................................. 294,687
--------------
907,633
--------------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003...................................................... 58,580
--------------
Mobile Co., AL, GO,
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102....................... 52,852
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102....................... 171,816
--------------
224,668
--------------
Mobile Co., AL., Board of Education Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008...................................................... 389,808
--------------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 3.80%, due 02/01/1998...................................................... 99,980
100,000 4.50%, due 02/01/2003...................................................... 97,540
--------------
197,520
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Montgomery, AL, GO,
$ 200,000 4.25%, due 05/01/1999, ETM................................................. $ 199,128
200,000 4.70%, due 05/01/2002...................................................... 198,478
--------------
397,606
--------------
Montgomery, AL, Waterworks & Sanitation Rev.,
200,000 5.85%, due 03/01/2003...................................................... 208,564
400,000 5.60%, due 09/01/2009...................................................... 405,524
--------------
614,088
--------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006...................................................... 100,306
--------------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010...................................................... 402,548
--------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003...................................................... 98,552
100,000 5.30%, due 07/01/2003...................................................... 102,339
--------------
200,891
--------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000...................................................... 208,938
50,000 5.35%, due 08/01/2001...................................................... 51,316
--------------
260,254
--------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM................................................. 37,212
25,000 6.60%, due 02/01/2002, ETM................................................. 26,814
40,000 6.60%, due 02/01/2003, ETM................................................. 43,263
--------------
107,289
--------------
Shelby Co., AL, Board of Education Capital Outlay Special Tax Warrants,
100,000 4.80%, due 02/01/1998...................................................... 100,791
--------------
Tuscaloosa, AL, Board of Education GO,
100,000 5.10%, due 02/01/2004...................................................... 100,623
--------------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005...................................................... 77,981
125,000 6.00%, due 02/15/2009...................................................... 130,259
--------------
208,240
--------------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999...................................................... 248,197
50,000 5.00%, due 11/01/2000...................................................... 50,586
200,000 5.10%, due 10/01/2002...................................................... 202,484
400,000 5.25%, due 06/01/2010...................................................... 391,052
--------------
892,319
--------------
Vestavia Hills, AL, Board of Education Capital Outlay Rev.,
55,000 5.25%, due 02/01/2004...................................................... 55,816
--------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005...................................................... 123,004
--------------
TOTAL ALABAMA (COST $15,999,410) ............................................ $ 16,183,854
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares MONEY MARKETS -- 2.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 395,867 Star Tax-Free Money Market Fund (Cost $395,867).............................. $ 395,867
-------------
TOTAL INVESTMENTS AT VALUE (COST $16,395,277)-- 98.7% ...................... $ 16,579,721
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.3% ................................ 220,937
--------------
NET ASSETS-- 100.0% ......................................................... $ 16,800,658
==============
<FN>
ETM - Escrowed to maturity.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
==============================================================================
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 series of The
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered 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 fixed income 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.
<PAGE>
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.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation............................ $ 14,593,143 $ 206,157 $ 256,957
Gross unrealized depreciation............................ (341,078) (726,036) (72,513)
--------------- --------------- ---------------
Net unrealized appreciation (depreciation)............... $ 14,252,065 $ (519,879) $ 184,444
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------
</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, 1997, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$307,540, and $200,015, respectively, which expire through the year 2005. In
addition, The Government Street Bond Fund realized net capital losses of $90,284
during the period from November 1, 1996 through March 31, 1997, which are
treated for federal income tax purposes as arising in the tax year ending March
31, 1998. 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, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $9,860,380 and $8,804,209, respectively, for The Government Street Equity
Fund, $6,894,444 and $5,758,302, respectively, for The Government Street Bond
Fund, and $2,372,120 and $1,008,079, respectively, for The Alabama Tax Free Bond
Fund.
<PAGE>
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% of its average daily net assets up to $100 million and .50% of such
assets in excess of $100 million. The Government Street Bond Fund pays the
Adviser a fee at an annual rate of .50% of its average daily net assets up to
$100 million and .40% of 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% of its
average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of the
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $19,812 of its investment advisory fees from the
Fund during the year ended March 31, 1997.
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
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., CFS provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Funds. For these services, CFS receives a
monthly fee from The Government Street Equity Fund at an annual rate of .20% of
its average daily net assets up to $25 million; .175% of the next $25 million of
such assets; and .15% of such net assets in excess of $50 million. From The
Government Street Bond Fund, CFS receives a monthly fee of .075% of its average
daily net assets up to $200 million and .05% of such assets in excess of $200
million. From The Alabama Tax Free Bond Fund, CFS receives a monthly fee of .15%
of its average daily net assets up to $200 million and .10% of 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, postage, supplies, and costs of pricing the Funds' portfolio
securities.
Certain officers of the Trust are also officers of CFS.
<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, 1997, and the
related statements of operations for the year then ended, 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, 1997 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, 1997, 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 25, 1997
<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
Countrywide Fund Services, Inc.
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>
STATEMENT OF ADDITIONAL INFORMATION
THE
GOVERNMENT STREET
FUNDS
The Government Street Equity Fund
The Government Street Bond Fund
August 1, 1997
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................................................. 4
INVESTMENT LIMITATIONS...................................................... 7
TRUSTEES AND OFFICERS....................................................... 8
INVESTMENT ADVISOR.......................................................... 13
ADMINISTRATOR............................................................... 14
OTHER SERVICES.............................................................. 15
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, 1997. The
Prospectus may be obtained from the Funds, at the address and phone number shown
above, at no charge.
sai.gov
July 30, 1997
- 1 -
<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.
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
- 2 -
<PAGE>
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 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
- 3 -
<PAGE>
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.
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.
- 4 -
<PAGE>
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.
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.
- 5 -
<PAGE>
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.
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
- 6 -
<PAGE>
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);
(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);
- 7 -
<PAGE>
(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
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, 1997:
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<PAGE>
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 43) Principal of 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. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) 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;
Director of Montgomery Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of 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 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
- 9 -
<PAGE>
<CAPTION>
<S> <C> <C>
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
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 44) Vice President of
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
- 10 -
<PAGE>
<CAPTION>
<S> <C> <C>
R. Gregory Porter, III (age 56) Principal of
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 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
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 40) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 46) 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
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<PAGE>
<CAPTION>
<S> <C>
Craig D. Truitt (age 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
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. Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will 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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, 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 27.6% of the
then outstanding shares of the Equity Fund and 15.3% of the then outstanding
shares of the Bond Fund; First Alabama Bank as Trustee of the Mobile Paint
Manufacturing Co. Employee Retirement Plans, P.O. Box 2527, Mobile, Alabama
36622, owned of record 6.1% of the then outstanding shares of the Equity Fund
and 7.4% of the then outstanding shares of the Bond Fund; and the Bonnie Brewton
Company, P.O. Box 469, Brewton, Alabama 36427, owned of record 23.2% of the then
outstanding shares of the Equity Fund and 10.3% of the then outstanding shares
of the Bond Fund.
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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,
1998 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, 1997, 1996 and 1995, the Equity Fund paid to the Advisor
advisory fees of $275,299, $221,551 and $175,295, 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, 1997, 1996 and 1995, the Bond Fund paid the Advisor advisory
fees of $147,268, $143,643 and $129,997, 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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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.
The Advisor may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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, 1997, 1996 and 1995, the Administrator
received fees of $86,708, $71,060 and $56,151, respectively, from the Equity
Fund and $24,000, $24,000 and $23,111, respectively, from the Bond Fund.
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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 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 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, 1997, 1996 and 1995, the total amount of
brokerage commissions paid by the Equity Fund was $15,451, $21,642 and $63,251,
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
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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.
As of March 31, 1997, the Bond Fund held securities 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 $751,566);
Salomon Incorporated (the market value of which was $881,834); NationsBank (the
market value of which was $555,208); and Bear Stearns Company (the market value
of which was $183,246).
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,
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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 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
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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 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 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
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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.
As of March 31, 1997, the Bond Fund had capital loss
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carryforwards for federal income tax purposes of $307,540 which expire through
the year 2005. In addition, the Bond Fund realized net capital losses of $90,284
during the period from November 1, 1996 through March 31, 1997, which are
treated for federal income tax purposes as arising in the tax year ending March
31, 1998. 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 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
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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, 1997, for the five year period ended March 31, 1997 and
for the period since inception (June 18, 1991) to March 31, 1997 are 16.94%,
11.50% and 11.36%, respectively. The average annual total return quotations for
the Bond Fund for the one year period ended March 31, 1997, for the five year
period ended March 31, 1997 and for the period since inception (June 7, 1991) to
March 31, 1997 are 4.60%, 6.36% and 6.87%, 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
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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, 1997 were 1.26% and 6.45%, 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 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 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 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, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
- 25 -
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
No Load Mutual Funds
Annual Report
March 31, 1997
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
==============================================================================
May 22, 1997
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report of The
Government Street Funds and of The Alabama Tax Free Bond Fund for the year
ending March 31, 1997.
THE GOVERNMENT STREET EQUITY FUND
With a nearly ideal environment of moderate economic growth, rising corporate
profits and continued low inflation, the U.S. stock market continued its advance
through the end of 1996 and into 1997's first quarter. Despite falling stock
prices in March, the Standard & Poor's 500 Index turned in a total return of
19.8% for the twelve month period ending March 31, 1997. For its fiscal year
ending March 31, 1997, The Government Street Equity Fund achieved a total return
of 16.9%.
Due to the decline in the stock market in March, the average fund investing in
diversified U.S. stocks lost 2.0% in 1997's first quarter; during this same
period, however, The Government Street Equity Fund achieved a positive return of
1.6%.
12/31/96- 3/31/96-
3/31/97 3/31/97
The Government Street Equity Fund 1.6% 16.9%
General Equity Funds Average -2.0% 10.8%
(source: Lipper Analytical Services)
Historically, the return of common stocks for shorter periods depends to a large
degree on prevailing interest rates. The Federal Reserve Board currently appears
poised to tighten credit further; yet, economic indicators continue to suggest a
continuing low rate of inflation. This uncertainty regarding the direction of
interest rates is likely to create an environment of stock market volatility.
Regardless of what the U.S. stock market may experience in the short term,
though, investors in The Government Street Equity Fund - with its broad
diversification of quality stocks, its low expenses and its tax efficiency will
be rewarded over extended periods.
As of March 31, 1997, the net assets of the Fund were $49,628,951; net asset
value was $32.59. The ratio of expenses to average net assets was 0.89%. The
Fund's portfolio consisted of 79 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
As the expansion of the U.S. economy reached its seventh year, most economists
were predicting a slow down during the first calendar quarter of 1997. And
though bond prices did rise during the first six weeks of the quarter, the
economy continued to grow. The anticipation of renewed inflation concerned bond
investors, and, in March, bond prices began to fall as a result. When the
Federal Reserve Board raised the federal funds rate to 5.5% from 5.25% on March
25, interest rates rose to their highest level in more than a year.
Fortunately, this year-end decline in bond prices did not completely undermine
what had been achieved in the bond market earlier in the year.
<PAGE>
For the fiscal year ending March 31, 1997, the total return of The Government
Street Bond Fund was 4.6%. This compares favorably both with the 4.5% return of
the average intermediate corporate debt fund (source: Lipper Analytical
Services) and with the 4.8% return of the Lehman Government Corporate
Intermediate Bond Index achieved during the same twelve month period. The ratio
of net investment income to average net assets was 6.44%.
On March 31, 1997, the Fund had a weighted average maturity of 5.1 years. The
portfolio consisted of 89 individual issues with no single investment exceeding
4% 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 40.5% of the Fund's total net assets; high quality corporate bonds
comprised 53.7% of the portfolio. The net assets of the Fund were $29,442,465;
net asset value was $20.47. The ratio of expenses to average net assets was
0.75%.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund continues to provide a tax free option for those
investors seeking current income exempt from both Federal and Alabama income
tax. It remains the only no-load Alabama municipal bond fund.
For its fiscal year ending March 31, 1997, the ratio of net investment income to
average net assets was 4.24%. To an Alabama investor in the maximum combined
federal and state tax brackets (42.6%), the taxable equivalent of this ratio was
7.39%.
The total return of the Fund for the year ending March 31, 1997 was 3.82%. This
return compares favorably with the 4.27% return of the Lehman 3-Year Municipal
Bond Index and with the 4.61% return of the Lehman 7-Year Municipal Bond Index
over the same period.
On March 31, 1997, the net assets of the Fund were $16,800,658; net asset value
was $10.18. The weighted average maturity of the Fund's portfolio was 6.9 years.
All bonds were rated A or better by Standard & Poor's or Moody's Investors
Service; more than 60% of the Fund's assets were rated AAA.
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>
<TABLE>
<CAPTION>
[line chart]
The Government Street Equity Fund
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
The Government Standard & Consumer
Street Equity Poor's 500 Price
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
9795 9813 10030
10297 10337 10090
11147 11203 10181
Mar 92 10812 10920 10253
10822 11127 10335
11214 11478 10407
11821 12056 10491
Mar 93 11857 12582 10586
11682 12642 10649
11971 12968 10692
12194 13269 10767
Mar 94 11825 12766 10821
11471 12820 10886
12086 13446 10984
11855 13443 11050
Mar 95 12655 14752 11138
13564 16161 11239
14385 17445 11284
15106 18495 11340
Mar 96 15941 19488 11431
16399 20363 11558
17247 20992 11609
18351 22742 11704
Mar 97 18642 23352 11785
Past performance is not predictive of future performance.
The Government Street Equity Fund Average Annual Total Return
1 Year 5 Years Since Inception*
16.94% 11.50% 11.36%
*Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Government Steet Bond Fund
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
Government/Corporate 90-Day
The Government Intermediate Treasury
Street Bond Bond Bill
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
10045 10007 10039
10444 10488 10193
10931 10992 10342
Mar 92 10813 10892 10445
11218 11323 10559
11706 11822 10666
11627 11780 10748
Mar 93 12125 12249 10832
12366 12513 10916
12673 12796 11005
12650 12818 11091
Mar 94 12350 12558 11176
12261 12452 11283
12347 12585 11405
12310 12571 11556
Mar 95 12859 13123 11729
13533 13778 11905
13727 14006 12075
14213 14499 12253
Mar 96 14072 14378 12404
14158 14469 12563
14403 14726 12737
14731 15087 12903
Mar 97 14719 15070 13067
Past performance is not predictive of future performance.
The Government Street Bond Fund Average Annual Total Return
1 Year 5 Years Since Inception*
4.60% 6.36% 6.87%
* Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Alabama Tax Free Bond Fund
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
The Alabama Lehman 7-Year Lehman 3-Year
Tax Free G.O. Municipal Municipal
Bond Fund Bond Index Bond Index
<S> <C> <C> <C>
10000 10000 10000
Mar 93 10096 10255 10168
10380 10547 10321
10670 10856 10467
10781 11004 10585
Mar 94 10440 10527 10445
10506 10673 10558
10562 10755 10657
10439 10647 10658
Mar 95 10927 11224 10957
11219 11526 11189
11459 11905 11428
11735 12198 11603
Mar 96 11693 12172 11668
11724 12208 11763
11921 12437 11918
12178 12757 12118
Mar 97 12140 12738 12168
Past performance is not predictive of future performance.
The Alabama Tax Free Bond Fund Average Total Return
1 Year Since Inception*
3.82% 4.71%
* Initial public offering of shares was January 15, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31,1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................... $ 32,714,617 $ 28,448,442 $ 16,395,277
=============== =============== ===============
At value (Note 1)..................................... $ 46,966,682 $ 27,928,563 $ 16,579,721
Investments in repurchase agreements (Note 1)............ 2,618,000 1,064,000 --
Cash .................................................... 197 618 20
Receivable for securities sold........................... 126,626 -- --
Receivable for capital shares sold....................... 7,530 1,039 28,660
Interest receivable...................................... 382 529,039 220,629
Dividends receivable..................................... 78,841 -- --
Other assets............................................. 1,609 1,270 444
--------------- --------------- ---------------
TOTAL ASSETS.......................................... 49,799,867 29,524,529 16,829,474
--------------- --------------- ---------------
LIABILITIES
Payable for securities purchased......................... 79,705 -- --
Payable for capital shares redeemed...................... 47,325 46,398 2,500
Dividends payable........................................ 7,274 17,530 16,623
Accrued advisory fees (Note 3)........................... 26,325 12,598 5,093
Accrued administration fees (Note 3)..................... 8,000 2,000 2,100
Other accrued expenses and liabilities................... 2,287 3,538 2,500
--------------- --------------- ---------------
TOTAL LIABILITIES..................................... 170,916 82,064 28,816
--------------- --------------- ---------------
NET ASSETS .............................................. $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Net assets consist of:
Paid-in capital ......................................... $ 34,220,612 $ 30,348,441 $ 16,816,229
Accumulated net realized gains (losses)
from security transactions............................ 1,144,252 (397,824) (200,015)
Undistributed net investment income...................... 12,022 11,727 --
Net unrealized appreciation (depreciation)
on investments........................................ 14,252,065 (519,879) 184,444
--------------- --------------- ---------------
Net assets............................................... $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)............ 1,523,001 1,438,620 1,649,601
=============== =============== ===============
Net asset value, offering price and
redemption price per share (Note 1)................... $ 32.59 $ 20.47 $ 10.18
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest.............................................. $ 125,441 $ 2,123,021 $ 795,132
Dividends............................................. 820,461 -- --
--------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................. 945,902 2,123,021 795,132
--------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................... 275,299 147,268 56,628
Administrative fees (Note 3).......................... 86,708 24,000 24,513
Professional fees..................................... 10,295 10,295 7,258
Pricing costs......................................... 1,881 10,848 13,653
Custodian fees........................................ 12,087 6,801 5,456
Printing of shareholder reports....................... 6,801 6,309 6,507
Trustees' fees and expenses........................... 5,002 5,002 5,002
Postage and supplies.................................. 4,242 4,150 2,762
Registration fees..................................... 3,448 3,885 2,521
Other expenses........................................ 3,717 3,234 2,288
--------------- --------------- ---------------
TOTAL EXPENSES...................................... 409,480 221,792 126,588
Fees waived by the Adviser (Note 3)................... -- -- (19,812)
--------------- --------------- ---------------
NET EXPENSES........................................ 409,480 221,792 106,776
--------------- --------------- ---------------
NET INVESTMENT INCOME ................................... 536,422 1,901,229 688,356
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions.......................... 2,262,399 (201,643) 6,155
Net change in unrealized appreciation/depreciation
on investments...................................... 4,313,961 (362,072) (76,770)
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS ....................................... 6,576,360 (563,715) (70,615)
--------------- --------------- ---------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 7,112,782 $ 1,337,514 $ 617,741
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
==================================================================================================================================
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,
1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 536,422 $ 553,483 $1,901,229 $1,830,191 $ 688,356 $583,437
Net realized gains (losses)
from security transactions.......... 2,262,399 1,093,838 (201,643) (43,990) 6,155 (3,107)
Net change in unrealized appreciation/
depreciation on investments.......... 4,313,961 6,795,880 (362,072) 791,184 (76,770) 340,163
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from operations 7,112,782 8,443,201 1,337,514 2,577,385 617,741 920,493
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (526,528) (552,981) (1,892,341) (1,829,817) (688,356) (583,437)
From net realized gains............... (1,910,988) ( 280,943) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from
distributions to shareholders........ (2,437,516) (833,924) (1,892,341) (1,829,817) (688,356) (583,437)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS(A):
Proceeds from shares sold............. 5,118,742 7,310,859 3,531,544 2,484,795 2,068,564 2,543,833
Net asset value of shares issued in
reinvestment of distributions
to shareholders...................... 2,347,971 798,493 1,663,544 1,597,448 480,364 410,869
Payments for shares redeemed.......... (3,933,851) (5,771,194) (3,915,554) (3,891,999) (1,158,134) (627,496)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from
capital share transactions............ 3,532,862 2,338,158 1,279,534 190,244 1,390,794 2,327,206
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ........... 8,208,128 9,947,435 724,707 937,812 1,320,179 2,664,262
NET ASSETS:
Beginning of year..................... 41,420,823 31,473,388 28,717,758 27,779,946 15,480,479 12,816,217
----------- ----------- ----------- ----------- ----------- -----------
End of year........................... $49,628,951 $ 41,420,823 $ 29,442,465 $ 28,717,758 $ 16,800,658 $15,480,479
=========== =========== ============ ============= =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME .................... $ 12,022 $ 2,128 $ 11,727 $ 2,839 $ -- $ --
=========== =========== ============ ============= ============ ===========
(a) Summary of capital share activity:
Shares sold.......................... 162,325 273,855 170,003 117,710 202,023 247,956
Shares issued in reinvestment of
distributions to shareholders 76,331 29,243 80,355 75,860 46,910 40,072
Shares redeemed...................... (124,086) (213,229) (188,067) (183,993) (112,871) (61,341)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in shares outstanding 114,570 89,869 62,291 9,577 136,062 226,687
Shares outstanding, beginning of year 1,408,431 1,318,562 1,376,329 1,366,752 1,513,539 1,286,852
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of year...... 1,523,001 1,408,431 1,438,620 1,376,329 1,649,601 1,513,539
=========== =========== =========== =========== =========== ===========
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
==========================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
==========================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.37 0.40 0.38 0.30 0.34
Net realized and unrealized
gains (losses) on investments........ 4.50 5.75 1.19 (0.37) 1.71
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 4.87 6.15 1.57 (0.07) 2.05
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.36) (0.40) (0.39) (0.30) (0.36)
Distributions from net realized gains.. (1.33) (0.21) -- -- --
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.69) (0.61) (0.39) (0.30) (0.36)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 32.59 $ 29.41 $ 23.87 $ 22.69 $ 23.06
=========== =========== ========== ========== ===========
Total return.............................. 16.94% 25.96% 7.02% (0.31%) 9.66%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 49,629 $ 41,421 $ 31,473 $ 27,101 $ 21,735
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets (a) 0.89% 0.94% 0.91% 1.00% 1.00%
Ratio of net investment income
to average net assets.................. 1.17% 1.50% 1.71% 1.33% 1.55%
Portfolio turnover rate................... 20% 31% 55% 63% 59%
Average commission rate per share......... $ 0.0410 $ -- $ -- $ -- $ --
<FN>
(a) 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% and 1.20% for the years
ended March 31, 1995, 1994 and 1993, respectively.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
===================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 1.34 1.35 1.35 1.32 1.34
Net realized and unrealized
gains (losses) on investments........ (0.40) 0.54 (0.53) (0.90) 1.10
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.94 1.89 0.82 0.42 2.44
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (1.34) (1.35) (1.36) (1.32) (1.33)
Distributions from net realized gains.. -- -- -- -- (0.01)
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.34) (1.35) (1.36) (1.32) (1.34)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 20.47 $ 20.87 $ 20.33 $ 20.87 $ 21.77
=========== =========== ========== ========== ===========
Total return.............................. 4.60% 9.43% 4.12% 1.85% 12.14%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 29,442 $ 28,718 $ 27,780 $ 22,633 $ 15,955
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(a) 0.75% 0.76% 0.85% 0.86% 0.88%
Ratio of net investment income
to average net assets.................. 6.44% 6.38% 6.68% 6.15% 6.44%
Portfolio turnover rate................... 20% 10% 11% 10% 17%
<FN>
(a) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03% and 1.09% for the years
ended March 31, 1994 and 1993, respectively (Note 3).
