PROSPECTUS
December 31, 1997
THE DAVENPORT EQUITY FUND
A NO-LOAD FUND
The investment objective of The Davenport Equity Fund is long term growth of
capital through investment in a diversified portfolio of common stocks. Current
income is incidental to this objective and may not be significant.
INVESTMENT ADVISOR
Davenport & Company LLC
Richmond, Virginia
The Davenport 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 December 31, 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
INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS.................................................... 4
HOW TO PURCHASE SHARES....................................................... 7
HOW TO REDEEM SHARES......................................................... 8
HOW NET ASSET VALUE IS DETERMINED............................................10
MANAGEMENT OF THE FUND.......................................................10
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION........................13
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.
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PROSPECTUS SUMMARY
THE FUND. The Davenport 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." It represents a separate
mutual fund with its own investment objective and policies. 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 OBJECTIVE. The Fund's investment objective is long term growth of
capital through investment in a diversified portfolio of common stocks. Current
income is incidental to this objective and may not be significant.
INVESTMENT APPROACH. Equity investments are made primarily for growth with
investment decisions based upon fundamental factors specific to individual
companies and sector fundamentals specific to individual industries. (See
"Investment Objective, Investment Policies and Risk Considerations.")
INVESTMENT ADVISOR. Davenport & Company LLC (the "Advisor") serves as investment
advisor to the Fund. For its services, the Advisor receives compensation at the
annual rate of 0.75% of the average daily net assets of the Fund. (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 $10,000 ($2,000 for
tax-deferred retirement plans). Subsequent investments in the Fund 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 the
Fund. 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.")
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SYNOPSIS OF COSTS AND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average net assets)
Investment Advisory Fees 0.75%
Administrator's Fees 0.20%
Other Expenses 0.20%
-----
Total Fund Operating Expense 1.15%
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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
------ -------
$12 $37
The purpose of the foregoing tables is to assist investors in the Fund in
understanding the various costs and expense 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. 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.
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INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
The investment objective of the Fund is long term growth of capital through
investment in a well-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 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.
EQUITY SELECTION. Under normal market conditions, the Fund will be primarily
invested (i.e., at least 65% of its total assets) in common stocks, which by
definition entail risk of loss of principal. The Fund's investments are made
primarily for long term growth of capital. Selection of equity securities is
made on the basis of several criteria, including, among other things:
1. The price-earnings ratio;
2. The rate of earnings growth;
3. The depth of management;
4. The company's past financial stability;
5. The company's present and projected position within its
industry; and
6. The dividend record.
Selection of equity securities is made by the Investment Policy Committee and
the portfolio manager. The Investment Policy Committee is comprised of five
individuals who are responsible for the formalized investment approach upon
which the Advisor's Asset Management division is based. Committee members and
the portfolio manager meet formally on a weekly basis. Decisions to buy or sell
a security require a majority vote of the Committee. The Committee's approach is
to insist on value in every stock purchased, to control risk through
diversification, and to establish price targets at the time a specific stock is
purchased.
Although the Fund invests primarily in common stocks, the Fund may also invest a
portion of its assets in straight preferred stocks, convertible preferred
stocks, convertible bonds and warrants. The Fund may invest in preferred stocks
and convertible bonds which are rated at the time of purchase in the
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four highest grades assigned by Moody's Investors Service, Inc. (Aaa, Aa, A or
Baa) or Standard & Poor's Rating Group (AAA, AA, A or BBB) or unrated securities
determined by the Advisor to be of comparable quality. Preferred stocks and
bonds rated Baa or BBB have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to pay principal and interest or to pay the preferred stock obligations than is
the case with higher grade securities. Subsequent to its purchase by the Fund, a
security's rating may be reduced below Baa or BBB and the Advisor will sell such
security, subject to market conditions and the Advisor's assessment of the most
opportune time for sale.
The Fund may from time to time invest a portion of its assets in small,
unseasoned companies. While smaller companies generally have potential for rapid
growth, they often involve higher risks because they lack the management
experience, financial resources, product diversification and competitive
strengths of larger corporations. In addition, in many instances, the securities
of smaller companies are traded only over-the-counter or on a regional
securities exchange, and the frequency and volume of their trading is
substantially less than is typical of larger companies. Therefore, the
securities of smaller companies may be subject to wider price fluctuations. When
making large sales, the Fund may have to sell portfolio holdings at discounts
from quoted prices or may have to make a series of small sales over an extended
period of time.
Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Advisor. As a result, the return and net asset value
of the Fund will fluctuate. Securities in the Fund's portfolio may not increase
as much as the market as a whole and some undervalued securities may continue to
be undervalued for long periods of time. Some securities may be inactively
traded, i.e., not quoted daily in the financial press, and thus may not be
readily bought or sold. Although profits in some Fund holdings may be realized
quickly, it is not expected that most investments will appreciate rapidly.
FOREIGN COMPANIES. The Fund may invest up to 10% of its total assets at the time
of purchase in securities of foreign issuers. When selecting foreign
investments, the Advisor will seek to invest in securities that have investment
characteristics and qualities comparable to the kinds of domestic securities in
which the Fund invests. The Fund may invest in securities of foreign issuers
directly or in the form of sponsored American Depository Receipts. American
Depository Receipts are receipts typically issued by an American bank or trust
company that evidence ownership of underlying securities issued by a foreign
corporation. Foreign investments may be subject to special
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risks, including future political and economic developments and the possibility
of seizure or nationalization of companies, the imposition of withholding taxes
on income, establishment of exchange controls or adoption of other restrictions,
that might affect an investment adversely. The Fund will not invest in
securities of foreign issuers which are not listed on a recognized domestic or
foreign exchange.
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 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 Advisor's opinion. See the Statement of
Additional Information for a further description of money market investments.
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 Fund's portfolio is fully 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. 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.")
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
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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 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.
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 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 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) invest in
restricted securities, or invest more than 15% of the Fund's net assets in other
illiquid securities, including repurchase agreements maturing in over seven
days, and other securities for
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which there is no established market or for which market quotations are not
readily available; (3) write, acquire or sell puts, calls or combinations
thereof, or purchase or sell commodities, commodities contracts, futures
contracts or related options; and (4) 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 the 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 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 $10,000 ($2,000 for
tax-deferred retirement plans). 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.
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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
Fund, and mail it to:
The Davenport 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.
ABA# 042000013
For Davenport Equity Fund #485777056
(Shareholder name and account number or tax identification number)
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
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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 $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
Fund, at 1-800-443-4249, or write to the address shown below.
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REGULAR MAIL REDEMPTIONS. Your request should be addressed to The Davenport
Equity Fund, P.O. Box 5354, Cincinnati, Ohio 45201- 5354. Your request for
redemption must include:
1) your letter of instruction or a stock assignment specifying the account
number, and the number of shares or dollar amount to be redeemed. This
request must be signed by all registered shareholders in the exact names
in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships,
pension or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days after
receipt of your redemption request. However, the Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. Such delay (which may take up to 15 days) may
be reduced or avoided if the purchase is made by certified check, government
check or wire transfer. In such cases, the net asset value next determined after
receipt of the request for redemption will be used in processing the redemption
and your redemption proceeds will be mailed to you upon clearance of your check
to purchase shares. The Fund may suspend redemption privileges or postpone the
date of payment (i) during any period that the Exchange is closed, or trading on
the Exchange is restricted as determined by the Securities and Exchange
Commission (the "Commission"), (ii) during any period when an emergency exists
as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or to
fairly determine the value of its assets, and (iii) for such other periods as
the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized 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.")
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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.
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.
Obligations 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. See the Statement of
Additional Information for further details.
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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.
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, Davenport
& Company LLC (the "Advisor") provides the Fund with a continuous program of
supervision of its 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.
Davenport & Company LLC was originally organized in 1863, reorganized as a
Virginia corporation in 1972, and subsequently converted to a Limited Liability
Company in 1997. Through two Sub-S corporation unitholders, the Advisor has 99
owners all of whom are employees of the Advisor and none of whom own in excess
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of 10% of the Advisor. In addition to acting as Adviser to the Fund, the Advisor
also provides investment advice to corporations, trusts, pension and profit
sharing plans, other business and institutional accounts and individuals.
Joseph L. Antrim is primarily responsible for managing the portfolio of the Fund
in consultation with the Advisor's Investment Policy Committee. The members of
the Advisor's Investment Policy Committee are:
JOSEPH L. ANTRIM, CFA, 52, is a graduate of the University of Virginia and began
his investment career with Chemical Bank in New York City in 1968. Subsequently
he joined Branch & Co., a Richmond brokerage firm, as a securities analyst. Mr
Antrim became associated with the Advisor when Branch & Co. was merged with the
Advisor in 1975. Mr. Antrim is an Executive Vice President, member of the
Executive Committee, and Director of the Advisor and manages the Advisor's
Investment Advisory division.
MICHAEL S. BEALL, CFA, CPA, 43, graduated from the University of Virginia with
undergraduate and masters degrees in accounting. Prior to joining the Advisor in
1980, he was employed by a "Big Six" accounting firm. Mr. Beall is an Executive
Vice President, member of the Executive Committee, Director of the Advisor and
is the Advisor's Director of Research.
JAMES C. HAMILTON, JR., 65, graduated from Yale University in 1954 and after
serving three years as an officer in the United States Air Force he began his
career with a New York investment firm. Mr. Hamilton joined the Advisor in 1968
and is a First Vice President and a Director of the Advisor.
BEVERLEY B. MUNFORD, III, CFA, 70, graduated from the University of Virginia in
1950 and has spent his entire career with the Advisor. Mr. Munford is Vice
Chairman of the Advisor and a former member of the Executive Committee. Mr.
Munford also serves as a Trustee of the Advisor's Employee Profit-Sharing Plan.
HUNTER R. PETTUS, JR., 69, is a graduate of the University of Virginia and
joined the Advisor in 1960. Mr. Pettus is a Senior Vice President and Director
of the Advisor and is a former member of the Executive Committee. Mr. Pettus
also serves as a Trustee of the Advisor's Employee Profit-Sharing Plan.
Compensation of the Advisor is at the annual rate of 0.75% of the Fund's average
daily net assets. The Advisor intends to waive its advisory fees to the extent
necessary to limit the total operating expenses of the Fund to 1.15% 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
- 14 -
<PAGE>
fiscal years and expenses of the Fund may therefore exceed 1.15% of its average
daily net assets.
The Advisor's address is One James Center, P.O. Box 85678, Richmond, Virginia
23285.
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 an indirect wholly-owned 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
0.20% 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 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
- 15 -
<PAGE>
wit 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.
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. 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 or the
Advisor. It is anticipated that a substantial portion of the Fund's portfolio
transactions may be executed by the Advisor, for which it will receive brokerage
commissions. 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 and pay dividends from net investment income quarterly. Net
capital gains, if any, are distributed annually.
- 16 -
<PAGE>
The Fund will 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 for the Fund. 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 twelve funds,
or series, to be issued. Shares of all twelve 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; The Jamestown Equity Fund, The
Jamestown Balanced Fund, The Jamestown International Equity Fund and The
Jamestown Tax Exempt Virginia Fund, which are managed by Lowe, Brockenbrough &
Tattersall, Inc. of Richmond, Virginia; and shares of The Jamestown Bond Fund
and The Jamestown Short Term Bond Fund, which are managed by Tattersall Advisory
Group, Inc. of Richmond, Virginia. The Trustees are permitted to create
additional series, or funds, at any time.
- 17 -
<PAGE>
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust or
a particular Fund of the Trust, holders of the outstanding shares of the Fund
being liquidated shall be entitled to receive, in proportion to the number of
shares of the Fund held by them, the excess of that Fund's assets over its
liabilities. Each outstanding share is entitled to one vote for each full share
and a fractional vote for each fractional share, on all matters which concern
the Trust as a whole. On any matter submitted to a vote of shareholders, all
shares of the Trust then issued and outstanding and entitled to vote,
irrespective of the Fund, shall be voted in the aggregate and not by Fund,
except (i) when required by the 1940 Act, shares shall be voted by individual
Fund; and (ii) when the matter does not affect any interest of a particular
Fund, then only shareholders of the affected Fund or Funds shall be entitled to
vote thereon. Examples of matters which affect only a particular Fund could be a
proposed change in the fundamental investment objective 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.
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.
- 18 -
<PAGE>
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional Information
for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time the Fund may advertise its
total return. The Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate future
performance.
The "total return" of the Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. If the Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. 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.
- 19 -
<PAGE>
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISOR
Davenport & Company LLC
One James Center
901 East Cary Street, 11th Floor
Richmond, Virginia 23219-4037
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
Joseph L. Antrim III, President
Coleman Wortham III, Vice President
J. Lee Keiger III, Vice President
John P. Ackerly IV, 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.