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
Seven
Months January 15,
Years Ended March 31, Ended 1993(b) to
March 31, August 31,
1997 1996 1995 1994(a) 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 10.23 $ 9.96 $ 9.96 $ 10.30 $ 10.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.43 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments........ (0.05) 0.27 -- (0.34) 0.30
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.38 0.69 0.45 (0.08) 0.53
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.43) (0.42) (0.45) (0.26) (0.23)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30
=========== =========== ========== ========== ===========
Total return.............................. 3.82% 7.02% 4.66% (1.50%)(d) 8.79%(d)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 16,801 $ 15,480 $ 12,816 $ 9,716 $ 3,429
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(c) 0.66% 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets.................. 4.24% 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate................... 6% 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 0.78%,
0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1997,
1996, 1995, 1994 and August 31, 1993, respectively (Note 3).
(d) Annualized.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS AND DRUGS -- 16.5%
20,000 Becton Dickinson & Company................................................. $ 900,000
13,000 Biomet, Inc.(a) ........................................................... 219,375
20,000 Cardinal Health, Inc....................................................... 1,087,527
20,000 ChemFirst, Inc............................................................. 425,000
13,200 duPont (E.I.) de Nemours & Company......................................... 1,399,200
6,500 Eli Lilly & Company........................................................ 534,625
18,000 Goodrich (B.F.) Company.................................................... 659,250
15,000 Johnson & Johnson.......................................................... 793,125
3,500 Merck & Company, Inc....................................................... 294,875
6,679 Mississippi Chemical Corporation........................................... 159,484
10,000 Schering-Plough Corporation................................................ 727,500
16,000 Schulman (A.), Inc......................................................... 304,000
22,000 Sigma-Aldrich.............................................................. 679,250
--------------
8,183,211
--------------
CONSTRUCTION -- 5.6%
12,750 Blount, Inc. - Class A..................................................... 525,937
12,000 Caterpiller, Inc........................................................... 963,000
20,312 Clayton Homes, Inc......................................................... 258,984
5,000 Florida Rock Industries, Inc............................................... 163,750
4,000 Lowe's Companies, Inc...................................................... 149,500
25,600 Valspar Corporation........................................................ 736,000
--------------
2,797,171
--------------
CONSUMER PRODUCTS -- 11.7%
20,632 Archer-Daniels-Midland Company............................................. 368,797
13,500 Belo (A.H.) Corporation - Class A.......................................... 499,500
12,000 General Motors Corporation................................................. 664,500
15,000 Gillette Company........................................................... 1,089,375
10,000 Kimberly-Clark Corporation................................................. 993,750
10,000 Motorola, Inc.............................................................. 603,750
12,000 Polygram NV................................................................ 591,000
8,500 Procter & Gamble Company................................................... 977,500
--------------
5,788,172
--------------
DURABLE GOODS -- 15.0%
10,000 AMP, Inc................................................................... 343,750
12,000 Cabletron Systems, Inc.(a) ................................................ 351,000
26,000 Cisco Systems, Inc.(a) .................................................... 1,251,250
4,000 Compaq Computer Corp.(a) .................................................. 306,500
7,000 Cummins Engine Company, Inc. .............................................. 358,750
7,000 Deere & Company............................................................ 304,500
11,500 General Electric Company .................................................. 1,141,375
2,500 Intel Corporation.......................................................... 347,812
4,600 International Business Machines Corporation................................ 631,925
10,000 Loral Space & Communications(a) ........................................... 141,250
14,000 McDonnell Douglas Corporation.............................................. 854,000
16,000 Philips Electronics NV..................................................... 712,000
11,500 Raytheon Company........................................................... 518,938
4,000 Shared Medical Systems, Inc................................................ 186,000
--------------
7,449,050
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- 12.0%
9,195 Aetna, Inc................................................................. $ 789,621
15,000 AFLAC, Inc................................................................. 562,500
10,000 American Express Company................................................... 598,750
3,000 Citicorp................................................................... 324,750
22,000 Federal Home Loan Mortgage Corporation..................................... 599,500
8,000 Fleet Financial Group, Inc................................................. 458,000
14,000 Mellon Bank Corporation.................................................... 1,018,500
35,000 Star Banc Corporation...................................................... 1,395,625
4,000 Travelers, Inc............................................................. 191,500
--------------
5,938,746
--------------
FOOD/BEVERAGES -- 2.9%
20,000 Coca-Cola Enterprises...................................................... 1,147,500
20,000 Hudson Foods, Inc. - Class A............................................... 312,500
--------------
1,460,000
--------------
METAL AND MINING -- 2.7%
9,000 Aluminum Company of America................................................ 612,000
17,400 Broken Hill Proprietary Company, LTD....................................... 461,100
9,543 Freeport McMoran Copper & Gold, Inc. - Class B............................. 289,869
--------------
1,362,969
--------------
OIL/ENERGY -- 10.7%
12,500 Amoco Corporation.......................................................... 1,082,812
13,000 Chevron Corporation........................................................ 905,125
7,325 Exxon Corporation.......................................................... 789,269
3,000 Halliburton Company........................................................ 203,250
12,500 Kerr McGee Corporation..................................................... 773,437
9,500 Shell Transport & Trading PLC.............................................. 992,750
10,000 Sonat, Inc................................................................. 545,000
--------------
5,291,643
--------------
PAPER AND FOREST PRODUCTS -- 1.3%
9,000 Georgia Pacific Corporation................................................ 652,500
--------------
RETAIL -- 6.0%
6,000 American Stores Company.................................................... 267,000
11,800 Home Depot, Inc............................................................ 631,300
15,000 Nike, Inc. - Class B....................................................... 930,000
12,000 Pep Boys - Manny, Moe & Jack............................................... 360,000
5,000 Wal-Mart Stores, Inc....................................................... 139,375
15,000 Walgreen Company........................................................... 628,125
--------------
2,955,800
--------------
SERVICES - COMPUTER -- 1.7%
11,100 Automatic Data Processing, Inc............................................. 464,813
6,000 Computer Sciences Corporation(a) .......................................... 370,500
--------------
835,313
--------------
TELECOMMUNICATION EQUIPMENT -- .8%
6,000 Corning, Inc............................................................... 266,250
10,000 Scientific - Atlanta, Inc.................................................. 152,500
--------------
418,750
--------------
TRANSPORTATION -- 1.7%
16,000 Federal Express Corporation(a) ............................................ 834,000
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 5.9%
14,500 Ameritech Corporation...................................................... $ 891,750
20,000 DPL, Inc................................................................... 482,500
15,490 Duke Power Company......................................................... 683,496
8,000 Hong Kong Telecommunications, LTD.......................................... 131,000
14,000 SBC Communications, Inc.................................................... 736,750
--------------
2,925,496
--------------
TOTAL COMMON STOCKS (COST $32,661,488) ...................................... $46,892,821
--------------
<CAPTION>
===================================================================================================================
Shares PREFERRED STOCKS -- .1% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- .1%
898 Aetna Inc., Convertible.................................................... $ 73,861
--------------
TOTAL PREFERRED STOCKS (COST $53,129)........................................ $ 73,861
--------------
TOTAL INVESTMENTS AT VALUE (COST $32,714,617) - 94.6%........................ $ 46,966,682
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 5.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 2,618,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $2,618,382 (Cost $2,618,000)......................... $ 2,618,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE 99.9% ................. $ 49,584,682
OTHER ASSETS IN EXCESS OF LIABILITIES-- .1% ................................. 44,269
--------------
NET ASSETS-- 100.0% ......................................................... $ 49,628,951
==============
<FN>
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,842,338.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS-- 39.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 12.0%
$ 975,000 6.75%, due 05/31/1997...................................................... $ 976,524
40,000 8.50%, due 07/15/1997...................................................... 40,325
65,000 8.75%, due 10/15/1997...................................................... 65,975
10,000 7.875%, due 01/15/1998..................................................... 10,137
70,000 7.875%, due 04/15/1998..................................................... 71,203
50,000 8.25%, due 07/15/1998...................................................... 51,219
855,000 7.125%, due 10/15/1998..................................................... 864,619
225,000 7.00%, due 04/15/1999...................................................... 227,320
150,000 6.375%, due 07/15/1999..................................................... 149,672
100,000 8.00%, due 08/15/1999...................................................... 103,187
200,000 6.00%, due 10/15/1999...................................................... 197,688
250,000 7.50%, due 10/31/1999...................................................... 255,391
50,000 7.875%, due 11/15/1999..................................................... 51,547
100,000 8.50%, due 02/15/2000...................................................... 104,875
20,000 8.75%, due 08/15/2000...................................................... 21,244
50,000 8.50%, due 11/15/2000...................................................... 52,875
140,000 8.00%, due 05/15/2001...................................................... 146,300
125,000 7.875%, due 08/15/2001..................................................... 130,234
--------------
3,520,335
--------------
U.S. TREASURY STRIPS -- .1%
Coupon Treasury Investment Growth Security,
11,000 due 08/15/1998........................................................... 10,103
--------------
FEDERAL HOME LOAN BANK BONDS -- 1.7%
500,000 7.57%, due 08/19/2004...................................................... 513,600
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- 8.8%
240,000 7.12%, due 09/30/2005...................................................... 232,825
200,000 6.73%, due 01/05/2006...................................................... 191,458
300,000 7.52%, due 04/21/2006...................................................... 298,351
500,000 7.55%, due 04/26/2006...................................................... 494,646
800,000 7.44%, due 09/20/2006...................................................... 792,443
600,000 7.04%, due 01/09/2007...................................................... 582,475
--------------
2,592,198
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- 10.3%
750,000 7.85%, due 09/10/1998...................................................... 764,785
100,000 8.45%, due 07/12/1999...................................................... 103,850
100,000 5.98%, due 03/22/2000...................................................... 98,138
650,000 6.85%, due 05/04/2001...................................................... 647,204
175,000 7.90%, due 04/10/2002...................................................... 175,000
250,000 7.00%, due 08/12/2002...................................................... 245,219
500,000 8.00%, due 06/15/2006...................................................... 506,462
500,000 7.36%, due 02/07/2007...................................................... 489,737
--------------
3,030,395
--------------
PRIVATE EXPORT FUNDING BONDS -- 1.6%
470,000 7.90%, due 03/31/2000...................................................... 484,854
--------------
TENNESSEE VALLEY AUTHORITY BONDS -- 5.2%
799,000 7.45%, due 10/15/2001...................................................... 807,963
745,000 6.875%, due 01/15/2002..................................................... 740,396
--------------
1,548,359
--------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS (COST $11,906,301) ............... $ 11,699,844
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value MORTGAGE-BACKED SECURITIES -- 1.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- .3%
$ 100,000 Series #G92-40, Class G, 7.00%, due 07/25/2002............................. $ 99,916
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- .5%
32,247 Pool #15032, 7.50%, due 02/15/2007......................................... 31,592
22,855 Pool #176413, 7.50%, due 09/15/2016........................................ 22,392
43,908 Pool #170784, 8.00%, due 12/15/2016........................................ 44,115
32,518 Pool #181540, 8.00%, due 02/15/2017........................................ 32,671
--------------
130,770
--------------
OTHER MORTGAGE-BACKED SECURITIES -- .7%
Collateralized Mortgage Securities Corporation,
200,000 Series 1991-8PF, 7.30%, due 08/20/2020................................ 200,902
--------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $437,575) ............................ $ 431,588
--------------
<CAPTION>
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 26.6%
American Express Company,
$ 350,000 8.50%, due 08/15/2001.................................................... $ 367,987
--------------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999................................................... 445,200
300,000 7.75%, due 05/15/2004.................................................... 302,356
--------------
747,556
--------------
Associates Corporation, N.A.,
300,000 8.80%, due 08/01/1998.................................................... 308,546
--------------
Banc One Corporation,
600,000 7.00%, due 07/15/2005.................................................... 585,532
--------------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002................................................... 518,319
--------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001................................................... 183,246
--------------
Chevron Capital Corporation,
500,000 7.45%, due 08/15/2004.................................................... 498,056
--------------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002.................................................... 101,071
150,000 7.50%, due 03/15/2002.................................................... 153,182
--------------
254,253
--------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002................................................... 751,566
--------------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002.................................................... 502,630
--------------
NationsBank,
550,000 7.625%, due 04/15/2005................................................... 555,208
--------------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002.................................................... 353,102
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Salomon, Inc.,
$ 400,000 7.25%, due 01/15/2000.................................................... $ 401,993
480,000 7.50%, due 02/01/2003.................................................... 479,841
--------------
881,834
--------------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004.................................................... 787,846
--------------
Wachovia Corporation,
535,000 7.00%, due 12/15/1999.................................................... 537,047
--------------
TOTAL FINANCE CORPORATE BONDS ............................................... 7,832,728
--------------
INDUSTRIAL -- 23.2%
BP America Inc.,
265,000 8.50%, due 04/15/2001................................................... 278,731
--------------
Campbell Soup Company,
500,000 6.90%, due 10/15/2006.................................................... 487,866
--------------
Coca-Cola Company,
401,000 7.875%, due 09/15/1998.................................................. 408,274
--------------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000.................................................... 159,201
300,000 6.75%, due 10/15/2002.................................................... 295,334
--------------
454,535
--------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003................................................... 1,100,075
--------------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002.................................................... 1,005,990
--------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001................................................... 253,824
--------------
Limited, Inc.,
150,000 8.875%, due 08/15/1999................................................... 154,742
--------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001................................................... 104,691
--------------
Philip Morris Companies, Inc.,
150,000 8.75%, due 06/15/1997.................................................... 150,856
305,000 7.375%, due 02/15/1999................................................... 307,605
175,000 7.75%, due 05/01/1999.................................................... 177,660
--------------
636,121
--------------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001.................................................... 159,232
--------------
Raytheon Company,
800,000 6.50%, due 07/15/2005.................................................... 749,411
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wal-Mart Stores, Inc.,
$ 170,000 9.10%, due 07/15/2000.................................................... $ 180,863
100,000 8.625%, due 04/01/2001................................................... 105,545
745,000 7.50%, due 05/15/2004.................................................... 755,890
--------------
1,042,298
--------------
TOTAL INDUSTRIAL CORPORATE BONDS ............................................ 6,835,790
--------------
UTILITY -- 3.9%
Consolidated Edison,
785,000 7.60%, due 01/15/2000.................................................... 797,871
--------------
Emerson Electric Company,
352,000 6.30%, due 11/01/2005.................................................... 330,742
--------------
TOTAL UTILITY CORPORATE BONDS ............................................... 1,128,613
--------------
TOTAL CORPORATE BONDS (COST $16,104,566) .................................... $ 15,797,131
--------------
TOTAL INVESTMENTS AT VALUE (COST $28,448,442)-- 94.9% ...................... $ 27,928,563
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) -- 3.6% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 1,064,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $1,064,155 (Cost $1,064,000)......................... $ 1,064,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 98.5% ................ $ 28,992,563
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.5% ................................ 449,902
--------------
NET ASSETS-- 100.0% ......................................................... $ 29,442,465
==============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2004. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $1,155,175.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama Housing Finance Auth. Rev.,
$ 15,000 6.00%, due 10/01/1997...................................................... $ 15,091
245,000 4.90%, due 10/01/1998...................................................... 247,553
--------------
262,644
--------------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006...................................................... 296,541
--------------
Alabama State GO,
200,000 5.90%, due 03/01/1999...................................................... 205,700
100,000 5.70%, due 12/01/2002...................................................... 104,563
--------------
310,263
--------------
Alabama State Corrections Institutions Rev.,
100,000 4.20%, due 04/01/1998...................................................... 100,369
--------------
Alabama State Industrial Access Road & Bridge Corp. GO,
100,000 4.00%, due 06/01/1998...................................................... 99,893
85,000 5.25%, due 06/01/2003...................................................... 85,885
--------------
185,778
--------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000..................................................... 154,661
340,000 5.75%, due 09/01/2001...................................................... 353,661
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101....................... 431,156
--------------
939,478
--------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000...................................................... 99,300
250,000 5.25%, due 11/01/2005...................................................... 252,915
50,000 5.00%, due 12/01/2005...................................................... 49,753
--------------
401,968
--------------
Alabama Water Pollution Control Rev.,
160,000 3.75%, due 08/15/1997...................................................... 159,974
25,000 7.00%, due 08/15/2001...................................................... 26,223
200,000 6.25%, due 08/15/2004...................................................... 215,244
--------------
401,441
--------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004...................................................... 258,948
--------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
30,000 7.375%, due 07/01/2006, ETM................................................ 32,438
--------------
Auburn University, Alabama Rev.,
25,000 6.10%, due 06/01/1999...................................................... 25,820
50,000 4.90%, due 06/01/2001...................................................... 50,427
150,000 5.20%, due 06/01/2004...................................................... 151,868
325,000 5.25%, due 04/01/2005...................................................... 328,595
--------------
556,710
--------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003...................................................... 210,668
400,000 5.00%, due 02/01/2007...................................................... 393,572
--------------
604,240
--------------
Baldwin Co., AL, Board of Education Rev.,
50,000 5.40%, due 12/01/1998...................................................... 50,880
300,000 5.90%, due 12/01/2001...................................................... 309,087
--------------
359,967
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Birmingham, AL, GO,
$ 100,000 5.80%, due 04/01/2002...................................................... $ 104,038
200,000 5.90%, due 04/01/2003...................................................... 209,548
--------------
313,586
--------------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999...................................................... 100,015
--------------
Birmingham, AL, Industrial Water Board Rev.,
100,000 5.00%, due 03/01/2001...................................................... 100,987
100,000 6.00%, due 07/01/2007...................................................... 106,449
--------------
207,436
--------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM................................................. 65,339
--------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003...................................................... 52,424
400,000 6.15%, due 01/01/2006...................................................... 422,152
--------------
474,576
--------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004...................................................... 54,800
--------------
Fairhope, AL, Utility, Rev.,
200,000 5.10%, due 12/01/2008...................................................... 195,348
--------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009...................................................... 290,727
--------------
Hoover, AL, Board of Education GO,
400,000 6.00%, due 02/15/2006...................................................... 423,652
--------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102...................... 216,804
--------------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998...................................................... 100,052
250,000 5.00%, due 07/01/2002...................................................... 251,585
--------------
351,637
--------------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000...................................................... 116,891
100,000 5.20%, due 11/01/2000...................................................... 101,924
500,000 5.50%, due 11/01/2002...................................................... 516,695
100,000 5.90%, due 11/01/2005...................................................... 105,231
--------------
840,741
--------------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000...................................................... 157,089
150,000 5.00%, due 12/01/2003...................................................... 150,243
--------------
307,332
--------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004...................................................... 151,410
150,000 5.25%, due 05/01/2005...................................................... 151,494
--------------
302,904
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002...................................................... $ 154,278
100,000 5.00%, due 04/01/2004...................................................... 99,650
--------------
253,928
--------------
Jefferson Co., AL, Board of Education Capital Outlay Warrants,
300,000 5.70%, due 02/15/2011...................................................... 302,727
--------------
Jefferson Co., AL, Sewer Rev
140,000 5.15%, due 09/01/2002...................................................... 142,227
50,000 5.50%, due 09/01/2003...................................................... 51,800
300,000 5.75%, due 09/01/2005...................................................... 314,730
--------------
508,757
--------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007...................................................... 306,606
--------------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999...................................................... 101,210
--------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007...................................................... 335,062
--------------
Madison Co., AL, Board of Education Capital Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004...................................................... 177,898
--------------
Mobile, AL, GO,
200,000 5.00%, due 08/15/1998...................................................... 202,662
150,000 5.20%, due 02/15/1999...................................................... 152,347
200,000 5.40%, due 08/15/2000...................................................... 205,122
25,000 6.25%, due 08/01/2001...................................................... 26,295
25,000 6.30%, due 08/01/2001...................................................... 26,520
275,000 6.20%, due 02/15/2007, ETM................................................. 294,687
--------------
907,633
--------------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003...................................................... 58,580
--------------
Mobile Co., AL, GO,
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102....................... 52,852
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102....................... 171,816
--------------
224,668
--------------
Mobile Co., AL., Board of Education Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008...................................................... 389,808
--------------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 3.80%, due 02/01/1998...................................................... 99,980
100,000 4.50%, due 02/01/2003...................................................... 97,540
--------------
197,520
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Montgomery, AL, GO,
$ 200,000 4.25%, due 05/01/1999, ETM................................................. $ 199,128
200,000 4.70%, due 05/01/2002...................................................... 198,478
--------------
397,606
--------------
Montgomery, AL, Waterworks & Sanitation Rev.,
200,000 5.85%, due 03/01/2003...................................................... 208,564
400,000 5.60%, due 09/01/2009...................................................... 405,524
--------------
614,088
--------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006...................................................... 100,306
--------------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010...................................................... 402,548
--------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003...................................................... 98,552
100,000 5.30%, due 07/01/2003...................................................... 102,339
--------------
200,891
--------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000...................................................... 208,938
50,000 5.35%, due 08/01/2001...................................................... 51,316
--------------
260,254
--------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM................................................. 37,212
25,000 6.60%, due 02/01/2002, ETM................................................. 26,814
40,000 6.60%, due 02/01/2003, ETM................................................. 43,263
--------------
107,289
--------------
Shelby Co., AL, Board of Education Capital Outlay Special Tax Warrants,
100,000 4.80%, due 02/01/1998...................................................... 100,791
--------------
Tuscaloosa, AL, Board of Education GO,
100,000 5.10%, due 02/01/2004...................................................... 100,623
--------------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005...................................................... 77,981
125,000 6.00%, due 02/15/2009...................................................... 130,259
--------------
208,240
--------------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999...................................................... 248,197
50,000 5.00%, due 11/01/2000...................................................... 50,586
200,000 5.10%, due 10/01/2002...................................................... 202,484
400,000 5.25%, due 06/01/2010...................................................... 391,052
--------------
892,319
--------------
Vestavia Hills, AL, Board of Education Capital Outlay Rev.,
55,000 5.25%, due 02/01/2004...................................................... 55,816
--------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005...................................................... 123,004
--------------
TOTAL ALABAMA (COST $15,999,410) ............................................ $ 16,183,854
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares MONEY MARKETS -- 2.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 395,867 Star Tax-Free Money Market Fund (Cost $395,867).............................. $ 395,867
-------------
TOTAL INVESTMENTS AT VALUE (COST $16,395,277)-- 98.7% ...................... $ 16,579,721
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.3% ................................ 220,937
--------------
NET ASSETS-- 100.0% ......................................................... $ 16,800,658
==============
<FN>
ETM - Escrowed to maturity.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
==============================================================================
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 series of The
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered 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 fixed income 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.
<PAGE>
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.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation............................ $ 14,593,143 $ 206,157 $ 256,957
Gross unrealized depreciation............................ (341,078) (726,036) (72,513)
--------------- --------------- ---------------
Net unrealized appreciation (depreciation)............... $ 14,252,065 $ (519,879) $ 184,444
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------
</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, 1997, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$307,540, and $200,015, respectively, which expire through the year 2005. In
addition, The Government Street Bond Fund realized net capital losses of $90,284
during the period from November 1, 1996 through March 31, 1997, which are
treated for federal income tax purposes as arising in the tax year ending March
31, 1998. 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, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $9,860,380 and $8,804,209, respectively, for The Government Street Equity
Fund, $6,894,444 and $5,758,302, respectively, for The Government Street Bond
Fund, and $2,372,120 and $1,008,079, respectively, for The Alabama Tax Free Bond
Fund.
<PAGE>
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% of its average daily net assets up to $100 million and .50% of such
assets in excess of $100 million. The Government Street Bond Fund pays the
Adviser a fee at an annual rate of .50% of its average daily net assets up to
$100 million and .40% of 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% of its
average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of the
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $19,812 of its investment advisory fees from the
Fund during the year ended March 31, 1997.
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
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., CFS provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Funds. For these services, CFS receives a
monthly fee from The Government Street Equity Fund at an annual rate of .20% of
its average daily net assets up to $25 million; .175% of the next $25 million of
such assets; and .15% of such net assets in excess of $50 million. From The
Government Street Bond Fund, CFS receives a monthly fee of .075% of its average
daily net assets up to $200 million and .05% of such assets in excess of $200
million. From The Alabama Tax Free Bond Fund, CFS receives a monthly fee of .15%
of its average daily net assets up to $200 million and .10% of 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, postage, supplies, and costs of pricing the Funds' portfolio
securities.
Certain officers of the Trust are also officers of CFS.
<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, 1997, and the
related statements of operations for the year then ended, 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, 1997 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, 1997, 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 25, 1997
<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
Countrywide Fund Services, Inc.
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>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN
INTERNATIONAL EQUITY FUND
August 1, 1997
A Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVE AND POLICIES.......................................... 2
DESCRIPTION OF BOND RATINGS................................................ 9
INVESTMENT LIMITATIONS..................................................... 12
TRUSTEES AND OFFICERS...................................................... 14
INVESTMENT ADVISOR......................................................... 18
SUB-ADVISOR................................................................ 19
ADMINISTRATOR.............................................................. 20
OTHER SERVICES............................................................. 20
BROKERAGE.................................................................. 21
SPECIAL SHAREHOLDER SERVICES............................................... 22
PURCHASE OF SHARES......................................................... 24
REDEMPTION OF SHARES....................................................... 24
NET ASSET VALUE DETERMINATION.............................................. 25
ALLOCATION OF TRUST EXPENSES............................................... 25
ADDITIONAL TAX INFORMATION................................................. 26
CAPITAL SHARES AND VOTING.................................................. 28
CALCULATION OF PERFORMANCE DATA............................................ 29
FINANCIAL STATEMENTS AND REPORTS........................................... 31
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Jamestown International Equity
Fund (the "Fund") dated August 1, 1997. The Prospectus may be obtained from the
Fund, at the address and phone number shown above, at no charge.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective 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.
FOREIGN SECURITIES. The Fund will invest primarily in foreign securities,
including those traded domestically as American Depository Receipts (ADRs).
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.
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The value of the Fund's portfolio
securities which are invested in non-U.S. dollar denominated instruments as
measured in U.S. dollars may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations, and the Fund
may incur costs in connection with conversions between various currencies. The
Fund will conduct its foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation
- 2 -
<PAGE>
to purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. These contracts are traded directly
between currency traders (usually large commercial banks) and their customers.
The Fund will not, however, hold foreign currency except in connection with
purchase and sale of foreign portfolio securities.
The Fund will enter into forward foreign currency exchange contracts as
described hereafter. When the Fund enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may desire to establish
the cost or proceeds relative to another currency. The forward contract may be
denominated in U.S. dollars or may be a "cross-currency" contract where the
forward contract is denominated in a currency other than U.S. dollars. However,
this tends to limit potential gains which might result from a positive change in
such currency relationships.
The forecasting of a short-term currency market movement is extremely difficult
and the successful execution of a short-term hedging strategy is highly
uncertain. The Fund may enter into such forward contracts if, as a result, not
more than 50% of the value of its total assets would be committed to such
contracts. Under normal circumstances, consideration of the prospect for
currency parities will be incorporated into the longer term investment decisions
made with regard to overall diversification strategies. However, the Trustees
believe that it is important to have the flexibility to enter into forward
contracts when the Sub-Advisor determines it to be in the best interests of the
Fund. The Custodian will segregate cash, U.S. Government obligations or other
liquid high-grade debt obligations in an amount not less than the value of the
Fund's total assets committed to foreign currency exchange contracts entered
into under this type of transaction. If the value of the segregated securities
declines, additional cash or securities will be added on a daily basis, i.e.,
"marked to market," so that the segregated amount will not be less than the
amount of the Fund's commitments with respect to such contracts.
Generally, the Fund will not enter into a forward foreign currency exchange
contract with a term of greater than 90 days. At the maturity of the contract,
the Fund may either sell the portfolio security and make delivery of the foreign
currency, or may retain the security and terminate the obligation to deliver the
foreign currency by purchasing an "offsetting" forward contract with the same
currency trader obligating the Fund to purchase, on the same maturity date, the
same amount of the foreign currency.
- 3 -
<PAGE>
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the contract. Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency the Fund is obligated to
deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between entering into a forward contract for the sale of a
foreign currency and the date the Fund enters into an offsetting contract for
the purchase of the foreign currency, the Fund will realize a gain to the extent
the price of the currency the Fund has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency the Fund has agreed
to purchase exceeds the price of the currency the Fund has agreed to sell.
The Fund's dealings in forward foreign currency exchange contracts will be
limited to the transactions described above. The Fund is not required to enter
into such transactions with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by the Sub-Advisor. It
should also be realized that this method of protecting the value of the Fund's
portfolio securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities held by the
Fund. It simply establishes a rate of exchange which one can achieve at some
future point in time. Additionally, although such contracts tend to minimize the
risk of loss due to a decline in the value of the hedged currency, at the same
time, they tend to limit any potential gain which might result should the value
of such currency increase.
WRITING COVERED CALL OPTIONS. The Fund may write covered call options on equity
securities or futures contracts to earn premium income, to assure a definite
price for a security it has considered selling, or to close out options
previously purchased. A call option gives the holder (buyer) the right to
purchase a security or futures contract at a specified price (the exercise
- 4 -
<PAGE>
price) at any time until a certain date (the expiration date). A call option is
"covered" if the Fund owns the underlying security subject to the call option at
all times during the option period. A covered call writer is required to deposit
in escrow the underlying security in accordance with the rules of the exchanges
on which the option is traded and the appropriate clearing agency.
The writing of covered call options is a conservative investment technique which
the Sub-Advisor believes involves relatively little risk. However, there is no
assurance that a closing transaction can be effected at a favorable price.
During the option period, the covered call writer has, in return for the premium
received, given up the opportunity for capital appreciation above the exercise
price should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security decline.
The Fund may write covered call options if, immediately thereafter, not more
than 30% of its net assets would be committed to such transactions. As long as
the Securities and Exchange Commission continues to take the position that
unlisted options are illiquid securities, the Fund will not commit more than 15%
of its net assets to unlisted covered call transactions and other illiquid
securities. The ability of the Fund to write covered call options may be limited
by state regulations which require the Fund to commit no more than a specified
percentage of its assets to such transactions and the tax requirement that less
than 30% of the Fund's gross income be derived from the sale or other
disposition of securities held for less than 3 months.
WRITING COVERED PUT OPTIONS. The Fund may write covered put options on equity
securities and futures contracts to assure a definite price for a security if it
is considering acquiring the security at a lower price than the current market
price or to close out options previously purchased. A put option gives the
holder of the option the right to sell, and the writer has the obligation to
buy, the underlying security at the exercise price at any time during the option
period. The operation of put options in other respects is substantially
identical to that of call options. When the Fund writes a covered put option, it
maintains in a segregated account with its Custodian cash or obligations in an
amount not less than the exercise price at all times while the put option is
outstanding.
The risks involved in writing put options include the risk that a closing
transaction cannot be effected at a favorable price and the possibility that the
price of the underlying security may fall below the exercise price, in which
case the Fund may be required to purchase the underlying security at a higher
price
- 5 -
<PAGE>
than the market price of the security at the time the option is exercised. The
Fund may not write a put option if, immediately thereafter, more than 25% of its
net assets would be committed to such transactions.
OPTIONS TRANSACTIONS GENERALLY. Option transactions in which the Fund may engage
involve the specific risks described above as well as the following risks: the
writer of an option may be assigned an exercise at any time during the option
period; disruptions in the markets for underlying instruments could result in
losses for options investors; imperfect or no correlation between the option and
the securities being hedged; the insolvency of a broker could present risks for
the broker's customers; and market imposed restrictions may prohibit the
exercise of certain options. In addition, the option activities of the Fund may
affect its portfolio turnover rate and the amount of brokerage commissions paid
by the Fund. The success of the Fund in using the option strategies described
above depends, among other things, on the Sub-Advisor's ability to predict the
direction and volatility of price movements in the options, futures contracts
and securities markets and the Sub-Advisor's ability to select the proper time,
type and duration of the options.
LOANS OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities;
however, the aggregate of portfolio securities loaned will not exceed 25% of the
value of the Fund's net assets, measured at the time any such loan is made.
Under applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the value of the loaned
securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. The
Fund receives amounts equal to the interest on loaned securities and also
receives one or more of (a) negotiated loan fees, (b) interest on securities
used as collateral, or (c) interest on short-term debt securities purchased with
such collateral; either type of interest may be shared with the borrower. The
Fund may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a placing
broker provided that the Trustees determine that the fee paid to the placing
broker is reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Advisor, the
Sub-Advisor or any affiliated person of the Trust or an affiliated person of the
Advisor, the Sub-Advisor or other affiliated person. The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code and permit the
- 6 -
<PAGE>
Fund to reacquire loaned securities on five days' notice or in time to vote on
any important matter.
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 Sub-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 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
- 7 -
<PAGE>
"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 Sub-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 Sub-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.
U.S. GOVERNMENT SECURITIES. The 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
- 8 -
<PAGE>
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 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.
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 Sub-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
Sub-Advisor believes that the quality of fixed-
- 9 -
<PAGE>
income securities in which the 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.
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
- 10 -
<PAGE>
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.
- 11 -
<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 Fund has adopted the following investment limitations 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 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);
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<PAGE>
(3) Invest in the securities of any issuer if any of the officers or
trustees of the Trust or its Advisor or Sub- 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 Fund may invest in the securities
of companies (other than those which are not readily
marketable) which own or deal in such things, and the Fund
may invest in certain mortgage backed securities as
described in the Prospectus under "Investment Objective,
Investment Policies and Risk Considerations";
(6) 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;
(7) Purchase securities on margin (but the Fund 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) Make loans of money or securities, except that the Fund may (a) make
loans of its portfolio securities in amounts not in excess of 25% of
its net assets, and (b) invest in repurchase agreements;
(10) 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;
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<PAGE>
(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);
(12) Invest more than 15% of its net assets in 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; or
(13) Purchase or sell puts, calls options, futures, straddles, commodities,
commodities contracts or commodities futures contracts, except as
described in the Prospectus and this Statement of Additional
Information.
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 (limitation number 10, above) the Fund will, to the extent
necessary, reduce its existing borrowings to comply with the limitation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 8, above), the Sub-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, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
- 14 -
<PAGE>
<CAPTION>
<S> <C> <C>
John T. Bruce (age 43) Principal of 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. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) 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;
Director of Montgomery Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of 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 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
- 15 -
<PAGE>
<CAPTION>
<S> <C> <C>
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
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 44) Vice President of
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 56) Principal of
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
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<PAGE>
<CAPTION>
<S> <C> <C>
Mark J. Seger (age 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
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 40) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 46) 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 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 17 -
<PAGE>
<CAPTION>
<S> <C> <C>
Beth Ann Walk (age 38) Portfolio Manager of
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. Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will 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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 3.2% of the then outstanding shares of the Fund. On the same
date, Oechsle International Advisors, L.P. Profit Sharing Trust owned of record
6.1% of the then outstanding shares of the Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Inc. (the "Advisor") performs management,
statistical, portfolio advisor selection and general investment supervisory
services for the Fund pursuant to an Investment Advisory Agreement (the Advisory
Agreement"). The Advisory Agreement is effective until February 28, 1999 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.
- 18 -
<PAGE>
Compensation of the Advisor is at the annual rate of 1.00% of the Fund's average
daily net assets. The Advisor currently intends to waive its advisory fees to
the extent necessary to limit the total operating expenses of the Fund to 1.60%
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 1.60% of its average daily net
assets. For the fiscal period ended March 31, 1997, the Fund paid the Advisor
advisory fees of $211,861 (which was net of voluntary fee waivers of $29,007).
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough III. In addition to acting as Advisor to
the Fund, the Advisor serves as investment advisor to three 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 also provides, at its own expense, certain Executive Officers to the
Trust, and pays the entire cost of distributing Fund shares.
The Advisor may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
SUB-ADVISOR
Oechsle International Advisors, L.P. (the "Sub-Advisor") supervises the Fund's
investments pursuant to a Sub-Advisory Agreement (the "Sub-Advisory Agreement")
between the Sub-Advisor, the Advisor and the Trust. The Sub-Advisory Agreement
is effective until February 28, 1999 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, the
Advisor or the Sub-Advisor by vote cast in person at a meeting called for the
purpose of voting on such approval. The Sub-Advisory Agreement is terminable
without penalty on sixty days notice by the Board of Trustees of the Trust, by
the Advisor or by the Sub-Advisor. The Sub-Advisory Agreement provides that it
will terminate automatically in the event of its assignment.
Compensation of the Sub-Advisor is paid by the Advisor (not the Fund) in the
amount of one-half of the advisory fee (net of any waivers) received by the
Advisor. Compensation payable to the Sub-Advisor for the fiscal period ended
March 31, 1997 was $105,930.
- 19 -
<PAGE>
The Sub-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 Sub-Advisor determines what
securities and other investments will be purchased, retained or sold by the
Fund, and does so in accordance with the investment objective and policies of
the Fund as described herein and in the Prospectus. The Sub- Advisor places all
securities orders for the Fund, determining with which broker, dealer, or issuer
to place the orders.
The Sub-Advisor must adhere to the brokerage policies of the Fund in placing all
orders, the substance of which policies are that the Sub-Advisor must seek at
all times the most favorable price and execution for all securities brokerage
transactions.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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 0.25% of the average value of its
daily net assets up to $25,000,000, 0.225% of such assets from $25,000,000 to
$50,000,000 and 0.20% of such assets in excess of $50,000,000; provided,
however, that the minimum fee is $4,000 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 period ended March 31, 1997, the Administrator received fees of
$59,209 from the 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 prepare the Fund's
federal and state tax
- 20 -
<PAGE>
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 Northern Trust Company, 50 South LaSalle
Street, Chicago, IL 60675. 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 Sub-Advisor (subject to the general supervision of
the Board of Trustees and the Advisor) directs the execution of the Fund's
portfolio transactions. The Sub-Advisor may effect 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 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 period ended March 31, 1997, the total amount of brokerage
commissions paid by the Fund was $203,458.
While there is no formula, agreement or undertaking to do so, the Sub-Advisor
may allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Sub-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 Sub-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 Sub-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 Sub-Advisor's perception of the broker's
reliability, integrity and financial condition.
- 21 -
<PAGE>
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, 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 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 7 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
- 22 -
<PAGE>
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 Jamestown International Equity 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 Sub-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 Sub-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.
- 23 -
<PAGE>
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, the Sub-Advisor and certain
parties related thereto, including clients of the Advisor and the Sub-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.
- 24 -
<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.
The value of non-dollar denominated portfolio instruments held by the Fund will
be determined by converting all assets and liabilities initially expressed in
foreign currency values into U.S. dollar values at the mean between the bid and
offered quotations of such currencies against U.S. dollars as last quoted by any
recognized dealer. If such quotations are not available, the rate of exchange
will be determined in accordance with policies established in good faith by the
Board of Trustees. Gains or losses between trade and settlement dates resulting
from changes in exchange rates between the U.S. dollar and a foreign currency
are borne by the Fund. To protect against such losses, the Fund may enter into
forward foreign currency exchange contracts, which will also have the effect of
limiting any such gains.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor,
Sub-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.
- 25 -
<PAGE>
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.
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 investment 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 regulated
investment companies 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. 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, 1997, the Fund had capital loss carryforwards for federal income
tax purposes of $137,352 which expire on March 31, 2005. In addition, the Fund
had net realized capital losses of $1,067,584 during the period from November 1,
1996 through
- 26 -
<PAGE>
March 31, 1997, which are treated for federal income tax purposes as arising
during the Fund's tax year ending March 31, 1998. These capital loss
carryforwards and "post-October" losses may be utilized in the current and
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 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. 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 Fund. The 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.
Investments by the Fund in certain options, futures contracts and options on
futures contracts are "section 1256 contracts." Any gains or losses on section
1256 contracts are generally considered 60% long-term and 40% short-term capital
gains or losses ("60/40"). Section 1256 contracts held by the Fund at the end of
each taxable year are treated for federal income tax purposes as being sold on
such date for their fair market value. The resultant paper gains or losses are
also treated as 60/40 gains or losses. When the section 1256 contract is
subsequently disposed of, the actual gain or loss will be adjusted by the amount
of any preceding year-end gain or loss. The use of section 1256 contracts may
force the Fund to distribute to shareholders paper gains that have not yet been
realized in order to avoid federal income tax liability.
Foreign currency gains or losses on non-U.S. dollar denominated
bonds and other similar debt instruments and on any non-U.S.
dollar denominated futures contracts, options and forward
- 27 -
<PAGE>
contracts that are not section 1256 contracts generally will be treated as
ordinary income or loss.