- 20 -
<PAGE>
<TABLE>
<S> <C>
Rep. Name and Number_____________________________ Account No.________________________________
(For Fund Use Only)
THE DAVENPORT EQUITY FUND
Send completed application to:
THE DAVENPORT EQUITY FUND
c/o Davenport & Company LLC
One James Center
901 East Cary Street
FUND SHARES APPLICATION Richmond, VA 23219
(Please type or print clearly) Attention: John P. Ackerly
- ----------------------------------------------------------------------------------------------------------------
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 to Minors Act
(First Name)(Middle Initial)(Last Name) (State)
__________________________________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
___________________________________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o For Corporations ___________________________________________________________________________________________
Partnerships, Name of Corporation or Partnership. If a Trust, include the name(s) of Trustees in which
Trusts, Retirement account will be registered, and the date of the Trust instrument.
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: $10,000)
o Enclosed is a check payable to THE DAVENPORT 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.
ABA #042000013
For credit Davenport Equity Fund #485777056
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 DAVENPORT EQUITY FUND for the Registered Owner and to execute and deliver any instrument
necessary to effectuate the authority hereby conferred:
Name Title Signature
_______________________________ __________________________ ___________________________
_______________________________ __________________________ ___________________________
_______________________________ __________________________ ___________________________
THE DAVENPORT 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 DAVENPORT 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 account the bank draft o both the 15th and last business day
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, Davenport &
Company LLC, 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
</TABLE>
<PAGE>
DAVENPORT
EQUITY FUND
-----------
PROSPECTUS
December 31, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE DAVENPORT EQUITY FUND
December 31, 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
INVESTMENT LIMITATIONS. . . . . . . . . . . . . . . . . 4
TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . 5
INVESTMENT ADVISOR. . . . . . . . . . . . . . . . . . . 10
ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . 11
OTHER SERVICES. . . . . . . . . . . . . . . . . . . . . 11
BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . 12
SPECIAL SHAREHOLDER SERVICES. . . . . . . . . . . . . . 12
PURCHASE OF SHARES. . . . . . . . . . . . . . . . . . . 14
REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . 15
NET ASSET VALUE DETERMINATION . . . . . . . . . . . . . 15
ALLOCATION OF TRUST EXPENSES. . . . . . . . . . . . . . 16
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 Davenport Equity Fund (the
"Fund") dated December 31, 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.
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. The Fund may invest in foreign securities if the Advisor
believes such investment would be consistent with the Fund's investment
objective. 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.
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
- 2 -
<PAGE>
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, 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 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 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
- 3 -
<PAGE>
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.
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 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
(except that securities of the U.S. Government, its agencies and
instrumentalities are not subject to these limitations);
(3) Invest for the purpose of exercising control or management
of another issuer;
(4) 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 mortgage-backed securities;
- 4 -
<PAGE>
(5) 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;
(6) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions);
(7) 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.);
(8) Make loans of money or securities, except that the Fund may invest in
repurchase agreements;
(9) Write, purchase or sell commodities, commodities contracts, commodities
futures contracts, warrants on commodities or related options; or
(10) Issue or sell any senior security as defined by the Investment Company
Act of 1940 except insofar as any borrowing that the Fund may engage in
may be deemed to be an issuance of a senior security.
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) 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 7, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg Investment
Trust (the "Trust"), their present position with the Trust or Fund, age,
principal occupation during the past 5 years and their aggregate compensation
from the Trust for the fiscal year ended March 31, 1997:
- 5 -
<PAGE>
<TABLE>
<S> <C> <C>
Name, Position, Principal Occupation Compensation
Age and Address During Past 5 Years From the Trust
- ------------------ -------------------- ---------------
Austin Brockenbrough III (age 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. (age 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 Indemnity
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.
- 6 -
<PAGE>
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 and South
Alabama Bank Corp.
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Tattersall Advisory Group, Inc.,
President Richmond, Virginia
The Jamestown Bond Fund
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 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 34) Portfolio Manager of
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia;
One James Center, 901 E. Cary St. prior to February 1994, a
Richmond, Virginia 23219 Portfolio Manager with
Central Fidelity Bank
Joseph L. Antrim III (age 52) Executive Vice President of
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
Vice President Lowe, Brockenbrough & Tattersall, Inc.,
The Jamestown International Equity Richmond, Virginia
Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 7 -
<PAGE>
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
J. Lee Keiger III (age 43) First Vice President and Chief Financial
Vice President Officer of
The Davenport Equity Fund Davenport & Company LLC,
One James Center, 901 E. Cary St. Richmond, Virginia
Richmond, Virginia 23219
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
- 8 -
<PAGE>
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 Tattersall Advisory Group, Inc.