Certain hedging transactions undertaken by the Fund may result in "straddles"
for federal income tax purposes. The straddle rules may affect the character of
gains (or losses) realized by the Fund. In addition, losses realized by the Fund
on positions that are part of a straddle may be deferred, rather than being
taken into account in calculating taxable income for the taxable year in which
such losses are realized. Because only a few regulations implementing the
straddle rules have been promulgated, the tax consequences of hedging
transactions to the Fund are not entirely clear. The hedging transactions may
increase the amount of short-term capital gain realized by the Fund which is
taxed as ordinary income when distributed to shareholders. The Fund may make one
or more of the elections available under the Internal Revenue Code of 1986, as
amended, which are applicable to straddles. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the elections made. The rules applicable under certain of the
elections operate to accelerate the recognition of gains or losses from the
affected straddle positions. Because application of the straddle rules may
affect the character of gains or losses, defer losses and/or accelerate the
recognition of gains or losses from the affected straddle positions, the amount
which must be distributed to shareholders, and which will be taxed to
shareholders as ordinary income or long-term capital gain in any year, may be
increased or decreased substantially as compared to a fund that did not engage
in such hedging transactions.
The 30% limit on gains from the sale of certain assets held for less than three
months and the diversification requirements applicable to the Fund's assets may
limit the extent to which the Fund will be able to engage in transactions in
options, futures contracts or options on futures contracts.
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
- 28 -
<PAGE>
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, 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 for the period since inception (April 16, 1996)
to March 31, 1997 is -1.56%.
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. 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
- 29 -
<PAGE>
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 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 Europe,
Australia and Far East Index (the "EAFE Index"), which is generally considered
to be representative of the performance of unmanaged common stocks that are
publicly traded in the securities markets located outside the United States.
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
- 30 -
<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.
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, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
- 31 -
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN INTERNATIONAL EQUITY FUND
The return on the Jamestown International Equity Fund was -1.5% since inception
on April 16, 1996. Over the same time period, the Morgan Stanley EAFE Index had
a return of -1.4%. This period was characterized by the strength in the U.S.
dollar, strong European markets, and continued weakness in Japan.
Oechsle continues to believe that the perception of the domestic situation in
Japan is worse than the reality. The imposition of new consumer taxes, the
relatively slow pace of government reforms and coporate restructurings, and
fears of a crisis in the financial system have adversely affected domestic
attitudes and caused foreigners to shy away. However, the depreciating yen
provides a more competitive base for export-oriented companies. Inventory levels
are low, and industrial production is rising. Capital investment appears to have
bottomed out, and the excesses in land prices have largely been removed.
Improving fundamentals should continue to gradually fall into place, reversing
the negative sentiment that has been built up.
Recently, Oechsle built up the emerging market compenent of the portfolio to
10%. Driven by their fundamental company research, Oechsle initiated positions
in companies in Brazil, India, Indonesia, Mexico, Phillipines, and Thailand.
Oechsle will continue to invest in emerging markets on an opportunistic basis to
add value to the Jamestown International Equity Fund.
GRAPHIC ASSET ALLOCATION
<TABLE>
<CAPTION>
The Jamestown
International Equity Morgan Stanley
Fund EAFE Index
<S> <C> <C>
Continental Europe 43.39% 40.50%
United Kingdom 13.73% 19.50%
Pacific Basin, excluding Japan 11.82% 10.90%
Japan 19.04% 29.10%
Emerging Markets 10.68% 0.00%
Other 1.34% 0.00%
------ ------
Total 100.00% 100.00%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Jamestown International Equity Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
International Equity Fund and the Europe, Australia and Far East Index
(EAFE Index)
JAMESTOWN INTERNATIONAL EQUITY FUND
EUROPE, AUSTRALIA AND FAR EAST JAMESTOWN INTL EQUITY FUND
INDEX (EAFE INDEX)
MONTHLY MONTHLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C> <C>
04/30/96 10,000 04/30/96 10,000
05/31/96 -1.84% 9,816 05/31/96 -1.30% 9,870
06/30/96 0.56% 9,871 06/30/96 -0.51% 9,820
07/31/96 -2.92% 9,583 07/31/96 -4.49% 9,379
08/31/96 0.22% 9,604 08/31/96 0.00% 9,379
09/30/96 2.66% 9,859 09/30/96 1.71% 9,539
10/31/96 -1.02% 9,759 10/31/96 -0.21% 9,519
11/30/96 3.98% 10,147 11/30/96 3.89% 9,890
12/31/96 -1.29% 10,016 12/31/96 -1.22% 9,770
01/31/97 -3.50% 9,666 01/31/97 -0.41% 9,730
02/28/97 1.64% 9,824 02/28/97 0.52% 9,780
03/31/97 0.36% 9,860 03/31/97 0.72% 9,850
</TABLE>
Past performance is not predictive of future performance.
* Initial public offering of shares was April 16, 1996.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 28,035,009
==============
At value (Note 1) $ 29,035,982
Cash denominated in foreign currencies (cost $3,945) 3,953
Cash 390,591
Receivable for capital shares sold 1,485
Dividends receivable 56,632
Interest receivable 1,059
--------------
TOTAL ASSETS 29,489,702
--------------
LIABILITIES
Payable for securities purchased 146,520
Accrued advisory fees (Note 3) 23,265
Accrued administration fees (Note 3) 6,000
Other accrued expenses 23,500
--------------
TOTAL LIABILITIES 199,285
--------------
NET ASSETS $ 29,290,417
==============
Net assets consist of:
Paid-in Capital $ 29,477,977
Undistributed net investment income 42,215
Accumulated net realized losses from security and foreign currency transactions (1,230,188)
Net unrealized appreciation on investments 1,000,973
Net unrealized depreciation on translation of assets and liabilities in foreign currencies (560)
--------------
Net assets $ 29,290,417
==============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 2,986,210
==============
Net asset value, offering price and redemption price per share (Note 1) $ 9.81
==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the Period Ended March 31, 1997 (a)
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $32,734) $ 267,828
Interest 80,887
-------------------
TOTAL INVESTMENT INCOME 348,715
-------------------
EXPENSES
Investment advisory fees (Note 3) 240,868
Custodian fees 66,654
Administration fees (Note 3) 59,209
Professional fees 14,884
Pricing costs 11,047
Registration fees 9,977
Trustees' fees and expenses 4,959
Shareholder report printing 3,553
Postage and supplies 2,307
Other expenses 935
-------------------
TOTAL EXPENSES 414,393
Fees waived by the Adviser (Note 3) (29,007)
-------------------
NET EXPENSES 385,386
NET INVESTMENT LOSS (36,671)
-------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (Note 4)
Net realized gains (losses) from:
Security transactions (1,230,188)
Foreign currency transactions 185,973
Net change in unrealized appreciation/depreciation on:
Investments 1,000,973
Translation of assets and liabilities in foreign currencies (560)
-------------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
AND FOREIGN CURRENCIES (43,802)
-------------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (80,473)
===================
<FN>
(a) Represents the period from the start of business (April 16, 1996)
through March 31, 1997.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period Ended March 31, 1997 (a)
<S> <C>
FROM OPERATIONS:
Net investment loss $ (36,671)
Net realized losses from security transactions (1,230,188)
Net realized gains from foreign currency transactions 185,973
Net change in unrealized appreciation/depreciation on investments 1,000,973
Net change in unrealized appreciation/depreciation on translation
of assets and liabilities in foreign currencies (560)
-----------------
Net decrease in net assets from operations (80,473)
-----------------
DISTRIBUTIONS TO SHAREHOLDERS:
In excess of net investment income (107,087)
-----------------
FROM CAPITAL SHARE TRANSACTIONS (b):
Proceeds from shares sold 29,619,931
Net asset value of shares issued in reinvestment
of distributions to shareholders 105,780
Payments for shares redeemed (247,734)
-----------------
Net increase in net assets from capital share transactions 29,477,977
-----------------
TOTAL INCREASE IN NET ASSETS 29,290,417
NET ASSETS:
Beginning of period 0
-----------------
End of period - (including undistributed net investment
income of $42,215) $ 29,290,417
=================
<FN>
(a) Represents the period from the start of business (April 16, 1996)
through March 31, 1997.
(b) Number of capital shares:
Sold 3,000,775
Reinvested 10,836
Redeemed (25,401)
----------
Net increase in shares outstanding 2,986,210
Shares outstanding, beginning of period 0
==========
Shares outstanding, end of period 2,986,210
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding
Throughout the Period Ended March 31, 1997(a)
<S> <C>
Net asset value at beginning of period $10.00
--------
Income from investment operations:
Net investment loss (0.01)
Net realized and unrealized losses
on investments and foreign currency (0.14)
--------
Total from investment operations (0.15)
--------
Less distributions:
Dividends in excess of net investment income (0.04)
--------
Net asset value at end of period $9.81
========
Total return -1.56%(c)
========
Net assets at end of period (000's) $29,290
========
Ratio of expenses to average net assets (b) 1.60%(c)
Ratio of net investment loss to average net assets -0.15%(c)
Portfolio turnover rate 70%(c)
Average commission rate per share $0.0258
<FN>
(a) Represents the period from the start of business (April 16, 1996) through
March 31, 1997.
(b) Absent investment advisory fees waived by the Adviser, the ratio of expenses
to average net assets would have been 1.71%(c) for the period ended
March 31, 1997.
(c) Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.1%
Australia - 5.4%
73,400 Australia and New Zealand Banking Group Ltd. $ 464,877
50,000 Coca-Cola Amatil Ltd. 475,363
81,991 News Corporation Ltd. 382,396
39,193 WMC Ltd. 247,614
-----------
1,570,250
-----------
Brazil - 3.2%
7,500 Companhia Vale do Rio Doce - ADR 170,471
7,400 Telecomunicacoes Brasileiras SA - Telebras - ADR 757,575
-----------
928,046
-----------
France - 7.6%
4,284 Alcatel Alsthom (Cie Gen El) 516,043
368 Carrefour SA 228,247
8,066 Michelin SA - Class B 479,360
5,802 Total SA - Class B 501,909
7,339 Valeo SA 493,135
-----------
2,218,694
-----------
Germany - 5.9%
13,114 Hoechst AG 530,961
1,461 Mannesmann AG 558,692
1,139 Volkswagen AG 629,443
-----------
1,719,096
-----------
Hong Kong - 3.9%
57,000 Hutchison Whampoa Ltd. 428,473
85,000 New World Development 458,509
25,000 Sun Hung Kai Properties Ltd. 264,550
-----------
1,151,532
-----------
India - 1.6%
5,600 Hindalco Industries Ltd. - GDR 182,364
9,300 Reliance Industries Ltd. - GDR 133,116
13,200 Tata Engineering and Locomotive Company Ltd. - GDR 167,970
-----------
483,450
-----------
Indonesia - .9%
33,000 PT Hanjaya Mandala Sampoerna - foreign registered 154,623
4,000 PT Telekomunikasi Indonesia - ADR 120,500
-----------
275,123
-----------
<PAGE>
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Italy - 6.5%
147,925 Fiat SPA $ 469,955
229,716 Istituto Nazionale delle Assicurazioni 308,445
151,155 Pirelli SPA 328,903
186,202 Stet Societa Finanziaria Telefonica SPA 813,675
-----------
1,920,978
-----------
Japan - 19.1%
24,000 Canon, Inc. 513,690
64 DDI Corporation 403,715
7,000 Denso Corporation 137,388
500 Isetan Company 5,250
7,000 Ito-Yokado Co. Ltd. 310,960
43,000 Kawasaki Heavy Industries 167,054
3,000 Kyocera Corporation 170,099
11,000 Matsuzakaya Company 81,294
15,000 Murata Manufacturing Company Ltd. 537,921
175,000 Nippon Steel Company 480,575
53 Nippon Telegraph and Telephone Corporation 372,853
14 NTT Data Communications Systems Company 372,022
7,000 Rohm Company 515,629
41,000 Sharp Corporation 486,794
6,500 Sony Corporation 454,123
20,000 Sumitomo Bank 237,461
53,000 Sumitomo Realty & Development 356,158
-----------
5,602,986
-----------
Malaysia - 1.3%
233,000 Renong Berhad 394,709
-----------
Mexico - 3.9%
3,200 ACER Computec Latino America, SA de CV - GDR (a) 58,504
30,000 Carso Global Telecom (a) 90,026
30,500 Grupo Carso SA de CV - ADR 178,824
4,500 Grupo Televisa SA 111,938
60,000 Kimberly-Clark de Mexico, SA de CV - Class A 241,710
11,900 Telefonos De Mexico SA - ADR 458,150
-----------
1,139,152
-----------
<PAGE>
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Netherlands - 6.2%
14,933 ING Groep NV $ 588,321
34,670 VNU-Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 713,450
4,169 Wolters Kluwer NV 502,077
-----------
1,803,848
-----------
Philippines - .6%
540,000 Filinvest Land Inc. (a) 172,046
-----------
Singapore - 1.2%
41,000 City Developments Ltd. 363,106
-----------
Spain - 5.4%
5,200 Banco Santander SA 357,621
6,962 Empresa Nacional de Electricidad, SA 448,353
32,007 Telefonica de Espana 770,995
-----------
1,576,969
-----------
Sweden - 6.8%
20,936 Astra AB - Class A 1,012,941
3,450 Hennes and Mauritz AB - Class B 462,065
45,360 Skandinaviska Enskilda Banken - Class A 502,751
-----------
1,977,757
-----------
Switzerland - 5.3%
846 Ciba Specialty Chemicals AG (a) 69,882
846 Novartis AG 1,048,823
50 Roche Holding AG 431,932
-----------
1,550,637
-----------
Thailand - 0.5%
15,000 Bangkok Bank Public Company Ltd. - foreign
registered 145,524
-----------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
United Kingdom - 13.8%
27,500 BOC Group PLC 431,682
34,870 British Aerospace PLC 781,266
51,258 British Petroleum Company PLC 594,631
31,892 Carlton Communications PLC 273,354
31,800 Glaxo Wellcome PLC 582,988
44,639 Orange PLC (a) 151,725
79,496 Safeway PLC 465,348
166,431 Vodafone Group PLC 761,085
-----------
4,042,079
-----------
Total Common Stocks (Cost $28,035,009) - 99.1% $ 29,035,982
Other Assets in Excess of Liabilities - 0.9% 254,435
-----------
Net Assets - 100.0% $ 29,290,417
===========
<FN>
(a) Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown International Equity Fund (the Fund) is a no-load, diversified
series of the Williamsburg Investment Trust (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on April 16, 1996.
The Fund's investment objective is to achieve superior total returns through
investment in equity securities of issuers located outside the United States.
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 or foreign stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. Foreign securities are translated from the local
currency into U.S. dollars using currency exchange rates supplied by a quotation
service.
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 and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
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,
which may differ from generally accepted accounting principles.
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 revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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 $28,060,261 as of March 31, 1997:
Gross unrealized appreciation...................... $ 2,387,489
Gross unrealized depreciation....................... (1,411,768)
-----------
Net unrealized appreciation........................ $ 975,721
===========
As of March 31, 1997, the Fund had capital loss carryforwards for federal income
tax purposes of $137,352 which expire on March 31, 2005. In addition, the Fund
had net realized capital losses of $1,067,584 during the period from November 1,
1996 through March 31, 1997, which are treated for federal income tax purposes
as arising during the Fund's tax year ending March 31, 1998. These capital loss
carryforwards and "post-October" losses may be utilized in the current and
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the period ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $45,751,404 and $16,485,445, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
Lowe, Brockenbrough & Tattersall, Inc. (the Adviser), under the terms of an
Investment Advisory Agreement, provides general investment supervisory services
to the Fund. 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 1.00% of its average daily net assets.
The Adviser retains Oechsle International Advisors, Inc. (Oechsle) to provide
the Fund with a continuous program of supervision of the Fund's assets,
including the composition of its portfolio, and to furnish advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to the terms of a Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, the Adviser, not the Fund, pays
Oechsle a fee in the amount of one-half of the monthly advisory fee received by
the Adviser, net of any advisory fee waivers.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
The Adviser currently intends to limit the total operating expenses of the Fund
to 1.60% of its average daily net assets. Accordingly, the Adviser waived
$29,007 of its investment advisory fees for the period ended March 31, 1997.
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
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Fund. For these services, CFS receives a monthly fee from the
Fund at an annual rate of .25% of its average daily net assets up to $25
million; .225% of the next $25 million of such net assets; and .20% of such net
assets in excess of $50 million, subject to a $4,000 minimum monthly fee. In
addition, the Fund pays out-of-pocket expenses including, but not limited to,
postage, supplies, and cost of pricing the Fund's portfolio securities. Certain
officers of the Trust are also officers of CFS.
4. FOREIGN CURRENCY TRANSLATION
Amounts denominated in or expected to settle in foreign currencies are
translated into U.S. dollars based on exchange rates on the following basis:
A. The market values of investment securities and other assets and
liabilities are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and
expenses are translated at the rate of exchange prevailing on the respective
dates of such transactions.
C. The Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from those resulting from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or losses
from investments.
Reported net realized foreign exchange gains or losses arise from 1) sales of
foreign currencies, 2) currency gains or losses realized between the trade and
settlement dates on securities transactions, and 3) the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received or
paid. Reported net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities, other than investment
securities, resulting from changes in exchange rates.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund enters into forward foreign currency exchange contracts as a way of
managing foreign exchange rate risk. The Fund may enter into these contracts for
the purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific transactions or portfolio
positions. The objective of the Fund's foreign currency hedging transactions is
to reduce risk that the U.S. dollar value of the Fund's securities denominated
in foreign currency will decline in value due to changes in foreign currency
exchange rates. All foreign currency exchange contracts are "marked-to-market"
daily at the applicable translation rates resulting in unrealized gains or
losses. Realized and unrealized gains or losses are included in the Fund's
Statement of Assets and Liabilities and Statement of Operations. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At March 31, 1997, the Fund had no forward foreign currency exchange contracts
outstanding.
<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 International Equity Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1997, and the
related statement of operations, changes in net assets, and financial highlights
for the period April 16, 1996 (commencement of operations) to March 31, 1997.
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 audit.
We conducted our audit 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, 1997 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 audit provides 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 International Equity Fund as of March 31, 1997, the
results of its operations, the changes in its net assets, and financial
highlights for the period April 16, 1996 to March 31, 1997, in conformity with
generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN
TAX EXEMPT VIRGINIA FUND
August 1, 1997
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............................................ 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, 1997. The Prospectus may be obtained from the
Fund, at the address and phone number shown above, at no charge.
jamexpva.sai
<PAGE>
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 instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks,
- 2 -
<PAGE>
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.
- 3 -
<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.
- 4 -
<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 Funds, age,
principal occupation during the past 5 years and their aggregate compensation
from the Trust for the fiscal year ended March 31, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 43) Principal of 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. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) 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;
Director of Montgomery Mutual
Insurance Co.
- 5 -
<PAGE>
<CAPTION>
<S> <C> <C>
Richard Mitchell (age 48) Principal of 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 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
- 6 -
<PAGE>
<CAPTION>
<S> <C> <C>
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
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 44) Vice President of
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 56) Principal of
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 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 7 -
<PAGE>
<CAPTION>
<S> <C> <C>
John F. Splain (age 40) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 46) 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 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
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. Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the
Trust's Nominating Committee. Messrs. Caravati, Lee, Morrill,
Morrissette, Will and Witt constitute the Trust's Audit
Committee. The Audit Committee reviews annually the nature and
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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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 12.7% 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
5.6% 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 5.1% of the then outstanding shares of the Fund;
Robert B. Seidensticker, 352 Rolling Lake Court, Manakin, Virginia 23103, owned
of record 9.5% of the then outstanding shares of the Fund; Elizabeth B. Towers,
Rural Hill P.O. Box 677, Goochland, Virginia 23063, owned of record 6.7% of the
then outstanding shares of the Fund; Marjorie W. Arenstein, 4222 Cox Rd., Suite
100, Glen Allen, Virginia, 23060, owned of record 8.1% of the then outstanding
shares of the Fund; and Doris L. Crickenberger, 607 Henri Road, Richmond,
Virginia 23226, owned of record 6.8% 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 February
28, 1999 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
years ended March 31, 1997 and 1996, the Fund paid the Advisor advisory fees of
$27,398 (which was net of voluntary fee waivers of $14,090) and $9,576 (net of
voluntary fee waivers of $23,645), respectively. The
- 9 -
<PAGE>
Advisor voluntarily waived its entire advisory fee and reimbursed a portion of
the Fund's operating expenses for the fiscal year ended March 31, 1995.
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough, III. In addition to acting as Advisor to
the Fund, the Advisor serves as investment advisor to three 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.
The Advisor may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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.
- 10 -
<PAGE>
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, 1997, 1996 and 1995, the Administrator
received from the Fund fees of $24,000, $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.
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
- 11 -
<PAGE>
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:
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
- 12 -
<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 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:
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
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<PAGE>
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 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
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<PAGE>
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.
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
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<PAGE>
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.
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, 1997, the Fund had capital loss carryforwards for federal income
tax purposes of $57,120 which expire on March 31, 2004. These capital loss
carryforwards may be utilized in future
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<PAGE>
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 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
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<PAGE>
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, 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, 1997 and for the period since inception (September 1, 1993) to
March 31, 1997 are 4.39% and 4.04%, 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.
- 18 -
<PAGE>
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:
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, 1997 was 4.43%.
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, 1997, based on the highest
marginal combined federal and Virginia income tax rate, was 7.78%.
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.
- 19 -
<PAGE>
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 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, 1997, together
- 20 -
<PAGE>
with the report of the independent accountants thereon, are
included on the following pages.
- 21 -
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 1997, The Jamestown Tax Exempt Virginia Fund
had a total return of 4.39% after operating expenses. This compared favorably to
the Lipper Intermediate Municipal Fund Index which was up 4.17%. The Lehman
Municipal Bond Index advanced 5.45% during this same period. The Fund maintained
an 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.