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
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
Coleman Wortham III (age 51) President and Chief Executive Officer of
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
- -----------------------------
<FN>
**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.
</FN>
</TABLE>
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
- 9 -
<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.
INVESTMENT ADVISOR
Davenport & Company LLC (the "Advisor") supervises the Fund's investments
pursuant to an Advisory Agreement (the "Advisory Agreement") described in the
Prospectus. The Advisory Agreement is effective until April 1, 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 with respect to the Fund is at the annual rate of
0.75% of the Fund's average daily net assets.
The Advisor was originally organized in 1863, re-organized as a Virginia
corporation in 1972, and subsequently converted to a Limited Liability
Corporation in 1997. Through two Sub-S corporation unitholders, the Advisor has
99 owners all of whom are employees of the Advisor and none of whom own in
excess of 10% of the Advisor. In addition to acting as Advisor to the Fund, the
Advisor 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 objective 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.
- 10 -
<PAGE>
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 0.20% 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. 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.
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.
- 11 -
<PAGE>
The Custodian of the Fund's assets is Star Bank, N.A, 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Fund
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Fund.
BROKERAGE
It is the Fund's practice to seek the best price and execution for all portfolio
securities transactions. The Advisor (subject to the general supervision of the
Board of Trustees) directs the execution of the Fund's portfolio transactions.
The 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.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Advisor for the benefit of the other clients it may have. Conversely, the
Fund may benefit from such transactions effected for the benefit of other
clients. In all cases, the Advisor is obligated to effect transactions for the
Fund based upon obtaining the most favorable price and execution. Factors
considered by the Advisor in determining whether the Fund will receive the most
favorable price and execution include, among other things: the size of the
order, the broker's ability to effect and settle the transaction promptly and
efficiently and the Advisor's perception of the broker's reliability, integrity
and financial condition.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder services:
- 12 -
<PAGE>
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 three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see "Signature Guarantees"). A corporation (or partnership)
must also submit a "Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures authorized to act
on its behalf. The application must be signed by a duly authorized officer(s)
and the corporate seal affixed. No redemption fees are charged to shareholders
under this plan. Costs in conjunction with the administration of the plan are
borne by the Fund. Shareholders should be aware that such systematic withdrawals
may deplete or use up entirely their initial investment and may result in
realized long-term or short-term capital gains or losses. The Systematic
Withdrawal Plan may be terminated at any time by the
- 13 -
<PAGE>
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 Davenport Equity Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
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 has been filed
under Rule 18f-1 of the 1940 Act, wherein the Fund commits itself to pay
redemptions in cash, rather than in kind, to any shareholder of record of the
Fund who redeems during any ninety day period, the lesser of (a) $250,000 or (b)
one percent (1%) of the Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include the
following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required for
transfer by corporations, administrators, executors, trustees, guardians, etc.
If you have any questions about transferring shares, call or write the Fund.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next determined
after the order is received. An order received prior to 4:00 p.m. Eastern time
will be executed at the price 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.
- 14 -
<PAGE>
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 their shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Fund, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange (the "Exchange") is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an emergency
exists as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or to
fairly determine the value of its assets, and (iii) for such other periods as
the Commission may permit.
No charge is made by the Fund for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities held
by the Fund.
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
- 15 -
<PAGE>
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, Martin Luther King, Jr. 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
The Fund 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 the fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to the fund.
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.
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
- 16 -
<PAGE>
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.
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.
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
- 17 -
<PAGE>
with or without cause at any time (a) by a written instrument, signed by at
lease two-thirds of the number of Trustees prior to such removal; or (b) by vote
of shareholders holding not less than two-thirds of the outstanding shares of
the Trust, cast in person or by proxy at a meeting called for that purpose; or
(c) by a written declaration signed by shareholders holding not less than
two-thirds of the outstanding shares of the Trust and filed with the Trust's
custodian. Shareholders have certain rights, as set forth in the Declaration of
Trust, including the right to call a meeting of the shareholders for the purpose
of voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
Prior to January 24, 1994 the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, 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.
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. 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 the
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 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 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.
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<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 standardized 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.
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