We were experiencing similar interest rates just nine months ago, right before
municipal yields dropped between 40 and 45 basis points. What is different this
time around is that economic growth is clearly stronger, the fears of impending
inflation are clearly stronger, the dollar is stronger, and the Federal Reserve
has already raised interest rates. What is similar is that by most popular
measures, inflation still has not appeared and pricing power is most likely
limited now as it was then. It remains to be seen if the Federal Reserve is as
convinced as the markets that the best of all possible worlds of strong growth,
full employment, minimal inflation and balanced budgets has been achieved.
The Jamestown Tax Exempt Virginia Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown Tax
Exempt Virginia Fund and the Lehman Municipal Bond Index
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
LEHMAN MUNICIPAL BOND INDEX: THE JAMESTOWN TAX EXEMPT
VIRGINIA FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
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
06/30/96 0.76% 11,372 06/30/96 0.63% 11,110
09/30/96 2.29% 11,633 09/30/96 1.65% 11,293
12/31/96 2.55% 11,929 12/31/96 2.15% 11,536
03/31/97 -0.24% 11,901 03/31/97 -0.10% 11,525
<CAPTION>
LIPPER INTERMEDIATE MUNICIPAL FUND INDEX
QTRLY
DATE RETURN BALANCE
<S> <C> <C>
09/01/93 10,000
09/30/93 1.14% 10,114
12/31/93 1.18% 10,233
03/31/94 -3.89% 9,835
06/30/94 0.92% 9,926
09/30/94 0.59% 9,984
12/31/94 -3.54% 9,631
03/31/95 4.94% 10,107
06/30/95 1.66% 10,274
09/30/95 2.26% 10,507
12/31/95 2.58% 10,778
03/31/96 -0.66% 10,707
06/30/96 0.49% 10,759
09/30/96 1.63% 10,934
12/31/96 2.09% 11,163
03/31/97 -0.09% 11,153
Past performance is not predictive of future performance.
The Jamestown Tax Exempt Virginia Fund Average Annual Total Returns
1 Year Since Inception*
4.39% 4.04%
</TABLE>
* Initial public offering of shares was September 1, 1993.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 11,173,093
========================
At value (Note 1) $ 11,355,378
Cash 13
Interest receivable 169,652
Other assets 266
TOTAL ASSETS 11,525,309
------------------------
LIABILITIES
Dividends payable 20,246
Payable for investment securities purchased 300,862
Payable for capital shares redeemed 419
Accrued advisory fees (Note 3) 3,456
Accrued administration fees (Note 3) 2,000
Other accrued expenses 1,200
------------------------
TOTAL LIABILITIES 328,183
------------------------
NET ASSETS $ 11,197,126
========================
Net assets consist of:
Paid-in capital $ 11,071,961
Accumulated net realized losses from security transactions (57,120)
Net unrealized appreciation on investments 182,285
------------------------
Net assets $ 11,197,126
========================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,139,442
========================
Net asset value, offering price and redemption price per share (Note 1) $ 9.83
========================
<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, 1997
<S> <C>
INVESTMENT INCOME
Interest $ 546,299
------------
EXPENSES
Investment advisory fees (Note 3) 41,488
Administration fees (Note 3) 24,000
Professional fees 7,258
Pricing costs 5,202
Trustees' fees and expenses 5,002
Custodian fees 4,724
Printing of shareholder reports 1,862
Postage and supplies 1,102
Other expenses 1,247
------------
TOTAL EXPENSES 91,885
Fees waived by the Adviser (Note 3) (14,090)
------------
NET EXPENSES 77,795
------------
NET INVESTMENT INCOME 468,504
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions 16,747
Net change in unrealized appreciation/depreciation on investments (32,780)
------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (16,033)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 452,471
============
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
--------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 468,504 $ 378,620
Net realized gains from security transactions 16,747 44,594
Net change in unrealized appreciation/depreciation
on investments (32,780) 87,707
--------------- ---------------
Net increase in net assets from operations 452,471 510,921
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (468,504) (378,620)
--------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 3,430,016 1,576,152
Net asset value of shares issued in reinvestment
of distributions to shareholders 251,004 242,402
Payments for shares redeemed (1,247,016) (883,247)
--------------- ---------------
Net increase in net assets from capital share transactions 2,434,004 935,307
--------------- ---------------
TOTAL INCREASE IN NET ASSETS 2,417,971 1,067,608
NET ASSETS:
Beginning of year 8,779,155 7,711,547
--------------- ---------------
End of year $ 11,197,126 $ 8,779,155
=============== ===============
(a)Number of shares:
Sold 349,394 159,428
Reinvested 25,420 24,511
Redeemed (126,290) (89,606)
--------------- ---------------
Net increase in shares outstanding 248,524 94,333
Shares outstanding, beginning of year 890,918 796,585
--------------- ---------------
Shares outstanding, end of year 1,139,442 890,918
=============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years ended March 31, Ended
March 31,
1997 1996 1995 1994 (a)
--------- ------- ------ ----------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $9.85 $9.68 $9.61 $10.00
--------- ------- ------ ----------
Income from investment operations:
Net investment income 0.45 0.45 0.44 0.23
Net realized and unrealized gains
(losses) on investments (0.02) 0.17 0.07 (0.39)
-------- ------ ------- ----------
Total from investment operations 0.43 0.62 0.51 (0.16)
-------- ------ ------- ----------
Less distributions:
Dividends from net investment income (0.45) (0.45) (0.44) (0.23)
-------- ------ ------- ----------
Net asset value at end of period $9.83 $9.85 $9.68 $9.61
======== ======= ======= ==========
Total return 4.39% 6.51% 5.47% (2.96)%(c)
======== ======= ======= ==========
Net assets at end of period (000's) $11,197 $8,779 $7,712 $2,056
======== ====== ======= ==========
Ratio of expenses to average net assets (b) 0.75% 0.75% 0.75% 0.75%(c)
Ratio of net investment income to average net assets 4.51% 4.57% 4.64% 4.07%(c)
Portfolio turnover rate 24% 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 assests would have been
0.88%, 1.04%, 1.62% and 4.83%(c) for the periods ended March 31, 1997,
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
<CAPTION>
PORTFOLIO OF INVESTMENTS
March 31, 1997
Par
Amount Value
------- -------
<S> <C>
FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS - 93.6%
Virginia - 92.2%
Arlington Co., Virginia, GO,
$ 300,000 5.60%, due 08/01/2006 $ 312,591
--------------
Brunswick Co., Virginia, Industrial Dev. Authority, Revenue,
300,000 5.45%, due 07/01/2006 306,309
--------------
Cheasapeake, Virginia, GO,
200,000 5.60%, due 05/01/2000 205,912
--------------
Chesterfield Co., Virginia, GO,
350,000 6.25%, due 07/15/2005 372,893
--------------
Fairfax Co., Virginia, GO,
350,000 5.60%, due 05/01/2003 359,551
--------------
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 312,759
--------------
Fairfax Co., Virginia, Sewer, Revenue,
350,000 5.625%, due 07/15/2008 359,838
--------------
Hanover Co., Virginia, Industrial Dev. Authority, Revenue,
225,000 6.25%, due 10/01/2011 232,754
--------------
Harrisonburg, Virginia, GO,
250,000 5.50%, due 07/15/2000 256,700
--------------
Loudoun Co., Virginia, GO,
300,000 5.50%, due 06/01/2009 302,967
--------------
Martinsville, Virginia, Industrial Dev. Authority, Hospital Facility, Revenue,
150,000 6.50%, due 01/01/1999 154,803
--------------
Newport News, Virginia, GO,
400,000 5.40%, due 07/01/2002 407,640
--------------
Norfolk, Virginia, GO,
300,000 5.75%, due 06/01/2011 306,618
--------------
Norfolk, Virginia, Industrial Dev. Authority, Hospital, Revenue,
350,000 6.80%, due 06/01/2005 386,109
--------------
Peumansend Creek, Virginia, Regional Jail Authority, Revenue,
300,000 5.75%, due 06/01/2017 297,498
--------------
<CAPTION>
<PAGE>
Par
Amount Value
-------- -----------
<S> <C>
Virginia - Continued
Pittsylvania Co., Virginia, GO,
$ 300,000 5.65%, due 07/01/2006 $ 309,564
--------------
Portsmouth, Virginia, GO,
200,000 5.90%, due 11/01/2001 209,700
--------------
Prince William Co., Virginia, Park Authority, Revenue,
250,000 6.10%, due 10/15/2004 263,275
--------------
Prince William Co., Virginia, Service Auth. Water & Sewer, Revenue,
150,000 6.40%, due 07/01/2004 160,392
--------------
Richmond, Virginia, GO,
400,000 6.25%, due 01/15/2018 411,272
--------------
Richmond, Virginia, Metropolitan Authority, Revenue,
250,000 6.00%, due 07/15/2004 265,405
--------------
Richmond, Virginia, Public Utility, Revenue,
150,000 7.10%, due 01/15/2000 155,837
--------------
Riverside, Virginia, Regional Jail Authority, Revenue,
300,000 5.30%, due 07/01/2002 306,585
--------------
Roanoke, Virginia, GO,
300,000 6.40%, due 08/01/2012 316,254
--------------
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 357,179
--------------
Virginia Beach, Virginia, GO,
325,000 6.20%, due 09/01/2013 339,827
--------------
Virginia State, GO,
300,000 5.90%, due 06/01/2005 312,831
--------------
Virginia State Housing Dev. Authority, Revenue,
150,000 5.60%, due 01/01/2002 153,078
150,000 6.60%, due 11/01/2012 157,230
150,000 6.30%, due 11/01/2015 154,272
--------------
464,580
--------------
Virginia State Public Building Authority, Revenue,
250,000 5.30%, due 08/01/1998 254,035
--------------
<PAGE>
<CAPTION>
Par
Amount Value
---------- ---------
<S> <C>
Virginia - Continued
Virginia State Public School Authority, Revenue,
$ 150,000 6.50%, due 08/01/2005 $ 161,382
250,000 5.90%, due 08/01/2006 261,155
--------------
422,537
--------------
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012 366,383
--------------
Virginia Commonwealth University, Revenue,
250,000 5.75%, due 05/01/2006 260,393
--------------
Winchester, Virginia, Industrial Dev. Authority, Revenue
280,000 7.25%, due 01/01/2000, prerefunded at 102 303,951
--------------
York Co., Virginia, Certificates of Participation, Revenue,
250,000 6.625%, due 03/01/2012 263,955
--------------
Total Virginia 10,318,897
--------------
Puerto Rico - 1.4%
Puerto Rico Commonwealth, Highway and Transp. Authority, Revenue,
150,000 6.375%, due 07/01/2007 158,859
--------------
Total Puerto Rico 158,859
--------------
Total Fixed Rate Revenue and General Obligation Bonds
(Cost $10,295,471) $ 10,477,756
--------------
<CAPTION>
Shares
<S> <C> <C>
MONEY MARKETS - 7.8%
877,622 Star Tax Free Fund (Cost $877,622) $ 877,622
--------------
Total Investments at Value (Cost $11,173,093) - 101.4% $ 11,355,378
Liabilities in Excess of Other Assets - (1.4)% (158,252)
--------------
Net Assets - 100.0% $ 11,197,126
==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Tax Exempt Virginia Fund (the Fund) is a no-load series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered 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 and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with income tax regulations. 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,
which may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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 revenues 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, 1997:
Gross unrealized appreciation.................... $ 201,865
Gross unrealized depreciation..................... (19,580)
---------
Net unrealized appreciation ..................... $ 182,285
=========
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, 1997, the Fund
had capital loss carryforwards for federal income tax purposes of $57,120 which
expire on March 31, 2004. These capital loss carryforwards may be utilized in
current and future years to offset net realized capital gains prior to
distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $4,524,334 and $2,355,813, respectively.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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% of its
average daily net assets up to $250 million; .35% of the next $250 million of
such net assets; and .30% of 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
$14,090 of its investment advisory fee for the year ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc., (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .15% of its average daily net
assets up to $200 million and .10% of 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, postage, supplies and
costs of pricing the Fund's portfolio securities. Certain officers of the Trust
are also officers of CFS.
<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, 1997, 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, 1997 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 Tax Exempt Virginia Fund as of March 31, 1997, 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 25, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
August 1, 1997
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
SUB-ADVISOR..................................................................15
ADMINISTRATOR................................................................16
OTHER SERVICES...............................................................16
BROKERAGE....................................................................17
SPECIAL SHAREHOLDER SERVICES.................................................18
PURCHASE OF SHARES...........................................................20
REDEMPTION OF SHARES.........................................................21
NET ASSET VALUE DETERMINATION................................................21
ALLOCATION OF TRUST EXPENSES.................................................21
ADDITIONAL TAX INFORMATION...................................................22
CAPITAL SHARES AND VOTING....................................................23
CALCULATION OF PERFORMANCE DATA..............................................24
FINANCIAL STATEMENTS AND REPORTS.............................................26
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, 1997. 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 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.
- 2 -
<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., obligations of the Government
National Mortgage Association ("GNMA"), the Farmers Home Administration and the
Export Import
- 3 -
<PAGE>
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-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
- 4 -
<PAGE>
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 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
- 5 -
<PAGE>
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.
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.
- 6 -
<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.
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.
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.
- 7 -
<PAGE>
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;
(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
- 8 -
<PAGE>
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.
- 9 -
<PAGE>
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, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (60) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 43) Principal of 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. (60) Physician $8,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 57) 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;
Director of Montgomery Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of 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
- 10 -
<PAGE>
<CAPTION>
<S> <C> <C>
Richard L. Morrill (age 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
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 55) Principal of
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
- 11 -
<PAGE>
<CAPTION>
<S> <C> <C>
Timothy S. Healey (age 44) Vice President of
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 56) Principal of
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 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust,
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
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 40) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust,
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
- 12 -
<PAGE>
<CAPTION>
<S> <C>
Connie R. Taylor (age 46) 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 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.,
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
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. Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will 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.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 11, 1997, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 1.3% of the then outstanding shares of the Balanced Fund and
4.7% 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 6.6%
of the then outstanding shares of the Balanced Fund; Bova & Co., P.O. Box 85539,
- 13 -
<PAGE>
Richmond, Virginia 23285, owned of record 8.2% of the then outstanding shares of
the Balanced Fund; John M. Street and Joanne N. Street, 315 Cheswick Lane,
Richmond, Virginia 23229, owned of record 8.3% of the then outstanding shares of
the Equity Fund; and Virginia Management Services Organization, LLC 401(K)
Profit Sharing Plan and Trust and Money Purchase Pension Plan and Trust, 9200
Arboretum Parkway., Suite 130, Richmond Virginia 23236, owned of record 7.0% 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 February
28, 1999 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 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, 1997, 1996 and 1995, the
Balanced Fund paid the Advisor advisory fees of $430,381, $373,945 and $315,464,
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, 1997, 1996 and 1995, the Equity Fund paid the Advisor
advisory fees of $160,646, $79,891 and $8,908 (which was net of voluntary fee
waivers of $24,281), respectively.
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough, III. In addition to acting as Advisor to
the Funds, the 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.
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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.
The Advisor may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
SUB-ADVISOR
Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc. (the "Sub-Advisor")
supervises the Balanced Fund's fixed income investments pursuant to a
Sub-Advisory Agreement (the "Sub- Advisory Agreement") between the Sub-Advisor,
the Advisor and the Trust. The Sub-Advisory Agreement is effective until
February 28, 1999, 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 a vote of a majority of the Balanced 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, the
Advisor, or the Sub-Advisor by vote cast in person at a meeting called for the
purpose of voting on such approval. The Sub-Advisory Agreement is terminable
without penalty on sixty days notice by the Board of Trustees of the Trust, by
the Advisor, or by the Sub-Advisor. The Sub-Advisory Agreement provides that it
will terminate automatically in the event of its assignment.
Compensation of the Sub-Advisor is paid by the Advisor (not the Balanced Fund)
in the amount of $5,000 per year.
The Sub-Advisor provides a continuous investment program for the fixed income
portion of the Balanced Fund, including investment research and management with
respect to all fixed income securities of the Balanced Fund. The Sub-Advisor
determines what fixed income securities will be purchased, retained or sold by
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the Balanced Fund, and does so in accordance with the investment objective and
policies of the Balanced Fund, as described herein and in the Prospectus. The
Sub-Advisor places all fixed income securities orders for the Balanced Fund,
determining which broker, dealer, or issuer to place the orders. The Sub-Advisor
must adhere to the brokerage policies of the Balanced Fund in placing all
orders, the substance of which policies are that the Sub-Advisor must seek at
all times the most favorable price and execution for all securities brokerage
transactions.
ADMINISTRATOR
Countrywide Fund Services, Inc. (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, 1997, 1996 and 1995, the Administrator
received fees of $118,380, $105,023 and $90,029, respectively, from the Balanced
Fund and $49,129, $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.
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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 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, 1997, 1996 and 1995, the total amount of
brokerage commissions paid by the Balanced Fund was $63,382, $63,217 and
$61,053, respectively. For the fiscal years ended March 31, 1997, 1996 and 1995,
the total amount of brokerage commissions paid by the Equity Fund was $47,290,
$26,512 and $16,795, 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
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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.
In order to reduce the total operating expenses of the Funds, each 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. Total custodian fees and other operating expenses reimbursed
by the broker-dealer for the fiscal year ended March 31, 1997 were $23,361 for
the Balanced Fund and $13,440 for the Equity Fund.
As of March 31, 1997, the Balanced Fund held securities issued by the following
of the Trust's "regular broker-dealers" (as defined in the 1940 Act) or their
parents: Merrill Lynch & Company, Inc. (th e market value of which was
$406,630) and NationsBank (the market value of which was $1,529,900). As of
March 31, 1997, the Equity Fund also held securities issued by NationsBank
(the market value of which was $664,500).
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.
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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 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
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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.
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
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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
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 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.
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
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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 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
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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 Balanced Fund for the one year
period ended March 31, 1997, for the five year period ended March 31, 1997 and
for the period since inception (July 3, 1989) to March 31, 1997 are 12.29%,
11.60% and 10.39%, respectively. The average annual total return quotations for
the Equity Fund for the one year period ended March 31, 1997 and for the period
since inception (December 1, 1992) to March 31, 1997 are 15.27% and 13.11%,
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
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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, 1997 were 2.52% and 0.88%, 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
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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, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
- 26 -
<PAGE>
THE JAMESTOWN BALANCED FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN BALANCED FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN BALANCED FUND
The fiscal year ended March 31, 1997, has been another good year for The
Jamestown Balanced Fund. For the 12 month period, the total return for the
Balanced Fund was 12.29% after expenses. This compared quite favorably to the
Lipper Balanced Fund Index which was up 11.02% for the same time period. The
Standard & Poor's 500 Index, which of course is 100% in common stocks, had a
return of 19.82%. Since only 70% of your fund is normally invested in stocks and
the remaining 30% is allocated to bonds and cash equivalents, 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 underweightings and overweightings. The two exceptions to this are
the utility and transportation sectors, in which we were not invested during the
year. During the 12 month period, the outstanding sector was technology
(+35.7%), followed by finance (+30.4%). Other sectors outperforming the S&P 500
were staples, energy, and health care, in that order. Sectors underperforming
the market were transportation, consumer cyclicals, basic industries, and
utilities. The capital goods sector fell just 100 basis points short of matching
the S&P.
The bond portion of the Fund provided positive returns for the year, although
less so than did stocks. The Lehman Intermediate Bond Index was up 4.8% during
our fiscal year.
Looking forward to the following year, we are somewhat cautious on both the
stock and bond markets. The increase in the Federal Funds rate instituted on
March 25 has caused consternation in both stock and bond markets. The good new
is that inflation appears to be well contained at this point in time, although
the wage component of the CPI has been creeping up for the last two years. This
slow but steady increase in wages has been offset, so far, by lower benefit
costs, so that overall compensation has remained stable.
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:
<TABLE>
<CAPTION>
The Jamestown Balanced Fund
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
THE JAMESTOWN BALANCED FUND
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN BALANCED FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
07/03/89 10,000 07/03/89 10,000
09/30/89 10.71% 11,071 09/30/89 0.00% 10,000
12/31/89 2.06% 11,299 12/31/89 6.25% 10,625
03/31/90 -3.00% 10,960 03/31/90 -2.62% 10,347
06/30/90 6.28% 11,648 06/30/90 4.90% 10,853
09/30/90 -13.75% 10,047 09/30/90 -9.33% 9,841
12/31/90 8.97% 10,948 12/31/90 5.17% 10,350
03/31/91 14.53% 12,539 03/31/91 9.96% 11,380
06/30/91 -0.23% 12,510 06/30/91 -0.91% 11,277
09/30/91 5.35% 13,179 09/30/91 5.12% 11,854
12/31/91 8.38% 14,284 12/31/91 6.97% 12,681
03/31/92 -2.53% 13,922 03/31/92 -2.03% 12,423
06/30/92 1.90% 14,187 06/30/92 2.03% 12,675
09/30/92 3.15% 14,634 09/30/92 4.46% 13,241
12/31/92 5.03% 15,370 12/31/92 3.74% 13,736
03/31/93 4.36% 16,040 03/31/93 1.75% 13,976
06/30/93 0.48% 16,117 06/30/93 -0.26% 13,941
09/30/93 2.58% 16,533 09/30/93 2.49% 14,287
12/31/93 2.32% 16,916 12/31/93 0.32% 14,333
03/31/94 -3.79% 16,275 03/31/94 -1.58% 14,107
06/30/94 0.42% 16,343 06/30/94 0.91% 14,235
09/30/94 4.88% 17,141 09/30/94 1.64% 14,469
12/31/94 -0.02% 17,137 12/31/94 -0.83% 14,349
03/31/95 9.74% 18,807 03/31/95 8.67% 15,594
06/30/95 9.55% 20,602 06/30/95 7.60% 16,779
09/30/95 7.95% 22,239 09/30/95 5.50% 17,702
12/31/95 6.02% 23,578 12/31/95 4.75% 18,542
03/31/96 5.37% 24,844 03/31/96 3.27% 19,148
06/30/96 4.49% 25,959 06/30/96 3.05% 19,731
09/30/96 3.09% 26,761 09/30/96 2.41% 20,207
12/31/96 8.34% 28,992 12/31/96 6.21% 21,462
03/31/97 2.68% 29,769 03/31/97 0.18% 21,501
<CAPTION>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
<S> <C> <C>
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% 10,933
06/30/91 0.40% 10,977
09/30/91 0.60% 11,043
12/31/91 0.90% 11,142
03/31/92 0.70% 11,221
06/30/92 0.80% 11,311
09/30/92 0.70% 11,390
12/31/92 0.80% 11,481
03/31/93 0.90% 11,585
06/30/93 0.60% 11,654
09/30/93 0.40% 11,701
12/31/93 0.70% 11,783
03/31/94 0.50% 11,842
06/30/94 0.60% 11,913
09/30/94 0.90% 12,020
12/31/94 0.60% 12,093
03/31/95 0.80% 12,190
06/30/95 0.90% 12,300
09/30/95 0.40% 12,349
12/31/95 0.50% 12,411
03/31/96 0.80% 12,510
06/30/96 1.10% 12,649
09/30/96 0.44% 12,704
12/31/96 0.82% 12,809
03/31/97 0.69% 12,897
The Jamestown Balanced Fund Average Annual Total Returns
1 Year 5 Years Since Inception*
12.29% 11.60% 10.39%
</TABLE>
* Initial public offering of shares was July 3, 1989.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost
$ 53,298,520
====================
At value (Note 1)
$ 67,064,552
Investments in repurchase
agreements (Note 1)
2,396,000
Cash
758
Receivable for securities sold
961,414
Receivable for capital shares sold
10,000
Interest receivable
274,630
Dividends receivable
52,018
Other assets
2,564
--------------------
TOTAL ASSETS
70,761,936
--------------------
LIABILITIES
Payable for capital shares redeemed
27,640
Dividends payable
20,483
Accrued advisory fees (Note 3)
40,324
Accrued administration fees (Note 3)
10,700
Other accrued expenses
9,218
-------------------
TOTAL LIABILITIES
108,365
-------------------
NET ASSETS
$ 70,653,571
===================
Net assets consist of:
Paid-in capital
$ 55,607,351
Accumulated net realized gains from
security transactions
1,254,624
Undistributed net investment income
<PAGE>
<CAPTION>
<S> <C>
25,564
Net unrealized appreciation on investments 13,766,032
--------------------
Net assets $ 70,653,571
====================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) 4,658,602
====================
Net asset value, offering price and
redemption price per share (Note 1) $ 15.17
====================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Interest $ 1,383,876
Dividends 727,002
--------------
TOTAL INVESTMENT INCOME 2,110,878
--------------
EXPENSES
Investment advisory fees (Note 3) 430,381
Administrative fees (Note 3) 118,380
Custodian fees 15,658
Professional fees 12,288
Pricing costs 5,382
Trustees' fees and expenses 5,002
Insurance expense 4,256
Registration fees 3,594
Other expenses 6,332
-------------
TOTAL EXPENSES 601,273
Expenses reimbursed through a directed
brokerage arrangement (Note 4) (23,361)
-------------
NET EXPENSES 577,912
-------------
NET INVESTMENT INCOME 1,532,966
-------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 3,339,264
Net change in unrealized appreciation/depreciation
on investments 2,746,030
-------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 6,085,294
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,618,260
===========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
---------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,532,966 $ 1,446,610
Net realized gains from security transactions 3,339,264 4,448,919
Net change in unrealized appreciation/depreciation
on investments 2,746,030 5,730,142
---------------- -------------
Net increase in net assets from operations 7,618,260 11,625,671
---------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,518,758) (1,451,395)
From net realized gains from security transactions (4,545,144) (1,982,339)
---------------- -------------
Decrease in net assets from distributions to shareholders (6,063,902) (3,433,734)
---------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 9,763,400 5,197,403
Net asset value of shares issued in reinvestment
of distributions to shareholders 5,853,635 3,265,651
Payments for shares redeemed (8,094,099) (7,140,816)
---------------- -------------
Net increase in net assets from capital share transactions 7,522,936 1,322,238
TOTAL INCREASE IN NET ASSETS 9,077,294 9,514,175
ASSETS:
Beginning of year 61,576,277 52,062,102
---------------- -------------
End of year - (including undistributed net investment
income of $25,564 and $11,356, respectively) $ 70,653,571 $ 61,576,277
================ =============
(a) Number of shares:
Sold 631,119 370,290
Reinvested 383,386 229,365
Redeemed (526,294) (510,212)
---------------- -------------
Net increase in shares outstanding 488,211 89,443
Shares outstanding, beginning of year 4,170,391 4,080,948
---------------- -------------
Shares outstanding, end of year 4,658,602 4,170,391
================ =============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
Years Ended March 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $14.77 $12.76 $12.15 $12.49 $11.52
------- ------ ------ ------ ------
Income from investment operations:
Net investment income 0.35 0.36 0.33 0.30 0.31
Net realized and unrealized gains (losses)
on investments 1.45 2.50 0.90 (0.18) 1.11
------- ------ ------ ------ -----
Total from investment operations 1.80 2.86 1.23 0.12 1.42
------- ------ ------ ------ -----
Less distributions:
Dividends from net investment income (0.35) (0.36) (0.33) (0.30) (0.31)
Distributions from net realized gains (1.05) (0.49) (0.29) (0.16) (0.14)
------- ------ ------ ------ ------
Total distributions (1.40) (0.85) (0.62) (0.46) (0.45)
------- ------ ------ ------ ------
Net asset value at end of year $15.17 $14.77 $12.76 $12.15 $12.49
======= ====== ====== ====== ======
Total return 12.29% 22.79% 10.54% 0.94% 12.50%
======= ====== ====== ====== ======
Net assets at end of year (000's) $70,654 $61,576 $52,062 $46,928 $40,512
======= ====== ====== ====== ======
Ratio of gross expenses to average net assets 0.91% 0.93% 0.99% 1.01% 1.07%
Ratio of net expenses to average net assets (a) 0.87% 0.88% 0.96% 0.98% 0.99%
Ratio of net investment income to average net assets 2.31% 2.52% 2.72% 2.47% 2.59%
Portfolio turnover rate 58% 72% 95% 123% 134%
Average commission rate per share $0.0667 -- -- -- --
<FN>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 65.3%
Advertising - 2.1%
28,000 Interpublic Group of Companies, Inc. $ 1,477,000
---------------
Building and Construction - 1.1%
22,000 Foster Wheeler Corporation 778,250
---------------
Chemicals - 1.2%
12,000 Air Products & Chemicals, Inc. 814,500
---------------
Commercial Banking - 4.4%
24,000 Federal National Mortgage Association 867,000
15,000 First Union Corporation 1,216,875
19,000 NationsBank Corporation 1,052,125
---------------
3,136,000
---------------
Communications - 5.3%
46,000 Alltel Corporation 1,495,000
37,000 Equifax, Inc. 1,008,250
34,000 MCI Communications Corporation 1,211,250
---------------
3,714,500
---------------
Computers/Computer Technology Services - 6.8%
29,000 Cabletron Systems (b) 848,250
14,000 Cisco Systems, Inc. (b) 673,750
25,000 Computer Sciences Corporation (b) 1,543,750
12,300 Intel Corporation 1,711,237
---------------
4,776,987
---------------
Consumer Products - 10.7%
21,000 Avon Products, Inc. 1,102,500
16,000 General Electric Company 1,588,000
7,000 Gillette Company 508,375
14,000 Kimberly-Clark Corporation 1,391,250
5,000 Procter & Gamble Company 575,000
46,000 Sysco Corporation 1,569,750
35,000 Whitman Corporation 857,500
---------------
7,592,375
---------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Drugs/Medical Equipment - 6.3%
27,000 Abbott Laboratories $ 1,515,375
17,000 Merck and Company, Inc. 1,432,250
21,000 Schering-Plough Corporation 1,527,750
---------------
4,475,375
---------------
Durable Goods - 2.1%
26,000 Avnet, Inc. 1,465,750
---------------
Electronics - 1.5%
20,000 Hewlett-Packard Company 1,065,000
---------------
Entertainment - 1.9%
18,270 Walt Disney Company 1,333,710
---------------
Fast Food Restaurants - 1.8%
27,000 McDonald's Corporation 1,275,750
---------------
Fire Systems - 2.3%
29,000 Tyco International Ltd. 1,595,000
---------------
Food Productions - 1.5%
20,000 Conagra, Inc. 1,085,000
---------------
Health Care Centers - 2.8%
45,000 Columbia/HCA Healthcare Corporation 1,513,125
20,000 Manor Care, Inc. 487,500
---------------
2,000,625
---------------
Hotels - 1.3%
70,100 Choice Hotel International, Inc. (b) 946,350
---------------
Insurance - 3.2%
12,000 American International Group 1,408,500
16,000 Jefferson-Pilot Corporation 870,000
---------------
2,278,500
---------------
Oil and Gas Drilling - 4.9%
12,500 Amoco Corporation 1,082,813
28,000 Coastal Corporation 1,344,000
9,200 Texaco, Inc. 1,007,400
---------------
3,434,213
---------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Real Estate - 1.5%
72,000 United Dominion Realty Trust $ 1,053,000
---------------
Retail Stores - 2.6%
53,400 AutoZone, Inc. (b) 1,201,500
20,000 Circuit City Stores, Inc. 667,500
----------------
1,869,000
----------------
Total Common Stocks (Cost $32,248,573) $ 46,166,885
----------------
Par Value
U.S. TREASURY NOTES - 16.7%
$ 1,000,000 5.125%, due 04/30/1998 $ 989,690
3,275,000 7.75%, due 11/30/1999 3,366,602
2,065,000 6.25%, due 02/15/2003 2,008,853
5,350,000 7.25%, due 08/15/2004 5,456,144
----------------
Total U.S. Treasury Notes (Cost $11,899,361) $ 11,821,289
----------------
MORTGAGE-BACKED SECURITIES - 5.3%
Federal Home Loan Mortgage Corporation - 2.3%
$ 336,945 Pool #G50153, 4.50%, due 05/01/1999 $ 325,152
500,000 Pool #1490-PE, 5.75%, due 07/15/2006 490,000
167,668 Pool #162-E, 7.00%, due 02/15/2020 167,668
124,963 Pool #D69139, 6.50%, due 03/01/2026 116,605
538,354 Pool #D70284, 6.50%, due 04/01/2026 501,509
----------------
1,600,934
----------------
Federal National Mortgage Association - 1.8%
400,000 Series #1993-63-PE, 6.25%, due 06/25/2005 394,500
243,942 Series #70, 8.50%, due 01/01/2012 252,336
231,368 Series #88-29-B, 9.50%, due 12/25/2018 239,320
395,203 Series #1990-35-E, 9.50%, due 04/25/2020 414,097
----------------
1,300,253
----------------
Government National Mortgage Association - 1.0%
88,288 Series #327273, 7.5%, due 08/15/2022 87,127
590,177 Series #343536, 7.5%, due 02/15/2023 581,856
----------------
668,983
----------------
Other Mortgage-Backed Securities - .2%
Lehman Brothers Mortgage Trust #91-2-A1,
151,925 8.00%, due 03/20/1999 154,014
----------------
Total Mortgage-Backed Securities (Cost $3,758,959) $ 3,724,184
----------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
ASSET-BACKED SECURITIES - 2.1%
Advanta Mortgage Loan Trust #92-2-A2,
$ 365,000 7.03%, due 03/25/2011 $ 364,927
AFG Receivables Trust #95-A-A,
225,209 6.15%, due 09/15/2000 224,150
Fleetwood Credit Corporation Grantor Trust #95-A-A,
509,683 8.45%, due 11/15/2010 522,583
Nationscredit Grantor Trust #96-1-A,
377,776 5.85%, due 09/15/2011 364,818
----------------
Total Asset-Backed Securities (Cost $1,498,341) $ 1,476,478
----------------
CORPORATE BONDS - 5.5%
Beneficial Corporation Medium Term Notes,
$ 275,000 8.05%, due 11/16/1998 $ 281,091
Caterpillar Financial Services Medium Term Notes,
450,000 6.80%, due 06/15/1999 450,230
Fleet Mortgage Group Medium Term Notes,
400,000 7.25%, due 01/15/1998 402,724
Ford Motor Credit Medium Term Notes,
225,000 7.55%, due 07/19/1999 228,679
Ford Motor Credit,
200,000 8.00%, due 12/01/1997 202,216
GMAC Medium Term Notes,
525,000 6.65%, due 05/24/2000 520,285
International Lease Finance Corporation,
425,000 6.42%, due 09/11/2000 417,371
Merrill Lynch and Company Medium Term Notes,
410,000 7.26%, due 03/25/2002 406,630
NationsBank Medium Term Notes,
500,000 5.80%, due 01/31/2001 477,775
Northern Trust Corporation,
100,000 9.00%, due 05/15/1998 102,811
Pacific Bell,
400,000 6.875%, due 08/15/2006 385,904
----------------
Total Corporate Bonds (Cost $3,893,286) $ 3,875,716
----------------
Total Investments at Value (Cost $53,298,520) - 94.9% $ 67,064,552
----------------
<PAGE>
<CAPTION>
Face
Value Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 3.4%
Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997
$ 2,396,000 repurchase proceeds $2,396,349 (Cost $2,396,000 $ 2,396,000
----------------
Total Investments and Repurchase Agreements
at Value - 98.3% $ 69,460,552
Other Assets in Excess of Liabilities - 1.7% 1,193,019
----------------
Net Assets - 100.0% $ 70,653,571
================
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,601,314.
(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, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered 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 and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with tax regulations. Dividend income is recorded on the
ex-dividend date. Discounts 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, which may differ from generally accepted accounting
principles.
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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 reported amounts of assets and liabilites at the
date of the financial statements and the reported amounts of revenues 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 $53,418,457 as of March 31, 1997:
Gross unrealized appreciation............. $14,492,285
Gross unrealized depreciation............. (846,190)
-----------
Net unrealized appreciation............... $13,646,095
===========
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $39,882,224 and $36,790,471, respectively.
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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% of its
average daily net assets up to $250 million; .60% of the next $250 million of
such net assets; and .55% of such net assets in excess of $500 million. Certain
trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such net assets; and
.15% of 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, postage, supplies, and cost of pricing the Fund's portfolio
securities. Certain officers of the Trust are also officers of CFS.
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 $23,361 for the year ended March 31, 1997.
<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, 1997, 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, 1997 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, 1997, 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 25, 1997
<PAGE>
THE JAMESTOWN EQUITY FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN EQUITY FUND
The fiscal year ended March 31, 1997, has been a gratifying year for The
Jamestown Equity Fund. For the 12 month period, the total return for the Equity
Fund was 15.27% after expenses. This compared very favorably to the Lipper
Growth Fund Index which was up 12.03% for the same time period. The Standard &
Poor's 500 Index was up 19.82% including the reinvestment of dividends.
Our equity sector allocations were mostly in line with those of the S&P 500 with
slight underweightings and overweightings. The two exceptions to this are the
utility and transportation sectors, in which we were not invested during the
year. During the 12 month period, the outstanding sector was technology
(+35.7%), followed by finance (+30.4%). Other sectors outperforming the S&P 500
were staples, energy, and health care, in that order. Sectors underperforming
the market were transportation, consumer cyclicals, basic industries, and
utilities. The capital goods sector fell just 100 basis points short of matching
the S&P returns.
Looking forward to the following year, we are somewhat cautious on the stock
market. The increase in the Federal Funds rate instituted on March 25 has caused
consternation in the stock market. The good new is that inflation appears to be
well contained at this point in time, although the wage component of the CPI has
been creeping up for the last two years. This slow but steady increase in wages
has been offset, so far, by lower benefit costs, so that overall compensation
has remained stable. If inflation can be in check, the number of increases by
the Fed may be relatively few.
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:
The Jamestown Equity Fund
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
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
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
06/30/96 4.49% 17,097 06/30/96 4.05% 15,397
09/30/96 3.09% 17,626 09/30/96 2.74% 15,819
12/31/96 8.34% 19,095 12/31/96 7.83% 17,057
03/31/97 2.68% 19,607 03/31/97 0.00% 17,057
<CAPTION>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
<S> <C> <C> <C>
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
06/30/96 1.10% 11,038
09/30/96 0.44% 11,086
12/31/96 0.82% 11,178
03/31/97 0.69% 11,255
Past performance is not predictive of future performance.
The Jamestown Equity Fund Average Annual Total Returns
1 Year Since Inception*
15.27% 13.11%
* Initial public offering of shares was December 1, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 23,059,778
=================
At value (Note 1) $ 28,274,888
Investments in repurchase agreements (Note 1) 1,873,000
Cash 624
Receivable for securities sold 1,039,730
Receivable for capital shares sold 1,187
Dividends receivable 32,015
Interest receivable 273
Other assets 2,476
-----------------
TOTAL ASSETS 31,224,193
-----------------
LIABILITIES
Dividends payable 4,252
Payable for capital shares redeemed 15,000
Accrued advisory fees (Note 3) 18,005
Accrued administration fees (Note 3) 5,300
Other accrued expenses 1,388
-----------------
TOTAL LIABILITIES 43,945
-----------------
NET ASSETS $ 31,180,248
=================
Net assets consist of:
Paid-in capital $ 25,447,288
Accumulated net realized gains from security transactions 509,687
Undistributed net investment income 8,163
Net unrealized appreciation on investments 5,215,110
-----------------
Net assets $ 31,180,248
=================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,991,174
=================
Net asset value, offering price and redemption price per share (Note 1) $ 15.66
=================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Dividends $ 359,403
Interest 80,996
----------------
TOTAL INVESTMENT INCOME 440,399
----------------
EXPENSES
Investment advisory fees (Note 3) 160,646
Administration fees (Note 3) 49,129
Custodian fees 8,493
Professional fees 7,258
Registration fees 4,970
Trustees' fees and expenses 5,002
Postage and supplies 2,711
Insurance expense 1,516
Printing of shareholder reports 1,310
Other expenses 914
----------------
TOTAL EXPENSES 241,949
Expenses reimbursed through a directed brokerage arrangement (Note 4) (13,440)
----------------
NET EXPENSES 228,509
----------------
NET INVESTMENT INCOME 211,890
----------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 777,388
Net change in unrealized appreciation/depreciation on investments 2,328,613
----------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS 3,106,001
----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 3,317,891
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
---------- ----------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 211,890 $ 155,881
Net realized gains from security transactions 777,388 567,635
Net change in unrealized appreciation/depreciation
on investments 2,328,613 2,204,131
---------- ----------
Net increase in net assets from operations 3,317,891 2,927,647
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (206,587) (153,763)
From net realized gains from security transactions (521,388) (304,491)
---------- ----------
Decrease in net assets from distributions to shareholders (727,975) (458,254)
---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 11,827,742 7,025,441
Net asset value of shares issued in reinvestment
of distributions to shareholders 671,223 420,203
Payments for shares redeemed (1,765,155) (169,689)
---------- ----------
Net increase in net assets from capital share transactions 10,733,810 7,275,955
---------- ----------
TOTAL INCREASE IN NET ASSETS 13,323,726 9,745,348
NET ASSETS:
Beginning of year 17,856,522 8,111,174
---------- ----------
End of year - (including undistributed net investment
income of $8,163 and $2,860, respectively) $ 31,180,248 $ 17,856,522
---------- ----------
(a) Number of shares:
Sold 788,755 542,324
Reinvested 43,245 31,979
Redeemed (120,237) (13,292)
---------- ----------
Net increase in shares outstanding 711,763 561,011
Shares outstanding, beginning of year 1,279,411 718,400
---------- ----------
Shares outstanding, end of year 1,991,174 1,279,411
========== ==========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years ended March 31, Ended
------------------------------------------------ March 31,
1997 1996 1995 1994 1993 (a)
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $13.96 $11.29 $10.19 $10.18 $10.00
------ ------ ------ ------ -------
Income from investment operations:
Net investment income 0.13 0.15 0.10 0.08 0.04
Net realized and unrealized gains (losses)
on investments 2.00 2.98 1.15 (0.01) 0.18
------ ------ ------ ------ -------
Total from investment operations 2.13 3.13 1.25 0.07 0.22
------ ------ ------ ------ -------
Less distributions:
Dividends from net investment income (0.13) (0.15) (0.12) (0.06) (0.04)
Distributions from net realized gains (0.30) (0.31) (0.03) -- --
------ ------ ------ ------ -------
Total distributions (0.43) (0.46) (0.15) (0.06) (0.04)
------ ------ ------ ------ -------
Net asset value at end of period $15.66 $13.96 $11.29 $10.19 $10.18
====== ====== ====== ====== ======
Total return 15.27% 28.00% 12.33% 0.67% 6.81%(d)
====== ====== ====== ====== ======
Net assets at end of period (000's) $31,180 $17,857 $8,111 $2,811 $1,953
======= ======= ====== ====== ======
Ratio of gross expenses to average net assets 0.98% 1.14% 1.99% 3.16% 3.19%
Ratio of net expenses to average net assets 0.92%(b) 1.01%(b) 1.44%(c) 1.50%(c) 1.50%(c)(d)
Ratio of net investment income to average net assets 0.85% 1.27% 1.18% 0.82% 1.13%(d)
Portfolio turnover rate 44% 54% 48% 92% 54%
Average commission rate per share $0.0688 -- -- -- --
<FN>
(a) Represents the period from the commencement of operations
(December 1, 1992) through March 31, 1993.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
(c) Ratios were determined based on net expenses after the Advisor waived all
or a portion of its advisory fee and/or reimbursed the Fund for operating
expenses.
(d) Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 90.7%
Advertising - 2.7%
16,000 Interpublic Group of Companies, Inc. $ 844,000
------------
Building and Construction - 1.5%
13,000 Foster Wheeler Corporation 459,875
------------
Chemicals - 1.5%
6,900 Air Products & Chemicals, Inc. 468,338
------------
Commercial Banking - 6.3%
15,000 Federal National Mortgage Association 541,875
9,500 First Union Corporation 770,688
12,000 NationsBank Corporation 664,500
------------
1,977,063
------------
Communications - 7.6%
29,000 Alltel Corporation 942,500
24,300 Equifax, Inc. 662,175
2,000 Lucent Technologies, Inc. 105,500
19,000 MCI Communications Corporation 676,875
------------
2,387,050
------------
Computers/Computer Technology Services - 10.0%
21,500 Cabletron Systems (b) 628,875
9,500 Cisco Systems, Inc. (b) 457,187
15,500 Computer Sciences Corporation (b) 957,125
7,700 Intel Corporation 1,071,262
------------
3,114,449
------------
Consumer Products - 14.9%
15,500 Avon Products, Inc. 813,750
9,500 General Electric Company 942,875
4,000 Gillette Company 290,500
9,000 Kimberly-Clark Corporation 894,375
3,000 Procter & Gamble Company 345,000
24,800 Sysco Corporation 846,300
20,500 Whitman Corporation 502,250
------------
4,635,050
------------
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Drugs/Medical Equipment - 8.7%
16,500 Abbott Laboratories $ 926,063
11,000 Merck and Company, Inc. 926,750
12,000 Schering-Plough Corporation 873,000
------------
2,725,813
------------
Durable Goods - 2.8%
15,500 Avnet, Inc. 873,813
------------
Electronics - 1.9%
11,000 Hewlett-Packard Company 585,750
------------
Entertainment - 2.5%
10,500 Walt Disney Company 766,500
------------
Fast Food Restaurants - 2.7%
18,000 McDonald's Corporation 850,500
------------
Fire Systems - 2.9%
16,400 Tyco International Ltd. 902,000
------------
Food Productions - 2.6%
15,000 Conagra, Inc. 813,750
------------
Health Care Centers - 4.4%
30,000 Columbia/HCA Healthcare Corporation 1,008,750
15,000 Manor Care, Inc. 365,625
------------
1,374,375
------------
Hotels - 2.3%
53,000 Choice Hotel International, Inc. (b) 715,500
------------
Insurance - 4.6%
7,000 American International Group 821,625
11,000 Jefferson-Pilot Corporation 598,125
------------
1,419,750
------------
Oil and Gas Drilling - 6.8%
7,500 Amoco Corporation 649,687
18,000 Coastal Corporation 864,000
5,500 Texaco, Inc. 602,250
------------
2,115,937
------------
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Real Estate - 1.6%
35,000 United Dominion Realty Trust $ 511,875
------------
Retail Stores - 2.4%
32,600 AutoZone, Inc. (b) 733,500
------------
Total Common Stocks (Cost $23,059,778) $ 28,274,888
------------
<CAPTION>
Face
Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 6.0%
$ 1,873,000 Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $1,873,273 (Cost $1,873,000)$ 1,873,000
------------
Total Investments and Repurchase Agreements
at Value - 96.7% $ 30,147,888
Other Assets in Excess of Liabilties - 3.3% 1,032,360
------------
Net Assets - 100.0% $ 31,180,248
============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,033,498..
(b) Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Equity Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered 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 and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
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,
which may differ from generally accepted accounting principles.
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 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 revenues and expenses during
the reporting period. Actual results could differ from those estimates.
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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 $23,081,108 as of March 31, 1997:
Gross unrealized appreciation............... $ 5,746,232
Gross unrealized depreciation............... (552,452)
Net unrealized appreciation................. $ 5,193,780
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $19,134,396 and $10,119,785, 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% of its
average daily net assets up to $500 million and .50% of such net assets in
excess of $500 million. Certain trustees and officers of the Trust are also
officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such net assets; and
.15% of 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, postage, supplies, and costs of pricing the Fund's portfolio
securities. Certain officers of the Trust are also officers of CFS.
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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 $13,440 for the year ended March 31, 1997.
<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, 1997, 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, 1997 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, 1997, 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 25, 1997
<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 as of
March 31, 1997
(b) Exhibits:
1. Declaration of Trust*
2. Bylaws*
3. Not Applicable
4. See Exhibits 1 and 2
5. (i) Investment Advisory Agreement for The
Jamestown Equity Fund**
(ii) Investment Advisory Agreement for The
Jamestown Balanced Fund**
(iii) Sub-Advisory Agreement for The Jamestown
Balanced Fund*
(iv) Investment Advisory Agreement for The
Jamestown International Equity Fund**
(v) Sub-Advisory Agreement for The Jamestown
International Equity Fund**
(vi) Investment Advisory Agreement for The
Jamestown Tax Exempt Virginia Fund**
(vii) Investment Advisory Agreements for The
Jamestown Bond Fund and The Jamestown
Short Term Bond Fund*
(viii) Investment Advisory Agreements for the FBP
Contrarian Balanced Fund and the FBP
Contrarian Equity Fund*
(ix) Investment Advisory Agreements for The
Government Street Equity Fund, The
Government Street Bond Fund and The
Alabama Tax Free Bond Fund*
6. Not Applicable
7. Not Applicable
<PAGE>
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 Independent Public Accountants**
12. Not Applicable
13. Not Applicable
14. Not Applicable
15. Plan of Distribution Pursuant to Rule 12b-1**
16. Not Applicable
17. Financial Data Schedules**
18. Rule 18f-3 Plan Adopted With Respect to the
Multiple Class Distribution System*
* 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 May 31, 1997,
of the shares of the Trust:
Number of Record
TITLE OF CLASS HOLDERS
Shares of beneficial interest of
FBP Contrarian Equity Fund 328
Shares of beneficial interest of
FBP Contrarian Balanced Fund 458
<PAGE>
Shares of beneficial interest of
The Government Street Equity Fund 283
Shares of beneficial interest of
The Government Street Bond Fund 148
Shares of beneficial interest of
The Alabama Tax Free Bond Fund 124
Shares of beneficial interest of
The Jamestown Balanced Fund 250
Shares of beneficial interest of
The Jamestown Equity Fund 212
Shares of beneficial interest of
The Jamestown Bond Fund 33
Shares of beneficial interest of
The Jamestown Short Term Bond Fund 13
Shares of beneficial interest of
The Jamestown Tax Exempt Virginia Fund 41
Shares of beneficial interest of
The Jamestown International Equity Fund 180
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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 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),
<PAGE>
that there is reason to believe that the Advisor
ultimately will be entitled to indemnification
hereunder.
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
<PAGE>
benefit of its/their respective successors,
assigns and personal representatives.
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 four series of Williamsburg Investment
Trust: The Jamestown Balanced Fund, The Jamestown Equity Fund,
The Jamestown Tax Exempt Virginia Fund and The Jamestown
International Equity Fund. 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 LB&T, 6620
West Broad Street, Suite 300, Richmond, Virginia 23230.
(1) Austin Brockenbrough III - 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) Henry C. Spalding, Jr. - Executive Vice President
of LB&T.
(a) President of The Jamestown Balanced Fund and
The Jamestown Equity Fund.
(3) William F. Shumadine, Jr. - Senior Vice President
of LB&T.
(a) President of Central Fidelity Bank until
October, 1993.
(4) Ernest H. Stephensen, Jr. - Vice President of
LB&T.
(a) Vice President of The Jamestown Balanced Fund
and The Jamestown Equity Fund.
<PAGE>
Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc.
("LBTSA") is a registered investment advisor providing general
investment advisory services to two series of Williamsburg
Investment Trust, The Jamestown Bond Fund and The Jamestown
Short Term Bond Fund, and subadvisory services to The
Jamestown Balanced Fund, another series of Williamsburg
Investment Trust. LBTSA 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 LBTSA, 6620
West Broad Street, Suite 300, Richmond, Virginia 23230.
(1) Fred T. Tattersall - Managing Director of LBTSA.
(a) A Trustee of Williamsburg Investment Trust
and President of The Jamestown Bond Fund and
The Jamestown Short Term Bond Fund.
(2) Kevin D. Girts - Executive Vice President of
LBTSA.
(3) Craig D. Truitt - Senior Vice President of LBTSA.
(a) Vice President of The Jamestown Bond Fund and
The Jamestown Short Term Bond 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
<PAGE>
and profit sharing plans, other business and institutional
account and individuals. The following list sets forth 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.
(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
<PAGE>
Equity Fund and The Alabama Tax Free
Bond Fund.
(4) Kenneth P. Pulliam - Portfolio Manager of
TLA.
(5) Mary Shannon Hope - Portfolio Manager of TLA.
(6) Timothy S. Healy - Vice President and
Portfolio Manager of TLA.
(a) Vice President of The Alabama Tax
Free Bond Fund.
(7) 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) Not Applicable
(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 the Reigstration 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, 1997.
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.
<PAGE>
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, 1997
John T. Bruce (principal executive
officer)
/s/ Mark J. Seger
- ------------------------- Treasurer (principal July 31, 1997
Mark J. Seger financial and
accounting officer)
Austin Brockenbrough III* Trustee
Charles M. Caravati, Jr.* Trustee
J. Finley Lee, Jr.* Trustee
Richard Mitchell* Trustee
Richard L. Morrill* Trustee
Harris V. Morrissette* Trustee
Fred T. Tattersall* Trustee
Erwin H. Will, Jr* Trustee
Samuel B. Witt III* Trustee
*By: /S/ JOHN F. SPLAIN
John F. Splain
Attorney-in-Fact
July 31, 1997
<PAGE>
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 Agreement for The Jamestown
Equity Fund**
(ii) Investment Advisory Agreement for The Jamestown
Balanced Fund**
(iii) Sub-Advisory Agreement for The Jamestown
Balanced Fund**
(iv) Investment Advisory Agreement for The
Jamestown International Equity Fund**
(v) Sub-Advisory Agreement for The Jamestown
International Equity Fund**
(vi) Investment Advisory Agreement for The
Jamestown Tax Exempt Virginia Fund**
(vii) Investment Advisory Agreements for The Jamestown
Bond Fund an The Jamestown Short Term Bond Fund*
(viii) Investment Advisory Agreements for the FBP
Contrarian Balanced Fund and the FBP Contrarian
Equity Fund*
(ix) Investment Advisory Agreements for The Government
Street Equity Fund, The Government Street Bond Fund
and The Alabama Tax Free Bond 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 Independent Public Accountants**
12 Not Applicable
13 Not Applicable
14 Not Applicable
<PAGE>
15 Plan of Distribution Pursuant to Rule 12b-1**
16 Not Applicable
17 Financial Data Schedules**
18 Rule 18f-3 Plan Adopted With Respect to the
Multiple Class Distribution System*
* Previously filed as Exhibit to Registration
Statement on Form N-1A
** Filed herewith
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of February 28, 1997, by and between
WILLIAMSBURG INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), on
behalf of THE JAMESTOWN EQUITY FUND, and LOWE BROCKENBROUGH & TATTERSALL, INC.,
a Virginia corporation (the "Adviser"), registered as an investment adviser
under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, 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 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 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 Adviser
with copies properly certified or authenticated of each of
the following:
(a) The Trust's Declaration of Trust, as filed with the
Commonwealth 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, 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;
<PAGE>
(e) The Fund's Prospectus (such Prospectus, as presently in effect
and all amendments and supplements thereto are herein called
the "Prospectus").
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 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 of 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 SEC 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 and
other services, or who recommend or sell Fund shares,
and (ii) brokers who are affiliated with the Trust or
the Adviser, PROVIDED, HOWEVER, that in no 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.
- 2 -
<PAGE>
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 Fund.
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.
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 1940 Act that are not maintained by others
on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. 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 the entire cost of the promotion and sale of
Fund shares.
Notwithstanding the foregoing, the Fund 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;
(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;
- 3 -
<PAGE>
(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 Trustees desire to limit Fund expenses to 2%
of average daily net assets. The Adviser agrees to reimburse the Fund
for any excess expenses incurred over 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 Fund pursuant to paragraph 7,
below.
7. COMPENSATION. For the services provided and the expenses assumed by the
Adviser pursuant to this Agreement, the Fund will pay the Adviser and
the Adviser will accept as full compensation an investment advisory
fee, based upon the daily average net assets of the Fund, computed at
the end of each month and payable within five (5) business days
thereafter, according to the following schedule:
NET ASSETS ANNUAL RATE
First $500 million 0.65%
All over $500 million 0.55%
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,
excepta 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,
includingbut 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 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
- 4 -
<PAGE>
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) willful 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
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 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
- 5 -
<PAGE>
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 willful 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
indemnification 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.
9. DURATION AND TERMINATION. This Agreement shall be effective on the date
hereof and, unless sooner terminated as provided herein, shall continue
in effect for two years. Thereafter, this Agreement shall be renewable
for successive periods of one year each, PROVIDED such continuance is
specifically approved annually:
(a) By a vote of the 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
- 6 -
<PAGE>
(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 this change, waiver, discharge or
termination is sought. No material amendment of this
Agreement shall be effective until approved by a vote of the
holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
11. SHAREHOLDER LIABILITY. The Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set
forth in the Agreement and Declaration of Trust of the
Trust, which is on file with the Secretary of the
Commonwealth of Massachusetts, 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
Advisor agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Trust.
12. 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.
13. APPLICABLE LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the
Commonwealth of Virginia.
- 7 -
<PAGE>
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/ JOHN T. BRUCE
Title: SECRETARY Title: CHAIRMAN
ATTEST: LOWE BROCKENBROUGH & TATTERSALL, INC.
By:______________________ By:/S/ AUSTIN BROCKENBROUGH, III
Title:___________________ Title: PRESIDENT
- 8 -
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of February 28, 1997, by and between
WILLIAMSBURG INVESTMENT TRUST, a Massachusetts business trust (the "Trust"),
with respect to THE JAMESTOWN BALANCED FUND, and LOWE BROCKENBROUGH &
TATTERSALL, INC., a Virginia corporation (the "Adviser"), registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, 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 Balanced 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 Balanced 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 Adviser
with copies properly certified or authenticated of each of
the following:
(a) The Trust's Declaration of Trust, as filed with the
Commonwealth 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, 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;
<PAGE>
(e) The Fund's Prospectus (such Prospectus, as presently in effect
and all amendments and supplements thereto are herein called
the "Prospectus").
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 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 of 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 SEC 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 and
other services, or who recommend or sell Fund shares,
and (ii) brokers who are affiliated with the Trust or
the Adviser, PROVIDED, HOWEVER, that in no 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.
- 2 -
<PAGE>
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 Fund.
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.
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 1940 Act that are not maintained by others
on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. 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 the entire cost of the promotion and sale of
Fund shares.
Notwithstanding the foregoing, the Fund 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;
(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;
- 3 -
<PAGE>
(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 Trustees desire to limit Fund expenses to 2%
of average daily net assets. The Adviser agrees to reimburse the Fund
for any excess expenses incurred over 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 Fund pursuant to paragraph 7,
below.
7. COMPENSATION. For the services provided and the expenses assumed by the
Adviser pursuant to this Agreement, the Fund will pay the Adviser and
the Adviser will accept as full compensation an investment advisory
fee, based upon the daily average net assets of the Fund, computed at
the end of each month and payable within five (5) business days
thereafter, according to the following schedule:
NET ASSETS ANNUAL RATE
First $250 million 0.65%
Second $250 million 0.60%
All over $500 million 0.55%
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 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
- 4 -
<PAGE>
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) willful 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
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 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
- 5 -
<PAGE>
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 willful 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
indemnification 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.
9. DURATION AND TERMINATION. This Agreement shall be effective on the date
hereof and, unless sooner terminated as provided herein, shall continue
in effect for two years. Thereafter, this Agreement shall be renewable
for successive periods of one year each, PROVIDED such continuance is
specifically approved annually:
(a) By a vote of the 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
- 6 -
<PAGE>
(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 this change, waiver, discharge or
termination is sought. No material amendment of this
Agreement shall be effective until approved by a vote of the
holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
11. SHAREHOLDER LIABILITY. The Advisor is hereby expressly put
---------------------
on notice of the limitation of shareholder liability as set
forth in the Agreement and Declaration of Trust of the
Trust, which is on file with the Secretary of the
Commonwealth of Massachusetts, 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
Advisor agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Trust.
12. 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.
13. APPLICABLE LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the
Commonwealth of Virginia.
- 7 -
<PAGE>
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/ JOHN T. BRUCE
Title: SECRETARY Title: CHAIRMAN
ATTEST: LOWE BROCKENBROUGH & TATTERSALL, INC.
By:______________________ By:/S/ AUSTIN BROCKENBROUGH, III
Title:___________________ Title: PRESIDENT
- 8 -
SUB-ADVISORY AGREEMENT
Lowe Brockenbrough & Tattersall
Strategic Advisers, Inc.
6620 West Broad Street, Suite 300
Richmond, Virginia 23230-1720
Gentlemen:
Williamsburg Investment Trust (the "Trust") is an 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
assets, subject to the liabilities, allocated to that fund. Each fund has
separate investment objectives and policies. The Jamestown Balanced Fund (the
"Fund") has been established as a series of the Trust.
Lowe Brockenbrough & Tattersall, Inc. (the "Advisor") acts as the
investment manager for the Fund pursuant to the terms of an Investment Advisory
Agreement. The Advisor is responsible for the coordination of investment of the
Fund's assets in portfolio securities. The relative allocation of the Fund's
portfolio between equity securities, fixed-income securities and money market
instruments and the specific portfolio purchases and sales for the portion of
the Fund's portfolio invested in equity securities are to be made by the
Advisor. Specific portfolio purchases and sales for the portion of the Fund's
portfolio invested in fixed-income securities may be made by the
<PAGE>
advisory organizations recommended by the Advisor and approved by the Board
of Trustees and shareholders of the Trust.
1. APPOINTMENT AS SUB-ADVISOR. The Trust being duly authorized hereby
appoints and employs Lowe Brockenbrough & Tattersall Strategic Advisors, Inc.
(the "Sub-Advisor") as the fixed income portfolio manager of the portion of the
Fund's portfolio invested in fixed-income securities, on the terms and
conditions set forth herein.
2. ACCEPTANCE OF APPOINTMENT; STANDARD OF PERFORMANCE. The Sub-Advisor
accepts the appointment as the fixed income 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-ADVISOR. The Sub- Advisor is hereby
employed and authorized to select fixed-income securities for investment by the
Fund, to purchase and sell fixed-income 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-Advisor shall be
subject to such investment restrictions as are set forth in the Act and the
rules thereunder, 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-Advisor, the investment
objectives, policies and restrictions of the Fund
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<PAGE>
furnished pursuant to paragraph 4, 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
restriction, limitation, objective, policy or instruction described in the
previous sentence. At the Trust's reasonable request, the Sub-Advisor will
consult with the Advisor 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-Advisor with the statement of the investment objectives, policies and
restrictions applicable to the Fund as contained in the Trust's registration
statement 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-Advisor with such further information concerning the investment
objectives, policies and restrictions applicable thereto as the Sub-Advisor may
from time to time reasonably request. The Trust retains the right, on written
notice to the Sub-Advisor from the Trust or the Advisor, 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 Star Bank, N.A. 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
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<PAGE>
from the Fund, and the Sub-Advisor shall not have possession or custody
thereof. The Sub-Advisor shall advise the Custodian and confirm in writing to
the Trust and to the Advisor all investment orders for the Fund placed by it
with brokers and dealers. The Sub-Advisor shall issue to the Custodian such
instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Sub-Advisor. It shall be the responsibility of the
Sub-Advisor to take appropriate action if the Custodian fails to confirm in
writing proper execution of the instructions.
6. ALLOCATION OF BROKERAGE. The Sub-Advisor 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
Sub-Advisor will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when the Sub-Advisor
believes two or more brokers or dealers are comparable in price and execution,
the Sub-Advisor may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund shares, and
(ii) brokers who are affiliated with the Trust or the Sub- Adviser, PROVIDED,
HOWEVER, that in no instance will portfolio securities be purchased from or sold
to the Sub-Adviser or any affiliated person of the Sub-Adviser in principal
transactions.
For each fiscal quarter of the Fund, the Sub-Advisor shall prepare and
render reports to the Advisor and the Trust's Board
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<PAGE>
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.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor 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 Sub-Advisor 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 1940 Act that are not maintained by others on
behalf of the Trust.
8. REPORTS TO THE SUB-ADVISOR. The Trust will provide the Sub-Advisor with
such periodic reports concerning the status of the Fund as the Sub-Advisor may
reasonably request.
9. FEES FOR SERVICES. For the services provided to the Fund, the Advisor
(not the Fund) shall pay the Sub-Advisor a fee equal to $5,000 per year. The
Sub-Advisor's fees shall be payable quarterly within ten days following the end
of each fiscal quarter of the Trust.
Pursuant to the provisions of the Investment Advisory Agreement between the
Trust and the Advisor, the Advisor is solely responsible for the payment of fees
to the Sub-Advisor,
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<PAGE>
and the Sub-Advisor agrees to seek payment of the Sub-Advisor's
fees solely from the Advisor.
10. OTHER INVESTMENT ACTIVITIES OF THE SUB-ADVISOR. The advisory services
furnished by the Sub-Advisor hereunder are not to be deemed exclusive, and the
Sub-Advisor shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired.
11. CERTIFICATE OF AUTHORITY. The Trust, the Advisor and the Sub-Advisor
shall furnish to each other from time to time certified 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
Advisor and/or the Sub-Advisor.
12. LIMITATION OF LIABILITY. The Sub-Advisor shall not be liable for any
error of judgment, mistake of law or any loss resulting from 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-Advisor's willful
misfeasance, bad faith or gross negligence, a violation of the standard of care
established by and applicable to the Sub-Advisor in its actions under this
Agreement or breach of its duties or its obligations
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<PAGE>
hereunder. Nothing in this paragraph 12 shall be construed in a manner
inconsistent with sections 17(h) and (i) of the Act.
13. ASSIGNMENT. No assignment of this Agreement shall be made by the
Sub-Advisor, and this Agreement shall terminate automatically in the event of
such assignment. The Sub-Advisor shall notify the 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-Advisor.
14. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST. The Trust
represents, warrants and agrees that:
A. The Sub-Advisor 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-Advisor 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- Advisor 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.
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<PAGE>
15. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SUB- ADVISOR. The
Sub-Advisor represents, warrants and agrees that:
A. The Sub-Advisor is registered as an "investment adviser" under the
Investment Advisers Act of 1940.
B. The Sub-Advisor will complete such reports concerning purchases or
sales of securities on behalf of the Fund as the Advisor or the Trust may from
time to time require to ensure compliance with the Act, the Internal Revenue
Code and applicable state securities laws.
C. The Sub-Advisor 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 each calendar quarter of each year while this
Agreement is in effect, the president or a vice president of the Sub-Advisor
shall certify to the Trust that the Sub-Advisor has complied with the
requirements of Rule 17j-1 during the previous year and that there has been no
violation of the Sub-Advisor'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-Advisor shall submit to the Trust the
reports required to be made to the Sub-Advisor by Rule 17j-1(c)(1).
D. The Sub-Advisor 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 Advisor.
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<PAGE>
E. The Sub-Advisor will immediately notify the Trust and the Advisor
of the occurrence of any event which would disqualify the Sub-Advisor from
serving as an investment advisor of an investment company pursuant to
Section 9(a) of the Act or otherwise.
16. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Sub-Advisor 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.
17. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
of its execution and shall remain in force for a period of two years, 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 Advisor or the Sub- Advisor, 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.
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<PAGE>
18. TERMINATION. This Agreement may be terminated by the Trust, by the
Advisor or by the Sub-Advisor, without the payment of any penalty, immediately
upon written notice to the other in the event of any 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.
19. SHAREHOLDER LIABILITY. The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the Agreement
and Declaration of Trust of the Trust, which is on file with the Secretary of
the Commonwealth of Massachusetts, 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-Advisor agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual shareholder of the
Fund, nor from the Trustees or any individual Trustee of the Trust.
20. DEFINITIONS. As used in paragraphs 13 and 17 of this Agreement, the
terms "assignment," "interested person" and "vote of a majority of the
outstanding voting majorities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
10
<PAGE>
21. 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 Commonwealth of Virginia.
LOWE BROCKENBROUGH & WILLIAMSBURG INVESTMENT TRUST
TATTERSALL, INC.
By:/S/ AUSTIN BROCKENBROUGH, III By:/S/ JOHN T. BRUCE
Title: PRESIDENT Title:CHAIRMAN
Date: February 28, 1997 Date: February 28, 1997
ACCEPTANCE
The foregoing Agreement is hereby accepted.
LOWE BROCKENBROUGH &
TATTERSALL STRATEGIC
ADVISORS, INC.
By:/S/ FRED T. TATTERSALL
Title:MANAGING DIRECTOR
Date: February 28, 1997
11
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of February 28, 1997, by and between
WILLIAMSBURG INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), on
behalf of THE JAMESTOWN INTERNATIONAL EQUITY FUND, and LOWE BROCKENBROUGH &
TATTERSALL, INC., a Virginia corporation (the "Adviser"), registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, 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 Adviser
with copies properly certified or authenticated of each of
the following:
(a) The Trust's Declaration of Trust, as filed with the
Commonwealth 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 By-Laws (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, 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;
willburg\jaminteq.prx
<PAGE>
(e) The Fund's Prospectus (such Prospectus, as presently in effect
and all amendments and supplements thereto are herein called
the "Prospectus").
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 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 of 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 SEC 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 and
other services, or who recommend or sell Fund shares,
and (ii) brokers who are affiliated with the Trust or
the Adviser, PROVIDED, HOWEVER, that in no 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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<PAGE>
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 Fund.
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.
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 1940 Act that are not maintained by others
on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. 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 the entire cost of the promotion and sale of
Fund shares.
Notwithstanding the foregoing, the Fund 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 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;
(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;
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<PAGE>
(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 Trustees desire to limit Fund expenses to 2%
of average daily net assets. The Adviser agrees to reimburse the Fund
for any excess expenses incurred over 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 Fund 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 1.00% 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 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 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
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<PAGE>
for services; or (ii) willful 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
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 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
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<PAGE>
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 willful 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
indemnification 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.
9. DURATION AND TERMINATION. This Agreement shall be effective on the date
hereof and, unless sooner terminated as provided herein, shall continue
in effect for two years. Thereafter, this Agreement shall be renewable
for successive periods of one year each, PROVIDED such continuance is
specifically approved annually:
(a) By a vote of the 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.
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<PAGE>
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 this change, waiver, discharge or
termination is sought. No material amendment of this
Agreement shall be effective until approved by a vote of the
holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
11. SHAREHOLDER LIABILITY. The Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set
forth in the Agreement and Declaration of Trust of the
Trust, which is on file with the Secretary of the
Commonwealth of Massachusetts, 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
Advisor agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Trust.
12. 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.
13. APPLICABLE LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the
Commonwealth of Virginia.
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<PAGE>
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/ JOHN T. BRUCE
Title: SECRETARY Title: CHAIRMAN
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 an 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 may be made by advisory
organizations recommended by the Adviser and approved by the Board of Trustees
of the Trust.
1. APPOINTMENT AS SUB-ADVISER. The Trust being duly authorized hereby
appoints and employs Oechsle International Advisors, L.P. (the "Sub-Adviser") as
the discretionary portfolio
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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 restriction, limitation, objective, policy or instruction
described in the previous sentence. The
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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
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all investment orders for 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
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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 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.
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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 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 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
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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 copies of the
resolutions of their Board of Trustees or
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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
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shall notify the 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 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
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in Schedule 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).
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.
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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.
18. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
of its execution and, unless sooner terminated as provided herein, shall remain
in force for a period of two years, and from year to year thereafter but only so
long as such continuance is specifically approved at least annually by
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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, which is on file with the Secretary of the
Commonwealth of Massachusetts, 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 the Fund, nor
from the Trustees or any individual Trustee of the Trust.
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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 Commonwealth of Virginia.
LOWE BROCKENBROUGH & WILLIAMSBURG INVESTMENT TRUST
TATTERSALL, INC.
By:/S/ AUSTIN BROCKENBROUGH, III By:/S/ JOHN T. BRUCE
Title:PRESIDENT Title: CHAIRMAN
Date: February 28, 1997 Date: February 28, 1997
ACCEPTANCE
The foregoing Agreement is hereby accepted.
OECHSLE INTERNATIONAL
ADVISORS, L.P.
By:/S/ L.S. ROCHE
Title: GENERAL PARTNER
Date: February 28, 1997
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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.
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B. Shall show the nature of the services or benefits made
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 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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INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of February 28, 1997, by and between
WILLIAMSBURG INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), on
behalf of THE JAMESTOWN TAX EXEMPT VIRGINIA FUND, and LOWE BROCKENBROUGH &
TATTERSALL, INC., a Virginia corporation (the "Adviser"), registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, 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 Tax Exempt Virginia 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 Tax Exempt Virginia
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 Adviser
with copies properly certified or authenticated of each of
the following:
(a) The Trust's Declaration of Trust, as filed with the
Commonwealth 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, 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;
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(e) The Fund's Prospectus (such Prospectus, as presently in effect
and all amendments and supplements thereto are herein called
the "Prospectus").
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 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 of 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 SEC 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 brokers and
dealers who provide the Fund with research advice and
other valuable services;
(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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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.
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 1940 Act that are not maintained by others on behalf of the
Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. 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 the entire cost of the promotion and sale of
Fund shares.
Notwithstanding the foregoing, the Fund 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;
(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; and
(k) The investment advisory fee payable to the Adviser, as
provided in paragraph 7 herein.
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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, based upon the daily average net assets of the Fund, computed at
the end of each month and payable within five (5) business days
thereafter, according to the following schedule:
NET ASSETS ANNUAL RATE
On the first $250 million 0.40%
On the next $250 million 0.35%
On all assets over $500 million 0.30%
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 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) willful
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
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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
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 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 willful 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
- 5 -
<PAGE>
the rights to indemnification 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.
9. DURATION AND TERMINATION. This Agreement shall be effective on the date
hereof and, unless sooner terminated as provided herein, shall continue
in effect for two years. Thereafter, this Agreement shall be renewable
for successive periods of one year each, PROVIDED such continuance is
specifically approved annually:
(a) By a vote of the 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).
- 6 -
<PAGE>
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 this change, waiver, discharge or
termination is sought. No material amendment of this
Agreement shall be effective until approved by a vote of the
holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
11. SHAREHOLDER LIABILITY. The Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set
forth in the Agreement and Declaration of Trust of the
Trust, which is on file with the Secretary of the
Commonwealth of Massachusetts, 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
Advisor agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Trust.
12. 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.
13. APPLICABLE LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the
Commonwealth of Virginia.
- 7 -
<PAGE>
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/ JOHN T. BRUCE
Title: SECRETARY Title: CHAIRMAN
ATTEST: LOWE, BROCKENBROUGH & TATTERSALL, INC.
By:______________________ By:/S/ AUSTIN BROCKENBROUGH, III
Title:___________________ Title: PRESIDENT
- 8 -
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 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, The Jamestown International Equity 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 25, 1997 on the financial statements and financial highlights. Such
financial statements and financial highlights appear in each series' respective
1997 Annual Report to Shareholders which accompanies the Statement of Additional
Information.
/s/Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 29, 1997
<PAGE>
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1 FOR
RETAIL SHARES OF THE JAMESTOWN BOND FUND
THE JAMESTOWN SHORT TERM BOND FUND
WHEREAS, Williamsburg Investment Trust (the "Trust"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts, is
an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which are divided into
separate series of Shares; and
WHEREAS, the Jamestown Bond Fund and The Jamestown Short
Term Bond Fund (the "Funds") are series of the Trust; and
WHEREAS, the Trust issues shares of the Funds in Classes
(one of which may be designated as Retail Shares); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Rule 12b-1 Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit each Fund and the holders of
its Consultant Shares, have approved this Plan by votes cast in person at a
meeting called for the purpose of voting hereon and on any agreements related
hereto;
NOW, THEREFORE, the Trust hereby adopts this Plan for the Retail Shares
of the Funds in accordance with Rule 12b-1 under the 1940 Act, on the following
terms and conditions:
1. DISTRIBUTION ACTIVITIES. Subject to the supervision of the Trustees
of the Trust, the Funds may, directly or indirectly, engage in any activities
related to the distribution of Retail Shares, which activities may include, but
are not limited to, the following: (a) payments to securities dealers and others
who are engaged in the sale of Retail Shares and who may be advising
shareholders of the Funds regarding the purchase, sale or retention of Retail
Shares; (b) expenses of maintaining personnel (including personnel of
organizations with which the Funds have entered into agreements related to this
Plan) who engage in or support distribution of Retail Shares or who render
shareholder support services not otherwise provided by the Funds' transfer
agent, including, but not limited to, office space and equipment, telephone
facilities and expenses, answering routine inquiries regarding the Funds,
processing shareholder transactions, and providing such other shareholder
services as the Funds may reasonably request; (c) formulating and implementing
of marketing and promotional activities, including, but not limited to, direct
mail promotions and television, radio, newspaper, magazine and
- 19 -
<PAGE>
other mass media advertising; (d) preparing, printing and distributing sales
literature; (e)preparing, printing and distributing prospectuses and statements
of additional information and reports of the Funds for recipients other than
existing shareholders of the Funds; and (f) obtaining such information, analyses
and reports with respect to marketing and promotional activities as the Funds
may, from time to time, deem advisable. The Funds are authorized to engage in
the activities listed above, and in any other activities related to the
distribution of Retail Shares, either directly or through other persons with
which the Trust have entered into agreements related to this Plan.
2. MAXIMUM EXPENDITURES. The expenditures to be made pursuant to this
Plan and the basis upon which payment of such expenditures will be made shall be
determined by the Trustees of the Trust, but in no event may such expenditures
exceed in any fiscal year an amount calculated at the rate of .10% of the
average daily net asset value of the Retail Shares of any Fund. Such payments
for distribution activities may be made directly by the Retail Shares or the
Trust's investment adviser may incur such expenses and obtain reimbursement from
the Retail Shares.
3. TERM AND TERMINATION. This Plan shall become effective on the date
hereof. Unless terminated as herein provided, this Plan shall continue in effect
for one year from the date hereof and shall continue in effect for successive
periods of one year thereafter, but only so long as each such continuance is
specifically approved by votes of a majority of both (i) the Trustees of the
Trust and (ii) the Rule 12b-1 Trustees, cast in person at a meeting called for
the purpose of voting on such approval. This Plan may be terminated with respect
to any Fund at any time by vote of a majority of the Rule 12b-1 Trustees or by
vote of a majority (as defined in the 1940 Act) of the outstanding Retail Shares
of such Series of the Trust.
4. AMENDMENTS. This Plan may not be amended with respect to any Fund to
increase materially the amount of expenditures provided for in Section 2 hereof
unless such amendment is approved by a vote of the majority (as defined in the
1940 Act) of the outstanding Retail Shares of such Fund, and no material
amendment to this Plan shall be made unless approved in the manner provided for
annual renewal of this Plan in Section 3 hereof.
5. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in effect,
the selection and nomination of Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
- 20 -
<PAGE>
6. QUARTERLY REPORTS. The Treasurer of the Trust shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to this Plan and any related agreement, the
purposes for which such expenditures were made and the allocation of such
expenditures as provided for in Section 7.
7. ALLOCATING EXPENDITURES BETWEEN CLASSES. Only distribution
expenditures properly attributable to the sale of Consultant Shares may be used
to support the distribution fee charged to shareholders of such class of Shares.
For this purpose, Consultant Shares issued upon reinvestment of dividends or
distributions will not be considered sales.
8. RECORDKEEPING. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant to Section 6 hereof, for a
period of not less than six years from the date of this Plan, the agreements or
such reports, as the case may be, the first two years in an easily accessible
place.
9. LIMITATION OF LIABILITY. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of the Commonwealth of
Massachusetts and notice is hereby given that this Plan is executed on behalf of
the Trustees of the Trust as trustees and not individually and that the
obligations of this instrument are not binding upon the Trustees or shareholders
of the Trust individually but are binding only upon the assets and property of
the Trust.
IN WITNESS WHEREOF, the Trust has caused this Plan to be executed as of
the date set forth below.
Dated: July 31, 1997, 1997
Attest:
/s/ John F. Splain By: /s/ John T. Bruce
- -------------------------- ---------------------
Secretary Chairman
<PAGE>
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<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
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<INVESTMENTS-AT-VALUE> 16,628,159
<RECEIVABLES> 186,390
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 874
<TOTAL-ASSETS> 16,815,423
<PAYABLE-FOR-SECURITIES> 440,501
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34,654
<TOTAL-LIABILITIES> 475,155
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,012,026
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<SHARES-COMMON-PRIOR> 639,722
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 161,939
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,164,995
<NET-ASSETS> 16,340,268
<DIVIDEND-INCOME> 215,221
<INTEREST-INCOME> 128,149
<OTHER-INCOME> 0
<EXPENSES-NET> 153,106
<NET-INVESTMENT-INCOME> 190,264
<REALIZED-GAINS-CURRENT> 320,296
<APPREC-INCREASE-CURRENT> 1,419,505
<NET-CHANGE-FROM-OPS> 1,930,065
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 190,839
<DISTRIBUTIONS-OF-GAINS> 303,199
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 467,711
<NUMBER-OF-SHARES-REDEEMED> 118,787
<SHARES-REINVESTED> 27,437
<NET-CHANGE-IN-ASSETS> 7,250,354
<ACCUMULATED-NII-PRIOR> 1,883
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<PER-SHARE-NII> .22
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 31,066,301
<INVESTMENTS-AT-VALUE> 40,636,245
<RECEIVABLES> 303,187
<ASSETS-OTHER> 1,808
<OTHER-ITEMS-ASSETS> 2
<TOTAL-ASSETS> 40,941,242
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 86,890
<TOTAL-LIABILITIES> 86,890
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,527,779
<SHARES-COMMON-STOCK> 2,573,969
<SHARES-COMMON-PRIOR> 2,397,993
<ACCUMULATED-NII-CURRENT> 7,701
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 684,058
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,634,814
<NET-ASSETS> 40,854,352
<DIVIDEND-INCOME> 488,130
<INTEREST-INCOME> 977,544
<OTHER-INCOME> 0
<EXPENSES-NET> 423,163
<NET-INVESTMENT-INCOME> 1,042,511
<REALIZED-GAINS-CURRENT> 1,428,438
<APPREC-INCREASE-CURRENT> 2,379,725
<NET-CHANGE-FROM-OPS> 4,850,674
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,041,994
<DISTRIBUTIONS-OF-GAINS> 1,212,659
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 346,188
<NUMBER-OF-SHARES-REDEEMED> 310,312
<SHARES-REINVESTED> 140,100
<NET-CHANGE-IN-ASSETS> 5,213,621
<ACCUMULATED-NII-PRIOR> 7,184
<ACCUMULATED-GAINS-PRIOR> 468,279
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 293,819
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<GROSS-EXPENSE> 423,163
<AVERAGE-NET-ASSETS> 39,268,475
<PER-SHARE-NAV-BEGIN> 14.86
<PER-SHARE-NII> .42
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<AVG-DEBT-PER-SHARE> 0
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<SERIES>
<NUMBER> 10
<NAME> THE ALABAMA TAX FREE BOND FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 16,395,277
<INVESTMENTS-AT-VALUE> 16,579,721
<RECEIVABLES> 249,289
<ASSETS-OTHER> 444
<OTHER-ITEMS-ASSETS> 20
<TOTAL-ASSETS> 16,829,474
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,816
<TOTAL-LIABILITIES> 28,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,816,229
<SHARES-COMMON-STOCK> 1,649,601
<SHARES-COMMON-PRIOR> 1,513,539
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (200,015)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,444
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 795,132
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<EXPENSES-NET> 106,776
<NET-INVESTMENT-INCOME> 688,356
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<APPREC-INCREASE-CURRENT> (76,770)
<NET-CHANGE-FROM-OPS> 617,741
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 688,356
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<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (206,170)
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<PER-SHARE-NII> .43
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<PERIOD-END> MAR-31-1997
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<PAID-IN-CAPITAL-COMMON> 34,220,612
<SHARES-COMMON-STOCK> 1,523,001
<SHARES-COMMON-PRIOR> 1,408,431
<ACCUMULATED-NII-CURRENT> 12,022
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,252,065
<NET-ASSETS> 49,628,951
<DIVIDEND-INCOME> 820,461
<INTEREST-INCOME> 125,441
<OTHER-INCOME> 0
<EXPENSES-NET> 409,480
<NET-INVESTMENT-INCOME> 536,422
<REALIZED-GAINS-CURRENT> 2,262,399
<APPREC-INCREASE-CURRENT> 4,313,961
<NET-CHANGE-FROM-OPS> 7,112,782
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 526,528
<DISTRIBUTIONS-OF-GAINS> 1,910,988
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<NET-CHANGE-IN-ASSETS> 8,208,128
<ACCUMULATED-NII-PRIOR> 2,128
<ACCUMULATED-GAINS-PRIOR> 792,841
<OVERDISTRIB-NII-PRIOR> 0
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<PER-SHARE-NII> .37
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<S> <C>
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<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 29,512,442
<INVESTMENTS-AT-VALUE> 28,992,563
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<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82,064
<TOTAL-LIABILITIES> 82,064
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,348,441
<SHARES-COMMON-STOCK> 1,438,620
<SHARES-COMMON-PRIOR> 1,376,329
<ACCUMULATED-NII-CURRENT> 11,727
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (397,824)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (519,879)
<NET-ASSETS> 29,442,465
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,123,021
<OTHER-INCOME> 0
<EXPENSES-NET> 221,792
<NET-INVESTMENT-INCOME> 1,901,229
<REALIZED-GAINS-CURRENT> (201,643)
<APPREC-INCREASE-CURRENT> (362,072)
<NET-CHANGE-FROM-OPS> 1,337,514
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,892,341
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170,003
<NUMBER-OF-SHARES-REDEEMED> 188,067
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